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What Did AGN’s US Medical Aesthetics Segment Contribute in 1Q16?

Understanding Allergan's Business, Valuation, and Growth Strategy

(Continued from Prior Part)

The US medical aesthetics segment

Allergan (AGN) leads in aesthetics products globally. Its US medical aesthetics segment includes facial aesthetics, medical dermatology products, and a wide range of silicone gel and saline breast implants in US markets only.

The total revenue for Allergan’s US medical aesthetics segment was $449.7 million in 1Q16.

Franchise performances

The segment’s facial aesthetics franchise reported revenue of $279.4 million in 1Q16 compared to $35.2 million in 1Q15. The franchise’s total facial rejuvenation portfolio includes Botox, an injectible that reduces glabellar lines temporarily, Juvederm dermal filler gel products, Vivite, Prevage MD, and MD Forte products.

The medical dermatology franchise reported revenue of $122.2 million in 1Q16 compared to $30.5 million in 1Q15. This franchise includes advanced dermatology products that treat skin diseases and improve the skin’s appearance.

The plastic surgery products franchise reported revenue of $48.1 million in 1Q16 compared to $14.1 million in 1Q15. These products include the Natrelle brand of products for breast augmentation, including silicone-filled implants, saline-filled implants, and breast reconstruction products.

Botox cosmetics revenue rose by 12%, and filler revenue rose by 14% in 1Q16. The US medical aesthetics segment’s gross margin fell by 1.3% to 93.1% in 1Q16.

Investors can consider ETFs such as the Fidelity MSCI Healthcare ETF (FHLC), which holds ~2.3% of its total assets in Allergan, or the iShares US Healthcare ETF (IYH), which holds ~4.2% of its total assets in Allergan, in order to divest their risk.

Apart from Allergan, IYH holds 4.2% of its total assets in Amgen (AMGN), 5.2% in Merck & Co. (MRK), and 4.0% in Bristol-Myers Squibb (BMY).

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