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Payment to partner hits Allergan 3Q net income

IRVINE, Calif. (AP) -- Allergan Inc. said Tuesday its net income dipped in the third quarter as a payment to a drug development partner canceled out greater sales of Botox and other products.

Allergan said its total revenue rose 6 percent, and sales of Botox and neuromodulation products increased 9 percent. However its net income declined after it made a $62.5 million payment to Molecular Partners AG for drug technology. The companies began working together in mid-2011 on experimental eye disorder drugs, and in August they agreed to expand their partnership.

Molecular Partners said in August that it could get up to $1.4 billion in milestone payments if the drugs advance through development, receive marketing approval, and achieve sales targets.

Allergan said its quarterly net income slipped to $249.4 million from $249.8 million. Because the company had fewer shares of stock on the market than it did a year ago, its per-share income grew to 82 cents from 81 cents. Excluding one-time items Allergan said it earned $1.06 per share in the latest quarter. Revenue rose to $1.41 billion from $1.33 billion.

The company said its sales of eye drugs rose 8 percent to $663.2 million, and sales of Botox and neuromodulation products increased to $431.6 million. Skin care product sales also picked up. However medical device sales fell 4 percent to $212.6 million as sales of obesity devices dropped 25 percent. Allergan said it is exploring options and may sell the obesity intervention business.

Allergan said it expects adjusted net income of $1.18 to $1.20 per share and $1.47 billion to $1.55 billion in product sales in the fourth quarter.

The company tightened its guidance for the full year. Allergan now expects to report adjusted net income of $4.17 to $4.19 per share, compared to its previous estimate of $4.15 to $4.19 per share. It said revenue will be between $5.7 billion and $5.77 billion, mostly above its prior guidance of $5.65 billion to $5.8 billion in revenue.