Vanity, thy true name be Profits -- at least for Allergan. The company is a leading maker of eye care, skin care, and aesthetic products, including best-selling pharmaceutical Botox. Originally used to treat muscle spasms (as well as eye spasms and misalignment), Botox found another, more popular application in diminishing facial wrinkles. Allergan's eye care products include medications for glaucoma, allergic conjunctivitis, and chronic dry eye. Skin care products include treatments for acne, wrinkles, and psoriasis. Allergan also sells breast augmentation implants and other surgical devices. Its products are sold in more than 100 countries. Pharmaceutical giant Actavis is buying Allergan in a $66 billion deal.

Change in Company Type

The combination of Allergan and Actavis, a leading producer of generic medications as well as branded products, will create one of the top 10 global pharmaceutical firms, with revenues anticipated to surpass $23 billion in 2015. The merger announcement capped a bidding war for Allergan between Actavis and Valeant Pharmaceuticals.


Allergan's specialty pharmaceuticals segment accounts for the majority (more than 80%) of annual revenues. The segment's largest product lines are its eye care offerings -- featuring such brands as Alphagan, Restasis, and Refresh -- and the Botox/neuromodulator products. Smaller specialty lines include skin care and urologic medications. The company's second segment -- medical devices -- encompasses the facial aesthetic and breast aesthetic product lines. (Allergan divested its obesity intervention medical device line in 2013.)

With a nod to vertical integration, Allergan manufactures most of its products, as well as the plastic parts and bottles used in its ophthalmic solutions. While it purchases most of its raw materials, it does brew up the botulinum toxin for its Botox products.

Geographic Reach

The US is Allergan's largest market, accounting for more than 60% of product sales. The company also conducts sales in Europe (20% of sales), the Asia/Pacific region, and Latin America.

Sales and Marketing

Allergan distributes its products through its own sales representatives and via drug wholesalers to customers including hospitals, surgery centers, doctors, group purchasing organizations, pharmacies, and retailers. Its largest customers include wholesale distributors Cardinal Health and McKesson, each of which accounted for about 14% of revenues in 2012.

The company targets its marketing efforts toward specialty medical practitioners and hospitals, as well as directly to consumers. Marketing tactics include ads in medical journals, direct mail, and Internet-based product literature. Advertising expenses totaled some $162 million in 2012.

Financial Performance

Allergan's revenues rose 9% to $6.3 billion, from $5.8 billion, in 2013, primarily due to higher specialty pharmaceutical sales (including eye care drugs, Botox, and skin care lines). The company also experienced increased medical device sales (face and breast aesthetics) and income from the sale of its obesity device product line. Net income dropped 10% to $985 million that year as a result of the rise in selling and general costs and from those associated with settling its Department of Justice case. Cash from operations rose by $95.5 million in 2013 due to the increase in revenue.

While its sales and profits have mostly increased over the last five years, even during recessionary times, the company did see its income drop sharply in 2010 as a result of a legal settlement (to the tune of $609 million) following a US Department of Justice investigation into Allergan's sales and marketing practices with Botox.

A good portion of Allergan's products are not reimbursable by governmental or other health care plans, meaning consumers must pay out-of-pocket for them. In theory this could make the company particularly vulnerable in times of economic uncertainty when consumers limit non-essential spending.


To maintain a robust product pipeline, Allergan relies on a regimen of acquisitions and in-house development of its niche pharmaceuticals. The company aims to grow in existing specialty areas, as well as new niche markets where unmet medical needs are evident. It opened a new R&D center in New Jersey in 2012 to support its research efforts.

To share the cost of drug development, Allergan actively seeks out licensing agreements and partnerships. It currently has development agreements with Molecular Partners (retinal disease), ACADIA Pharmaceuticals (ophthalmology and pain), and Serenity Pharmaceuticals (treatment for nighttime urinary incontinence). It also rakes in royalties from the licensing of its own products to other companies.

Allergan has also had success in discovering new uses for its existing drugs, such as glaucoma drug Lumigan, which is also sold as Latisse for eyelash growth. As competition from other anti-wrinkle drugs ramped up, the company has found new uses for Botox, including as a treatment for excessive underarm sweating, migraines, and urinary incontinence in adults with neurological conditions, such as spinal cord injury or multiple sclerosis. Allergan is still looking for new ways to apply Botox, including as a possible treatment for children with cerebral palsy or to alleviate post-herpetic neuralgia; it is also looking to market the drug in new geographic territories.

In 2012 Allergan launched a restructuring plan to streamline its obesity intervention operations. The program included layoffs and the integration of the customer service and back-office functions to a new office in Austin, Texas. The move prepared the division for a sale, which occurred in late 2013 when Allergan sold the business -- including the Lap-Band gastric bypass and Orbera (intragastric balloon system) offerings -- to Apollo Endosurgery in a deal worth up to $110 million.

Mergers and Acquisitions

Acquisitions have plumped up the company's pipeline with potential new products and technologies. In 2013 Allergan acquired one of its development partners, MAP Pharmaceuticals, for some $958 million to gain full access to MAP's inhaled migraine treatment candidate (under review by the FDA).

To expand its range of skin care products, in 2012 Allergan acquired rival dermatology company SkinMedica for $350 million upfront and an additional $25 million if certain sales goals are met. The acquisition expanded Allergan's product portfolio with prescription treatments to reduce female facial hair and lotions to reduce the appearance of wrinkles. Following the transaction, SkinMedica operates as an independent subsidiary of Allergan, continuing to market its own offerings; SkinMedica has also taken over sales efforts on Allergan's Vivite and Latisse product lines.

▲ Show Less▼ Show Full Description

Company News and Press Releases

▲ Show Less▼ Show More News and Press Releases


2525 Dupont Dr
Irvine, CA 92612-1599
Phone: 1 (714) 246-4500


  • Employer Type: Public
  • Stock Symbol: AGN
  • Stock Exchange: NYSE
  • Chairman and CEO: David E. I. Pyott
  • President: Douglas S. Ingram
  • Chairman and CEO: David E. I. Pyott

Major Office Locations

  • Irvine, CA

Become a Vault Basic Member

Complete your Vault Profile and get seen by top employers