Allergan beats 3Q profit forecasts

If the two companies were to combine, the merger would be the largest takeover deal in 2015.

Specialty-drug giant Allergan (NYSE:AGN) beat analysts’ Q3 estimates Wednesday as CEO Brent Saunders dodged questions about buyout talks with Pfizer (NYSE:PFE) while defending the company’s drug-pricing strategies and distancing its model from its peer Valeant Pharmaceuticals worldwide (NYSE:VRX). Allergan will also be providing an update on its pipeline.

Shares of Allergan rose by as much as 1.25% to $313.67 per share in premarket trades. One idea floating around Wall Street has been that it might make more sense for Allergan to buy Pfizer than vice versa, given the politics of inversion transactions that let USA companies move their headquarters to lower-tax jurisdictions overseas. Actavis later changed its name to Allergan.

Meanwhile, along with reporting third quarter results, the company announced a licensing agreement for the treatment of dry eye disease and an acquisition agreement which will add earFold, a medical device for the correction of prominent ears, to its portfolio. Botox sales grew about 7.9% from a year earlier, or 13% on a currency-adjusted basis, Chief Financial Officer Maria Teresa Hilado said on a call with analysts, according to a FactSet transcript.

For its portfolio of top-promoted products, sales surged 64% to $3.42 billion.

Allergan plc’s AGN third quarter 2015 earnings came in at $3.48 per share, well above the Zacks Consensus Estimate of $3.20 per share and 65% above the year-ago period.

Adjusted earnings per share (EPS), after excluding for the impact of one-time costs, painted a bright picture of the company’s performance.

Allergan is treating its Global Generics business as discontinued operations from the third quarter following its agreement to divest the business to Teva Pharmaceutical Industries Ltd. (TEVA – Analyst Report). Analysts projected $3.18 in adjusted per-share earnings and $4 billon in revenue, according to FactSet.

Allergan’s U.S. Brands saw a 50% increase in net revenue to $2.4 billion, with most of that growth related to the acquisition of legacy products like Botox.

Analysts at Bernstein noted that Allergan was a good fit for Pfizer. The deal, worth a massive $66 billion, concluded in March this year and is expected to result in double-digit accretion to be realized by the second half of next year. This also meant the interest expense for the whole company was counted in continuing operations, which in turn lowered the tax rate.

Pre-Market Trading: Allergan’s shares were up 1.44% in pre-market trading. Pfizer is known for making blockbuster drugs Viagra and Lipitor.

Shares in the company, up 21% this year, slipped 1.6% in midday trading.