Allergan Second Quarter Earnings Preview

In addition to earnings numbers, investors will be expecting to hear an update on the company's biggest drug, Botox as it tries to gain FDA approval for more than just cosmetic uses.

Botox is by far the company's biggest drug, and accounts for a big portion of the company's income. During 2009 alone, Botox sales were $1.3 billion, 30% of total sales for the company.

What makes Botox so successful for the company is that its cosmetic results only last between 3 and 6 months, so patients have to keep coming back to enjoy the results that they get. Botox is not a patented drug, but Allergan faces little competition, and has previously stated that it has a 79% share of the global aesthetic market (a market that grows around 13% a year).

While Allergan already makes a fortune off its Botox product, the figures could grow much larger pending a decision by the Food and Drug Administration that could allow doctors to start using Botox to treat migraines.

Earlier this month, Botox was approved by British regulators to treat migraines, and the company is expecting a similar decision from the FDA shortly.

How important would this be for the company? It could be substantial given that some analysts have forecast that should the drug gain FDA approval for treating migraines, Botox sales could increase by as much as $1 billion a year.

This would not be the first time that Botox was approved for non-cosmetic uses. Earlier this year, the Food and Drug Administration approved Botox for treating stiffness in elbows, wrists and fingers, but this use has much less potential for the company.

Analyst take: Earlier this week, Macquarie initiated coverage on the stock with an outperform rating, and set a $75 price target on the stock.

The stock closed Friday's trading session down $0.02 to $11.46.