UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Securities Exchange Act of 1934
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Allergan, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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On July 23, 2014, Allergan, Inc. prepared the following presentation:
 July
2014 Allergan
A Specialist in the Biopharmaceutical
& Medical Device Industries |
 2
2
Forward-Looking Statements
®
&
™
Marks
owned
by
Allergan,
Inc.
JUVÉDERM
®
is
a
registered
trademark
of
Allergan
Industrie
SAS
All
other
products
are
registered
trademarks
of
their
respective
companies
©
2014
Allergan,
Inc.
All
rights
reserved.
This presentation contains “forward-looking statements,” including statements regarding
product acquisition and development, regulatory approvals, market potential, expected growth,
operational efficiencies, a proposed offer made by Valeant, and Allergan’s expected,
estimated or anticipated future results, including Allergan’s earnings per share and revenue
forecasts, among other statements. All forward- looking statements herein are based on
Allergan’s current expectations of future events and represent Allergan’s judgment only as of the
date of this presentation. If underlying assumptions prove inaccurate or unknown risks or
uncertainties materialize, actual results could vary materially from Allergan's expectations
and projections. Therefore, you are cautioned not to rely on any of these forward-looking statements
and Allergan expressly disclaims any intent or obligation to update these forward-looking
statements except as required to do so by law.
Actual results may differ materially from Allergan’s current expectations based on a number of
factors affecting Allergan’s businesses, including changing competitive, market and
regulatory conditions; the timing and uncertainty of the results of both the research and
development and regulatory processes; domestic and foreign health care and cost containment reforms,
including government pricing, tax and reimbursement policies; revisions to regulatory policies
related to the approval of competitive generic products; technological advances and patents
obtained by competitors; the ability to obtain and maintain adequate protection of intellectual property rights; the performance of
new products, including obtaining government approval and consumer and physician acceptance, the
continuing acceptance of currently marketed products, and consistency of treatment results
among patients; the effectiveness of promotional and advertising campaigns; the potential for
negative publicity concerning any of Allergan’s products; the timely and successful implementation of strategic initiatives,
including expansion of new or existing products into new markets; the results of any pending or future
litigation, investigations or claims; the uncertainty associated with the identification of,
and successful consummation, execution and integration of, external corporate development
initiatives and strategic partnering transactions; potential difficulties in manufacturing; and
Allergan’s ability to obtain and successfully maintain a sufficient supply of products to
meet market demand in a timely manner. In addition, matters generally affecting the U.S. and
international economies, including consumer confidence and debt levels, changes in interest and
currency exchange rates, political uncertainty, international relations, the status of
financial markets and institutions, impact of natural disasters or geo-political events and the
state of the economy worldwide, may materially affect Allergan’s results. These and other
risks and uncertainties affecting Allergan’s businesses and operations may be found in Allergan’s most recently filed
Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, including under
the heading “Risk Factors”. These filings, as well as Allergan's other public filings
with the U.S. Securities and Exchange Commission (SEC), can be obtained without charge at the
SEC's web site at www.sec.gov. These SEC filings are also available at Allergan’s web site at www.allergan.com along with copies of
Allergan’s press releases and additional information about Allergan. For further information, you
can contact the Allergan Investor Relations Department by calling 714-246-4636. |
 3
Executive Summary |
 •
Allergan Now
•
We
have
built
a
pre-eminent
specialty
pharmaceutical
and
medical
device
company
based
on
a
track
record
of
innovation
and
shareholder
value
creation
•
#1
or
#2
positions
in
high
growth
markets,
based
on
premium
high
quality
products
•
Taking
advantage
of
market
dislocation
and
weakening
competitors
•
Targeted
expansion
into
high
value
geographies
and
new
specialty
areas
•
Innovation
in
products
and
marketing
drives
our
success
•
Prolific
R&D
generates
products
that
customers
want
and
make
us
a
market
leader
•
Sophisticated
and
proprietary
sales,
support
and
marketing
infrastructure
•
Allergan in the Future
•
Our
management
team
is
best
positioned
to
drive
growth
through
innovation
and
operational
excellence
•
Continue
to
maximize
value
through
market
expansion
and
new
market
creation
•
In
mid-2013,
management
and
our
Board
of
Directors
began
working
on
a
plan
to
further
enhance
sales
and
earnings performance
•
Organization
Re-design
•
Refocusing
our
resources
on
the
highest
yielding
initiatives
•
Right-sizing,
adapting
and
simplifying
our
structure
and
processes
•
Past
strong
SG&A
investments
have
created
critical
mass
that
can
now
be
leveraged
•
R&D:
heavy
concentration
on
programs
already
in
clinic
•
There
will
be
no
compromise
to
our
commercial
strategy
and
low
impact
to
our
long-term
revenue
growth
targets
•
We
will
maintain
strength
in
our
R&D
pipeline
to
bring
innovative
therapies
to
patients
Highlights of Allergan Business
4 |
 Allergan
Has Delivered Outstanding Growth Over Time ALPHAGAN
®
,
TAZORAC
®
Launch,
BOTOX
®
Investment
Inamed
Acquisition
BOTOX
®
Chronic
Migraine (US) Approval
5
BOTOX
®
Cosmetic
Approval
Denotes
periods
of
accelerated
growth
Re-structuring
Sales Performance Over Time ($bn)
EPS Performance Over Time
Multiple
Product
Approvals
Accelerating
Growth
Leveraging
Critical Mass
RESTASIS
®
(US)
Approval
EPS
adjusted
for
non-GAAP
items
and
2002
spin-off
of
Advanced
Medical
Optics,
Inc.
Includes
the
effect
of
EITF
04-8.
Historical
EPS
adjusted
for
Q2
2007
stock
split.
A
reconciliation
of
non-GAAP
items
may
be
found
under
the
heading
“Non-GAAP
Financial
Reconciliations”
in
the
investor
relations
section
of
the
www.Allergan.com
website.
1
Excludes
estimated
diluted
earnings
per
share
impact
of
pro-forma
AMO
spin-off
adjustment.
2
Pre
IRS
Tax
Settlement.
3
2006
EPS
growth
excludes
FAS
123R
stock
option
expense.
4
2012
EPS
growth
includes
the
2012
Obesity
impact
of
$0.10
and
the
2012
R&D
Tax
Credit
impact
of
$0.06.
5
2013
EPS
Growth
–
Restating
2012
to
exclude
the
2012
Obesity
impact
of
$0.10
and
including
the
2012
R&D
Tax
Credit
impact
of
$0.06.
6
Represents
mid-point
of
July
21,
2014
guidance. |
 Leading
Market Share Position in Growing Markets
6
US$
sales,
share
and
growth
estimates
Sources:
Eye
Care
–
IMS
Global
(53
countries)
at
Q1-14
constant
exchange
rates
+
some
actual
US
retina
sales
data,
Topical
Acne
–
US
only
–
IMS,
Neuromodulators
–
AGN
estimates
of
WW
(at
AR)
and
Top
10
Markets
(at
AR
with
growth
at
AR
and
AGN
14
BR),
Mixture
of
Public
Information
(Earnings
Releases,
10Ks,
10Qs),
D&B,
AGN
Internal
Data,
Syndicated
Marketing
Research
Reports,
and
Analyst
Reports
(1)
MAT
=
Moving
Annual
Total
(trailing
12
months) |
 Allergan
2,042%
FDA approved
JUVÉDERM
®
VOLUMA™
XC
10/23/13
Announced acquisition
of Inamed for ~$3bn
11/15/05
FDA approved
RESTASIS
®
12/24/02
FDA
approved
BOTOX
®
for
cosmetic
use
04/15/02
FDA
approved
BOTOX
®
(Chronic
Migraine)
10/15/10
Delivering Consistent Outperformance and Driving
Long-Term Shareholder Value
Exceed
/
Meet
Guidance
Missed
Guidance
7
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Performance Against
Company Guidance:
NBI
765%
S&P500
103%
Allergan Has Exceeded Its Guidance Virtually Every Year For the Past 15 Years
Source: FactSet as of 07/21/14. |
 Allergan
Is
Now
The
Market
Leader
In
Multiple
Therapeutic
Areas
BOTOX
®
Therapeutic
-
Spasticity, CD, Chronic
Migraine, JCP,
Osteoarthritis
(Ph
2),
Pain
(Ph
2),
Depression
(Ph
2),
etc.
* Plastic surgery & dermatology
Ophthalmics
Glaucoma
-
LUMIGAN
®
-
ALPHAGAN
®
-
GANFORT™
-
COMBIGAN
®
-
IOP lowering
-Bimatoprost
Sus. Release
(Ph 2
Ph 3)
Retina
-
OZURDEX
®
-
NOVADUR
®
(Brimonidine)
(Ph 2 Confirmatory)
-
AGN 150998 (Anti-VEGF
DARPin
®
(Ph 2
Ph
3))
-
Anti-VEGF-A / PDGF-B
DARPin
®
(Pre-Clinical)
-
TKI
(Pre-Clinical)
Urologics
Neurology
Medical
Dermatology
TAZORAC
®
-
Cream
-
Gel
ACZONE
®
-
Topical Acne
BOTOX
®
Therapeutic
-
Hyperhidrosis
(Axillary)
AGN-199201
(Oxymetazoline) (Ph 3)
-
Rosacea
BOTOX
®
Therapeutic
-
Overactive Bladder
Dry Eye
-
RESTASIS
®
-
REFRESH
-
OPTIVE
®
Ocular Surface
Disease
-
ACUVAIL
®
-
ZYMAXID
®
-
LASTACAFT
®
Medical
Aesthetics
*
Physician
Dispensed
Creams
-
SkinMedica
®
-
VIVITÉ
®
-
M.D. FORTE
®
Soft Tissue Support
(Plastic Surgery)
-
SERI
®
Dermal Fillers
-
JUVÉDERM
®
-
VOLUMA™
-
VOLBELLA
®
-
VOLIFT
®
BOTOX
®
Cosmetic
-
Glabellar Lines
-
Crow’s Feet Lines
LATISSE
®
-
Eyelash Growth
-
Brow
(Ph
3)
-
Scalp
(Ph
2
-
POC)
TEM
-
Pain
(Ph
2)
Nocturia
-
Ser-120
(Ph
3)
•
Current Footprint In Our Pillars
SEMPRANA
®
(Registration)
-
Migraine
(Acute Therapy)
BOTOX
®
Therapeutic
-
Neurogenic Detrusor
Overactivity
Breast Aesthetics
-
NATRELLE
®
BOTOX
®
Therapeutic
-
Premature Ejaculation
(Ph 2)
8 |
 Significant R&D Investment
Consistently Fueling the Pipeline
9
1
Adjusted for non-GAAP items. A reconciliation of non-GAAP items may be found under the
heading “Non-GAAP Financial Reconciliation” in the investor relations section of
the www.Allergan.com website. (Periods 1998-2001 not restated for 2006 change in financial reporting of
amortization of acquired intangible assets). ² Includes Allergan Medical activities for 9 months. ³ Excludes Obesity Intervention, which
was divested in Q4 2013. * Represents the midpoint of expectations
provided on July 21, 2014. |
 US
– 12 FDA Approvals
EU
ROW
•
BOTOX
®
Chronic Migraine
•
BOTOX
®
Cosmetic –
Crow’s Feet Lines
•
BOTOX
®
Overactive Bladder
•
BOTOX
®
Neurogenic Detrusor Overactivity
•
BOTOX
®
Spasticity (UL)
•
JUVÉDERM
®
+ Lidocaine
•
JUVÉDERM VOLUMA
™
XC
•
LUMIGAN
®
0.01%
•
NATRELLE
®
410 Highly Cohesive
Anatomically Shaped Silicone-Filled Breast
Implants
•
OZURDEX
®
Uveitis
•
OZURDEX
®
DME
•
ZYMAXID
®
•
BOTOX
®
Chronic Migraine
•
BOTOX
®
Idiopathic Overactive Bladder
(Positive Opinion)
•
BOTOX
®
Neurogenic Detrusor Overactivity
•
GANFORT
™
Unit Dose
•
LUMIGAN
®
0.01%
•
LUMIGAN
®
0.03%
Preservative
Free
Unit
Dose
•
OZURDEX
®
RVO
•
VISTABEL
®
–
Crow’s Feet Lines (Positive
Opinion)
•
ALPHAGAN
®
P 0.01% (Japan)
•
BOTOX
®
Chronic Migraine (Canada, LA &
Asia)
•
BOTOX
®
Overactive Bladder (Canada &
Asia)
•
BOTOX
®
Neurogenic Detrusor Overactivity
(Canada, LA & Asia)
•
BOTOX
®
Spasticity (Japan)
•
LATISSE
®*
•
Canada
•
Brazil
•
Parts of East Asia
•
NATRELLE
®
Round Silicone Gel-Filled Breast
Implants and Style 133 Tissue Expanders
(Japan)
•
RESTASIS
®
(Canada)
Key Recent Approvals will Drive Growth in the Medium Term
10
Pipeline success has further positioned Allergan for sustained
medium-term growth with enhanced returns on investment |
 Driving Sustainable Operational Efficiencies
Without
Compromising Effectiveness
No
compromise
to
our
commercial
strategy
and
low
impact
to
our
long-
term
revenue
growth
targets
Maintain
strength
in
our
R&D
pipeline
to
bring
innovative
therapies
to
patients
~$475M
in
annual
operational
efficiencies
expected
to
be
realized
in
2015
Allergan 2014 -
2019
Double-Digit
Sales
CAGR
despite
a
~50
b.p.
reduction*
>20% EPS CAGR
2016 EPS -
~$10.00
Additional
free
cash
flow
of
~$18bn**
and
significant
borrowing
capacity
to
drive
strategic
options
and
financial
flexibility
*
There
was
a
~50
basis
point
reduction
in
the
Sales
CAGR
(2014E
–
2019E)
between
guidance
provided
on
May
12,
2014
vs.
the
guidance
provided
on
July
21,
2014.
**
2014
-
2019
11 |
 Allergan Has an Enduring Vision and a Goal to Create an
Even Stronger Company
Revenue Goal: ~$12bn by 2019
•
Double
digit
sales
growth
(2014E
–
2019E)
•
>20%
EPS
CAGR
(2014E
–
2019E)
•
Franchise
leadership:
#1
or
#2
in
every
category
Our earnings growth is
founded on quality net
sales growth
In short, our profit
comes from serving the
needs of physicians
and their patients
Customer-centric
We have a unique
employee culture that
drives our success
Action orientated and
flexible with a premium
placed on generating
results
Culture & Values
We have an enduring
model for the future
founded on an R&D
pipeline that is informed
by our intimate
knowledge of our
customers and the
franchises in which we
choose to operate
Innovation
12 |
 Recognition of Allergan Management by Third Parties
13
David Pyott named “Best CEO in Healthcare -
Pharmaceuticals”
--
Institutional Investor
November 2013
Jeff Edwards named “Best CFO in Healthcare –
Pharmaceuticals”
--
Institutional Investor
November 2013
Allergan named “Best Investor Relations Team
in Healthcare –
Pharmaceuticals”
--
Institutional Investor
November 2013
David Pyott named “Best CEO in Healthcare -
Pharmaceuticals”
--
Institutional Investor
November 2012
Jim Hindman named “Best Investor Relations
Professional in Healthcare –
Pharmaceuticals”
--
Institutional Investor
November 2012
Jeff Edwards named “Best CFO in Healthcare –
Pharmaceuticals”
--
Institutional Investor
November 2012
Allergan named “Best Investor Relations Team
in Healthcare –
Pharmaceuticals”
--
Institutional Investor
November 2012
David Pyott ranked #26 as one of the “Best
Performing CEO’s in the World”
--
Harvard Business Review
2012 |
 Recognition of Allergan Management by Third Parties
14
David Pyott named “Top CEO in
Healthcare -
Pharmaceuticals”
--
Institutional Investor
December 2011
Allergan named among “the best in
investor relations”
in the pharmaceutical
sector
--
Institutional Investor
December 2011
David Pyott named “Top CEO in
Healthcare -
Pharmaceuticals”
--
Institutional Investor
February 2010
Jeff Edwards named “one of America’s
best CFOs”
--
Institutional Investor
February 2010
Allergan named “Top IR Company in
Healthcare -
Pharmaceuticals”
--
Institutional Investor
February 2010
David Pyott ranked number #50 as “one
of the 100 Best-Performing CEO’s in the
World”
--
Harvard Business Review
February 2010
Allergan named Most Shareholder-Friendly
Company in the Pharmaceuticals / Specialty
category (February 2006 / February 2008 /
March 2009)
--
Institutional Investor |
 Allergan’s
promising
outlook
on
long-term
growth
driven
by
new
product
innovation
and
operational
excellence:
—
Additional
free
cash
flow
of
~$18bn
to
drive
strategic
options
and
financial
flexibility
—
5-year
double
digit
revenue
growth
and
>20%
EPS
CAGR
Investor
community
has
realized
an
increase
in
Allergan
value
as
our
management
team
has
and
will
continue
to
enhance
business
performance
and
outlook
To
further
enhance
stockholder
value,
Allergan
remains
focused
on
ongoing
value
driving
opportunities
Allergan
management
team
best
equipped
to
deliver
significant
value
for
stockholders
–
our
track
record
speaks
for
itself
Conclusions
Allergan
management
and
Board
of
Directors
are
committed
to
delivering
the
highest
value
for
stockholders
15 |
 16
2014 Update |
 Another
Outstanding Quarter Highlights the Strength of Allergan’s Business
Model Q2 2014 Guidance
(Issued May 7)
$1,725M -
$1,800M
$1.41 -
$1.44
16% -
18%
Actual Q2 2014
Results
$1,827M
$1.51
24%
Product Net Sales
Non-GAAP Diluted
EPS
Non-GAAP Diluted
YOY EPS Growth
Strong
business
momentum
continued
in
2nd
quarter
with
record
dollar
sales
growth
Depth
and
breadth
of
contribution
made
by
nearly
all
therapeutic
areas
and
geographies
Leverage
of
SG&A
investments
in
a
thoughtful
&
disciplined
approach
17 |
 Strong
Business Momentum Continues to Accelerate
Sales & EPS Growth
*
Sales
growth
in
local
currency
retrospectively
adjusted
to
exclude
Obesity
Intervention
Business.
**
2012
EPS
growth
includes
the
2012
Obesity
impact
of
$0.10
and
the
2012
R&D
Tax
Credit
impact
of
$0.06.
2013
EPS
Growth
–
Restating
2012
to
exclude
the
2012
Obesity
impact
of
$0.10
and
including
the
2012
R&D
Tax
Credit
impact
of
$0.06.
FY 2012
FY 2013
YTD Q2 2014
Sales Growth*
10%
12%
16%
EPS Growth**
15%
16%
22%
Quarterly Sales & EPS Performance
18 |
 Allergan’s 2014 Full Year Earnings Outlook
Continues to Improve
FY 2014
Product Net Sales
Non-GAAP
Diluted EPS
Non-GAAP
Diluted EPS YOY
Growth
$6.8bn -
$7.0bn
$5.64 -
$5.73
18% -
20%
$6.7bn -
$7.0bn
$5.36 -
$5.48
12% -
15%
Feb. 5 Guidance
May 12 Guidance
July 21 Guidance
$6.9bn -
$7.1bn
$5.74 -
$5.80
20% -
22%
19 |
 20 |
 Plants
R&D Facilities
Allergan is a Global Market Leader Driven by a Long
Allergan is a Global Market Leader Driven by a Long
Track Record of Innovation
Track Record of Innovation
David
Pyott
is
3
rd
CEO
in
63
year
history
Approximately
11,700
employees
worldwide
Power
and
sustainability
of
growing
markets
Balanced
growth
across
geographies
and
specialties
40
direct/selling
subsidiaries
in
No.
America,
Europe,
Asia-Pacific,
Latin
America
Leading
market
share
positions
in
its
key
specialty
areas
Streamlined,
efficient
manufacturing
and
R&D
facilities
21 |
 Recession Proof
Business Model Unique & Durable Product Portfolio
•
Complexity and size of molecule
•
Manufacturing and regulatory barriers
22
Product
Patent Expiration Date
ALPHAGAN
®
P 0.10%
2022
COMBIGAN
®
2022
LUMIGAN
®
0.01%
2027
RESTASIS
®
2024
LASTACAFT
®
2029
ACZONE
®
2016
TAZORAC
®
GEL
2014
BOTOX
®
& Neuromodulators –
over 100 use and process
patents, expiring out to 2031
(1) Requirement for bio-equivalence study has created a barrier for Gx
entry Sales ($bn)
R&D Ratio
Durable Business Model Continues To Create
Tremendous Shareholder Value
(1) |
 •
China
•
Poland
•
Turkey
Korea
•
Philippines
•
South Africa
Emerging Markets: Latin America, Asia (excluding Australia and New Zealand),
EAME Emerging Markets Growth in Local Currency
* CAGR calculated on sales in Dollars
Represents The Start of
Direct Operations
Russia
•
Indonesia
•
Vietnam
Targeted Expansion into High Value Geographies
23 |
 24 |
 Allergan Operates in Large, Growing Markets
WW Ophthalmic Market ($bn)
WW Neuromodulator
Therapeutic Market ($bn)
WW Aesthetics Market ($bn)
25
* Market projections based on Allergan estimates
|
 Focus
And Commitment Resulting In Leading Market Share Positions
Note:
Percentages
denote
growth
rates
of
Allergan’s
franchises
for
Neuromodulators,
Fillers
and
Breast.
Percentages
for
Ophthalmics
including
Retina
denote
IMS
growth
rates.
Sources:
Ophthalmics
–
IMS
Global
(53
countries)
at
Q4
2013
constant
exchange
rates.
Neuromodulator/Filler/Breast/Banding
–
Mixture
of
public
information
and
AGN
data
*
Neuromodulators
include
Therapeutic
and
Cosmetic
Neuromodulators *
Fillers
Breast
26
$0.6
$0.8
$1.0
$1.1
$1.2
$0.8
$0.8
$0.8
$0.9
$0.9
J&J
acquired
Mentor
Valeant
acquired
Medicis
AGN #2
AGN #1
AGN #1
AGN #1
AGN #1
AGN #1
AGN #1
AGN #2
AGN #2
AGN #2
Ophthalmics
$1.7
$1.9
$2.2
$2.5
$2.8
Valeant
acquired
Medicis
AGN #1
AGN #1
AGN #1
AGN #1
AGN #1
30%
28%
7%
23%
8%
12%
11%
12%
11%
10%
8%
0%
NVS
$14.6
$16.5
$17.9
$19.3
$20.9
Valeant
acquired
Bausch
&
Lomb
Novartis
acquired
Alcon
AGN #2
AGN #2
AGN #2
AGN #2
AGN #2
6%
9%
11%
12% |
 Differentiated Portfolio And New Product Offerings To
Address A Large, Growing Ophthalmic Market
•
Glaucoma
•
Worldwide
market
in
units
continues
to
grow,
especially
outside
the
U.S.
•
Allergan
portfolio
includes
1
st
line,
adjunctive
and
fixed
combination
products
•
Bimatoprost
Sustained
Release
to
address
patient
compliance
•
Therapeutic Dry Eye
•
Large
underserved
patient
population
•
New
branded
products
expected
to
stimulate
market
growth
•
RESTASIS
®
X
in
development
and
other
candidates
to
enter
clinic
in
2014
and
2015
•
Retina
•
OZURDEX
®
•
Retinal
Vein
Occlusion
and
Uveitis
–
entry
points
into
larger
markets
•
Diabetic
Macular
Edema
approved
in
the
U.S.
June
30,
2014
•
DARPin
®1
(Anti-VEGF)
–
announced
positive
Phase
2
data
and
advancing
to
Phase
3
Trial
(June
30,
2014)
* Market projections based on Allergan estimates
1
Indications/Compounds under investigation
2
Dry Eye includes Therapeutic Dry Eye and OTC Tears
WW Ophthalmic Market ($bn)
27 |
 Allergan Has Established The Neuromodulator Market And Is
The Market Leader
•
Originally established with movement disorders
•
Establishing markets for new indications where
BOTOX
®
is the only approved neuromodulator
•
Chronic Migraine, Overactive Bladder and
Neurogenic Detrusor Overactivity
•
Estimate 5-7 years of high growth period, followed
by prolonged moderate growth
•
Overseas markets –
establishing reimbursement
and pricing can take an additional 2 years
•
Majority of current neuromodulator market is
represented by BOTOX
®
sales in movement disorders,
migraine and bladder
•
BOTOX
®
for therapeutic indications is cited in scientific
literature almost 3x competitors combined
•
BOTOX
®
is being studied in 7 additional indications
•
Extremely high market barriers to entry (regulatory,
clinical studies, physician training)
WW Neuromodulator Therapeutic Market ($bn)
* Market projections based on Allergan estimates
28 |
 Leading
Aesthetics Franchise With Multiple New Offerings And Customer Loyalty
•
BOTOX
®
Cosmetic Franchise
•
Favorable demographics
•
Power of brand recognition
•
Patient loyalty
•
Crow’s Feet Lines approved in 2013
•
JUVÉDERM®
Franchise
•
VOLUMA
™
U.S. Launch late 2013
•
VYCROSS
™
Technology
–
VOLIFT
®
/
VOLBELLA
®
/ VOLUMA
™
stimulating
market growth
•
Breast Aesthetics
•
NATRELLE
®
410 shaped silicone U.S.
approved in 2013
•
Continued penetration in premium priced
reconstruction market
WW Aesthetics Market ($bn)
* Market projections based on Allergan estimates
29 |
 Worldwide DTC
Investment (in $bn) Our Investments Are Focused On Generating
Sustainable Sales Growth
30
Allergan Creates And Builds Markets With Focused Investment
Note: Sales CAGR calculated on 2008-2014 Est. sales. 2014 Est. sales based on
mid-point of guidance provided on July 21, 2014. |
 Patient
Focused Physician Focused
•
Direct-to-consumer advertising
•
Award winning campaigns driving
significant patient education ad
disease/product awareness
•
TV, Print, Online
•
Comprehensive Patient Savings and CRM
•
Brilliant Distinctions®
with over 1.4 million
U.S. women enrolled
•
Customer Savings
•
Feedback to Practices (over 13,000
accounts)
•
Helping patients get the treatment
they need
•
BOTOX®
/OZURDEX®
PATIENT
ASSISTANCE®
covering cost for insured and uninsured
•
Co-Pay foundation support
•
BOTOX®
Partnership for Access offering co-
pay assistance for out-of-pocket expenses
•
Industry leading disease state
education in Ophthalmology
•
Didactic/Live physician training
programs for injection
paradigm/technique
•
Extensive programs in Optometry
including Jumpstart for Teaching
Institutions
•
Practice consultation
•
Dedicated teams helping to enhance
office flow and logistics
•
Comprehensive reimbursement
support
•
Allergan Retina Coverage Connection
•
BOTOX®
Reimbursement Solutions
31
Allergan Maintains Market Leadership By
Putting Customers First |
 Allergan's Multi-Faceted Sales & Marketing Approach
Builds Value for Customers
32
Increasing access
to product
Helping physicians
build their practice
Exposure to and options for
products patients want
Classical pharmaceutical detailing
Classic detailing
is only one
component of a
successful
marketing effort
Sophistication of sales and marketing is an integral part of Allergan's success and
differentiation
Foundation
Supporting Sales
Force |
 Product Innovation Allows Allergan’s Sales
Infrastructure To Be Highly Successful
33
•
Creating new markets where none existed
•
Often targeting larger market
opportunities
•
Higher margin products, cash pay and
reimbursement markets
•
Develop differentiated, commercially
successful products
•
Drives customer loyalty
•
Optimizes better products for patients
•
Pipeline in a product
•
Employ efficient R&D model with probability
of success higher than the industry
•
Specialty focused
•
Local drug delivery |
 Allergan Innovation Has Created New
Therapeutic Markets…
1.
2007
Report
of
the
International
Dry
Eye
WorkShop
(DEWS).
Ocul
Surf.
2007;
IMS
HEALTH
Confidential
and
Proprietary;
Source:
IMS
MAT
Q3-13
+
CE
Mark
Data
from
11
European
Countries
at
Q3-13
Constant
Exchange
Rate.
The
first
and
only
therapeutic
product
indicated
for
the
treatment
of
dry
eye
Global Dry Eye Market
The
first
and
only
product
indicated
for
prophylaxis
of
headaches
in
patients
with
Chronic
Migraine
Post-RESTASIS
®
(Tears and Rx)
2013
Sales (in $bn)
Pre-RESTASIS
®
(Tears only)
2002
2014 E
Sales (in $bn)
2010
(BOTOX
®
Chronic
Migraine Launch)
U.S. BOTOX
®
Chronic Migraine Sales
34 |
 …And Also Led In The Creation Of The Aesthetic Market
BOTOX
®
single handedly expanded the aesthetic
market
Global Neuromodulator Cosmetic Market
First and only FDA approved to instantly add volume to
the cheek area
Sales (in $bn)
2013
Sales (in $bn)
2006
Global Filler Market
35
(Cosmetic)
2013
Pre-BOTOX
®
Cosmetic
Approval
(2001) |
 Successful “Customer First”
Approach
Sustains Market Leadership in Neurotoxins
Builds Shares in Fillers
36
Global
Neuromodulator
Market
Share
-
Quarterly
Global Fillers Market Share –
Yearly
*
Others
includes
Xeomin
/
Bocouture,
Neuronox
/
Meditoxin,Prosigne
/
C-BTX-A,
Botulax
and
NeuroBloc
/
Myobloc.
Products
listed
are
registered
trademarks
of
their
respective
companies.
Source:
mixture
of
public
information
(earnings
releases,
earnings
call,10K’s,10Q’s)
AGN
internal
data,
syndicated
marketing
research
reports,
and
analyst
reports
Valeant announces Medicis Acquisition
09/03/12, completed 12/11/12
(Valeant / Galderma / Ipsen) |
 Successful “Customer First”
Approach In Key US Franchises
37
US Aesthetic Neuromodulator Market Share
US Filler Market Share
Products
listed
are
registered
trademarks.
Source:
Guidepoint
Global
(historical
figures
Q1’14
and
prior
basedupon
the
March
2014
panel).
May
2014
figures
based
on
May
2014
panel.
Filler
Unit
share
based
on
core
injectors
(dermatologists
and
plastic
surgeons).
(1)
Includes
all
Valeant
(Medicis)
fillers,
including
the
Restylane®
brand.
Allergan is gaining market share (e.g. Fillers) in key franchises
(Valeant)
(Merz)
#1
#1
#1
#1
#1
#1
Medicis / Valeant
Pre-Acquisition
May 2014
Restylane
®
#1 Brand
#3 Brand
Filler Franchise
#1 Brand
#2 Brand
(Despite January 2014 sales force increases)
Dysport
®
Market Share
Pre-acquisition: ~17%
May 2014: ~14%
#2
#2
#2 |
 Sources:
Eye
Care
–
IMS
Global
(53
countries)
at
MAT
Q1
2014
constant
exchange
rates.
Excludes
retina.
Valeant acquired Bausch
& Lomb
Market Size
($B)
Market
Position
Growth
1H 2013
Growth
2H 2013
Growth
Q1 2014
Market
14.3
5.8%
8.1%
8.8%
NVS
4.3
#1
5.9%
9.1%
8.2%
AGN
3.2
#2
10.2%
13.6%
15.1%
VRX/BOL
1.2
#3
11.5%
6.2%
5.2%
YoY Growth Among Top Ophthalmology Players
New Products Driving Allergan Ophthalmic Growth
Global Eye Care Excluding Retina
38 |
 BOTOX
®
Worldwide Sales And R&D Spend
US Product Approvals
39
Sales (in $bn)
BOTOX
®
Total R&D Spend
BOTOX
®
Worldwide Sales (incl. Tx & Cos)
2000:
Cervical Dystonia
2004:
Hyperhidrosis
2010:
•
Upper Limb Spasticity
•
Chronic Migraine
2011:
Neurogenic
Overactive
Bladder
1989:
•
Blepharospasm
•
Strabismus
2002:
Glabellar Lines
Since
1989,
28
BOTOX®
Indications
Have
Been
Approved
Across
87
Countries
Cumulative
BOTOX®
Sales
Through
2013:
$15.7bn
Source:
IMS
US$MMs
Sales
@
actual
rates
(1996
to
2013)
53-country
rollup.
Note:
R&D
cumulative
between
1992
–
2013.
Revenue
cumulative
between
1997
–
2013.
Total Sales:
$15.7bn
Cumulative
R&D: $1.6bn
2013:
•
Crow’s
Feet Lines
•
Idiopathic
Overactive
Bladder
Unique Innovative Insights Have Built Pipeline Within A
Product
2013 |
 Investment in R&D for BOTOX
®
Has Created
Blockbuster Franchise
40
($Bn)
BOTOX®
Current Sales
(2013): $2.0bn
If R&D stopped before
Cervical Dystonia Approval,
BOTOX®
would be a $0.4bn
product (2013)
If R&D stopped before
Glabellar lines Approval,
BOTOX®
would be a $0.9bn
product (2013)
If R&D stopped before UL
Spasticity & Chronic Migraine
Approval, BOTOX®
would be a
$1.5bn product (2013)
If R&D stopped before Neurogenic
Overactive Bladder Approval, BOTOX®
would be a $1.7bn product (2013)
R&D Saved
Cumulative
Sales
Foregone
$0.3
$0.4
(1
*
)
$0.5
$0.8
(3
*
)
$1.0
$5.0
(11
*
)
$1.5
$10.6
(13
*
)
* Denotes number of years the new indication has been on market
|
 41
JUVÉDERM
®
WORLDWIDE SALES & R&D SPEND
US & Key OUS Product Approvals
Sales (in $bn)
US 2006:
JUVÉDERM®
Ultra,
Ultra Plus
US 2010:
JUVÉDERM®
Ultra
XC, UltraPlus XC –
with lidocaine
US 2013:
JUVÉDERM®
VOLUMA
TM
XC
Cumulative
Sales: $2.2Bn
Cumulative
R&D: $0.2Bn
Strong Innovative R&D is a Formula Repeatable in Other
Allergan Assets
Note: Allergan R&D cumulative between March 2006-2013.
VOLBELLA®&
VOLIFT®
Canada 2011:
VOLUMA
TM
XC
Europe 2009:
VOLUMA
TM
XC,
Ultra Smile, Ultra
XC, Ultra Plus XC –
with lidocaine
Asia Pacific 2010:
JUVÉDERM®
Ultra
XC, UltraPlus XC –
with lidocaine |
 More Approved
Indications vs. Competing Toxins…
…With Better Awareness and More
Established Studies in the Medical /
Academic Community
Major Indications
BOTOX
®
DYSPORT
®
XEOMIN
®
Cervical Dystonia
Blepharospasm
Hemi Facial Spasm
JCP
Spasticity
Chronic Migraine
OAB
NDO
Hyperhidrosis
Glabellar Lines
Crows Feet Lines
BOTOX
®
Is The Undisputed Leader In Neuromodulators
Therapeutic Use
Cosmetic Use
Peer-Reviewed Literature on Commercially
Available Botulinum Toxins
42
28 Worldwide
indications |
 $0.4
$0.6
$0.7
$0.8
$1.0
$1.2
$1.3
$1.3
$1.4
$1.6
$1.8
$2.0
60%
60%
58%
57%
52%
50%
50%
52%
51%
51%
52%
54%
40%
40%
42%
43%
48%
50%
50%
48%
49%
49%
48%
46%
WW BOTOX
®
Revenue ($Bn)
•
US therapeutic represents >70% of WW Sales
•
Significant international opportunity
•
Therapeutic indications require multi-faceted sales
and marketing program
•
Therapeutic indications typically require more units
per treatment than cosmetic indications
BOTOX
®
Growth Well Diversified as Therapeutic Growth
Outpaces Cosmetic Growth
USA:
Cosmetic
Europe:
Cosmetic
USA:
Hyperhidrosis
Japan:
Cosmetic
USA:
Chronic
Migraine
Europe¹,
Asia¹, LA:
Chronic
Migraine
USA, LA¹,
Europe¹: Neurogenic
Detrusor
Overactivity
Europe¹, Asia¹,
LA¹: Chronic Migraine
Asia¹, LA¹,
Europe¹:
Neurogenic
Detrusor
Overactivity
Europe¹:
Overactive
Bladder
USA:
Overactive
Bladder, Crow’s
Feet Lines
Europe:
Crow’s
Feet Lines
Asia:
Overactive
Bladder
1
Approved in several countries within Latin America (LA), Europe (EUR) and Asia
(ASIA). 43
Denotes Approvals
Europe:
Adult
Spasticity
Europe:
Hyperhidrosis
Europe:
Cosmetic
USA:
Adult
Spasticity
Cosmetic
Therapeutic |
 2010
Products
launched
by
company
1
2015E
2
2000
16
Co. B
17
Co. A
20
Co. K
11
Co. J
12
AGN
13
Co. I
13
Co. H
13
Co. G
15
Co. F
15
Co. E
16
Co. D
16
Co. C
2005
Source:
Independent
Global
Consultant
1
Includes
products
launched
in
the
20
years
preceding
given
year
and
in
the
year
itself
2
Based
on
consensus
analyst
forecasts
Co. G
11
Co. C
11
Co. K
11
Co. B
11
Co. I
13
Co. E
14
Co. J
14
Co. H
14
Co. F
14
AGN
15
Co. A
16
Co. D
17
Co. F
10
Co. C
11
Co. I
11
Co. J
12
Co. G
12
Co. A
13
Co. K
13
Co. E
14
Co. H
14
Co. B
14
AGN
15
Co. D
16
6
6
7
8
9
9
9
Co. A
Co. E
Co. I
10
Co. H
11
Co. K
11
Co. D
11
AGN
13
Co. F
Co. C
Co. G
Co. J
Co. B
15
14
12
9
X
Average
Consistently Outperforming Peers in R&D Innovation
44 |
 Based
on a Development Strategy That Delivers Success Higher Than Industry Average
(2000-2012) Local therapy vs. systemic administration improves approval POS
Data provided by CMR (Thomson Reuters)
1.7x Better
than Industry
(Ph. 1 to
Market)
45 |
 Waves
Of Innovation Are The Key To Multi-Pronged Value Creation
JUVÉDERM®
JUVÉDERM®
XC
VYCROSS
®
VOLBELLA
®
VOLUMA
TM
XC
46
VOLIFT
®
ALPHAGAN
®
0.2%
ALPHAGAN
®
0.15%
ALPHAGAN
®
0.1%
COMBIGAN
®
Portfolio Of
Products
Drives
Customer
Loyalty
Optimized
Products For
Patients
BOTOX
®
Blepharospasm
BOTOX
®
Glabellar Lines
BOTOX
®
Chronic
Migraine
Pipeline In A
Product
BOTOX
®
Bladder
LUMIGAN
®
Unit Dose
LUMIGAN
®
0.03%
LUMIGAN
®
0.01%
GANFORT
TM
Unit Dose
GANFORT™
|
 Improved
efficacy Better tolerated
Less systemic exposure
Substantial Sales Return On Relentless Product
Optimization / Life Cycle Extension Products
Improvements:
Reduced ocular
allergies
Improved efficacy
Much lower ocular
allergies
($ in bn)
47 |
 Value
Created Through Investments in All Pre-Phase III Projects
Abandoning pre-phase III projects will be value destructive
48
All currently approved and ongoing development projects
required or require pre-phase 3 work
If
Allergan
were
to
stop
DARPin
®
development
today
…
Cumulative R&D
Spend 1992–2013
2014 –
2024
Potential
Additional Sales
Associated with
R&D Spent
Cumulative Sales
1997–2013
Potential Phase 3
R&D Savings *
Potential Cumulative
10-year
DARPin®
Sales*
$0.35bn –$0.40bn
Note:
All
projections
based
on
Allergan
estimates.
*
R&D
investments
and
potential
sales
figures
are
from
Wet
AMD
only,
and
exclude
Dual
DARPin
®
. |
 Wet AMD
Glaucoma
U.S. Patient
Population
U.S. Market
(3)
1.8 million
(1)
~ $2.7 billion
Allergan's R&D pipeline potentially provides patients and physicians a better solution to
existing products. With Allergan’s expertise, these products are poised to be game
changers in the treatment paradigm. DARPin®
Bimatoprost Sustained-
Release Implant
Allergan's
Potentially
Differentiated
Solutions
3.8 million
(2)
~ $1.0 billion
Significant Market Opportunity for Allergan's Potentially
Differentiated Treatments of Widespread Ophthalmic Diseases
(1)
Arch
Ophthalmol.
2004;122(4):564-572.
doi:10.1001/archopht.122.4.564
(2)
Glaucoma
patient
population
represents
Glaucoma
(NEI
2010)
&
Ocular
Hypertensives
(based
on
estimates
using
Varma,
Ophthalmology
2004).
(3)
Represents
total
value
of
respective
market
based
on
current
market
data.
49
(2013)
(Potential Implant
Sub-market) |
 Retina Market
Overview Retina market is the largest and fastest growing Ophthalmic market
(1)
Considerable growth in the retina market has been entirely driven by rapid adoption of
Anti-VEGF therapies in exudative AMD and other key retina indications
Global
Retina Market
U.S Market Share
(of Retina Market)
(3)
2011
2012
2013
LUCENTIS®
97%
64%
56%
EYLEA®
1%
34%
43%
Improving treatment duration & offering choices are
key market drivers as evidenced by Eylea®'s rapid
market share gain
Eylea®
provides comparable clinical results to
Lucentis®
with less frequent injections
Future Anti-VEGF therapies that can provide additional
improvement in treatment duration should quickly
capture branded share
DARPin®
could
provide
the
next
leap
in
treatment
duration
&
has
~$20BN
in
potential
cumulative
10
year
Sales
(2)
(1)
Market projections based on Allergan estimates.
(2)
Potential sales figures exclude Dual DARPin®.
(3)
Based upon public information & SEC filings, Allergan internal data, syndicated marketing
research reports & secondary sources (IMS, etc). 50
|
 Vascular
endothelial growth factor (VEGF) is important in the pathogenesis of neovascular
(wet) AMD and drugs that block VEGF have been shown to
improve vision in patients with the disease
Patient and physician convenience could make
DARPin®
the
market
leader.
DARPin®
could
require
fewer injections with at least equal efficacy to
competing treatments
DARPin®’s
are potent biologics which may address significant unmet medical needs in large
patient populations in various disease areas
Potential to be best in class for wet AMD, due
to favorable pharmacokinetic profile: high
binding affinity, long half-life and good
stability
Could potentially offer dosing every 3 months versus
monthly injections required for Lucentis®, which is a
significant burden for patients
Potential Phase 3
R&D Spend
(1)
Potential Cumulative 10-year
DARPin®
Sales
(1)
DARPin®
is a Differentiated Asset That Will Be a Leading
Treatment for Wet AMD and Beyond
Note:
All
projections
based
on
Allergan
estimates.
(1)
R&D
investments
and
potential
sales
figures
are
from
Wet
AMD
only,
and
exclude
Dual
DARPin®.
51
DARPin®
Represent Significant
Commercial Opportunity
Importance of
DARPin®
(Dollars in Billions) |
 Abicipar Pegol
(DARPin
®
)
2mg (23 pts)
Abicipar Pegol
(DARPin
®
)
1mg (25 pts)
Ranibizumab
(Lucentis
®
)
0.5mg (16 pts)
Mean Visual Acuity Improvement from Baseline (Letters)
16 Weeks
8.2
6.3
5.3
20 Weeks
9.0
7.1
4.7
Ocular Inflammation
AE’s (pts)
2
3
0
There were no serious adverse events reported in any study group
Material from new manufacturing process to be used in Phase 3 program
Allergan
will
initiate
Phase
3
Studies
in
the
2
nd
quarter
of
2015
Recap of Positive Data from DARPin®
Abicipar Pegol
(Anti-VEGF DARPin®) Stage 3, Phase 2
(1) (2)
(1)
In
the
double-masked
trial,
a
total
of
64
patients
were
randomized
to
abicipar
pegol
1mg
(n=25),
abicipar
pegol
2mg
(n=23)
or
ranibizumab
0.5mg
(n=16)
and
were
followed
for
20
weeks.
All
patients
received
doses
at
the
start
of
the
trial
and
at
4
and
8
weeks.
Patients
in
the
ranibizumab
arm
of
the
study
received
additional
doses
at
12
and
16
weeks.
Patients
who
were
treated
with
either
dose
of
abicipar
pegol
received
sham
injections
at
12
and
16
weeks.
Patients
in
all
arms
of
the
study
were
well
matched
for
demographics
and
baseline
characteristics.
(2)
No
statistical
significance
between
treatment
groups;
study
not
powered
to
show
statistical
significance
52 |
 Glaucoma Market Overview
Glaucoma is a global and growing epidemic
Impacts 3.8
million people in the U.S.
(2)
Leading cause of irreversible blindness
globally
Loss of vision decreases quality of life
and daily functioning
Significant indirect societal cost ~ $1.5Bn
per annum in the U.S.
(3)
(1)
Market
projections
based
on
Allergan
estimates
(2)
Glaucoma
patient
population
represents
Glaucoma
(NEI
2010)
&
Ocular
Hypertensives
(based
on
estimates
using
Varma,
Ophthalmology
2004).
(3)
Quigley
and
Broman.
Br
J
Ophthalmol.
2006.
Global Glaucoma Pharma Market
(1)
53 |
 Inability to
correctly and reliably instill eye drops
(1)(2)
Adverse effects associated
with taking eye drops
(3)
The number of medication
and the complexity of the
dosing schedule
(4)(5)(6)(7)
Understanding of glaucoma
including the consequences
and its treatment
(1)(2)(8)
Medication cost
(9)
Patient forgetfulness
(2)(5)(8)
A sustained-release,
prostamide-loaded,
bioerodible implant
Injected into the anterior
chamber
Can be performed in the
office
Ensures patient compliance
~ 20%
Of Patients are
Not Well Managed
On Topical Drops
(10)
(1)
Wu and Yin. Chinese J Ophthalmology. 2010.
(2)
Stryker et al. J Glaucoma. 2010.
(3)
Zimmerman et al. J Ocular Pharmacol Ther. 2009.
(4)
Robin and Covert. Ophthalmology. 2005.
(5)
Patel and Spaeth. Ophthalmic Surg. 1995.
Bimatoprost Sustained-Release Implant is a
Significant Global Opportunity
Noncompliance is an Issue with
Current Treatments
Bimatoprost Sustained-Release Implant is a
Significant Innovation
(6)
Olthoff et al. Ophthalmology. 2005.
(7)
Stewart et al. J Ocul Pharmacol Ther. 2004.
(8)
Taylor et al. J Ocul Pharmacol Ther. 2002.
(9)
Schwartz and Quigley. Surv Ophthalmol. 2008.
(10)
Truven Health MarketScan®
Research Databases, August 2013 (Data on file with Allergan) & Anwar Z et al.
Current Opinions Ophthalmology 2013.
Disruptive, first-in-class
technology
Data from Phase 2 clinical trials
suggests that bimatoprost
sustained-release implant efficacy
is comparable to daily topical
bimatoprost with duration of 4-6
months
If approved, bimatoprost sustained-release implant for glaucoma has potential to change the
treatment paradigm 54 |
 55 |
 Overview of Today’s Plan to Restructure
Our
Operations & Processes
~13% reduction in
workforce
Site closures
~1,500 employees &
~250 vacant positions
3
Annual Cost reductions*
~ $475M
Our ongoing effort to improve efficiency and productivity will further increase
stockholder value
* Includes $27M of Gross Margin enhancements
56 |
 Driving Sustainable Operational Efficiencies
Without
Compromising Effectiveness
Organization Re-design
•
Refocusing our resources on the highest yielding initiatives
•
Right-sizing, adapting and simplifying our structure and processes
Selling, General and Administrative (SG&A)
•
Past strong investments have created critical mass that can now be leveraged
Research & Development (R&D)
•
Heavy concentration on programs already in clinic
From 1998 –
2014 Allergan Has Successfully Invested to Create Robust Top and Bottom Line Growth
•
Launched new markets, products and geographies
16% Sales CAGR
19% EPS CAGR
>2,000% Stock Price Appreciation
No compromise to our commercial
strategy and low impact to our long-term
revenue growth targets
Maintain strength in our R&D pipeline to
bring innovative therapies to patients
~$475M in annual operational efficiencies expected to be realized in 2015
(1)
(1)
(2)
(1)
Represents 1998 –
2014 CAGR. 2014 is midpoint of July 21, 2014 guidance.
(2)
Calculation
based
on
1998
–
July
18,
2014.
57 |
 Principles Behind Our Enduring Organization
Customer
Centricity
•
DTC spend preserved at 2014 levels in all priority
brands
DTC spend maintained ~$200M
•
Sales force maintained in all key areas
~ 94% of sales force remains intact
Reductions mainly in breast & glaucoma
•
Maintain education and training focus
Innovation
and
Pipeline
•
No changes to Phase 2/3 clinical pharmaceutical
R&D programs
•
Outsource to achieve efficiencies in non-core
areas (e.g. data management, global monitoring)
Preserve study protocol design and
Phase 2B & Phase 3 trials in-house
Culture
and values
•
Success continues to be driven by action-
oriented culture with a premium placed on
generating results
•
Rewire, right-size and reduce complexity /
layers within the organization
•
Optimize processes and speed of
decision
making
Commercial
•
Focus resources on highest ROI areas
•
Preserve customer facing headcount
•
Reduce complexity and layers within
the
organization
R&D
Principles Underpinning Allergan’s Plan
Allergan will not compromise
our successful business model
Maintains a robust platform for long-term sustainable growth
58 |
 Maintain Rich, Highly Diversified Clinical R&D Pipeline
Post
Approval
Pre-Clinical
Phase I
Phase II –
POC
Phase II –
Confirmatory
Phase III
Registration
Discontinued
Allergan remains committed to an industry leading R&D engine
Limited number of pre-clinical projects have been
cancelled
(all with projected approval dates after 2020)
59 |
 Strategic Options Available to Further Increase
Stockholder Value
•
Value from acquisitions
•
Value from capital return
•
Stock repurchases
•
“Special”
dividend
Additional free cash flow of ~$18bn
generated over strategic planning period
60 |
 Allergan’s Promising Outlook on Long-Term Organic Growth
Driven by New Product Innovation and Operational Excellence
2013A
2014E
Guidance
2019E
2015E
Guidance
Revenue
$6.9 -
$7.1bn
EPS
$5.74 -
$5.80
EPS Growth
20% -
22%
Revenue
Growth
Double Digit
EPS
$8.20 -
$8.40
Revenue
$6.2bn
EPS
$4.77
2016E
Guidance
2017E
2018E
* As a percentage of sales.
Additional stockholder value generated from strong business momentum & further
operational efficiencies
Revenue
Growth
Double Digit
EPS
~$10.00
61 |
 62 |
 Independent oversight
Right mix
The right experience for Allergan at the right time
Active involvement
We Have an Independent Board with the Right Experience to Lead
63
—
8 of 9 directors are independent
—
Declassified board; all directors elected annually
—
Experienced lead independent director
—
Fully independent Finance, Audit, Nominating & Governance and
Compensation committees
—
The Board conducts an annual review of director independence
—
Existing policies allow for the Board to meet regularly without the CEO
—
Three of Allergan’s independent directors have joined the board in the last 2
years —
Recognized as leaders in their respective fields
—
All directors have direct experience in healthcare and consumer related industries
—
Research and development expertise, CEO and CFO experience, operational and legal
leadership
—
Extensive experience leading M&A transactions
—
Robust lead independent director structure alongside combined Chairman/CEO, with
Lead Director and Shareholder Communication Procedures in place
—
Board reviews the company’s people and talent development strategy at least
annually —
Board assesses major risks facing the Company and reviews options for their
mitigation |
 Allergan’s Board –
Diverse and Proven Leadership with
Investor, Financial and Executive Backgrounds
David E.I. Pyott
Michael R. Gallagher
Deborah Dunsire, M.D.
Trevor M. Jones, Ph.D.
Louis J. Lavigne Jr.
Peter J. McDonnell, M.D.
—
Director and Professor of the Wilmer Eye Institute of Johns
Hopkins University School of Medicine
—
Wide-ranging expertise in ophthalmology and leader in
corneal transplantation, laser refractive surgery and the
treatment of dry eye
Timothy D. Proctor
—
Former General Counsel of Diageo, the world’s leading
premium drinks business with a broad range of beverage
alcohol brands across spirits, beer and wine
—
Significant, extensive international and legal expertise and
is a well-respected leader in the area of international law
Russell T. Ray
—
Special Advisor to HLM Venture Partners, a private equity
firm that provides venture capital to health care information
technology, health care services and medical technology
companies
—
Leading expert with extensive knowledge and experience
in the banking and healthcare industries, and M&A
Henri A. Termeer
—
Former President and Director of Genzyme Corporation
—
Wealth of expertise and significant experience in key
leadership roles in the pharmaceutical and biotechnology
industries, and M&A
64
—
Chief Executive Officer and Chairman of the Board at
Allergan
—
Significant, extensive management and leadership
experience across the healthcare sector, and M&A
—
Former Chief Executive Officer and a Director of Playtex
Products, a personal care and consumer products
manufacturer
—
Considerable experience in key leadership roles in the
personal care and consumer products industries
—
President and Chief Executive Officer of EnVivo
Pharmaceuticals
—
Considerable pharmaceutical management and operations
experience as a clinical researcher, physician and executive
—
Former Director General of the Association of the British
Pharmaceutical Industry
—
Extensive knowledge of and experience in research and
development in the European and global pharmaceutical
industry
—
Managing Director of Lavrite, LLC, a management consulting
firm in the areas of corporate finance, accounting,
management and strategy
—
Extensive background in and knowledge of management,
business operations, finance and accounting and business
strategy in the biotechnology and pharmaceutical industries
|
 Strong
Committee Structure Ensuring Effective Corporate Governance
Audit &
Finance
Organization &
Compensation
Governance &
Compliance
Science &
Technology
David E.I. Pyott
Michael R. Gallagher
C
C
Deborah Dunsire
M
M
Trevor M. Jones
M
C
Louis J. Lavigne Jr.
M F
M
Peter J. McDonnell
M
M
Timothy D. Proctor
M
M
Russell T. Ray
C F
M
Henri A. Termeer
M
M
Below is a summary of our committee structure and membership information:
C:
Chairperson
M:
Member
F:
Financial
Expert
65 |
 5
board meetings during fiscal year 2013 14 board meetings in fiscal year
2014 13 board meetings since Valeant’s proposal
Data and analysis provided by independent financial advisors and
legal counsel
Discussions with and feedback from Allergan shareholders
Regularly review financial alternatives
Detailed review of Valeant proposals
The Board Regularly Evaluates Alternatives to Enhance
Shareholder Value
66 |
 Allergan’s History of Advancing Shareholder Democracy
Date
Board Recommended Action
Shareholder Approval
September 24, 2007
Adoption of a majority vote standard for the election of
directors
N/A
January 25, 2010
Permitting the poison pill to expire without renewal
N/A
April 29, 2010
Elimination of the supermajority voting standards in the
Certificate of Incorporation
May 03, 2011
Declassification of the Board
April 30, 2013
Establishing a right for shareholders to request a special
meeting of shareholders
May 06, 2014
Establishing a right for shareholders to act by written
consent
Over the years, the Allergan Board has consistently recommended changes to its
Charter and Bylaws to enhance shareholder democracy
67 |
 Allergan Shareholders Have Nothing To “Gain”
By
Merging With Valeant
Allergan Strengths
Valeant Weaknesses
Divergent Growth
Profiles
Strong, long-term organic growth fueled by innovation and
marketing excellence
Creates new products and categories
Leading positions in some of the largest and fastest growing
emerging markets
Anemic growth driven by what we believe are unsustainable
price increases –
not volume
Subscale Valeant products losing their market share
Neglected coverage of key specialty areas, including urology
and plastic surgery
Emerging market growth in smaller countries with less revenue
potential
R&D Potential and
Performance
History
Extensive R&D engine that has a longstanding track record of
producing a +25x sales return on cumulative R&D spend
Potential to commercialize rich pipeline with billions of revenue
and profit potential
Long-tailed blockbuster products
Depleted R&D engine cut by $900mm; abandonment or sale of
pipeline
Steady state R&D ratio of ~2%
Lack of clinical and regulatory experience
Commitment to
Investing in the
Customer through
Promotion, Selling
and Marketing
Promotion, sales and marketing effort focused on physician
education and training; customer loyalty and service
Consumer awareness campaigns
Thin sales coverage focused on detailing only
Elimination of value added marketing programs
Decline in market share, competitiveness and product viability
Lack of scale & investment
Other
Considerations as
an Allergan
Shareholder
Strong and stable management team and Board of Directors
Positive net cash position and investment grade credit rating
of A+ / A3
High turnover of senior management and Board of Directors
Increased pro forma debt and a high yield credit rating
Lower tax regime with questionable sustainability
Decreased P/E Multiple Driven by
Reduced Growth Prospects and
Increased Uncertainty
Premium P/E Multiple Driven by
Sustained Growth, Efficient Pipeline
and Execution Experience
68 |
 Conclusions
THERE IS NO BENEFIT TO
SHAREHOLDERS FORCING A SPECIAL MEETING NOW
The Valeant proposal significantly undervalues your company
Allergan already has a pathway in place to deliver superior value
Allergan believes it has the right directors in place to deliver
value to shareholders
YOUR BOARD
UNANIMOUSLY DETERMINED THAT THE PERSHING SQUARE
SOLICITATION IS NOT
IN YOUR BEST INTERESTS AND RECOMMENDS THAT YOU:
NOT SUBMIT ANY
SPECIAL MEETING REQUESTS OR WHITE PROXY CARD
PROMPTLY EXECUTE A BLUE REVOCATION
CARD
69 |
 Reconciliation of Selected Non-GAAP Financial Measures
“GAAP”
refers to financial information presented in accordance with generally accepted
accounting principles in the United States.
In
this
presentation,
Allergan
included
historical
non-GAAP
financial
measures,
as
defined
in
Regulation
G
promulgated
by
the
Securities
and
Exchange
Commission,
with
respect
to
estimates
for
the
year
ended
December
31,
2013,
and
the
corresponding
periods
for
1999
through
2012.
The
information
for
2012
and
2011
has
been
retrospectively
adjusted
to
reflect
the
obesity
intervention
unit,
which
was
sold
on
December
2,
2013,
as
discontinued
operations.
Allergan
believes
that
its
presentation
of
historical
non-GAAP
financial
measures
provides
useful
supplementary
information
to
investors.
The
presentation
of
historical
non-GAAP
financial
measures
is
not
meant
to
be
considered
in
isolation
from
or
as
a
substitute
for
results
prepared
in
accordance
with
GAAP.
In
this
presentation,
Allergan
reported
certain
financial
measures
including
“Adjusted
Sales”,
“Adjusted
SG&A”,
“Adjusted
R&D”,
“Adjusted
EPS”,
“Pro
forma
Growth”
and
“Sales
Growth
at
constant
exchange
rates”
as
adjusted
for
Non-GAAP
items.
Allergan
uses
these
financial
measures
to
enhance
the
investor’s
overall
understanding
of
the
financial
performance
and
prospects
for
the
future
of
Allergan’s
core
business
activities.
Specifically,
Allergan
believes
that
a
report
of
these
financial
measures
provides
consistency
in
Allergan’s
financial
reporting
and
facilitates
the
comparison
of
results
of
core
business
operations
between
its
current,
past
and
future
periods.
Adjusted
Sales,
Adjusted
SG&A,
Adjusted
R&D,
Adjusted
EPS,
Pro
forma
Growth
and
Sales
Growth
are
the
primary
indicators
management
uses
for
planning
and
forecasting
in
future
periods.
Allergan
also
uses
Adjusted
Sales,
Adjusted
R&D
and
Adjusted
EPS
for
evaluating
management
performance
for
compensation
purposes.
A
reconciliation
of
non-GAAP
items
may
be
found
under
the
heading
“Non-GAAP
Financial
Reconciliation”
in
the
investor
relations
section
of
the
www.Allergan.com
website.
70 |
 Important Information
Information contained in this presentation regarding Valeant Pharmaceuticals
International, Inc. (“Valeant”) is taken directly from the
information publicly disclosed by Valeant and we do not make any representations or warranties,
either express or implied, with respect to such information’s accuracy or
completeness. In addition, certain other information contained in this
presentation is based on publicly available sources as of the date of this presentation,
and while we have no reason to believe that such information is not accurate, we
can provide no such assurances with respect thereto. IMS data used in this
presentation has been purchased from IMS Health, a provider of healthcare
information. This presentation was prepared with the assistance of Allergan’s independent financial
consultants and forensic accountants, Alvarez & Marsal and FTI Consulting. The
information in this presentation represents the opinions of Allergan and
investors and stockholders should make their own independent investigations
of the matters referenced in this presentation and draw their own
conclusions. 71 |
 Important Information
Allergan,
its
directors
and
certain
of
its
officers
and
employees
are
participants
in
solicitations
of
Allergan
stockholders.
Information
regarding
the
names
of
Allergan's
directors
and
executive
officers
and
their
respective
interests
in
Allergan
by
security
holdings
or
otherwise
is
set
forth
in
Allergan's
proxy
statement
for
its
2014
annual
meeting
of
stockholders,
filed
with
the
SEC
on
March
26,
2014,
as
supplemented
by
the
proxy
information
filed
with
the
SEC
on
April
22,
2014.
Additional
information
can
be
found
in
Allergan's
Annual
Report
on
Form
10-K
for
the
year
ended
December
31,
2013,
filed
with
the
SEC
on
February
25,
2014
and
its
Quarterly
Report
on
Form
10-Q
for
the
quarter
ended
March
31,
2014,
filed
with
the
SEC
on
May
7,
2014.
To
the
extent
holdings
of
Allergan's
securities
have
changed
since
the
amounts
printed
in
the
proxy
statement
for
the
2014
annual
meeting
of
stockholders,
such
changes
have
been
reflected
on
Initial
Statements
of
Beneficial
Ownership
on
Form
3
or
Statements
of
Change
in
Ownership
on
Form
4
filed
with
the
SEC.
These
documents
are
available
free
of
charge
at
the
SEC’s
website
at
www.sec.gov.
STOCKHOLDERS
ARE
ENCOURAGED
TO
READ
ANY
ALLERGAN
SOLICITATION
STATEMENT
(INCLUDING
ANY
SUPPLEMENTS
THERETO)
AND
ANY
OTHER
RELEVANT
DOCUMENTS
THAT
ALLERGAN
MAY
FILE
WITH
THE
SEC
CAREFULLY
AND
IN
THEIR
ENTIRETY
BECAUSE
THEY
WILL
CONTAIN
IMPORTANT
INFORMATION.
Stockholders
will
be
able
to
obtain,
free
of
charge,
copies
of
any
solicitation
statement
and
any
other
documents
filed
by
Allergan
with
the
SEC
at
the
SEC's
website
at
www.sec.gov.
In
addition,
copies
will
also
be
available
at
no
charge
at
the
Investors
section
of
Allergan's
website
at
www.allergan.com.
72 |
 July
2014 Allergan
A Specialist in the Biopharmaceutical
& Medical Device Industries |