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March 2010 Allergan A Specialist in the Biopharmaceutical & Medical Device Industries
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Page 1: Slide 1 - CLSA | Home

March 2010 AllerganA Specialist in the Biopharmaceutical & Medical Device Industries

Page 2: Slide 1 - CLSA | Home

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® & ™ Marks owned by Allergan, Inc. JUVEDERM® is a registered trademark of Allergan Industrie SAS

Imitrex STATdose System®, Amerge®, Restylane®, Radiesse®, Dysport®, Xeomin®, Macugen®, Visudyne®, Avastin ® and Lucentis® are registered trademarks of their respective companies

Forward-looking Statements

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding product development, market potential, expected growth, efficiencies, 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 reflect Allergan’s current analysis of existing trends and information and represent Allergan’s judgment only as of the date of this presentation. Allergan’s performance may differ materially from its estimates and targets. 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, among other things, the following: 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; technological advances and patents obtained by competitors; the performance of new products, including obtaining government approval and consumer and physician acceptance, and the continuing acceptance of currently marketed products; the effectiveness of promotional and advertising campaigns; the potential for negative publicity concerning any of Allergan’s products and it’s adverse effects; the timely and successful implementation of strategic initiatives; the results of any pending or future litigations, investigations or claims; the uncertainty associated with the identification of, and successful consummation and execution of, external corporate development initiatives and strategic partnering transactions; 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 economy, such as changes in interest and currency exchange rates, international relations, 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 Form 10-K and any subsequent Form 10-Q under the heading “Risk Factors”. These filings, as well as Allergan's other 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.

© 2010 Allergan, Inc.  All rights reserved.

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Allergan: Specialized and Diversified

• Focused on six medical specialties• Depth of physician relationships• Leading market share positions• Limited number of competitors

Specialized

• Broad portfolio of products• Cash pay vs. reimbursed markets• Worldwide geographic presence

– Emerging marketsDiversified

• Track record of creating markets– BOTOX® Cosmetic– RESTASIS®

– LATISSE®

• Leader in Medical Aesthetics & Ophthalmology

Growth

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4

Global Leader in Selected Medical Specialties

Yellow-shaded sections represent areas of interest for licensing and acquisitions

• Broad portfolio of products• Follow R&D technologies into specialties• Build presence within specialties organically and through acquisitions

Ophthalmology

Glaucoma- LUMIGAN®

- ALPHAGAN®

- GANFORT™- COMBIGAN®

- IOP lowering- EP Agonist- Sus. Release

Retina- OZURDEX™- TRIVARIS™- NOVADUR™ (Brimonidine)- TKI

Urologics

BPH - BOTOX®

Obesity

- LAP-BAND®

- ORBERA™- EASYBAND™

Neurosciences

BOTOX®

Therapeutic - Spasticity, CD, Chronic Migraine,

JCP, etc.

GSK Co-promote− Imitrex®

− Amerge®

MedicalDermatology

TAZORAC® Topical - Cream - Gel

ACZONE®

- Topical Acne

BOTOX®

- Hyperhidrosis

* Plastic surgery & dermatology

OAB - SANCTURA XR®

- BOTOX®

Dry Eye- RESTASIS®

- REFRESH®

- OPTIVE™

Ocular SurfaceDisease- ACUVAIL®

- ZYMAR®

Medical Aesthetics *

Physician Dispensed Creams- M.D.

FORTE®

- PREVAGE® MD

- VIVITÉ®

Breast Aesthetics

Dermal Fillers - JUVÉDERM® - VOLUMA™

BOTOX®

COSMETIC

LATISSE®

- Eyelash Growth

Targeted BOTOX®

(Next Generation) - Pain

Bladder Cancer - Apaziquone (EOQUIN®)

Specialized

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0% 20% 40% 60% 80% 100%

AllerganJ&JOther

0% 20% 40% 60% 80% 100%

BOTOX®DysportXeominOther

0% 20% 40% 60% 80% 100%

Mentor / J&JAllerganOther

0% 20% 40% 60% 80% 100%

PfizerGSKNovartisAllerganOther

0% 20% 40% 60% 80% 100%

Restylane(Medicis / QMed)JUVÉDERM®(Allergan)Radiesse (BioForm)Other

0% 20% 40% 60% 80% 100%

AlconAllerganPfizerOther

5

Global Market Leadership PositionsMost Markets With Limited Number of Competitors

Ophthalmology

Neuromodulator

Dermal Facial Filler

Breast Aesthetics

Gastric Banding

U.S. Urology

AGN Market Position

#2

#1

#2

#2

#1

#4

MAT Q3 2009. Sources: Ophthalmics – IMS Global (49 countries) at Q3-09 constant exchange rates + actual US retina sales data. OAB – SDI (VONA) and Mail Order at ex-factory price levels. Neuromodulator/Filler/Breast/Banding – Internal estimates. Mixture of Public Information (Earnings Releases, 10Ks, 10Qs), D&B, AGN Internal Data, Syndicated Marketing Research Reports, Analyst Reports, Internet Searches, Competitive Intelligence, etc.

Specialized

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6

Alle

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MAT Q4-08 US$ Sales at Actual RatesIncluded Businesses: Breast Aesthetics, Botulinum Toxins (Cosmetic), Dermal Facial Fillers, Health / Obesity (bands and balloons) and Skin CareSources: Internal estimates / various sources; Skin Care – IMS D Class (15 countries) (proxy for Dermatology)

A Global Leader in Medical Dermatology and Medical Aesthetics

0

200

400

600

800

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($M

Ms)

0

250

500

750

1,000

1,250

1,500

1,750

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$MM

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Specialized

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Broad Product PortfolioEstimated Peak Potential

Diversified

7

<$200 $200-500 $500-1,000 >$1B

ACUVAIL®

ACZONE®

SANCTURA XR®

TAZORAC® Topical

TRIVARIS™

ZYMAR®

ALPHAGAN® / COMBIGAN®

JUVÉDERM® / Dermal Fillers

NATRELLE® /Breast Implants

REFRESH® Tears Line

NOVADUR™ - OZURDEX™

LAP-BAND®

LATISSE®

LUMIGAN® / GANFORT™

RESTASIS®

BOTOX®

Page 8: Slide 1 - CLSA | Home

8

Business Segments~72% Reimbursed vs. ~28% Cash Pay

FY 2009 $4.4 Billion

+3%

Urologics2%

Skin Care3%

BOTOX® Therapeutic 15%

Obesity Intervention6%

BOTOX® Cosmetic14%

Breast Aesthetics6%

Facial Aesthetics5%

Ophthalmology47%

~28%

Cash P

ay~

72%

Rei

mbu

rsed

Diversified

LATISSE®

2%

Page 9: Slide 1 - CLSA | Home

2008 2009 2010

U.S. • ACZONE®• LATISSE®• TRIVARIS™

• ACUVAIL®• OZURDEX™ RVO

• BOTOX® Chronic Migraine*• BOTOX® Spasticity*• JUVÉDERM® + Lidocaine• LAP-BAND® Adolescent

Obesity*• LUMIGAN® 0.01%*• OZURDEX™ Uveitis*• Style 410 Breast Implant*• ZYMAR® X*

EU • JUVÉDERM® + Lidocaine• VOLUMA™

• LUMIGAN® 0.01%

ROW • BOTOX® Cosmetic (Korea)• BOTOX® Hyperhidrosis (Korea)• BOTOX® JCP (Australia)• BOTOX® Spasticity (Korea)• GANFORT™ (Brazil, Korea)• JUVÉDERM® + Lidocaine

(Canada, Australia)• VOLUMA™ (Canada, Australia)

• ALPHAGAN® P 0.1% (Brazil)• ALPHAGAN® P 0.15% (China)• BOTOX® Glabellar Lines

(Japan, China)• BOTOX® JCP (Japan)• BOTOX® Neurogenic OAB (Brazil)• COMBIGAN® (Korea)• GANFORT™ (Australia)• JUVÉDERM® + Lidocaine

(Brazil, Korea)• JUVÉDERM® (India)• LATISSE® (Korea)• LUMIGAN® 0.03% (Japan)• LUMIGAN® 0.01%

(Canada, Brazil)• ORBERA™ (Australia)• VOLUMA™ (Latin America)

• LATISSE® (Various)*

9

Variety of Growth CatalystsWorldwide Approvals / Launches

Diversified

* Anticipated future approvals

Page 10: Slide 1 - CLSA | Home

Growth

2009

Track Record of Creating MarketsFirst 5 years of revenue growth

BOTOX® Cosmetic RESTASIS®

LATISSE®

$0

$100

$200

$300

$400

$500

2002 2003 2004 2005 2006$0

$100

$200

$300

$400

2003 2004 2005 2006 2007

$0

$100

$200

$300

$400

$500

Peak Potential

10

Page 11: Slide 1 - CLSA | Home

Track Record of Creating Markets Accelerated Sales Post Acquisition by Allergan

Facial Aesthetics Breast Aesthetics

Obesity InterventionOwned by Allergan Owned by Allergan

Owned by Allergan

$0

$50

$100

$150

$200

$250

2004 2005 2006 2007 2008$0

$50

$100

$150

$200

$250

$300

$350

2004 2005 2006 2007 2008

$0

$50

$100

$150

$200

$250

$300

2004 2005 2006 2007 2008

Growth

11

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DTC - Spending Into Recovery

LATISSE® JUVÉDERM®

Growth

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13

RESTASIS® LAP-BAND®

DTC - Spending Into RecoveryGrowth

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Allergan DTC SpendingInvesting In Growth & Innovation

Ad

vert

isin

g E

xpe

nse

($

M)

Source: Allergan SEC filings. Expenditures net of media discounts, including fees and production costs.

Growth

14

0

20

40

60

80

100

120

140

160

180

200

2003 2004 2005 2006 2007 2008 2009

+47%

-7%+36%

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Retina: $2,023 0%+26%

15

Worldwide Ophthalmics: High Market Shares in Fastest Growing Market Segments

Source: IMS Global* Anticipated future approval

Worldwide MAT Q3 ‘09excluding Japan

Market GrowthAGN

Market Share

OZURDEX™ / TRIVARIS™

RESTASIS®

ACUVAIL®

REFRESH® / OPTIVE™

LUMIGAN® 0.01%*LUMIGAN® / GANFORT™

ALPHAGAN® / COMBIGAN®

$ Millions

Growth

Anti-Infective: $882 16%+8%

Other ExternalDisease: $1,261

9%+6%

Allergy: $862 6%+5%Other: $306 4%-1%

Glaucoma: $4,411 22%+7%

Artificial Tears: $1,020 29%+10%

NSAIDs: $375 41%+19%

Therapeutic Dry Eye: $507 100%+21%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$11,000

$12,000

ZYMAR® / ZYMAR® X*

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YTD 2009 world market growth 8%Allergan #2 market share position in 2008*

Allergan #2 in Glaucoma 2008**

* Source: Ophthalmics – IMS Global (48 countries) US$ sales growth, at constant exchange rates.  Excludes retina. ** Source: IMS Global, Excluding Japan

OphthalmologyAllergan fastest growing global ophthalmology company last 8 years*

Alcon PfizerAllergan Merck Total Market

-10%

-5%

0%

5%

10%

15%

20%

2002 2003 2004 2005 2006 2007 2008 YTD Q3 '09

Merck -37%

Sa

les

Gro

wth

*Growth

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•Therapeutic expected to re-accelerate withanticipated approvals

– Spasticity, Chronic Migraine, and OAB

BOTOX® GrowthPerformance Across Segments

* Growth rate in 2006 compared to 2005 excludes $38.8 million of Japan BOTOX® net sales in the 2005 base amount.

BOTOX®

Franchise

Cosmetic

Therapeutic

Sa

les

($M

)Growth

0

200

400

600

800

1,000

1,200

1,400

2002 2003 2004 2005 2006 2007 2008 2009

+42%

+25%

+28%

+25%+30%

+25%

+20%

+18%

+16%

+30%

+60%

+21%

+32%

+17%*

+24%

+23%

+19%

+29%

+8%

+8%

+8%

+0%

+4%

-4%

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*Source: Allergan Market Estimates Top 5 European Markets (France, Germany, Italy, Spain, UK)

Allergan

Competition

BOTOX® - The Winner in EuropeM

arke

t S

har

e*Growth

2000 – YTD Q3’09: Market share gains + 14 points Total Market + 12 points Therapeutic Market + 3 points Cosmetic MarketCosmetic share ~80%

30%

35%

40%

45%

50%

55%

60%

65%

70%

2000 2001 2002 2003 2004 2005 2006 2007 2008 YTD Q3'09

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$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2002 2003 2004 2005 2006 2007 2008 YTD Q3‘ 09

19

Allergan: • Successful investments to drive market expansion• Stable market share despite several new competitors

WW Neuromodulator Market BOTOX®

Sal

es $

Mill

ions

86%

87%

85%

85%

85%

Xeomin

China Toxin

Medy-Tox

Dysport

85%

81%83%

*

* Annualized Sales

Creating & Leading High Growth MarketsWorldwide Neuromodulator Market

Growth

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LATISSE® Sales Strategic Fit With Medical Aesthetics Franchise

Global Market Peak Sales Could Exceed $500MM

Growth

20

$0

$5

$10

$15

$20

$25

$30

Q1 2009 Q2 2009 Q3 2009 Q4 2009

Page 21: Slide 1 - CLSA | Home

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

-

$100

$200

$300

$400

$500

$600

$700

$800

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E

$675

21

R&D Spend

1 Adjusted for non-GAAP items. See reconciliation at end of presentation. (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 2010E represents midpoint of expectations provided on February 4, 2010 and has not been updated. This presentation does not reaffirm such expectations.

• Major efficiency gains in 2009• Completion of major clinical phase III trials in 2008/2009• Mid-term investment goal ~17% of product net sales

$98

$135$164

$1881

$2281

$3051

$3431$3841

$4761

$6461

$7291

R&

D $

(in

mil

lio

ns)

R&

D a

s a

% o

f S

ales

+38% +15%+21% +34%+21% +12% +12% +24% +36% +13% -7%

1

$722

+7%

2 3

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OZURDEX™ (dexamethasone intravitreal implant 0.7mg)

Retina Market Size:$2.1B* 5 Year CAGR: 42% Current Treatment Options: Lucentis/Avastin, Macugen, Visudyne, Steroids, Laser

* Worldwide MAT Q3 2009

• Launched Q3 2009• Swelling of the central retina or macula due to obstructed

retinal vein

Macular Edema associated with RVO

• Filed Q4 2009• Inflammation in the vitreous and retina (back of eye)

Uveitis(Intermediate & Posterior)

• Phase IIIB (Dexamethasone implant as adjunctive therapy to Lucentis)

• Added patient benefit in combination with Lucentis

Age Related Macular Degeneration

• Phase III (Enrollment completed Q2 2009)• Swelling of the macula resulting from leakage of damaged

blood vessels due to diabetes

Diabetic Macular Edema

Growth

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Potential Future Catalysts for BOTOX® Therapeutic

1 Scher AI, Stewart WF, Liberman J, Lipton RB. Prevalence of frequent headache in population sample. Headache 1998. Bigal ME, Serrano D, Reed ML, Lipton RB. Chronic migraine in the population. Neurology, 71; 2008.

•sBLA filed with FDA in Q3 2009•Estimated to affect between 1.2 and 3.6 million people in the United States1

•Clinical Trials (155-195 Units every 12 weeks)

BOTOX®

Chronic Migraine

•Approved in most international countries•Additional information requested by the FDA in its complete response letter submitted in Q3 2009

•Incremental peak year sales of $200M – $300M with U.S. approval

BOTOX® Spasticity

•Phase III trials for Neurogenic•Phase III trials for Idiopathic began recruiting Q3 2009 •Positive Phase II results for Idiopathic presented at AUA (April 2009)

BOTOX®

OAB

•Phase II trials ongoingBOTOX®

BPH

•Phase I trials ongoing including assessment in Pain•Patented molecule

Targeted

BOTOX®

Growth

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Product Indication Ph I Ph II Ph III FiledExpected Approval

LUMIGAN ® 0.01% Glaucoma ● ● ● ● ● 2010

OZURDEX ™ Uveitis ● ● ● ● ● 2010

OZURDEX ™ Diabetic Macular Edema ● ● ● ● 2012+

ZYMAR ® X Anti-infection ● ● ● ● ● 2010

RESTASIS ® X Ocular Surface Disease ● ● ● 2012+

IOP Lowering: EP Agonist Glaucoma ● ● ● 2012+

IOP Lowering (Sustained Release) Glaucoma ● ● ● 2012+

NOVADUR™ (Brimonidine) Retinal Diseases ● ● ● 2012+

Androgen Tear Ocular Surface Disease ● ● ● 2012+

TKI ARMD ● 2012+

Product Indication Ph I Ph II Ph III FiledExpected Approval

BOTOX ® Adult Spasticity ● ● ● ● ● 2010

BOTOX ® Chronic Migraine ● ● ● ● ● 2010

BOTOX ® Juvenile Cerebral Palsy ● ● ● 2012+

Targeted BOTOX ® (Next Generation) Pain ● ● 2012+

NeurologyPre-

Clinical

OphthalmologyPre-

Clinical

24

Strong R&D Pipeline

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Product Indication Ph I Ph II Ph III FiledExpected Approval

BOTOX ® OAB (Neurogenic) ● ● ● ● 2011

BOTOX ® OAB (Idiopathic) ● ● ● ● 2012+

BOTOX ® Benign Prostatic Hyperplasia ● ● ● 2012+

Apaziquone Bladder Cancer ● ● ● ● 2012+

Product Indication Feasibility Clinical Filed

Silicone Breast - Style 410 Cohesive Gel

Breast Reconstruction / Augmentation ● ● ● ● 2010

LAP-BAND ® Adolescent Obesity ● ● ● ● 2010

LAP-BAND ® Lower BMI ● ● ● 2011

ORBERA ™ (U.S.) Obesity ● ● ● 2012+

EASYBAND ™ (U.S.) Obesity ● ● 2012+

VOLUMA™ (U.S.) Facial Aesthetics ● ● ● 2012+

Expected Approval

Medical Device (Aesthetics / Health)

Pre-Clinical

Urology

Pre-Clinical

25

Strong R&D Pipeline

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Patent Protection Product AGN Strategy

2009 ALPHAGAN® P 0.15% ALPHAGAN® P 0.15% Royalty

ALPHAGAN® P 0.1%

COMBIGAN®

2009 ACULAR® ACUVAIL®

2010 ZYMAR® ZYMAR® X

2014 LUMIGAN® LUMIGAN® 0.01%

New IOP lowering molecules

2014 RESTASIS® RESTASIS® X

• Products with expiries post 2020 – COMBIGAN®, SANCTURA XR®, LATISSE®

• Strategies in place for products with short term expiries

Limited Generic ExposureStrong Patent Estate

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AllerganStaying Power

Track record of investing to create markets with favorable global mega-trends

Multiple growth drivers with leading market share positions Diversified product line with attractive payor mix (cash / reimbursed) Moderately priced therapies Fully integrated R&D

• Strong, diverse product pipeline Global infrastructure Unique blend of management skills Large enough to command sufficient resources to drive markets,

small enough for nimble execution Strong financial position

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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, 2009, and the corresponding periods for 1999 through 2008. 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 the financial measures “Adjusted Sales”, “Adjusted SG&A”, “Adjusted R&D” and “Proforma Growth” as adjusted for Non-GAAP items. Allergan uses Adjusted Sales, Adjusted SG&A, Adjusted R&D and Proforma Growth 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 Adjusted Sales, Adjusted SG&A, Adjusted R&D, and Proforma Growth provides consistency in its 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, and Proforma Growth are the primary indicators management uses for planning and forecasting in future periods. Allergan also uses Adjusted Sales and Adjusted R&D for evaluating management performance for compensation purposes.

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Reconciliation of Selected Non-GAAP Financial Measures

Adjustments to GAAP research and development expense used to calculate research and development expense, adjusted for non-GAAP items, include the following: $10.0 million for an upfront payment for technology that has not achieved regulatory approval, a $21.0 million charge related to the modification of certain employee stock options in connection with a restructuring plan and $0.1 million of termination benefits related to the phased closure of the Arklow, Ireland breast implant manufacturing plant in 2009; $68.7 million for upfront payments for technologies that have not achieved regulatory approval and $0.3 million of termination benefits related to the phased closure of the Arklow, Ireland breast implant manufacturing plant in 2008; $72.0 million of in-process research and development expense related to the EndoArt acquisition in 2007; $579.3 million of in-process research and development expense related to the Inamed acquisition, $0.2 million of Inamed integration and transition costs and $0.5 million of transition/duplicate operating expenses in 2006; $1.5 million of transition/duplicate operating expenses and a $3.0 million buy-out of a license agreement in 2005; $458.0 million of in-process research and development expense related to the acquisitions of Bardeen Sciences Company LLC and Oculex Pharmaceuticals, Inc. in 2003; $0.7 million of duplicate operating expenses and a $4.0 million charge related to a collaboration agreement in 2002; and $40.0 million of in-process research and development expense related to the acquisition of Allergan Specialty Therapeutics, Inc. in 2001. GAAP research and development expense was $706.0 million, $797.9 million, $718.1 million, $1,055.5 million, $388.3 million, $342.9 million, $762.6 million, $232.7 million and $227.5 million in 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002 and 2001, respectively. GAAP research and development expense growth (decline) was (12%), 11%, (32%), 172%, 13%, (55%), 227%, 3% and 37% for 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002 and 2001, respectively.

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March 2010 AllerganA Specialist in the Biopharmaceutical & Medical Device Industries


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