Creating Opportunities Through Specialization
`A B R E A K T H R O U G H Y E A R I N R & D
`
`2 0 1 0
`
`A N N U A L R E P O R T
`
`allergan annual report 2010
`
`APOTEX 1054, pg. 1
`
`

`

`2010: A Milestone in Allergan’s History;
`A Breakthrough Year in R&D
`
`APOTEX 1054, pg. 2
`
`

`

`Research and development: The search for something new and
`
`useful has driven Allergan’s evolution since 1950, when Gavin
`
`Herbert, Sr., began producing and marketing an anti-allergy nose
`
`drop invented by his friend, chemist Stanley Bly. They saw a need.
`
`They created a solution. And they launched a company that then
`
`focused on the eye care market, which was overlooked by the rest
`
`of the pharmaceutical industry at the time.
`
`Today, Allergan focuses on six distinct markets, and we believe
`
`our approach to specialization initiated 60 years ago remains
`
`the key to the growth and success we’ve had over the past six
`
`decades. At the heart of our specialized focus is Research and
`
`Development (R&D), which represents a critical component
`
`of Allergan’s values and culture. R&D fills our pipeline and
`
`fuels our growth by finding new opportunities to help patients
`
`in areas of substantial unmet need.
`
`This year, our R&D efforts resulted in 12 significant product
`
`approvals, bringing new and meaningful treatment options to
`
`patients around the world.
`
`As we celebrate this important achievement, we also use the
`
`occasion of our 60-year anniversary to reflect on what makes
`
`Allergan – a multi-specialty company – special.
`
`Allergan 2010 Annual Report / 1
`
`APOTEX 1054, pg. 3
`
`

`

`
`
`APOTEX 1054, pg. 4
`
`APOTEX 1054, pg. 4
`
`

`

`An Extraordinary Past. An Exciting Future
`G A V I N S . H E R B E R T, J R ., R E F L E C T S O N A L L E R G A N ’ S E V O L U T I O N
`
`In 1957, at the age of 25, Gavin S. Herbert, Jr., became president of Allergan, the company
`founded by his father in 1950. Allergan had just $100,000 in annual revenues, but
`Herbert had big ideas – and the capacity to turn ideas into results. He served as Allergan’s
`CEO for 30 years, was Chairman of the Board of Directors from 1977 to 1996, and
`served as Chairman Emeritus from 1996 until his retirement from the Board in
`May 2011. He has continued his association with Allergan by joining the Board of the
`Allergan Foundation. Under Herbert’s 60 years of leadership, Allergan evolved from
`a regional eye care company, to a national company, to a multi-specialty company with
`a worldwide presence.
`
`On focus: “My father, Gavin Herbert, Sr., owned a chain of
`drug stores and started Allergan with a few new ophthalmic
`products. But he didn’t see how we could compete with the
`large pharmaceutical companies. Well, that made me dig in
`my heels! The way I saw it, the big companies were overlooking
`the ophthalmology market. So, I had to convince my father
`we could build a good business by focusing on this niche
`and working with thought leaders to create innovative eye
`care products.”
`On optimism: “When we broke ground in Orange County
`in 1960, we acquired 24 acres for $1 million, at a time when
`our sales were just around $6 million. We created a master
`plan for the site, and we predicted that one day we would
`expand globally. But when I think back, not even in my
`wildest dreams did I envision how Allergan would grow into
`what it’s become today.”
`On the value of listening: “I always loved talking with the
`researchers active in our fi elds and the doctors who used our
`products. I met with physicians constantly, often over the
`weekend, when they had more time to talk, to fi nd out what
`their patients needed and to learn how we could make our
`products more effective. A lot of our ideas came from those
`conversations. We listened and we responded, as fast as we
`could – and Allergan remains nimble and agile today.”
`On building a team: “I realized early on that I didn’t know
`enough about this business. I needed to surround myself with
`talent, in everything from fi nance and marketing to research
`and development. One of my early priorities was to identify
`smart, experienced people and lure them out to Orange
`County. I was smart enough – or lucky enough – to pick out
`really good people. Getting the right people is everything!
`And that continues to be the case at Allergan.”
`
`On leadership and constancy: “I’m proud of the fact that
`during the past 60 years, Allergan has had just two CEOs
`after me: Bill Shepherd and current CEO David Pyott. I think
`this has helped us stay focused on what we do best – staying
`close to the medical community and addressing unmet patient
`needs within our specialties.”
`On specialization and serendipity: “Ophthalmology was our
`fi rst specialty, followed by dermatology. We found that many
`of the corticosteroids and compounds we developed for eye
`care could also be applied to medical dermatology. But seren-
`dipity is important and has led us to many new opportunities.
`Who, after all, could anticipate BOTOX® Cosmetic? We were
`initially interested in BOTOX® because it was used to treat
`a few rare eye conditions. Then we started to discover other
`applications for it, and today it’s a cornerstone of Allergan’s
`Neurosciences and Medical Aesthetics specialties. Today,
`Allergan is always looking for new ideas within its specialties,
`but always open to the unforeseen opportunities too, as long
`as they make strategic sense.”
`On Allergan’s future: “I have been actively involved with
`Allergan’s Research and Development committee, and that’s
`where the future of Allergan is being created. Three things give
`me confi dence: the quality of people, the ability to turn things
`around fast and a robust product pipeline. We are exploring
`a lot of promising therapies we believe will be able to treat
`conditions in patients in all of our specialties. I often cannot
`believe what Allergan has become over the past 60 years, but I
`am confi dent the next 60 will be good ones.”
`
`Sincerely,
`
`Gavin S. Herbert, Jr.
`Founder of Allergan & Chairman Emeritus since 1996
`
`Allergan 2010 Annual Report / 3
`
`APOTEX 1054, pg. 5
`
`

`

`To Our Investors
`
`The Value of Specialization
`Allergan is a unique company in many ways. We have a high
`degree of specialization and focus in the medical specialties
`that we serve. Our deep insight into doctors’ needs – not only
`in the United States but worldwide – to improve the care of
`their patients, coupled with continuous strong investment
`into innovation, certainly paid rich dividends. In fact, 2010
`was the best year in our 60-year history in terms of the number
`of major product approvals by the U.S. Food and Drug
`Administration (FDA) and other regulatory agencies.
`
`DIVERSIFIED BUSINESS SEGMENTS
`FY 2010 $4.8 Billion (+8%)
`
`71% Reimbursed
`29% Cash Pay
`
`15%
`
`BOTOX® Therapeutic
`
`47% Ophthalmology
`
`15%
`
`BOTOX® Cosmetic
`
`2%
`
`LATISSE®
`
`6%
`
`Facial Aesthetics
`
`Allergan has a unique set of diverse businesses, spanning
`biologics, pharmaceuticals, medical devices and over-the-
`counter consumer products, with our efforts concentrated on
`six distinct specialties, enabling us to preserve our focus while
`offering revenue diversity to stakeholders. Compared to most
`health care companies, Allergan is unusual in its mix of both
`reimbursed treatments and cash-pay products (paid for out-of-
`pocket by the patient). In 2010, this was an ideal position, with
`recovery in the industrialized economies of North America
`and Western Europe benefi ting these cash-pay businesses and
`offsetting new cost pressures from U.S. health care reform and containment of government spending in Europe. In
`each of our specialty fi elds, we established or retained the No. 1 or No. 2 market share position with the exception of
`urology – a business we entered only recently but in which we have already secured the No. 4 position in the U.S.
`market. In the coming years, we expect Allergan to be recognized as the emerging company in this specialty, given the
`promising strength and breadth of our pipeline.
`
`6%
`
`5%
`
`Breast Aesthetics
`
`1% 3%
`
`Urologics
`
`Obesity Intervention
`Skin Care
`
`Allergan is also far advanced compared to its specialized peers in biotech or medical devices in terms of its global
`geographical reach, rounding out historically strong market positions in highly industrialized countries. Today, we
`have sales and marketing subsidiaries in 36 countries, and in the last two years we have established direct operations in
`markets such as the Philippines, Turkey and Poland, with further expansion planned in other emerging markets. This
`approach is not new to Allergan, as we have had direct operations in India and Brazil for more than 20 years. In China
`and Japan, we reacquired the distribution rights to BOTOX® for aesthetic use from GlaxoSmithKline. Supplemented
`by distributors, Allergan today is present in more than 100 countries.
`
`Our multi-specialty focus and global presence are enhanced by the advantage of an ideal size – large enough to lead
`R&D investment in our specialist fi elds and invest in the creation of markets and product categories, yet small enough to
`move quickly and nimbly. We foster agility by assigning accountability to small management teams with a unique blend
`of skill sets from the pharmaceutical, medical device and consumer industries. Over and over again, Allergan has led
`the creation of new markets such as medical aesthetics with the launch of BOTOX® Cosmetic; JUVÉDERM® XC,
`
`4 / Allergan 2010 Annual Report
`
`APOTEX 1054, pg. 6
`
`

`

`“2010 was the best year in our 60 - year history in terms of number of major product approvals by the
`U.S. Food and Drug Administration and other regulatory agencies .”
`David E.I. Pyott, CEO
`
`our dermal fi ller containing lidocaine; and LATISSE®, the fi rst and only FDA-approved product to grow eyelashes.
`Another example is our development of the chronic dry eye market with RESTASIS®, the fi rst and only prescription
`therapy for this condition. Now, with the approval of BOTOX® for chronic migraine patients by the FDA and the U.K.
`government, we are again in a special position, not only to alleviate the suffering of millions of patients but also to create
`a new category as the only focal therapy for the prophylaxis of chronic migraine.
`
`Given our closeness to our customers and our in-depth knowledge of the markets in which we operate, execution is a key
`characteristic of our success. Our research knowledge in our areas of expertise allows us to generate a much higher than
`average rate of success in moving in-house developed compounds from pre-clinical research through to Phase III registration
`studies and eventual regulatory approval. It also enables Allergan to attract new technology for in-licensing from third parties.
`
`Today, the pharmaceutical industry is heavily challenged by expiring patents and the entry of generics. Allergan is uniquely
`positioned to handle competition from generics. BOTOX® is one of the largest biological pharmaceuticals in both its
`molecular weight and complexity. While the European Medicines Evaluations Agency has approved a limited number of
`biosimilars and the FDA has the mandate from Congress to establish a related approval pathway, a biosimilar of BOTOX® will
`require considerable resources and time to develop. In ophthalmic pharmaceuticals, we have applied innovation to optimize
`existing drug formulations, where pH and concentration of active ingredients make a substantial difference in the product’s
`risk-benefi t profi le. These efforts have resulted in strong effi cacy and improved tolerability for our glaucoma products, including
`ALPHAGAN® P 0.1%, LUMIGAN® 0.01% and COMBIGAN®, welcomed by doctors and their glaucoma patients.
`
`Lastly, I would be remiss if I did not acknowledge the impact of our unique culture, a blend of tradition and bold ,
`forward-looking innovation. This past year, we celebrated the 60th anniversary of the founding of Allergan by Gavin
`Herbert and his father, and a long tradition of fi rst-in-class products, especially in eye care. Only three CEOs have led
`the company, a testament to continuity, yet balanced by a constant search for discovery, new sources of growth and ways
`to improve our business processes and operating effi ciency. Also, as the environment in which we operate continues to
`evolve, it is imperative we continue to bolster our efforts to ensure our people and our practices are refl ective of the
`highest levels of ethics and integrity and are in full compliance with the laws that govern our business. In 2010, we
`further enhanced our compliance program in the United States by creating increasingly rigorous processes, supported
`by new technology, to help ensure continuing compliance as a top priority for all employees and Allergan stakeholders.
`
`We believe that all these unique elements add up to a sustainable growth strategy for Allergan, buoyed by global mega-
`trends in the fi eld of health care: the needs of an aging population, the epidemic of obesity worldwide and its linkages to the
`burden of diabetes and cardiovascular disease, as well as consumers’ desires worldwide to look as good as they feel.
`
`Strong Performance in 2010
`In 2010, Allergan grew sales by 8.4 percent in U.S. Dollars and 7.5 percent in local currencies and increased adjusted
`Diluted Earnings per Share by 13.7 percent benefi ting from cost reduction and operating effi ciency programs we had
`instituted in the depths of the recession. [A Reconciliation between Generally Accepted Accounting Principles [GAAP]
`and adjusted Diluted EPS is on pages 10-11.] Adjusted cash fl ow from operations was a strong $1,058 million(1) due to
`operating performance and strong balance sheet management.
`
`Economic Recovery and Market
`Share Gains
`Our sales growth was boosted by a recovery
`in our cash-pay businesses as highly indus-
`trialized countries recovered from the recess-
`sion and markets in East Asia, India and
`Brazil enjoyed booming conditions. In fact,
`all of our markets, with the exception of
`obesity intervention, are now at levels
`above 2008 – in part due to our decision to
`increase investment in direct-to-consumer
`advertising and educational programs in
`the tough economic climate. Allergan’s
`growth was further boosted by market
`share gains in almost all businesses. In
`2010, JUVÉDERM® captured the No. 1
`position worldwide in the dermal fi ller market with the launch of our new formulation containing lidocaine, as well
`as JUVÉDERM VOLUMA®, a volumizing fi ller approved in Europe, Canada, Australia, Latin America and many
`Asian markets. The obesity intervention market is still suffering declines due to reimbursement restrictions imposed
`by U.S. health care plans, as well as the collapse in the cash-pay segment of the market, where patients pay out-of-pocket
`for LAP-BAND® surgery and many procedures are funded on credit. We believe that the volume of obesity surgeries
`is correlated with levels of unemployment. During 2010, we were able to stabilize our U.S. market share in obesity
`intervention in excess of 70 percent as Ethicon, which launched a gastric band in 2008, moved its resources to other
`surgical intervention products.
`
`Challenges
`In 2010, we successfully dealt with several headwinds to sales growth. Most notably, in the United States we faced a
`full year of generic competition to our ophthalmic products, including ALPHAGAN® and ACULAR®; a full year of
`competition for BOTOX® Cosmetic from Dysport ®; and the entry of Dysport® for the therapeutic indication of cervical
`dystonia. In Europe, we saw the launches of aesthetic neuromodulators from Galderma and Merz. Even with these
`entries, global market share for BOTOX® in the neuromodulator market remained high at 79 percent in 2010.(2)
`
`Outlook for Growth Driven by Innovation
`With a record number of regulatory approvals in 2010, prospects for growth in the coming years are strong. In the
`pharmaceutical industry it is typical for a newly approved product to require 5-6 years to reach peak global sales.
`Almost all of our global markets today are generating double-digit growth rates.
`
`With BOTOX® , we have multiple opportunities to further expand its therapeutic potential – which accounted for approxi-
`mately 51 percent of the product’s total sales in 2010. With the pending approvals of BOTOX® for chronic migraine in
`several countries, and our clinical programs for overactive bladder as well as benign prostatic hyperplasia, the therapeutic
`franchise for BOTOX® where we have limited competition will take on even greater importance in the sales mix.
`
`(1) Adjusted cash fl ow from operating activities for 2010 excludes $594 million of payments related to the global settlement with the U.S. Department of Justice. GAAP cash fl ow from operating activities for 2010 was $464 million.
`
`(2) MAT Q3 2010. Internal estimates, including public information (earnings releases, 10Ks, 10Qs), Allergan internal data, syndicated marketing research reports, analyst reports, internet searches, competitive intelligence, etc.
`(3) MAT Q3 2010. Neuromodulators – Allergan estimates; Dermal Fillers/Breast Aesthetics/Obesity Intervention – Mixture of public information (earnings releases, 10Ks, 10Qs), D&B, Allergan internal data, syndicated
`marketing research reports, analyst reports, internet searches, competitive intelligence.
`
`Allergan 2010 Annual Report / 5
`
`6 / Allergan 2010 Annual Report
`
`APOTEX 1054, pg. 7
`
`

`

`F I N A N C I A L S U M M A R Y
`
`{
`
`WORLDWIDE MARKET IN RECOVERY
`Most Markets above pre-recession levels
`
`$1,824
`
` $1,687
`
` $1,642
`
` $1,479
`
`$823
`
` $767
`
` $791
`
` $774
`
`$764
`
` $646
`
` $686
`
` $674
`
`$366
`
` $361
`
` $381
`
` $319
`
` $2,000
`
`Economic Recovery and Market
`Share Gains
`Our sales growth was boosted by a recovery
`in our cash-pay businesses as highly indus-
`trialized countries recovered from the recess-
`sion and markets in East Asia, India and
`Brazil enjoyed booming conditions. In fact,
`all of our markets, with the exception of
`obesity intervention, are now at levels
`above 2008 – in part due to our decision to
`increase investment in direct-to-consumer
`advertising and educational programs in
`the tough economic climate. Allergan’s
`growth was further boosted by market
`share gains in almost all businesses. In
`2010, JUVÉDERM® captured the No. 1
`position worldwide in the dermal fi ller market with the launch of our new formulation containing lidocaine, as well
`as JUVÉDERM VOLUMA®, a volumizing fi ller approved in Europe, Canada, Australia, Latin America and many
`Asian markets. The obesity intervention market is still suffering declines due to reimbursement restrictions imposed
`by U.S. health care plans, as well as the collapse in the cash-pay segment of the market, where patients pay out-of-pocket
`for LAP-BAND® surgery and many procedures are funded on credit. We believe that the volume of obesity surgeries
`is correlated with levels of unemployment. During 2010, we were able to stabilize our U.S. market share in obesity
`intervention in excess of 70 percent as Ethicon, which launched a gastric band in 2008, moved its resources to other
`surgical intervention products.
`
`07 08 09 Q3 10(3)
`Obesity Intervention
`
`07 08 09 Q3 10(3)
`Dermal Fillers
`
`07 08 09 Q3 10(3)
`Breast Aesthetics
`
`07 08 09 Q3 10(3)
`Neuromodulators
`
` $1,500
`
` $1,000
`
` $500
`
`Worldwide Market Size (in millions)
`
`Challenges
`In 2010, we successfully dealt with several headwinds to sales growth. Most notably, in the United States we faced a
`full year of generic competition to our ophthalmic products, including ALPHAGAN® and ACULAR®; a full year of
`competition for BOTOX® Cosmetic from Dysport ®; and the entry of Dysport® for the therapeutic indication of cervical
`dystonia. In Europe, we saw the launches of aesthetic neuromodulators from Galderma and Merz. Even with these
`entries, global market share for BOTOX® in the neuromodulator market remained high at 79 percent in 2010.(2)
`
`Outlook for Growth Driven by Innovation
`With a record number of regulatory approvals in 2010, prospects for growth in the coming years are strong. In the
`pharmaceutical industry it is typical for a newly approved product to require 5-6 years to reach peak global sales.
`Almost all of our global markets today are generating double-digit growth rates.
`
`With BOTOX® , we have multiple opportunities to further expand its therapeutic potential – which accounted for approxi-
`mately 51 percent of the product’s total sales in 2010. With the pending approvals of BOTOX® for chronic migraine in
`several countries, and our clinical programs for overactive bladder as well as benign prostatic hyperplasia, the therapeutic
`franchise for BOTOX® where we have limited competition will take on even greater importance in the sales mix.
`
`(2) MAT Q3 2010. Internal estimates, including public information (earnings releases, 10Ks, 10Qs), Allergan internal data, syndicated marketing research reports, analyst reports, internet searches, competitive intelligence, etc.
`(3) MAT Q3 2010. Neuromodulators – Allergan estimates; Dermal Fillers/Breast Aesthetics/Obesity Intervention – Mixture of public information (earnings releases, 10Ks, 10Qs), D&B, Allergan internal data, syndicated
`marketing research reports, analyst reports, internet searches, competitive intelligence.
`
`Allergan 2010 Annual Report / 5
`
`6 / Allergan 2010 Annual Report
`
`APOTEX 1054, pg. 8
`
`

`

`}
`
`C O N D E N S E D C O N S O L I D A T E D S T A T E M E N T S O F O P E R A T I O N S A N D
`R E C O N C I L I A T I O N O F N O N - G A A P A D J U S T M E N T S
`
`2010 Accolades, Agreements, Awards and Filings
`
`In our ophthalmology franchise, RESTASIS® grew signifi cantly and is expected to become in 2011 the largest single
`prescription ophthalmic pharmaceutical in the United States, given the prevalence of chronic dry eye and the growing
`acceptance by more and more ophthalmologists of the advantages of early intervention in the treatment of chronic dry eye.
`RESTASIS® was also launched in Canada at year end. A key task is to secure approval of RESTASIS® in Europe. In
`the United States and Europe, our latest-generation formulation LUMIGAN® 0.01% enjoyed strong uptake due to
`its powerful ability to lower intraocular pressure accompanied by lower rates of hyperemia, when compared to the
`original LUMIGAN® formulation. In Canada, ophthalmologists’ appreciation of the new formulation has been so
`strong that we have announced the discontinuation of the original formula in early 2011.
`
`Today, retina conditions are the leading cause of blindness in highly industrialized countries, and retina is the
`second-largest segment in the ophthalmic pharmaceutical market by value. OZURDEX®, indicated for retinal vein
`occlusion (RVO) and uveitis in the United States and for RVO in Europe, is our entry point into this fast-growing
`segment of the market. In order to further boost our No. 2 global position in ophthalmology, we licensed from
`Johnson & Johnson the worldwide rights to LASTACAFT™ , already approved in the United States, which will give
`us a highly competitive product in the ocular allergy market.
`
`With our robust strategic position and track record of turning R&D investment into innovation, we will continue
`to invest strongly in discovery and clinical development, supplementing our internal efforts with selective licensing
`and acquisition of technology. A recent example is our 2010 acquisition of Serica Technologies, which provides a
`differentiated silk scaffold technology and a potentially revolutionizing approach to breast reconstruction surgery.
`
`Pursuit of Excellence
`Success fuels continuing energy, drives greater motivation and ideas, and in turn delivers continued strong performance.
`With attention to detail – from customer service to R&D execution – we are constantly looking for ways to improve
`our business model and advance patient care. We have emerged from the recession with an improved structure and
`even higher degree of operational focus, and are applying the same disciplines to absorb the costs of health care reform.
`This includes saving natural resources, an effort for which we have been recognized as one of the Greenest Companies
`in America. With our proven track record of success and commitment to our people, we continue to attract and retain
`some of the best employees in our industry.
`
`As individual and team contributions continue to lie at the heart of any company’s success, on behalf of our management
`team and our Board of Directors, I would like to thank our employees around the world for their many great results and
`dedication in 2010. It is a pleasure and honor serving you as Allergan’s CEO and I look forward to a continued strong 2011.
`
`Sincerely,
`
`David E.I. Pyott, CBE
`Chairman of the Board & Chief Executive Offi cer
`
`First Quarter
`• Allergan and Bristol-Myers Squibb Co. enter global agreement to develop investigative drugs to treat neuropathic pain
`• Harvard Business Review ranks Allergan CEO David Pyott No. 50 among 100 best-performing CEOs in the world
`• Allergan reacquires rights from GlaxoSmithKline to develop and sell BOTOX® (onabotulinumtoxinA) for current and future
`cosmetic indications in China and Japan
`• Allergan completes acquisition of Serica Technologies, a company with silk scaffold technology for use in tissue regeneration,
`especially applicable to breast reconstruction
`• Allergan receives U.S. Environmental Protection Agency Energy Star certifi cation for manufacturing facility in Waco, Texas
`and administrative buildings in Irvine, California.
`• Allergan and Serenity Pharmaceuticals enter global agreement for development of investigational drug to treat nocturia,
`a common yet often under-diagnosed urological disorder in adults characterized by frequent urination at night time
`
`Second Quarter
`• Allergan receives CEO Cancer Gold Standard™ Accreditation, recognizing its commitment to reduce cancer risk among
`employees through screenings, early detection and healthy changes in lifestyle and in the workplace
`• Allergan submits dossiers for BOTOX® for Chronic Migraine in Canada and Brazil
`• Allergan executives ring the New York Stock Exchange closing bell to celebrate the Company’s 60th anniversary
`• Allergan CFO Jeff Edwards named one of America’s best CFOs by Institutional Investor magazine
`• Allergan ranked No. 1 pharmaceutical manufacturer by pharmacy benefi t management companies for its expertise in simplifying
`prescription and reimbursement processes for physicians and programs that help patients afford the medications they need
`• Allergan named among “the best in investor relations” within the Pharmaceuticals sector by Institutional Investor magazine
`• Allergan Canada Listed Among 50 Best Employers in the Greater Toronto Area by The Toronto Star
`
`Third Quarter
`• Allergan establishes direct sales and marketing operations in Poland and Turkey
`• Allergan fi les BOTOX® for Chronic Migraine with the European Medicines Agency through the Mutual Recognition
`procedure, and submits dossiers in Australia, New Zealand, Switzerland and certain Latin American countries
`• Allergan licenses worldwide rights for an ophthalmic allergy product, LASTACAFT™ (alcaftadine ophthalmic solution),
`from Vistakon, a division of Johnson & Johnson, fortifying Allergan’s presence in the $1.3 billion worldwide allergy market
`• Allergan ranked No. 3 in the health care sector on the Carbon Disclosure Leadership Index (CDLI) and ranked No. 15
`out of 300 companies on the Maplecroft Bloomberg Sustainability Index
`• Fierce Biotech, the biotechnology industry’s daily online newsletter, selects Allergan Board member Dr. Deborah Dunsire
`as one of the Top 10 Women in Biotech
`
`Fourth Quarter
`• Allergan fi les a supplemental Biologics License Application with the FDA for BOTOX® for the treatment of neurogenic
`detrusor overactivity resulting from neurogenic bladder
`• Allergan ranked No. 19 overall and No. 3 pharmaceutical company on Newsweek ’s prestigious 100 Greenest
`Companies in America list
`• Federal University of São Paulo and Instituto da Visão bestow Brazil’s most prestigious award in Latin American
`Ophthalmology, the Moacyr E. Alvaro Medal, to David Pyott for services to the eye care specialty in Brazil and worldwide
`• RESTASIS® Ophthalmic Emulsion program, My Tears/My Rewards®, receives the Medical Marketing & Media Gold
`Award for communication program that improved patient adherence to chronic dry eye therapy by 30 percent
`
`Allergan 2010 Annual Report / 7
`
`12 / Allergan 2010 Annual Report
`
`APOTEX 1054, pg. 9
`
`

`

` Year Ended December 31,
`
`2010
`
`2009
`
`2008
`
`2007
`
`2006
`
`COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
`
`$140
`
`$120
`
`$100
`
`$80
`
`$60
`
`$40
`
`$20
`
`$0
`
`12/05 12/06 12/07 12/ 08 12/09 12/10
`
`$ 4,819.6
`4,919.4
`804.6
`4.9
`—
`4.3
`$ 0.6
`
`$ 4,447.6
`4,503.6
`706.0
`623.8
`—
`2.5
`$ 621.3
`
`$ 4,339.7
` 4,403.4
`797.9
`564.7
`—
`1.6
`$ 563.1
`
`$ 3,879.0
` 3,938.9
`718.1
` 487.0
`)
` (1.7
`0.5
`$ 484.8
`
`$ 3,010.1
`3,063.3
`1,055.5
`)
` (127.0
`—
`0.4
`$ (127.4
`)
`
`$
`
`0.00
`
`$ 2.05
`
`$ 1.85
`
`$ 1.59
`
`$ (0.43
`
`) )
`
`$ 0.00
`
`$ 2.03
`
`$ 1.84
`
`$ 1.57
`
`$ (0.43
`
`$ 0.20
`
`$ 0.20
`
`$ 0.20
`
`$ 0.20
`
`$ 0.20
`
`$ 973.9
`
`$ 849.8
`
`$ 786.5
`
`$ 672.9
`
`$ 547.2
`
`$ 2.59
`
`Financial Summary
`
`In millions, except per share data
`
`STATEMENT OF OPERATIONS HIGHLIGHTS
`(As reported under U.S. GAAP)
`
`
`
`
`
`Product net sales
`
`
`
`Total revenues
`
`
`Research and development
`
`Earnings (loss) from continuing operations
`
`Loss from discontinued operations
`Net earnings attributable to noncontrolling interest
`Net earnings (loss) attributable to Allergan, Inc.
`
`Net basic earnings (loss) per share attributable to
`Allergan, Inc. stockholders
`
`
`Net diluted earnings (loss) per share attributable to
`Allergan, Inc. stockholders
`
`
`
`Dividends per share
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`PHARMACEUTICAL SALES GROWTH
`(in millions of dollars)
`
`+16%
`
` $2,638.5
`
`
`
`The adjusted amounts in 2008 exclude a $2.4 million U.S. state and federal deferred tax benefi t related to the legal entity integration of the acquisitions of Esprit Pharma Holding Company, Inc. (Esprit) and
`Inamed Corporation (Inamed), a $3.8 million negative tax impact from non-deductible losses associated with the liquidation of corporate-owned life insurance contracts, and the after-tax effects of the follow-
`ing: 1) $129.6 million amortization of certain acquired intangible assets related to business combinations, asset acquisitions and product licenses; 2) $68.7 million for upfront payments for technologies that
`have not achieved regulatory approval; 3) $27.2 million restructuring charges and $10.0 million of termination benefi ts, asset impairments and accelerated depreciation costs related to the phased closure of
`the Arklow, Ireland breast implant manufacturing plant; 4) $3.4 million restructuring charges and $0.9 million gain on sale of technology and fi xed assets related to the phased closure of the Fremont, California
`collagen manufacturing plant; 5) $6.6 million of restructuring charges and $1.5 million of integration and transition costs related to the acquisition of Cornéal; 6) $4.1 million of restructuring charges related to
`the streamlining of the Company’s European operations and the acquisition of EndoArt SA (EndoArt); 7) $11.7 million rollout of fair market value inventory adjustment and $0.7 million of integration and transi-
`tion costs related to the acquisition of Esprit; 8) $25.7 million of external costs associated with responding to the DOJ subpoena; 9) $13.2 million settlement related to the termination of a distribution agreement
`in Korea; 10) $5.6 million impairment of intangible asset related to the phase-out of a collagen product; 11) $0.6 million of transaction costs related to ACZONE®; 12) $24.9 million non-cash interest expense
`associated with amortization of convertible debt discount and related non-cash selling, general and administrative expenses of $0.1 million; and 13) $14.8 million unrealized gain on derivative instruments.
`The adjusted amounts in 2007 exclude loss from discontinued operations of $1.7 million, the favorable recovery of $1.6 million in previously paid state income taxes, and the after-tax effects of the following:
`1) $72.0 million charge for in-process research and development related to the acquisition of EndoArt; 2)