Restasis Kicker Drives
`Strong 2Q Upside Surprise
`
`- Better-Than-Expected 20 Results: Allergan reported better-than-
`expected second quarter earnings of $0.78 per share ($0.05
`above our estimate) on higher product sales of $591 M ($37.4 M
`above CSFB estimate). Core eye care sales tracked better-than-
`expected at $325 million ($19 M above CSFB estimate), largely
`based on exceptional Restasis (dry eye) sales of $46.3 M (up
`130% and $14.3 M above CSFB estimate). Restasis realized sales
`tracked well above IMS 60% volume growth indicators,
`supported by new DTC advertising campaign momentum. Botox
`also registered strong sales of $212.5 M, up 20% vs. only 17% in
`10 and beating CSFB targets by $7.3 M. Botox has also
`benefited from re-invigorated DTC campaign initiatives.
`
`Core Portfolio Strength: New promotional campaigns are
`effectively driving better-than-expected gains across Allergan’s
`core pharmaceutical portfolio. Botox has re-established strength
`in core therapeutic markets, and appears to have strengthened
`its position in European cosmetic markets. Restasis has also
`emerged as a solid incremental earnings driver, with
`management elevating 2005 sales forecasts to a range of $165-
`$185 million.
`
`Earnings Revision and Target Price Adjustment: We are raising
`our 2005 earnings forecast by $0.04 to a new level of $3.22 to
`reflect second quarter upside. We are also adjusting upward our
`earnings forecasts by $0.08 to $3.73 in 06 and by $0.11 to $4.30
`in 07 due to an elevated 05 base. Upward earnings revisions also
`support an upward revision in our target price from a prior level
`of $88 to a new level of $95.
`
`While Allergan has re-invigorated growth behind key eye care
`products, our Neutral stance reflects on-going concerns over
`Botox growth reliance. We estimate Botox represents over 50%
`of Allergan’s core earnings base.
`
`Allergan is a leading research-based specialty pharmaceutical company and is among the global leaders in
`ophthalmology (prescription drugs, OTC solutions, intraocular lenses).
`
`research team
`
`Jessica Li, Ph.D
`Ken Kulju
`Research Analyst Research Analyst
`212 538 8391
`212 538 2586
`kenneth.l(ulju@cslb.com
`]essica.|i.2@csIb.com
`
`Tania Dimitrova
`Research Analyst
`212 325 3297
`lania.dimilrova@cs1b.com
`
`A I
`
`I.
`
`I I
`
`I < J I
`
`. I I
`
`n
`*1
`
`J I
`
`. I 0 < J l
`
`. I I
`
`I < J I
`
`. I l
`
`l 4 J I
`
`.
`
`CREDIT FIRST
`SUISSE BOSTON
`Equity Research United States
`
`Allergan Inc
`
`NEUTRAL*
`85.42 US$
`95.00 US$
`86.99 - 67.67
`11,468.06
`11,468.06
`Americas I United States
`
`Rating
`Price (26 Jul 05)
`Target price (12 months)
`52 week high — low
`Market cap. (US$m)
`Enterprise value (US$m)
`Region I Country
`Sector
`Analyst's Coverage Universe
`Weighting (vs. broad market)
`27 July 2005
`Date
`* Stock ratings are relative to the coverage universe in
`each analysts or each team's respective sector.
`
`Specialty Pharmaceuticals
`Specialty Pharmaceuticals
`OVERWEIGHT
`
`Price I Indexed S&P 500
`Daily Jul 27, 2004 - Jul 26, 2005, 7/27/04 : US$72.
`
`Oct-04
`ul-04
`: Price
`On 07/26/05 the S&P 500 index closed at 1,236.79
`
`Jan—05
`
`Apr-05
`Indexed S&P 500
`
`Year
`EPS (CSFB adj., US$)
`Prev. EPS (US$)
`P/E (x)
`P/E rel. (%)
`Q1 EPS
`Q2
`Q3
`Q4
`
`Number of shares (m)
`
`1204A
`2.77
`
`30.8
`168.4
`0.60
`0.64
`0.67
`0.86
`
`12/05E
`3.22
`3.18
`26.5
`161.7
`0.76
`0.78
`0.78
`0.89
`
`IC (12/05E, US$m)
`
`134.26
`
`12/06E
`3.73
`3.65
`22.9
`151.7
`0.85
`0.92
`0.96
`1.00
`
`1,819.53
`
`BV/Share (Current, US$)
`
`EV/IC (x)
`
`Net Debt (Current, US$m)
`-167.0
`Net debt/Total cap. (Current)
`5.0%
`
`Dividend (12/04A, US$m)
`
`Dividend yield
`
`6.3
`
`0.39
`
`0.5%
`12/06E
`2,399.3
`
`1204A
`2,045.7
`549.5
`
`12/05E
`2,268.2
`610.5
`
`Year
`Revenues (US$m)
`EBITDA (US$m)
`OCFPS (US$)
`P/OCF (x)
`16.8
`18.8
`EV/EBITDA (x)
`ROIC
`13.2%
`13.2%
`Source: Corrparry data, CREDIT SUISSE FIRST BOSTON (CSFB) estimates
`
`IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS ARE IN THE DISCLOSURE APPENDIX. U.S. Disclosure: CSFB does and
`seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest
`that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Customers
`of CSFB in the United States can receive independent, third party research on the company or companies covered in this report, at no cost to them,
`where such research is available. Customers can access this independent research at www.csfb.com/ir or call 1 877 291 2683 or email
`equity.research@csIb.com to request a copy of this research.
`
`1
`
`ALL 2047
`MYLAN PHARMACEUTICALS V. ALLERGAN
`IPR2016-01128
`
`

`

`Allergan Inc
`
`27 July 2005
`
`Investment Summary
`
`Allergan reported better—than—expected second quarter earnings of $0.78 per share
`
`($0.05 above our estimate) on higher product sales of $591 M ($37.4 M above CSFB
`
`estimate). Core eye care sales tracked better—than—expected at $325 million ($19 M
`
`above CSFB estimate), largely based on exceptional Restasis (dry eye) sales of $46.3
`
`M (up 130% and $14.3 M above CSFB estimate). Restasis realized sales tracked well
`
`above IMS 60% volume growth indicators, supported by new DTC advertising campaign
`
`momentum. Botox also registered strong sales of $212.5 M, up 20% vs. only 17% in 1Q
`
`and beating CSFB targets by $7.3 M. Botox has also benefited from re—invigorated DTC
`
`campaign initiatives.
`
`Exhibit 1: Allergan Variance Table
`
`Aller - an
`
`CSFB
`2Q05E
`
`Reported
`2Q05A
`
`Variance
`
`591.0
`
`325.0
`64.3
`61.5
`46.3
`212.5
`30.4
`
`94.1
`479.3
`81.1%
`
`240.7
`90.8
`
`147.8
`26.0%
`
`0.8
`44.6
`30.0%
`
`103.7
`0.78
`132.2
`
`$
`
`$
`$
`$
`$
`$
`
`$
`$
`
`$
`$
`
`$
`
`$
`$
`
`$
`$
`
`37.4
`
`19.0
`(0.7)
`(2.5)
`14.3
`7.3
`
`-
`27.0
`— 60 bs
`
`22.0
`7.2
`
`12.2
`
`- s
`
`(1.1)
`4.7
`+101 b
`
`s
`
`6.3
`0.05
`
`.
`
`.
`.
`.
`.
`.
`.
`
`$
`$
`
`$
`$
`
`$
`
`$
`$
`
`$
`$
`
`452.3
`81.7%
`
`218.7
`98.0
`
`135.6
`25.0%
`
`1.9
`39.9
`9.0%
`
`2
`
`97.4
`0.73
`132.6
`
`$
`$
`
`$ $
`
`$
`
`$
`$
`
`$
`$
`
`Total Product Sales
`
`Eye Care
`Alphagan (total)
`Lumigan Line
`Restasis
`Botox
`Skin Care
`
`Cost of Revenues
`
`Gross Profit
`Gross Marin
`
`SG&A
`R&D
`
`Operating Income
`0 -
`- ratin Mar in
`
`Other Income
`Taxes
`Rate
`
`Net Income
`EPS
`Shares
`
`Source: Company data, CSFB estimates
`
`Allergan Core Franchise Performance
`
`Restasis: Surprisingly Strong Sales in the Quarter
`
`Restasis remains in a strong growth mode. IMS prescription trends continue to point to
`
`robust on—going uptake for Restasis in severe dry eye therapy. Allergan has been
`
`leveraging this momentum with the start of new DTC advertising in both print and TV
`channels.
`
`Although Restasis total prescription trend in the quarter pointed to a 60% year—over—year
`
`growth rate, Allergan reported surprisingly strong sales of $46.3 million, a 130%
`
`increase from the same period last year. Allergan raised price for Restasis by 3.5% in
`
`February this year.
`
`2
`
`cnrsnrr FIRST
`surssrs BOSTON
`
`

`

`Allergan Inc
`
`27 July 2005
`
`To reflect higher—than—expected Restasis sales in the second quarter, we are moving up
`our Restasis sales forecast from $156 million to $172 million for 2005, and from $192
`
`million to $211 million in 2006.
`
`Exhibit 2:
`
`Restasis NRx and TRx Product Launch
`
`35.000 —
`
`30.000 —
`
`25.000 —
`
`20.000 —
`
`15.000 *
`
`10.000 —
`
`5.000 *
`
`
`
`4/14/034
`
`5/14/034
`
`6/14/03—
`
`7/14/03—
`
`8/14/034
`
`9/14/034
`
`3/14/03
`
`10/14/03—
`
`
`
`11/14/034
`
`
`
`12/14/034
`
`1/14/04—
`
`2/14/044
`
`3/14/044
`
`4/14/044
`
`5/14/04—
`
`6/14/044
`
`7/14/044
`
`8/14/04—
`
`9/14/044
`
`
`
`10/14/044
`
`11/14/04—
`
`
`
`12/14/044
`
`1/14/05—
`
`2/14/05—
`
`3/14/054
`
`4/14/05—
`
`5/14/05—
`
`6/14/054
`
`7/14/05A
`
`Source: Company data, CSFB estimates
`
`Exhibit 3:
`
`Restasis Weekly TRx YIY Growth
`
`
`
`
`
`12/14/04*
`
`
`
`10/14/04*
`
`
`
`11/14/04*
`
`Source: Company data, CSFB estimates
`
`CREDIT
`SUISSE
`
`FIRST
`BOSTON
`
`

`

`Allergan Inc
`
`27 July 2005
`
`Lumigan
`
`Allergan reported slightly lower sales generated from Lumigan at $61.5 million in the
`
`quarter. As shown in the relative growth chart below, the four—week moving average
`
`new prescription growth trends suggest Lumigan generating growth of about 10%—12%
`in volume terms.
`
`Exhibit 4:
`
`18% —
`
`Lumigan Y/Y NRx Growth (4-week moving average)
`
`
`
`4°/o —
`
`2°/o *
`
`0%
`
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`l
`<r
`LO
`Lo
`Lo
`no
`no
`no
`to
`L0
`Ln
`LO
`Ln
`LO
`La
`L!)
`<r
`<r
`<r
`<r
`<r
`<r
`<r
`<r
`<r
`0 o o o o o o o o o o o o o o o o o o o o o o o
`\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \
`o 0')
`l\
`.—
`LO
`on N to o <r
`l\
`1-
`<r
`no
`<r
`no
`.—
`no
`on
`to
`l\ o <r
`no
`8 E : B I E : fl : 3 > S N '— B : <\r : Q : Q : S R
`.—
`.—
`.—
`.—
`.—
`.-
`no
`0:
`1- o o .—
`.— N N
`1-
`N
`0')
`<r
`<r
`LO
`LO
`LO
`LO
`
`Source: Company data, CSFB estimates
`
`Alphagan/Alphagan P
`
`Allergan’s Alphagan franchise has been losing ground largely to Pfizer’s Xalatan. Chart
`
`3 shows year—over—year new prescription growth rates of Alphagan/Alphagan P slid to
`
`the negative territory since May. Management expressed confidence that the FDA will
`
`approve a new Alphagan product formulation, Alphagan—Z, shortly. This product
`
`conversion strategy is largely expected to sustain core Alphagan franchise sales in the
`
`face of generic challenges from A|con’s Falcon generics operation.
`
`4
`
`CREDIT FIRST
`SUISSE BOSTON
`
`

`

`Allergan Inc
`
`27 July 2005
`
`Exhibit 5:
`
`8%—
`
`6%—
`
`Alphagan/Alphagan P YIY NRx Growth (4-week moving average)
`
`4%— 12/17/04
`4 _4% ,
`
`_6% ,
`
`Source: Company data, CSFB estimates
`
`Exhibit 6: Xalatan Gaining Shares At the Expense of Alphagan Franchise
`
`Glaucoma Weekly NFIx Market Share
`—i—A|phagan (Allergan) —¢—A|phagan P (Allergan) —I—Total Alphagan
`—x— Lumigan (Allergan)
`—)|P Travatan (Alcon)
`-0- Xalatan (Pfizer)
`
`—A—Cosopt (Merck)
`
`50% V
`
`40% '
`
`30°/o —
`
`20°/o '
`
`10°/o *
`
`o%““““ .......................
`
`,
`",o"o"",o"',o"',o"',o"',o"';s”’,o”’,o"‘;S59“‘s9
`o<>°Qa<»
`«.2:
`V9
`3,0 $9 oa 0:25’
`(69
`V9‘
`30°
`vs» Ge
`04»
`
`6*
`,(av
`
`9"‘
`V9‘
`
`.6‘
`3.0
`
`,o‘*
`,0“
`00-’ Ce
`
`9”
`02°
`
`,°’
`3’
`89
`(ax V99 90°
`
`Source: Company data, CSFB estimates
`
`5
`
`CREDIT FIRST
`SUISSE BOSTON
`
`

`

`Allergan Inc
`
`27 July 2005
`
`Botox
`
`Botox remains a critical driver for Allergan, positioning to remain in a healthy growth
`
`mode in global cosmetic markets, considering its still early stage of introduction in
`
`Europe. This neurotoxin also possesses considerable opportunities in new therapeutic
`
`applications in new areas, such as hyperhidrosis and migraine headache therapy.
`
`Allergan reported strong sales in Botox of $212.5 million, up 20% vs. only 17% in 1Q
`
`($7.3 M above CSFB estimate), reflecting the re—introduction of the DTC campaign and
`
`the dissipation of the adverse publicity from an incident involving use of bogus Botox in
`Florida.
`
`Allergan began a new national DTC campaign for Botox Cosmetic and regional ad
`
`campaign for Cosmetic Therapeutic (hyperhydrosis and cervical distonia) in late March.
`
`To reflect the effective new Botox DTC campaign, we are raising our 05 sales forecast
`from $818 million to $832 million.
`
`Quarterly Botox Sales
`
`Exhibit 7:
`
`250.0 —
`
`200.0 —
`
`150.0 —
`
`100.0 —
`
`50.0 —
`
`0.0 —
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`'5o‘*o"o9>Q/
`'5
`‘V
`<=S"<a"’v§’v§’9“va“<a"’<¥’<a‘Z’°X°<S‘é‘9"’v§’9‘5<a‘5o°o° "0" ‘V
`pgQQQQQQp@9§p@p§@§§§§§§§p§p§
`
`Source: Company data, CSFB estimates
`
`6
`
`CREDIT FIRST
`SUISSE BOSTON
`
`

`

`Allergan Inc
`
`27 July 2005
`
`Exhibit 8:
`
`160%
`
`140%
`
`120%
`
`100%
`
`80%
`
`60%
`
`40%
`
`20%
`
`0%1
`
`Botox Y/Y Sales Growth Trend
`
`11
`
`11
`
`,\<>‘°Q’ 5&9’ K0‘? gag" ,‘c:9(°
`
`,§:9(° ,‘o‘5° ,5o‘5° ,§'°/\
`
`,_,,d'°/\ 9°?’ ,5o‘§’ ‘egg ,5o‘°g K0“? .50“? ,\c>‘—‘\ 60°)‘
`
`‘O6,’ 606'’ .965 $065 .96‘ 50°” 9°C’
`
`Source: Company data, CSFB estimates
`
`Earnings Revision and Target Price Adjustment
`We are raising our 2005 earnings forecast by $0.04 to a new level of $3.22 to reflect
`
`second quarter’s $0.05 earnings upside. We are also adjusting upward our earnings
`
`forecasts by $0.08 to $3.73 in 06 and by $0.11 to $4.30 in 07 due to an elevated 05
`base.
`
`The elevation in Allergan’s earnings foundation prompted us to raise our target price for
`
`the stock from a prior level of $88 to a higher level of $95.
`
`Conclusion
`
`New promotional campaigns are effectively driving better—than—expected gains across
`
`Allergan’s core pharmaceutical portfolio. Botox has re—estab|ished strength in core
`
`therapeutic markets, and appears to have strengthened its position in European
`
`cosmetic markets. Restasis has also emerged as a solid incremental earnings driver,
`
`with management elevating 2005 sales forecasts to a range of $165-$185 million.
`
`We are raising our 2005 earnings forecast by $0.04 to a new level of $3.22 to reflect
`
`second quarter upside. We are also adjusting upward our earnings forecasts by $0.08 to
`
`$3.73 in 06 and by $0.11 to $4.30 in 07 due to an elevated 05 base. Upward earnings
`
`revisions also support an upward revision in our target price from a prior level of $88 to
`a new level of $95.
`
`While Allergan has re—invigorated growth behind key eye care products, our Neutral
`
`stance reflects on—going concerns over Botox growth reliance. We believe Botox
`
`represents over 50% of Allergan’s core earnings base.
`
`7
`
`cnrsnrr FIRST
`surssrs BOSTON
`
`

`

`Allergan Inc
`
`27 July 2005
`
`Exhibit 9: CSFB Value Equation Analysis
`
`Market
`
`CSFB
`
`Expectations
`
`Expectations
`
`Income Statement Data:
`Fiscal Year (Income statement date):
`
`Sales (Income statement date):
`EBITA
`EBITA margin (%):
`Tax rate:
`
`Analyst EPS Estimate
`
`Business Model Value Creation:
`
`EBITA (3-5 year) growth rate:
`Pretax Capital Efficiency (ROIIC)
`
`Note: Aftertax ROIIC (%)
`
`Investment Neighborhood:
`
`Required Rate of Return (cost of capital):
`C.A.P.
`(Duration of value creation):
`
`CSFB Value-Equation Share Price Est.:
`Price Date:
`
`Actual Price
`Diff (%)
`
`Source: Company data, CSFB estimates
`
`1 1.50
`Dec-2021
`
`$89.20
`27-Jul-05
`
`$88.80
`0%
`
`11.50
`Dec-2021
`
`12-month Price Target
`
`$95.06
`27-Jul-06
`
`$88.80
`7%
`
`8
`
`cnemr FIRST
`SUISSE BOSTON
`
`

`

`Allergan Inc
`
`27 July 200:
`
`
`
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`
`
`

`

`Allergan Inc
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`27 July 200:
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`cmsnn FIRST
`SUISSEl BOSTON
`
`
`
`
`

`

`Allergan Inc
`
`27 July 2005
`
`Companies Mentioned (Price as of 27 Jul 05)
`Allergan Inc (AGN, $85.42, NEUTRAL, TP $88.00, OVERWEIGHT)
`
`Disclosure Appendix
`Important Global Disclosures
`
`I, Ken Kulju, certify that (1) the views expressed in this report accurately reflect my personal views about all
`of the subject companies and securities and (2) no part of my compensation was, is or will be directly or
`indirectly related to the specific recommendations or views expressed in this report.
`
`See the Companies Mentioned section for full company names.
`
`3-Year Price, Target Price and Rating Change History Chart for AGN
`
`33] N
`
`91I
`
`85I 85I
`
`88I
`85I
`
`32 I
`
`39
`
`84
`79
`
`74
`
`69
`
`64 64 I
`
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`
`O 0
`
`59
`
`54
`
`l
`
`07-Jul-03 0
`l
`
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`
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`
`\%‘”\@'\e"'e°°\°°°%“-’%“°€°6"s“%“s"‘®"‘®“s"‘3°€°6°
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`«\“3’
`88"
`.\“3’
`«fig
`{£3
`«$30
`Closing Price
`I Target Price
`0 Initiation/Assumption
`0 Rating
`Current: O=Outperfonn; N=Neutra|; U=Underperform; R=Restricted; NR=Not Rated
`Prior to 9-Sep-02: SB=Strong Buy; B=Buy; H=Ho|d; S=Se||; R=Restricted; NR=Not Rated
`
`AGN
`Date
`9/6/02
`2/27/03
`7/7/03
`4/22/04
`5/3/04
`7/12/04
`2/8/05
`6/10/05
`7/14/05
`
`Closing
`Price §US$[
`57.09
`63.89
`81.21
`90.64
`89.1
`81.91
`74.12
`81.75
`86.2
`
`Target
`Price §US$[
`64
`
`83
`85
`91
`85
`82
`85
`88
`
`Rating
`OUTPERFORM
`NOT RATED
`NEUTRAL
`
`lnitiationl
`Assumption
`
`X
`
`The ana|yst(s) responsible for preparing this research report received compensation that is based upon
`various factors including CSFB's total revenues, a portion of which are generated by CSFB's investment
`bankin activities.
`
`Analysts’ stock ratings are defined as follows***:
`Outperform: The stock’s total return is expected to exceed the industry average* by at least 10-15% (or
`more, depending on perceived risk) over the next 12 months.
`Neutral: The stock’s total return is expected to be in line with the industry average* (range of i10%) over
`the next 12 months.
`
`Underperiorm**: The stock’s total return is expected to underperform the industry average* by 10-15% or
`more over the next 12 months.
`
`*The industry average refers to the average total return of the analysts industry coverage universe
`(except with respect to Asia/Pacific, Latin America and Emerging Markets, where stock ratings are
`relative to the relevant country index, and CSFB HOLT Small and Mid—Cap Advisor stocks, where stock
`ratings are relative to the regional CSFB HOLT Small and Mid—Cap Advisor investment universe.
`
`1 1
`
`cneorr FIRST
`SUISSE BOSTON
`
`

`

`Allergan Inc
`
`27 July 2005
`
`the Firm has requested that
`**In an effort to achieve a more balanced distribution of stock ratings,
`analysts maintain at least 15% of their rated coverage universe as Underperform. This guideline is
`subject to change depending on several factors, including general market conditions.
`***For Australian and New Zealand stocks a 7.5% threshold replaces the 10% level in all three rating
`definitions.
`
`Restricted: In certain circumstances, CSFB policy and/or applicable law and regulations preclude certain
`types of communications,
`including an investment
`recommendation, during the course of CSFB's
`engagement in an investment banking transaction and in certain other circumstances.
`Volatility Indicator [V]: A stock is defined as volatile if the stock price has moved up or down by 20% or
`more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going
`forward. All CSFB HOLT Small and Mid—Cap Advisor stocks are automatically rated volatile. All IPO stocks
`are automatically rated volatile within the first 12 months of trading.
`
`Analysts’ coverage universe weightings* are distinct from analysts’ stock ratings
`and are based on the expected performance of an analyst’s coverage universe**
`versus the relevant broad market benchmark***:
`
`Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12
`months.
`
`Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the
`next 12 months.
`
`Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12
`months.
`
`*CSFB HOLT Small and Mid—Cap Advisor stocks do not have coverage universe weightings.
`**An analyst’s coverage universe consists of all companies covered by the analyst within the relevant
`sector.
`
`***The broad market benchmark is based on the expected return of the local market index (e.g., the S&P
`500 in the U. 8. over the next 12 months.
`
`CSFB’s distribution of stock ratings (and banking clients) is:
`Global Ratings Distribution
`0utperlormIBuy*
`39%
`(54% banking clients)
`NeutralIHold*
`43%
`(54% banking clients)
`UnderperlormISell*
`15%
`(47% banking clients)
`Restricted
`3%
`‘For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and
`Underperfonn most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock
`ratings are determined on a relative basis. (Please refer to definitions above.) An investors decision to buy or sell a security should be
`based on investment objectives, current holdings, and other individual factors.
`
`CSFB’s policy is to update research reports as it deems appropriate, based on developments with the
`subject company, the sector or the market that may have a material impact on the research views or
`opinions stated herein.
`
`independent, clear, fair and not
`is impartial,
`CSFB's policy is only to publish investment research that
`misleading. For more detail please referto CSFB's Policies for Managing Conflicts of Interest in connection with
`Investment Research: http://www.csfb.com/research-and—ana|ytics/disclaimer/managing_conf|icts_disc|aimer.html
`
`See the Companies Mentioned section for full company names.
`Price Target: (12 months) for (AGN)
`Method: CSFB Value Equation
`Risks: Risks to our target price include operational, regulatory, and pipeline risks associated with the
`company which would cause a slow down in growth; any slow down in growth or growth prospects.
`
`See the Companies Mentioned section for full company names.
`The subject company (AGN) currently is, or was during the 12-month period preceding the date of
`distribution of this report, a client of CSFB.
`CSFB provided investment banking services to the subject company (AGN) within the past 12 months.
`CSFB has received investment banking related compensation from the subject company (AGN) within the
`past 12 months.
`CSFB expects to receive or intends to seek investment banking related compensation from the subject
`company (AGN) within the next 3 months.
`
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`Allergan Inc
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`27 July 2005
`
`Important Regional Disclosures
`
`The ana|yst(s) involved in the preparation of this report have not visited the material operations of the
`subject company (AGN) within the past 12 months.
`
`Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS——Non—Voting
`shares; RVS——Restricted Voting Shares; SVS——Subordinate Voting Shares.
`Individuals receiving this report from a Canadian investment dealer that is not affiliated with CSFB should
`be advised that this report may not contain regulatory disclosures the non—affi|iated Canadian investment
`dealer would be required to make if this were its own report.
`For Credit Suisse First Boston Canada |nc.'s policies and procedures regarding the dissemination of equity
`research, please visit http://www.csfb.corn/|ega|_terms/canada_research_po|icy.shtm|.
`
`As of the date of this report, CSFB acts as a market maker or liquidity provider in the equities securities that
`are the subject of this report.
`For disclosure information on other companies mentioned in this report, please visit the website at
`www.csfb.corn/researchdisclosures or call +1 (877) 291-2683.
`Disclaimers continue on next page.
`
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`Disclaimers
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