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`
`MYLAN - EXHIBIT 1106
`Mylan Pharmaceuticals Inc. et al. v. Allergan, Inc.
`IPR2016-01127, -01128, -01129, -01130, -01131, & -01132
`
`

`

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`

`

`)AHC=1?3" %-=HECI+=6H=I?HEFJ5AAEC)FD=
`
`2=CA!B '
`
`,=LE@2OJJ
`David Pyott
`
`/HA=JJD=OKE/@HEC=@EAI=@CAJAA
`Great, thank you, Jim. Good morning, ladies and gentlemen.
`
`9AHA@AECDJA@JHAFHJKHBEHIJGK=HJAHALAHMEJDHAJD=>EEBI=AI=
`We're delighted to report on our first quarter ever with more than $1 billion of sales, an
`
`AN?AFJE=CHMJDB! -LA=BJAHB=?JHECEJDA>AABEJBJDAMA=@=H=@=
`exceptional growth of 32%. Even after factoring in the benefit of the weak dollar, and a
`
`I=BEHIJJEA?JHE>KJEBH5)+674)E3"I=AICHMJD=HC=E?>=IEIE
`small first time contribution from SANCTURA in Q4, sales growth on an organic basis in
`
`?=?KHHA?OM=I=AN?AFJE= #LAH3"B $
`local currency was an exceptional 25% over Q4 of 2006.
`
`2D=H=?AKJE?=I=AIE?HA=IA@ "#E@=HIMEJDJDAIJHCAIJCHMJDH=JABH=O
`Pharmaceutical sales increased 24.5% in dollars, with the strongest growth rate for any
`
`GK=HJAHE %BHFDJD=E?I=@?JEKA@IJHACJDE*6:5=AIB?HAA@E?=
`quarter in 2007 for ophthalmics and continued strength in BOTOX. Sales of core medical
`
`@ALE?AI?JEKA@=IFA?J=?K=HCHMJDJHA@MEJD=E?HA=IAB%E@=HIOA=H
`devices continued on a spectacular growth trend with an increase of 70% in dollars year-
`
`LAHOA=H
`over-year.
`
`.HJDABKOA=H %)AHC=IFD=H=?AKJE?=>KIEAIIAICHAM&E@=HI=@
`For the full year, 2007, Allergan's pharmaceutical businesses grew 18% in dollars and
`
`#E?=?KHHA?OB=HAN?AA@EC=OE@KIJHOCHMJD>A?D=HI6DA?HAA@E?=
`15% in local currency, far exceeding any industry growth benchmarks. The core medical
`
`@ALE?A>KIEAIIAI=FHBH=>=IEIEAE?K@ECJDADEIJHE?=I=AIBJDA
`device businesses on a proforma basis, i.e. including the historical sales of the
`
`FHA@A?AIIH?F=EAI1=A@=@+HA=EJDA>=IABH=BK?F=H=JELAOA=HJ
`predecessor companies lnamed and Corneal in the base for a full comparative year to
`
` $CHAMMEJD=AN?AFJE="'E %=?=?KHHA?O>=IEI
`2006, grew with an exceptional 49% in 2007 on a local currency basis.
`
`4AC=H@ECA=HECI=@KIJA@@EKJA@A=HECIFAHID=HABHJDABKHJDGK=HJAHMAHA$
`Regarding earnings, adjusted diluted earnings per share for the fourth quarter were $0.60
`
`=HEC=%$E?HA=IALAH3" $=IMA>IJA@4,ANFA@EJKHAI>O#H
`marking a 17.6% increase over Q4, 2006, as we boosted R&D expenditures by 50% or
`
`$"EEOA=HLAHOA=H.HJDABKOA=H=@KIJA@@EKJA@A=HECIFAHID=HA=J &
`$64 million year-over-year. For the full year, adjusted diluted earnings per share at $2.18
`
`E?HA=IA@'6DAHA??EE=JEBJDAIA=@KIJAJIJ/))2K>AHI=HABKO=E@
`increased 19.1%. The reconciliation of these adjustments to GAAP numbers are fully laid
`
`KJEKHFHAIIHAA=IA
`out in our press release.
`
`1JEI=FF=HAJJD=JKHELAIJAJIJCHMKHAMAIJ=HAJID=LAF=E@BBD=@IAO
`It is apparent that our investments to grow our newest markets have paid off handsomely
`
`=IMAHE@AJDAM=LAIBI=JEIBOEC?IKAH=@F=JEAJAA@IEJDA=AIJDAJE?=HAJI
`as we ride the waves of satisfying consumer and patient needs in the aesthetic markets,
`
`?JHE>KJEC=IKJEJJDAC>=>AIEJOAFE@AE?.HJDAJDEH@GK=HJAHB %JDA=IJ
`contributing a solution to the global obesity epidemic. For the third quarter of 2007, the last
`
`FAHE@BHMDE?DMAD=LAHAE=>A@=J==C>=>=IEIMA=?JK=OIAA==??AAH=JE
`period for which we have reliable data on a global basis, we actually see an acceleration
`
`BMH@ME@A=HAJCHMJDH=JAI13!MAAIJE=JAJDA=HAJICHAM=JJDABMEC
`of worldwide market growth rates. In Q3, we estimate the markets grew at the following
`
`H=JAI *=HE=JHE?>AIEJOEJAHLAJEFH@K?JI=J#'@AH=BEAHI=J"
`rates: Bariatric obesity intervention products at 59%, dermal fillers at 40%,
`
`AKH@K=JHI=J =@>HA=IJ=AIJDAJE?I=J "
`neuromodulators at 20%, and breast aesthetics at 24%.
`
`DJJFI IAAEC=FD=?=HJE?A$ !#=AHC=E?G" %A=HECI?=JH=I?HEFJ F=HJ IECA
`
`

`

`)AHC=1?3" %-=HECI+=6H=I?HEFJ5AAEC)FD=
`
`2=CA"B '
`
`OFDJD=E?FD=H=?AKJE?=FH@K?JIIECDJOIMA@J=CHMJDH=JA
`Only ophthalmic pharmaceutical products slightly slowed to a 10% growth rate.
`
`.KHJDAHHAMA=HACHMECKHC>==HAJID=HAE=BJDAIA=HAJI9DEAMA
`Furthermore, we are growing our global market share in all of these markets. While we
`
`>LEKIO?=JBKOFHA@E?JBKJKHAA?E?JHA@I=@JDAEHEF=?JKH=HAJIKF
`obviously cannot fully predict future economic trends and their impact on our markets, up
`
`JJ@=OMAD=LAJ@AJA?JA@=OEF=?JIKHI=AIB=OIM@ME?IKAH
`to today we have not detected any impacts on our sales of any slowdown in consumer
`
`IFA@ECEJDA75HJDAH=H=HAJIEJDAMH@
`spending in the US or other major markets in the world.
`
`4AC=H@ECA=JEAMA=HA>LEKIO@EI=FFEJA@JD=JJDAIA?@JHE=B=EA@JAAJ
`Regarding memantine, we are obviously disappointed that the second trial failed to meet
`
`EJIFHE=HOA@FEJB@A=OECFHCHAIIEBC=K?=,KHECJDA?KHIABJDA=IJ 
`its primary endpoint of delaying progression of glaucoma. During the course of the last 12
`
`JDIDMALAHMAD=LAHA?A@A@OKJHALA=OI=AIBHA=JEABH
`months however, we have recommended you to remove any sales from memantine from
`
`OKH@AI=@HAE@A@OKJD=JJDEIM=I=DECDHEIMEJDDECDHAM=H@FHCH==IEJ
`your models, and reminded you that this was a high risk with high reward program, as it
`
`M=IE=FEAAHECBEA@
`was in a pioneering field.
`
`4AC=H@ECKHMEJAH=IJH=JACE?F=IMAD=LA=M=OIAN?K@A@A=JEABHKH
`Regarding our own internal strategic plans we have always excluded memantine from our
`
`FAH=JECF=A@FHA?JEICELAJDAMFH>=>EEJOBIK??AII6DAHABHAMAHA=E
`operating planned projections given the low probability of success. Therefore, we remain
`
`?BE@AJ=>KJKH=>EEJOJ=?DEALAKHI=AI=@A=HECI=IFEH=JEI
`confident about our ability to achieve our sales and earnings aspirations.
`
`4AJKHECJKHFAH=JEI=IOK?===OABHKHFHAIIHAA=IAIJHCCHMJDEI
`Returning to our operations, as you can analyze from our press release, strong growth is
`
`??KHHEC=?HII=>H=@H=CAB>KIEAIIAI=@FH@K?JI1=@@EJEJDEIEI??KHHEC
`occurring across a broad range of businesses and products. In addition, this is occurring
`
`=?HII=FAH=JECHACEIBJDAMH@1B=?JBHJDABKOA=HKH75>KIEAIIAI
`across all operating regions of the world. In fact, for the full year, our non-US businesses,
`
`ALA=?=?KHHA?O>=IEICHAMIECDJOB=IJAHJD=KH?>EA@75>KIEAIIAI
`even on a local currency basis, grew slightly faster than our combined US businesses,
`
`HABA?JECKH=>EEJOJANA?KJAIK??AIIBKIJH=JACEAI@ALAFA@EJDA75H-KHFA
`reflecting our ability to execute successful strategies, developed in the US or Europe,
`
`across the world.
`=?HIIJDAMH@
`
`.HJDABKOA=HMACHAMALAHO>KIEAII=FHBH=>=IEIE?=?KHHA?O=JA=IJ=
`For the full year we grew every business on a proforma basis in local currency at least a
`
`@K>A@ECEJH=JAMEJDO=BAMAN?AFJEI 75IE?=HAMDAHAMAIKBBAHA@BHJDA
`double-digit rate with only a few exceptions; US skincare, where we suffered from the
`
`EF=?JBAM?FAJEJEJ6)4)+>HA=IJ=AIJDAJE?IMDAHAMAD=@IAEH
`impact of new competition to TAZORAC, breast aesthetics, where we had some minor
`
`FAH=JECEIIKAIE)KIJH=E==@=F==@@AH=BEAHIE=JE)AHE?=MDAHAMA
`operating issues in Australia and Japan, and dermal fillers in Latin America where we
`
`MAHAACJE=JECJDAHAJKHB@EIJHE>KJEHECDJIBH?=@EIJHE>KJHI=FFEJA@>O
`were negotiating the return of distribution rights from local distributors appointed by
`
`+HA=MDE?DA@JJDAHA=K?DBKHEAEJDA?KHIAB3"
`Corneal which led to the re-launch of our line in the course of Q4.
`
`4AC=H@ECEFHLAAJIEFAHBH=?ABHIE?=HAMA=HA@AECDJA@JD=JMAD=LA
`Regarding improvements in performance for skin care, we are delighted that we have
`
`AIJ=>EIDA@=?FHJE=CHAAAJBH6)4)+MEJD5JEABA=>H=JHEAIMDE?DEI=
`established a co-promotion agreement for TAZORAC with Stiefel Laboratories, which is a
`
`=HF=OAHEJDA=?A=HAJKH75IE?=HAHC=E=JED=I=I>AAHAIFIE>A
`major player in the acne market. Our US skin care organization has also been responsible
`
`BH?IE@AH=>ACHMJDEI=AIB*6:BHDOFAHDE@HIEIE %
`for considerable growth in sales of BOTOX for hyperhidrosis in 2007.
`
`DJJFI IAAEC=FD=?=HJE?A$ !#=AHC=E?G" %A=HECI?=JH=I?HEFJ F=HJ IECA
`
`

`

`)AHC=1?3" %-=HECI+=6H=I?HEFJ5AAEC)FD=
`
`2=CA#B '
`
`.KHJDAHHAMAMAHAFA=IA@JAJAHEJ=IJH=JACE??=>H=JEMEJD+EEGKA
`Furthermore, we were pleased to enter into a strategic collaboration with Clinique
`
`=>H=JHEAIMDE?DEIJDAK>AHAFHAIJECA?IAJE?I>H=@EJDA75=@
`Laboratories which is the number one prestige cosmetics brand in the US, and look
`
`BHM=H@J=K?DEC=FHAEKIE?=HAEAAN?KIELAJKHFDOIE?E=?D=AIK@AH
`fonivard to launching a premium skin care line, exclusive to our physician channels under
`
`=+EEGKA>=AHEJDAB=BJDEIOA=H)IEJDAF=IJKH>A?JELAEIJANF=@=
`a Clinique banner in the fall of this year. As in the past, our objective is to expand an
`
`=HA=@OCHMEC=HAJ=@=?DEALA==HAJA=@ECFIEJE
`already growing market and achieve a market leading position.
`
`6KHECJ=?AJ=HOJDAFAHBH=?ABJDAE@ELE@K=>KIEAII1IJ=HJMEJD
`Turning to a commentary on the performance of the individual business, I'll start with
`
`*6:+JEKECIJHCCHMJDEJDABKHJDGK=HJAHB "E@=HI=@ E?=
`BOTOX. Continuing strong growth in the fourth quarter of 24% in dollars and 20% in local
`
`?KHHA?OFEJIJJDACJAHFJAJE=B>JDJDAJDAH=FAKJE?=@=AIJDAJE?=HAJI
`currency, points to the long-term potential of both the therapeutic and aesthetic markets.
`
`)IMA=IJDAIKIJ=E=>EEJOBJDAIABH=?DEIAIBHJDABKOA=HJDAJDAH=FAKJE?BH=?DEIA
`As well as the sustainability of these franchises, for the full year, the therapeutic franchise
`
`=??AAH=JA@BHEJIHA?AJDEIJHE?=F=JDBE@@K>A@ECEJCHMJDJ'LAHIKI $
`accelerated from its recent historical path of mid double-digit growth, to 19% versus 2006.
`
`*6:?IAJE?ANF=@A@ 'MEJD=FAH=JECHACEICHMEC=JLAH LAHIKI
`BOTOX cosmetic expanded 29% with all operating regions growing at over 20% versus
`
` $*AABEJECBHJDAIOAHCEAIB)AHC=IBKH=CABFH@K?JIBH %JDAIFEJ
`2006. Benefiting from the synergies of Allergan's full range of products, for 2007 the split
`
`between the two franchises was 50:50.
`>AJMAAJDAJMBH=?DEIAIM=I# #
`
`1JDABKHJDGK=HJAHMAAOA@ALAIJHCAHI=AICHMJDKJIE@AJDA75FHA?EIAOE
`In the fourth quarter, we enjoyed even stronger sales growth outside the US, precisely in
`
`JDIA=HAJIMDAHAMA=HA=@OIK??AIIBKOB=?A?FAJEJE1JDAJFJAC>=
`those markets where we already successfully face competition. In the top ten global
`
`=HAJIMAAIJE=JAJD=JMA=EJ=EA@ID=HAE'@AIFEJAJDAAJHOBAM
`markets, we estimate that we maintained share in 91% despite the entry of new
`
`?FAJEJHI1-KHFA/=@AH==K?A@JD=JJDAO@JANFA?JJDA=FFHL=B
`competitors. In Europe, Galderma announced that they do not expect the approval of
`
`4ANEE.H=?AKJE '.H=?A=?JEC=IJDAHABAHA?AA>AHIJ=JAJDAHABHAJDA
`Reloxin in France until 2009. France acting as the reference member state, therefore the
`
`BEHIJ-7=HAJMK@JDA=MBHHKJIJJDAJDAHA>AHIJ=JAIE-KHFA6DEI
`first EU market, would then allow for rollouts to the other member states in Europe. This
`
`=HI=?IE@AH=>A@A=OBHKHDEIJHE?=ANFA?J=JEI1=F=MABHM=H@J
`marks a considerable delay from our historical expectations. In Japan, we look forward to
`
`JDA=FFHL=B*6:?IAJE?=@=K?DLE=KHF=HJAH/5=JJDAA@BJDEIOA=H
`the approval of BOTOX cosmetic and launch via our partner GSK at the end of this year.
`
`+A=HO=F=EI=DECDFJAJE==HAJBHB=?E==AIJDAJE?JHA=JAJI
`Clearly, Japan is a high potential market for facial aesthetic treatments.
`
`,AH=BEAHI3"I=AIB@AH=BEAHIIJHCOANF=@A@J$EEHAJD=
`Dermal fillers. Q4 sales of dermal fillers strongly expanded to 61 million, more than
`
`@K>ECJDAI=AIHA?H@A@>O+HA==I=E@AFA@AJ?F=O=IMA>KE@
`doubling the sales recorded by Corneal as an independent company as we build
`
`AJKBHJDA?JEKA@ANF=IEBJDEI=HAJEJDA75=@+==@=1JDA
`momentum for the continued expansion of this market in the US and Canada. In the
`
`=HAJIKHLAOIEHJD)AHE?=EJMK@=FFA=HJD=J78-,-4I=AI=HA=FFH=?DEC
`market surveys in North America it would appear that JUVEDERM sales are approaching
`
`JDIAB4-56;)-9A=JJHE>KJAJDEIJJDAGK=EJOBJDA78-,-4FH@K?JIJDA
`those of RESTYLANE. We attribute this to the quality of the JUVEDERM products, the
`
`>HA=@JDBKHFH@K?JH=CAMEJD*6:=?JEC=IJDAC=JAM=OFH@K?JELAIJAJIE
`breadth of our product range with BOTOX acting as the gateway product, investments in
`
`,6+=@JDAFMAHB)AHC=I@EIJHE>KJEAJMH78-,-4M=IHA?AJO=K?DA@
`DTC, and the power of Allergan's distribution network. JUVEDERM was recently launched
`
`E5KJDA=IJ)IE=1-KHFAE=K=HOMA=K?DA@=AMH=CAB@AH=BEAHI
`in Southeast Asia. In Europe in January we launched a new range of dermal fillers,
`
`78-,-4764)E?HFH=JECE@?=EABHF=JEAJ?BHJ
`JUVEDERM ULTRA incorporating lidocaine for patient comfort.
`
`DJJFI IAAEC=FD=?=HJE?A$ !#=AHC=E?G" %A=HECI?=JH=I?HEFJ F=HJ IECA
`
`

`

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`2=CA%B '
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`.HJDAIENJD?IA?KJELAOA=H)AHC=D=I>AAJDAB=IJAIJCHMECC>=FDJD=E?
`For the sixth consecutive year, Allergan has been the fastest growing global ophthalmic
`
`FD=H=?AKJE?=?F=OC=EEC=HAJID=HAEC=K?=ANJAH=@EIA=IAI=@
`pharmaceutical company, gaining market share in glaucoma, external diseases and
`
`=HJEBE?E=JA=HI=IC=HAHECID=HAE=IJALAHOMH@=HAJMEJDOEH
`artificial tears, also garnering share in almost every world market, with only minor
`
`AN?AFJEI
`exceptions.
`
`/ELAJDAIJHC@=J=JD=JM=I=HA=@O=L=E=>ABH+==@=-KHFA=@=JE
`Given the strong data that was already available from Canada, Europe and Latin
`
`)AHE?=+*1/)EIAOEC=IJHCEBJEFHAI?HEFJEIEJDA75=@EILECJ
`American, COMBIGAN is enjoying a strong lift in prescriptions in the US, and is moving to
`
`AIJ=>EID=IJHCFIEJE=I==JAH=JELA=@HAF=?AAJJ+IFJ=IMA=I=
`establish a strong position as an alternative and replacement to Cosopt, as well as a
`
`B=LHEJA=@K?JELAJHA=JAJJBEHIJEAKIABFHIJ=C=@EI=@FHIJ=AAI
`favorite adjunctive treatment to first-line use of prostaglandins and prostamenes.
`
`*KE@ECJDAIJHCDAHEJ=CAB)20)/)MDE?D?JEKA@JCHMEJDABKHJD
`Building on the strong heritage of ALPHAGAN, which continued to grow in the fourth
`
`GK=HJAH4-56)515AOA@EJIBEHIJEEGK=HJAH=IJDAFH@K?JD=IHAIF@A@J
`quarter, RESTASIS enjoyed its first $100 million quarter, as the product has responded to
`
`KHELAIJAJIE,6+=@@AJ=EECABBHJI)AM68?AH?E=BA=JKHEC=
`our investments in DTC and detailing efforts. A new TV commercial, featuring an
`
`FDJD=CEIJD=I=EHA@JDEIOA=H)IEJDA75JDAIJHCKFJ=AB2618-JF
`ophthalmologist, has aired this year. Also in the US, the strong uptake of OPTIVE, on top
`
`BJDA4-.4-506-)45EAD=IA@JHA?H@=HAJID=HAE=HJEBE?E=JA=HIBH
`of the REFRESH TEARS line, has led to record market share in artificial tears for
`
`)AHC=1-KHFA2618-D=IBKHJDAHIJHACJDAA@)AHC=ߣI=HAJA=@AHIDEF
`Allergan. In Europe, OPTIVE has further strengthened Allergan’s market leadership.
`
`2618-M=IEJH@K?A@E)KIJH=E==@1@E==@E=K=HOE*H=E)@@EJE=O
`OPTIVE was introduced in Australia and India and in January in Brazil. Additionally,
`
`+*1/)M=I=FFHLA@E6D=E=@
`COMBIGAN was approved in Thailand.
`
`4AC=H@ECKHCE?IMA=HAFA=IA@MEJDFIEJEHA=?JEJ=B=MAII=K=HO=K?DB
`Regarding urologics, we are pleased with position reaction to a flawless January launch of
`
`5)+674):4=@JEJIKEGKAA?D=EIB=?JE=IJDAOGK=JAH=HO=EA1JߣI
`SANCTURA XR, and to its unique mechanism of action as the only quaternary amine. It’s
`
`>AIJE?=IIE?E@A?AB@HOKJD=@EJILAH=ABBE?=?OJAH=>EEJO=@I=BAJOFHBEA
`best in class incidence of dry mouth, and its overall efficacy, tolerability and safety profile.
`
`4A=JELAJJDAFHJFKFEDE>EJHFHA?J?IEIJAJMEJDFHEH?AJIMA
`Relative to the proton pump inhibitor project, consistent with prior comments, we
`
`=JJAFJA@JKJE?AIAJDAFHCH=>KJD=LAJ>AAI=JEIBEA@MEJDJDAJAHI
`attempted to out-license the program, but have not been satisfied with the terms.
`
`6DAHABHAMAD=LAHAJKHA@JDAE?AIA=@=HA=EECHECDJIJ9EIJ
`Therefore we have returned the license and all remaining rights to Winston
`
`2D=H=?AKJE?=I)AHC=MEHA?AELAAJ=HO>AABEJIDK@9EIJ2D=H=?AKJE?=I
`Pharmaceuticals. Allergan will receive monetary benefit, should Winston Pharmaceuticals
`
`IK??AIIBKO>HECJDEIFH@K?JJJDA=HAJ
`successfully bring this product to the market.
`
`.H4, &ME>A=IJAHOA=HMEJD=O=FFHL=I=@BEECI=FFHL=B
`For R&D, 2008 will be a monster year, with many approvals and filings, approval of
`
`71/):EJDA75=FFHL=B71/)E=F==FFHL=B*6:+IAJE?E
`LUMIGAN-X in the US, approval of LUMIGAN in Japan, approval of BOTOX Cosmetic in
`
`=F=.,)BEECIB*6:BH?DHE?@=EODA=@=?DAE=K@E>A
`Japan, FDA filings of BOTOX for chronic daily headache, [inaudible].
`
`MBHJDAE@FEJIBKHCKE@=?AEKHFHAIIHAA=IAOK?=?=?K=JAJD=JMA
`Now from the midpoints of our guidance in our press release, you can calculate that we
`
`D=LAF=A@=JDAH=HE?HA=IAE4,IFA@ECJLAH%$EE=E?HA=IA
`have planned another major increase in R&D spending to over $760 million, an increase
`
`B=IJ EE)JJDA4,@=OEA=HOKAEAM;HMABHM=H@J
`of almost 120 million. At the R&D day in early June in New York, we look forward to
`
`KLAEECFHALEKIOK@EI?IA@FHA?JIE?K@ECKHA=HOIJ=CAFHCH=I
`unveiling previously undisclosed projects, including our early-stage programs.
`
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`
`

`

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`2=CA&B '
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`I would now like to pass to Jeff, who will comment on financials.
`
`Jeff Edwards
`ABB-@M=H@I
`
`6D=I,=LE@=@C@HECJ=BOKJDA?=5E?A,=LE@D=I=HA=@O
`Thanks David and good morning to all of you on the call. Since David has already
`
`=@@HAIIA@KHI=AIFAHBH=?A1ߣLA@EHA?JOEJ@EI?KIIEBJDAH?FAJIB
`addressed our sales performance, I’ll move directly into discussion of other components of
`
`KHBE=?E=FAHBH=?A
`our financial performance.
`
`.HJDABKHJDGK=HJAH=@KIJA@@EKJA@A=HECIFAHID=HAMAHA$=HEC=IJHC
`For the fourth quarter, adjusted diluted earnings per share were $0.60, marking a strong
`
`%$E?HA=IALAH $HAIKJIBHJDAI=AGK=HJAH6DEIIKFAH>FAHBH=?AM=I
`17.6% increase over 2006 results for the same quarter. This superb performance was
`
`FH@K?A@EJDAB=?ABIECEBE?=J=K?DHA=JA@ANFAIAIBH>JD5)+674):4=@
`produced in the face of significant launch-related expenses for both SANCTURA XR and
`
`+*1/).HBKOA=H %=@KIJA@A=HECIFAHID=HAMAHA &HAFHAIAJEC=
`COMBIGAN. For full year 2007, adjusted earnings per share were $2.18, representing a
`
`'CHMJDLAH $)HA??EE=JEB=BJDA=@KIJAJIJ/))2A=HECIEIIAJ
`19.1% growth over 2006. A reconciliation of all of the adjustments to GAAP earnings is set
`
`KJEKHA=HECIHAA=IA
`out in our earnings release.
`
`-N?K@ECJDAABBA?JIB/))2=@KIJAJI=@=HJE=JEB=?GKEHA@EJ=CE>AI
`Excluding the effects of non-GAAP adjustments and amortization of acquired intangibles,
`
`)AHC=ߣI3" %CHII=HCEB&!#E?HA=IA@'MDA?F=HA@JFHEHOA=H
`Allergan’s Q4 2007 gross margin of 83.5% increased 0.9% when compared to prior year.
`
`9DEAJDA)AHC=ߣIFD=H=3"CHIIFHBEJ=HCEM=I?IEIJAJMEJDJDAFHEHOA=HJDA
`While the Allergan’s pharma Q4 gross profit margin was consistent with the prior year, the
`
`A@E?=@ALE?A3"CHIIFHBEJ=HCEE?HA=IA@IK>IJ=JE=OLAHIKI3" $6DA
`medical device Q4 gross profit margin increased substantially versus Q4 2006. The
`
`EFHLAAJECHII=HCEMEJDEJDAA@E?=@ALE?A>KIEAIIM=I=BK?JEB=
`improvement in gross margin within the medical device business was a function of an
`
`CECE?HA=IAEJDAENBAMAHDECDAH=HCEFH@K?JI=IMA=ICHA=JAH
`ongoing increase in the mix of newer, higher margin products, as well as greater
`
`=KB=?JKHECJDHKCDFKJBJDAIAFH@K?JIMDE?DHAIKJA@E=EFHLA@=>IHFJE
`manufacturing throughput of these products, which resulted in an improved absorption
`
`OEA@=@EFHLA@?IJBC@I
`yield and improved cost of goods.
`
`.HJDABKOA=H %=@AN?K@ECJDAABBA?JIB/))2=@KIJAJI=@
`For the full year 2007, and excluding the effects of non-GAAP adjustments and
`
`=HJE=JEIB=?GKEHA@EJ=CE>AI)AHC=ߣICHII=HCEB& %EFHLA@>O 
`amortizations of acquired intangibles, Allergan’s gross margin of 82.7% improved by 0.2%
`
`MDA?F=HA@JFHEHOA=H*JDJDAFD=H==@A@E?=@ALE?A>KIEAIIAI
`when compared to prior year. Both the pharma and medical device businesses
`
`?JHE>KJA@JJDEIEFHLAAJMEJDJDA@HELAHI>AEC?IEIJAJMEJDJDA@AI?HEFJE1KIJ
`contributed to this improvement, with the drivers being consistent with the description ljust
`
`FHLE@A@BHJDAA@E?=@ALE?A>KIEAIIAI
`provided for the medical device businesses.
`
`)I1I=E@EFHEHGK=HJAHIJDAIJHCHAIKJIEJDAGK=HJAH=@OA=HJ@=JAMAHA
`As I said in prior quarters, the strong results in the quarter and year-to-date were
`
`CAAH=JA@MDEAMA?JEKA@JELAIJDA=LEOEJJDACJAHCHMJDBJDA?F=O
`generated while we continued to invest heavily into the long-term growth of the company.
`
`)@KIJA@IAECCAAH==@=@EEIJH=JELAANFAIAIMAHA" 'BFH@K?JAJI=AIBH
`Adjusted selling, general and administrative expenses were 42.9% of product net sales for
`
`JDAGK=HJAH=@" %BFH@K?JAJI=AIOA=HJ@=JA)AHC=ߣI=@KIJA@IAEC
`the quarter, and 42.7% of product net sales year-to-date. Allergan’s adjusted selling,
`
`CAAH==@=@EEIJH=JELAIFA@BHJDAOA=HJJ=A@$#%>EE=!%%EE
`general and administrative spend for the year totaled $1.657 billion, a $377 million
`
`increase over 2006.
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