`10K 1 d10k.htm ALLERGAN, INC. FORM 10K
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`Allergan, Inc. Form 10K
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`Table of Contents
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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`FORM 10K
`
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
`SECURITIES EXCHANGE ACT OF 1934
`For the Fiscal Year Ended December 31, 2009
`
`or
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
`SECURITIES EXCHANGE ACT OF 1934
`Allergan, Inc.
`
`Commission File Number 110269
`
`Delaware
`(State or Other Jurisdiction of
`Incorporation or Organization)
`
`(Exact Name of Registrant as Specified in its Charter)
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`
`
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`951622442
`(I.R.S. Employer Identification No.)
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`2525 Dupont Drive
`Irvine, California
`(Address of Principal Executive Offices)
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`92612
`(Zip Code)
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`
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`(714) 2464500
`(Registrant’s Telephone Number, Including Area Code)
`Securities Registered Pursuant to Section 12(b) of the Act:
`Name of Each Exchange on Which Registered
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`New York Stock Exchange
`
`Title of Each Class
`Common Stock, $0.01 Par Value
`Preferred Share Purchase Rights
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`Securities Registered Pursuant to Section 12(g) of the Act: None
`Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
`12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
`90 days. Yes No
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
`and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
`and post such files). Yes No
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK (§229.405 of this chapter) is not contained herein, and will not be contained,
`to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10
`K.
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, or a smaller reporting company. See the definitions of
`“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b2 of the Exchange Act.
` Large accelerated filer
`
`Accelerated filer
`Nonaccelerated filer (Do not check if a smaller reporting company)
`
`Smaller reporting company
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes No
`As of June 30, 2009, the aggregate market value of the registrant’s common stock held by nonaffiliates of the registrant was approximately $14,430 million based on the
`closing sale price as reported on the New York Stock Exchange.
`Common stock outstanding as of February 19, 2010 — 307,511,888 shares (including 3,511,177 shares held in treasury).
`DOCUMENTS INCORPORATED BY REFERENCE
`Part III of this report incorporates certain information by reference from the registrant’s proxy statement for the annual meeting of stockholders to be held on April 29, 2010,
`which proxy statement will be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2009.
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`MYLAN - EXHIBIT 1065
`Mylan Pharmaceuticals Inc. et al. v. Allergan, Inc.
`IPR2016-01127, -01128, -01129, -01130, -01131, & -01132
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`1/30/2017
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`Allergan, Inc. Form 10K
`
`Table of Contents
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`
`
`PART I.
`Item 1.
`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
`PART II.
`Item 5.
`
`Item 6.
`Item 7.
`Item 7A.
`Item 8.
`Item 9.
`Item 9A.
`Item 9B.
`PART III.
`Item 10.
`Item 11.
`Item 12.
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`Item 13.
`Item 14.
`PART IV.
`Item 15.
`SIGNATURES
`
`
`TABLE OF CONTENTS
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` Business
` Risk Factors
` Unresolved Staff Comments
` Properties
` Legal Proceedings
` Submission of Matters to a Vote of Security Holders
`
`Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer
`Purchases of Equity Securities
`
` Selected Financial Data
` Management’s Discussion and Analysis of Financial Condition and Results of Operations
` Quantitative and Qualitative Disclosures About Market Risk
` Financial Statements and Supplementary Data
` Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
` Controls and Procedures
` Other Information
`
` Directors, Executive Officers and Corporate Governance
` Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related
`Stockholder Matters
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` Certain Relationships and Related Transactions, and Director Independence
` Principal Accounting Fees and Services
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` Exhibits and Financial Statement Schedules
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`Statements made by us in this report and in other reports and statements released by us that are not historical facts constitute
`“forwardlooking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21 of the Securities
`Exchange Act of 1934. These forwardlooking statements are necessarily estimates reflecting the best judgment of our senior
`management based on our current estimates, expectations, forecasts and projections and include comments that express our current
`opinions about trends and factors that may impact future operating results. Disclosures that use words such as we “believe,”
`“anticipate,” “estimate,” “intend,” “could,” “plan,” “expect,” “project” or the negative of these, as well as similar expressions, are
`intended to identify forwardlooking statements. These statements are not guarantees of future performance and rely on a number of
`assumptions concerning future events, many of which are outside of our control, and involve known and unknown risks and
`uncertainties that could cause our actual results, performance or achievements, or industry results, to differ materially from any
`future results, performance or achievements expressed or implied by such forwardlooking statements. We discuss such risks,
`uncertainties and other factors throughout this report and specifically under the caption “Risk Factors” in Item 1A of Part I of this
`report below. Any such forwardlooking statements, whether made in this report or elsewhere, should be considered in the context of
`the various disclosures made by us about our businesses including, without limitation, the risk factors discussed below. Except as
`required under the federal securities laws and the rules and regulations of the U.S. Securities and Exchange Commission, we do not
`have any intention or obligation to update publicly any forwardlooking statements, whether as a result of new information, future
`events, changes in assumptions or otherwise.
`
`
`Item 1.
`
`Business
`
`General Overview of our Business
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`PART I
`
`We are a multispecialty health care company focused on developing and commercializing innovative pharmaceuticals,
`biologics and medical devices that enable people to live life to its greatest potential — to see more clearly, move more freely and
`express themselves more fully. Our diversified approach enables us to follow our research and development into new specialty areas
`where unmet needs are significant.
`
`We discover, develop and commercialize specialty pharmaceutical, medical device and overthecounter products for the
`ophthalmic, neurological, medical aesthetics, medical dermatology, breast aesthetics, obesity intervention, urological and other
`specialty markets in more than 100 countries around the world. Our diversified business model includes products for which consumers
`may be eligible for reimbursement and cash pay products that consumers pay for directly. Based on internal information and
`assumptions, we estimate that in fiscal year 2009, approximately 72% of our net product sales were derived from reimbursable
`products and 28% of our net product sales were derived from cash pay products.
`
`We are a pioneer in specialty pharmaceutical, biologic and medical device research and development, with global efforts
`targeting products and technologies related to eye care, skin care, neuromodulators, medical aesthetics, obesity intervention, urology
`and neurology. In 2009, our research and development expenditures were approximately 15.9% of our product net sales or
`approximately $706.0 million. We supplement our own research and development activities with our commitment to identify and
`obtain new technologies through inlicensing, research collaborations, joint ventures and acquisitions.
`
`In March 2006, we acquired Inamed Corporation, or Inamed, a global health care manufacturer and marketer of breast implants, a
`range of dermal filler products to correct facial wrinkles, and bariatric medical devices for approximately $3.3 billion, consisting of
`approximately $1.4 billion in cash and 34,883,386 shares of our common stock.
`
`In the first quarter of 2007, we acquired Groupe Cornéal Laboratoires, or Cornéal, a health care company that develops,
`manufactures and markets dermal fillers, for approximately $209.2 million, net of cash acquired. The acquisition of Cornéal expanded
`our marketing rights to Juvéderm and a range of hyaluronic acid dermal fillers from the United States, Canada and Australia to all
`®
`countries worldwide and provided us with control over the manufacturing process and future research and development of Juvéderm
`®
`and other dermal fillers.
`
`In the fourth quarter of 2007, we acquired Esprit Pharma Holding Company, Inc., or Esprit, for approximately $370.8 million, net
`of cash acquired. By acquiring Esprit, we obtained an exclusive license to
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`market Sanctura (trospium chloride), or Sanctura , and Sanctura XR (trospium chloride extended release capsules), or Sanctura
`®
`®
`®
`XR , anticholinergics approved for the treatment of overactive bladder, or OAB, in the United States and its territories from Indevus
`®
`Pharmaceuticals, Inc., or Indevus. We launched Sanctura XR in the United States in the first quarter of 2008. In the second quarter of
`®
`2008, we entered into a license agreement with Indevus and Madaus GmbH, which grants us the right to seek approval for and to
`commercialize Sanctura XR in Canada. In the first quarter of 2010, Health Canada, the Canadian national regulatory body, approved
`®
`Sanctura XR .
`®
`
`In the third quarter of 2008, we acquired Aczone (dapsone) gel 5% from QLT USA, Inc., or QLT, a whollyowned subsidiary of
`®
`QLT Inc. for approximately $150 million. Aczone , approved for sale in both the United States and Canada, is indicated for the
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`treatment of acne vulgaris in patients 12 and older. Aczone contains the first new FDAapproved chemical entity (dapsone) for acne
`®
`treatment since Tazorac (tazarotene) gel was approved in 1997. We launched Aczone in the United States in the fourth quarter of
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`®
`2008.
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`In the fourth quarter of 2008, we entered into a strategic collaboration arrangement with Spectrum Pharmaceuticals, Inc., or
`Spectrum, to develop and commercialize apaziquone, an antineoplastic agent currently being investigated for the treatment of non
`muscle invasive bladder cancer by intravesical instillation. Under the collaboration, Spectrum is conducting two Phase 3 clinical
`trials to explore apaziquone’s safety and efficacy as a potential treatment for nonmuscle invasive bladder cancer following surgery.
`We made an initial payment of $41.5 million to Spectrum and will make additional payments of up to $304 million based on the
`achievement of certain development, regulatory and commercialization milestones. Spectrum retained exclusive rights to apaziquone
`in Asia, including Japan and China. Allergan received exclusive rights to apaziquone for the treatment of bladder cancer in the rest of
`the world, including the United States, Canada and Europe. In the United States, Allergan and Spectrum will copromote apaziquone
`and share in its profits and expenses. Allergan will also pay Spectrum royalties on all of its apaziquone sales outside of the United
`States. In the third quarter of 2009, the U.S. Food and Drug Administration, or FDA, granted Fast Track Designation for the
`investigation of apaziquone for the treatment of nonmuscle invasive bladder cancer. Fast Track Designation was designed to
`facilitiate drug development and expedite the review of drugs intended to treat serious conditions. In the fourth quarter of 2009,
`Spectrum completed enrollment in the two Phase 3 clinical trials.
`
`In the third quarter of 2009, we entered into a copromotion agreement with Quintiles Transnational Corp., or Quintiles, under
`which Quintiles will copromote Sanctura XR , Latisse and Aczone , generally targeting primary care physicians. We will continue
`®
`®
`®
`to promote Sanctura XR , Latisse and Aczone using our existing sales forces to specialty physicians.
`®
`®
`®
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`In the first quarter of 2010, we acquired Serica Technologies, Inc., a medical device company focused on the development of
`biodegradable silkbased scaffolds for use in tissue regeneration, including breast augmentation, revision and reconstruction and
`bariatric applications, for an aggregate purchase price of approximately $70.0 million.
`
`We were founded in 1950 and incorporated in Delaware in 1977. Our principal executive offices are located at 2525 Dupont
`Drive, Irvine, California, 92612, and our telephone number at that location is (714) 2464500. Our Internet website address is
`www.allergan.com . We make our periodic and current reports, together with amendments to these reports, available on our Internet
`1
`website, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities
`and Exchange Commission, or SEC. The SEC maintains an Internet site at www.sec.gov that contains the reports, proxy and
`information statements and other information that we file electronically with the SEC.
`
`Operating Segments
`
`We operate our business on the basis of two reportable segments — specialty pharmaceuticals and medical devices. The
`specialty pharmaceuticals segment produces a broad range of pharmaceutical products, including: ophthalmic products for chronic
`dry eye, glaucoma therapy, ocular inflammation, infection, allergy and retinal
`
`1
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`This website address is not intended to function as a hyperlink and the information at this website address is not incorporated by
`reference into this Annual Report on Form 10K.
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`diseases; Botox for certain therapeutic and aesthetic indications; skin care products for acne, psoriasis, other prescription and over
`®
`thecounter skin care products and, beginning in the first quarter of 2009, eyelash growth products; and, beginning in the fourth
`quarter of 2007 urologics products. The medical devices segment produces a broad range of medical devices, including: breast
`implants for augmentation, revision and reconstructive surgery; obesity intervention products, including the LapBand System and
`®
`the Orbera Intragastric Balloon System and facial aesthetics products. The following table sets forth, for the periods indicated,
`™
`product net sales for each of our product lines within our specialty pharmaceuticals segment and medical devices segment, domestic
`and international sales as a percentage of total product net sales within our specialty pharmaceuticals segment and medical devices
`segment, and segment operating income for our specialty pharmaceuticals segment and medical devices segment:
`
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`2009
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`
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`Year Ended December 31,
`2008
`
`
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`(dollars in millions)
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`$2,100.6
` 1,309.6
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`208.0
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`65.6
`$3,683.8
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`66.5%
`33.5%
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`$2,009.1
` 1,310.9
`
`113.7
`
`68.6
`$3,502.3
`
`
`
`
`
`
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`65.2%
`34.8%
`
`
`
`
`$ 287.5
`
`258.2
`
`218.1
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`763.8
` —
`$ 763.8
`
`
`
`
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`60.5%
`39.5%
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`
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`$ 310.0
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`296.0
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`231.4
`
`837.4
` —
`$ 837.4
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`62.0%
`38.0%
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`$1,370.8
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`189.2
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`$3,673.2
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`577.4
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`$1,220.1
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`222.0
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`$3,781.0
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`553.8
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`2007
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`$1,776.5
` 1,211.8
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`110.7
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`6.0
`$3,105.0
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`65.8%
`34.2%
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`$ 298.4
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`270.1
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`202.8
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`771.3
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`2.7
`$ 774.0
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`
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`65.1%
`34.9%
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`$1,047.9
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`207.1
`
`$3,702.8
`
`557.5
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`
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`Specialty Pharmaceuticals Segment Product Net Sales by Product Line
`Eye Care Pharmaceuticals
`Botox /Neuromodulator
`®
`Skin Care Products
`Urologics
`Total Specialty Pharmaceuticals Segment Product Net Sales
`Specialty Pharmaceuticals Segment Product Net Sales
`Domestic
`International
`
`Medical Devices Segment Product Net Sales by Product Line
`Breast Aesthetics
`Obesity Intervention
`Facial Aesthetics
`Core Medical Devices
`Other (1)
`Total Medical Devices Segment Product Net Sales
`Medical Devices Segment Product Net Sales
`Domestic
`International
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`Specialty Pharmaceuticals Segment Operating Income (2)
`Medical Devices Segment Operating Income (2)
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`Consolidated LongLived Assets
`Domestic
`International
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`(1) Other medical device product sales primarily consist of sales of ophthalmic surgical devices pursuant to a manufacturing and
`supply agreement entered into as part of the sale of the former Cornéal ophthalmic surgical device business in the third
`quarter of 2007, which was substantially concluded in the fourth quarter of 2007.
`(2) Management evaluates business segment performance on an operating income basis exclusive of general and administrative
`expenses and other indirect costs, restructuring charges, inprocess research and development expenses, amortization of
`identifiable intangible assets related to business combinations and asset acquisitions and certain other adjustments, which
`are not allocated to our business segments for performance assessment by our chief operating decision maker. Other
`adjustments excluded from our business segments for purposes of performance assessment represent income or expenses that
`do not reflect, according to established companydefined criteria, operating income or expenses associated with our core
`business activities.
`
`We do not discretely allocate assets to our operating segments, nor does our chief operating decision maker evaluate operating
`segments using discrete asset information.
`
`See Note 18, “Business Segment Information,” in the notes to the consolidated financial statements listed under Item 15 of
`Part IV of this report, “Exhibits and Financial Statement Schedules,” for further information concerning our foreign and domestic
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`Specialty Pharmaceuticals Segment
`
`Eye Care Pharmaceuticals Product Line
`
`We develop, manufacture and market a broad range of prescription and nonprescription products designed to treat diseases and
`disorders of the eye, including chronic dry eye, glaucoma, inflammation, infection and allergy.
`
`Chronic Dry Eye. Restasis (cyclosporine ophthalmic emulsion) 0.05%, or Restasis , is the first, and currently the only,
`®
`®
`prescription therapy for the treatment of chronic dry eye worldwide. Restasis is our best selling eye care product. Chronic dry eye is a
`®
`painful and irritating condition involving abnormalities and deficiencies in the tear film initiated by a variety of causes. The
`incidence of chronic dry eye increases markedly with age, after menopause in women and in people with systemic diseases such as
`Sjögren’s syndrome and rheumatoid arthritis. Until the approval of Restasis , physicians used lubricating tears to provide palliative
`®
`relief of the debilitating symptoms of chronic dry eye. We launched Restasis in the United States in 2003 under a license from
`®
`Novartis AG, or Novartis, for the ophthalmic use of cyclosporine. Restasis is currently approved in 34 countries.
`®
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`Artificial Tears. Our artificial tears products, including the Refresh and Refresh Optive brands, treat dry eye symptoms
`®
`®
`™
`including irritation and dryness due to pollution, computer use, aging and other causes. Refresh , launched in 1986, is the best selling
`®
`overthecounter artificial tears brand in the United States and includes a wide range of preserved and nonpreserved drops as well as
`ointments to treat dry eye symptoms. According to IMS Health Incorporated, an independent marketing research firm, our artificial
`tears products, including the Refresh and Refresh Optive brands, were again the number one selling artificial tears products
`®
`®
`™
`worldwide for the first nine months of 2009.
`
`Glaucoma. The largest segment of the market for ophthalmic prescription drugs is for the treatment of glaucoma, a sight
`threatening disease typically characterized by elevated intraocular pressure leading to optic nerve damage. Glaucoma is currently the
`world’s second leading cause of blindness, and we estimate that over 70 million people worldwide have glaucoma. According to IMS
`Health Incorporated, our products for the treatment of glaucoma, including Lumigan (bimatoprost ophthalmic solution) 0.03%, or
`®
`Lumigan 0.03%, Lumigan 0.01%, Alphagan (brimonidine tartrate ophthalmic solution) 0.2%, or Alphagan , Alphagan P 0.15%,
`®
`®
`®
`®
`®
`Alphagan P 0.1%, Combigan (brimonidine tartrate/timolol maleate ophthalmic solution) 0.2%/0.5%, or Combigan , and Ganfort
`®
`®
`®
`™
`(bimatoprost/timolol maleate ophthalmic solution), or Ganfort
`, captured approximately 19% of worldwide glaucoma market sales
`™
`for the first nine months of 2009.
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`Lumigan 0.03% and Lumigan 0.01% are topical treatments indicated for the reduction of elevated intraocular pressure in
`®
`®
`patients with glaucoma or ocular hypertension. Lumigan 0.01% is an improved reformulation of Lumigan 0.03% for sale in certain
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`countries outside of the United States. We are also seeking approval of Lumigan 0.01% in the United States. We currently sell
`®
`Lumigan 0.01% and Lumigan 0.03% in over 75 countries worldwide and, together, they are our second best selling eye care
`®
`®
`products. According to IMS Health Incorporated, Lumigan 0.01% and Lumigan 0.03% were the fourth best selling glaucoma
`®
`®
`products in the world for the first nine months of 2009. In 2002, the European Commission approved Lumigan 0.03%. In 2004, the
`®
`European Union’s Committee for Proprietary Medicinal Products approved Lumigan 0.03% as a firstline therapy for the reduction of
`®
`elevated intraocular pressure in chronic openangle glaucoma and ocular hypertension. In 2006, the FDA approved Lumigan 0.03%
`®
`as a firstline therapy. In 2004, we entered into an exclusive licensing agreement with Senju Pharmaceutical Co., Ltd., or Senju, under
`which Senju became responsible for the development and commercialization of Lumigan 0.03% in Japan. In the third quarter of
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`2009, Senju received approval of Lumigan 0.03% in Japan. In the second quarter of 2009, Health Canada approved Lumigan
`®
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`0.01%. Lumigan 0.01% was also approved in Brazil in 2009. In the first quarter of 2010, the European Commission granted a
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`Marketing Authorization for Lumigan 0.01% in the 27 European Union member states.
`®
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` in the European Union. Combined sales of
`In 2006, we received a license from the European Commission to market Ganfort
`™
`Lumigan 0.03%, Lumigan 0.01% and Ganfort
` represented approximately 10% of our total consolidated product net sales in 2009,
`®
`®
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`2008 and 2007. Ganfort
` is now sold in over 29 countries outside the United States.
`™
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`Our third best selling eye care products are the ophthalmic solutions Alphagan , Alphagan P 0.15% and Alphagan P 0.1%.
`®
`®
`®
`These products lower intraocular pressure by reducing aqueous humor production and increasing uveoscleral outflow. Alphagan P
`®
`0.15% and Alphagan P 0.1% are improved reformulations of Alphagan containing brimonidine, the active ingredient in
`®
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`Alphagan , preserved with Purite . We currently market Alphagan , Alphagan P 0.15% and Alphagan P 0.1% in over 70 countries
`®
`®
`®
`®
`®
`worldwide.
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`Alphagan , Alphagan P 0.15% and Alphagan P 0.1% combined were the fourth best selling glaucoma products in the world
`®
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`for the first nine months of 2009, according to IMS Health Incorporated. Combined sales of Alphagan , Alphagan P 0.15% and
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`Alphagan P 0.1% and Combigan represented approximately 9% of our total consolidated product net sales in 2009, 2008 and
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`2007. In 2002, based on the acceptance of Alphagan P 0.15%, we discontinued the U.S. distribution of Alphagan . In 2004, we
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`entered into an exclusive licensing agreement with Kyorin Pharmaceutical Co., Ltd., or Kyorin, under which Kyorin became
`responsible for the development and commercialization of Alphagan and Alphagan P 0.15% in Japan. Kyorin subsequently
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`sublicensed its rights under the agreement to Senju. Alphagan P 0.1% was launched in the United States in 2006. The marketing
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`exclusivity period for Alphagan P 0.1% expired in the third quarter of 2008, although we have a number of patents covering the
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`Alphagan P 0.1% and Alphagan P 0.15% technology that extend to 2022 in the United States. In 2003, the FDA approved the first
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`generic of Alphagan . Additionally, a generic form of Alphagan is sold in a limited number of other countries, including Canada,
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`Mexico, India, Brazil, Colombia, Argentina and other countries in the European Union.
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`In addition to our Alphagan and Lumigan products, we developed the ophthalmic solution Combigan , a brimonidine and
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`timolol combination designed to treat glaucoma and ocular hypertension in people who are not responsive to treatment with only one
`medication and are considered appropriate candidates for combination therapy. In 2005, we received positive opinions for
`Combigan from 20 concerned member states included in the Combigan Mutual Recognition Procedure for the European Union,
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`and we launched Combigan in the European Union during 2006. In the fourth quarter of 2007, the FDA approved Combigan and
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`we launched Combigan in the United States. Combigan is now sold in over 55 countries worldwide.
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`Inflammation. Our leading ophthalmic antiinflammatory product is Acular LS (ketorolac ophthalmic solution) 0.4%, or Acular
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`LS . Acular LS is a version of Acular that has been reformulated for the reduction of ocular pain, burning and stinging following
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`corneal refractive surgery. Acular PF was the first preservativefree topical nonsteroidal antiinflammatory drug, or NSAID, in the
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`United States. Acular PF is indicated for the reduction of ocular pain and photophobia following incisional refractive surgery. The
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`Acular franchise was the best selling ophthalmic NSAID in the world during the first nine months of 2009, according to IMS Health
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`Incorporated. In the third quarter of 2009, the FDA approved Acuvail (ketorolac tromethamine ophthalmic solution) 0.45%, or
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`Acuvail , an advanced unitdose preservativefree formulation of ketorolac for the treatment of pain and inflammation following
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`cataract surgery and we began marketing Acuvail . In the fourth quarter of 2009, the FDA approved four Abbreviated New Drug
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`Applications, or ANDAs, for ketorolac tromethamine ophthalmic solution 0.5%, a generic version of Acular , and four companies
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`launched generic versions of Acular in the United States. Our ophthalmic antiinflammatory product Pred Forte remains a leading
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`topical steroid worldwide based on 2009 sales. Pred Forte has no patent protection or marketing exclusivity and faces generic
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`competition.
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`Infection. Our leading antiinfective is Zymar (gatifloxacin ophthalmic solution) 0.3%, or Zymar , which we license from
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`Kyorin and have worldwide ophthalmic commercial rights excluding Japan, Korea, Taiwan and certain other countries in Asia and
`Europe. We launched Zymar in the United States in 2003. Zymar is a fourthgeneration fluoroquinolone for the treatment of
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`bacterial conjunctivitis and is currently approved in 33 countries. Laboratory studies have shown that Zymar kills the most common
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`bacteria that cause eye infections
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`Table of Contents
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`as well as specific resistant bacteria. We completed our Phase 3 clinical studies of an enhanced formula of Zymar for bacterial
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`conjunctivitis and filed a New Drug Application, or NDA, with the FDA in the third quarter of 2009. According to Verispan, an
`independent research firm, Zymar was the number two ophthalmic antiinfective prescribed by ophthalmologists in the United States
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`in 2009. Zymar was the third best selling ophthalmic antiinfective product in the world for the first nine months of 2009, according
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`to IMS Health Incorporated.
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`Allergy. The allergy market is, by its nature, a seasonal market, peaking during the spring months. We market Alocril
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`ophthalmic solution for the treatment of itch associated with allergic conjunctivitis. We license Alocril from Fisons Ltd., a business
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`unit of SanofiAventis, and hold worldwide ophthalmic commercial rights excluding Japan. Alocril is approved in the United States,
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`Canada and Mexico. We license Elestat from Boehringer Ingelheim AG, and hold worldwide ophthalmic commercial rights
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`excluding Japan. Elestat is used for the prevention of itching associated with allergic conjunctivitis. We copromote Elestat in the
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`United States under an agreement with Inspire Pharmaceuticals, Inc., or Inspire, within the ophthalmic specialty area and to allergists.
`Under the terms of our agreement with Inspire, Inspire provided us with an upfront payment and we make payments to Inspire based
`on Elestat net sales. In addition, the agreement reduced our existing royalty payment to Inspire for Restasis . Inspire has primary
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`responsibility for selling and marketing activities in the United States related to Elestat . We have retained all international
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`marketing and selling rights. We launched Elestat in Europe under the brand names Relestat and Purivist during 2004, and Inspire
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`launched Elestat in the United States during 2004. Elestat (together with sales under its brand names Relestat and Purivist ) is
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`currently approved in 47 countr