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`20-F 1 acl20f2010.htm 20-F
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`acl20f2010.htm
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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`WASHINGTON, D.C. 20549
`
`FORM 20-F
`
`REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF
`1934
`OR
`X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
`For the fiscal year ended DECEMBER 31, 2010
`1934
`OR
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`OR
`SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`Commission file number 001-31269
`
`ALCON, INC.
`(Exact name of Registrant as specified in its charter)
`ALCON, INC.
` (Translation of Registrant's name into English)
`Switzerland
`(Jurisdiction of incorporation or organization)
`Bösch 69, P.O. Box 62, Hünenberg, Switzerland
`(Address of principal executive offices)
`Elaine E. Whitbeck, General Counsel & Corporate Secretary, Alcon Inc., 6201 South Freeway, TA7-1, Fort Worth, Texas, USA
`76134-2099; 817-293-0450; AlconSECContact@Alcon.com
`(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
`Securities registered or to be registered pursuant to Section 12(b) of the Act.
`Title of each class
`Name of each exchange on which registered
`Common Shares, par value CHF 0.20 per share
`The New York Stock Exchange
`
`Securities registered or to be registered pursuant to Section 12(g) of the
`Act. None
`Securities for which there is a reporting obligation pursuant to Section 15(d) of the
`Act. None
`Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by
` 302,390,266 Common Shares
`the annual report.
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
` Yes
` No
`
`X
`
`If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
`15(d) of the Securities Exchange Act of 1934.
` No
` Yes
`
`X
`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.
` No
` Yes
`X
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.
`Large
`Accelerated
`
`Non-accelerated Filer
`X
`Accelerated Filer
`Filer
`Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.
`U.S.
`International Financial Reporting
`
`Other
`
`X
`GAAP
`Standards as issued
`by the International Accounting
`Standards Board
`If ″Other″ has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has
`elected to follow.
`Exhibit 1075
`ARGENTUM1/232
`IPR2017-01053
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` Item 18
` Item 17
`
`
`
`If this report is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
`Exchange Act).
` Yes
`
`
`X
`
` No
`
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`acl20f2010.htm
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`TABLE OF CONTENTS
`
`
`
`INTRODUCTION AND USE OF CERTAIN TERMS
`CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
`PART I
`ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
`ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
`ITEM 3. KEY INFORMATION
`ITEM 4. INFORMATION ON THE COMPANY
`ITEM 4A. UNRESOLVED STAFF COMMENTS
`ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
`ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
`ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
`ITEM 8. FINANCIAL INFORMATION
`ITEM 9. THE OFFER AND LISTING
`ITEM 10. ADDITIONAL INFORMATION
`ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
`ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
`PART II
`ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
` ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
`OF PROCEEDS
`ITEM 15. CONTROLS AND PROCEDURES
`ITEM 16. [RESERVED]
`ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
`ITEM 16B. CODE OF ETHICS
`ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
` ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
`ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
`PURCHASERS
`ITEM 16F. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
`ITEM 16G. CORPORATE GOVERNANCE
`PART III
`ITEM 17. FINANCIAL STATEMENTS
`ITEM 18. FINANCIAL STATEMENTS
`ITEM 19. EXHIBITS
`SIGNATURES
`
`2
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`INTRODUCTION AND USE OF CERTAIN TERMS
`
`
`
`Trademarks used by Alcon, Inc. ("Alcon") appear in italic type in this report and are the property of or are licensed by one of our
`subsidiaries.
`
`In this report, the trademark product brand names refer to the products noted below.
`
`Referenced Product
`Product Brand Name
`A-OK® ophthalmic knives
`A-OK®
`Accurus® surgical system
`Accurus®
`AcrySof® intraocular lens
`AcrySof®
`AcrySof® CACHET™ phakic lens
`AcrySof® CACHET™
`AcrySof® IQ intraocular lens
`AcrySof® IQ
`AcrySof® IQ ReSTOR® intraocular lens
`AcrySof® IQ ReSTOR®
`AcrySof® IQ ReSTOR® Multifocal Toric intraocular lens
`AcrySof® IQ ReSTOR® Multifocal Toric
`AcrySof® IQ ReSTOR® +3.0 intraocular lens
`AcrySof® IQ ReSTOR® +3.0
`AcrySof® IQ Toric intraocular lens
`AcrySof® IQ Toric
`AcrySof® Natural intraocular lens
`AcrySof® Natural
`AcrySof® ReSTOR® intraocular lens
`AcrySof® ReSTOR®
`AcrySof® ReSTOR® Toric intraocular lens
`AcrySof® ReSTOR® Toric
`AcrySof® Toric intraocular lens
`AcrySof® Toric
`ALCON® house trademark
`ALCON®
`ALLEGRETTO™ laser system
`ALLEGRETTO™
`ALLEGRETTO™ EX-400 laser
`ALLEGRETTO™ EX-400
`ALLEGRETTO™ EX-500 laser
`ALLEGRETTO™ EX-500
`ALLEGRETTO WAVE® Eye-Q 400 Hz laser
`ALLEGRETTO WAVE® Eye-Q
`ALLEGRO ANALYZER® wavefront system
`ALLEGRO ANALYZER®
`ALLEGRO™ biometry system
`ALLEGRO™
`ALLEGRO OCULYZER® pentacam diagnostic device
`ALLEGRO OCULYZER®
`ALLEGRO TOPOLYZER® corneal topography system
`ALLEGRO TOPOLYZER®
`AquaLase® liquefaction device
`AquaLase®
`AZARGA® ophthalmic suspension
`AZARGA®
`Azopt® ophthalmic suspension
`Azopt®
`Betoptic S® ophthalmic suspension
`Betoptic S®
`BSS Plus® irrigating solution
`BSS Plus®
`CiloDex® otic solution
`CiloDex®
`CIPRODEX® otic suspension
`CIPRODEX®*
`Cipro® HC Otic
`Cipro® HC*
`CONSTELLATION® vitreoretinal system
`CONSTELLATION®
`Custom Pak® surgical procedure packs
`Custom Pak®
`DisCoVisc® viscosurgical device
`DisCoVisc®
`DuoTrav® ophthalmic solution
`DuoTrav® (EU)
`DuoTrav® APS ophthalmic solution
`DuoTrav® APS (EU)
`DuoVisc® viscoelastic system
`DuoVisc®
`DUREZOL® ophthalmic emulsion/steroid
`DUREZOL®
`EXPRESS® contact lens care solutions
`EXPRESS®
`EX-PRESS® glaucoma filtration device
`EX-PRESS®
`Grieshaber® surgical instruments
`Grieshaber®
`ICAPS® dietary supplements
`ICAPS®
`Infiniti® vision system
`Infiniti®
`Laureate® compact phacoemulsification system
`Laureate®
`LEGACY® surgical system
`LEGACY®
`LenSx® laser system
`LenSx®
`Maxitrol® ophthalmic suspension or ointment
`Maxitrol®
`Moxeza™ 0.5% ophthalmic solution
`Moxeza™*
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`Product Brand Name
`NEVANAC®
`Opatanol® (EU)
`OPTI-FREE®
`OPTI-FREE® EVERMOIST™
`OPTI-FREE® EXPRESS® No-Rub®
`OPTI-FREE® RepleniSH®
`OZil®
`Pataday™
`Patanase®
`Patanol®
`Perfluoron®
`ProVisc®
`Silikon®
`SOFZIA®
`Systane®
`Systane® Balance
`Systane® Ultra
`Tears Naturale®
`TobraDex®
`TobraDex® ST
`Tobrex®
`TRAVATAN®
`TRAVATAN® APS
`TRAVATAN Z®
`TRIESENCE®
`Vegamox®* (Japan)
`Vigadexa®
`Vigamox®*
`VISCOAT®
`WaveLight®
`
`Referenced Product
`NEVANAC® ophthalmic suspension
`Opatanol® ophthalmic solution
`OPTI-FREE® contact lens care solutions
`OPTI-FREE® EVERMOIST™ multi-purpose disinfecting solution
`OPTI-FREE® EXPRESS® No-Rub® contact lens care solution
`OPTI-FREE® RepleniSH® multi-purpose disinfecting solution
`OZil® torsional hand piece/technology
`Pataday™ ophthalmic solution
`Patanase® nasal spray
`Patanol® ophthalmic solution
`Perfluoron® perfluoro-n-octane liquid
`ProVisc® ophthalmic viscosurgical device
`Silikon® ophthalmic surgical oil
`SOFZIA® preservative system
`Systane® lubricant eye drops
`Systane® Balance lubricant eye drops
`Systane® Ultra lubricant eye drops
`Tears Naturale® lubricant eye drops
`TobraDex® ophthalmic suspension or ointment
`TobraDex® ST ophthalmic suspension
`Tobrex® ophthalmic solution or ointment
`TRAVATAN® ophthalmic solution
`TRAVATAN® APS ophthalmic solution
`TRAVATAN Z® ophthalmic solution
`TRIESENCE® injectable suspension
`Vegamox® ophthalmic solution
`Vigadexa® ophthalmic solution
`Vigamox® ophthalmic solution
`VISCOAT® ophthalmic viscosurgical device
`WaveLight® refractive suite
`
`* Cipro® and CIPRODEX® are registered trademarks of Bayer AG, licensed to Alcon by Bayer Schering Pharma
`AG. Moxifloxacin, the primary ingredient in Vigamox®, Vegamox® and Moxeza™, is licensed to Alcon by Bayer Schering Pharma AG.
`
`Avelox® is a trademark of Bayer Schering Pharma AG. Zaditor® is a trademark of Novartis AG. Timoptic-XE® is a trademark of
`Merck & Co., Inc. Lucentis® is a trademark of Genentech, Inc.
`
`In this report, references to "$", "U.S. $", "U.S. dollars" and "United States dollars" are to the lawful currency of the United States of
`America, references to "CHF" and "Swiss francs" are to the lawful currency of the Swiss Confederation, references to "euro" are to the
`lawful currency of the member states of the European Monetary Union that have adopted or that adopt the single currency in accordance
`with the Treaty establishing the European Community, as amended by the Treaty on European Union, and references to Japanese yen are to
`the lawful currency of Japan. Unless otherwise stated, figures provided are under United States generally accepted accounting principles
`("U.S. GAAP"). Unless we specify otherwise, all references in this report to "we," "our," "us," "the Company" and "our Company" refer to
`Alcon, Inc. and its subsidiaries.
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`This report uses certain terms defined below.
`
`
`
`Term
`Affordable Care Act
`AMD
`ANDA
`ANDS
`AOMT
`AREDS
`ASC
`ASERP
`BAC
`CEO
`CMS
`CP Program
`(the) Company
`DCP
`DTC
`EPS
`ESCP
`EU
`EUCMS
`Evaluation Date
`Exchange Act
`External auditors
`
`FASB
`FDA
`FDAAA
`FTC
`IFRS
`IPO
`
`IRB
`IRC
`LASIK
`MGD
`NDA
`Non-U.S. Holder
`NSAID
`NYSE
`OTC
`PMA
`Purchase and Option Agreement
`
`REMS
`RMS
`RSU(s)
`SAB
`SEC
`Second Stage Closing
`
`
`
`
`Definition
`Health Care and Education Reconciliation Act of 2010
`Age-related macular degeneration
`Abbreviated New Drug Application
`Abbreviated New Drug Submission
`Otitis media in the presence of tympanostomy tubes
`National Eye Institute's Age Related Eye Disease Study
`Accounting Standards Codification
`Alcon Supplemental Executive Retirement Plan
`Benzalkonium chloride
`Chief Executive Officer
`The Centers for Medicare and Medicaid Services
`Alcon's Commercial Paper Program
`Alcon, Inc. and its subsidiaries
`Alcon Executive Deferred Compensation Plan
`Depository Trust Company
`Earnings Per Share
`Alcon's Executive Salary Continuation Plan
`European Union
`Concerned member state of the European Union
`End of the period covered by this annual report
`U.S. Securities Exchange Act of 1934
`The primary Alcon Group external auditors and additional external auditors specific to
`the Company subsidiary
`Financial Accounting Standards Board
`United States Food and Drug Administration
`Food and Drug Administration Amendments Act of 2007
`U.S. Federal Trade Commission
`International Financial Reporting Standards
`The initial public offering of approximately 69,750,000 of Alcon, Inc.'s common shares
`on March 20, 2002
`Institutional Review Board
`U.S. Internal Revenue Code
`Laser-Assisted In Situ Keratomileusis
`Meibomian gland dysfunction
`New Drug Application
`A holder that is not a U.S. Holder (see definition of U.S. Holder below)
`Non-steroidal anti-inflammatory drug
`New York Stock Exchange
`Over-the-Counter drugs available without a prescription
`Pre-Market Approval
`Purchase and Option Agreement between Nestlé S.A. and Novartis AG dated as of
`April 6, 2008
`Risk evaluation and mitigation strategies discussed in the FDAAA
`Reference member state of the European Union
`Restricted share unit(s)
`Staff Accounting Bulletin published by the SEC
`United States Securities and Exchange Commission
`The purchase and sale of Nestlé's remaining Alcon shares to Novartis under the
`Purchase and Option Agreement
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`Term
`Securities Act
`Separation Agreement
`Services Agreement
`
`Shareholders Agreement
`SSAR(s)
`Swiss Holder
`TSR
`U.S. GAAP
`U.S. Holder
`VHCA
`
`acl20f2010.htm
`
`
`
`Definition
`U.S. Securities Act of 1933, as amended
`Separation Agreement between Nestlé and Alcon described in Item 7.B.5
`Guarantee Fee and Commercial Paper Program Services Agreement, as described in
`Item 7.B, "Related Party Transactions."
`Shareholders Agreement between Nestlé and Novartis dated as of April 6, 2008
`Share-settled stock appreciation right(s)
`Security holder as defined in Item 10.E.
`Total shareholder return
`United States generally accepted accounting principles
`Security holder as defined in Item 10.E.
`Veterans Health Care Act
`
`References to the ophthalmic industry in this report do not include eyeglasses or contact lenses. This report relies on and refers to
`statistics regarding the ophthalmic industry. Where specified, these statistics reflect the Company's internal estimates. Otherwise, we
`obtained these statistics from various third-party sources that we believe are reliable, but we have not independently verified these third-
`party statistics. Unless otherwise specified, all market share information was based on units sold.
`
`Statements in this report regarding the Company's market share position are from the following sources:
`
`· pharmaceutical products--IMS Research;
`· surgical products--internal estimates prepared using industry data;
`· consumer products--AC Nielsen, IMS Research, selected other third party data providers and company estimates.
`
`CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
`
`This report contains "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended,
`(the "Securities Act") and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, (the "Exchange Act") relating to our
`business and the sectors in which Alcon and its subsidiaries and interests operate. These forward-looking statements are contained
`principally in the sections entitled "Key Information," "Information on the Company," "Operating and Financial Review and Prospects,"
`"Financial Information," "Additional Information," and "Quantitative and Qualitative Disclosures about Market Risk." These statements
`involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be
`materially different from any future results, performances or achievements expressed or implied by our forward-looking
`statements. Forward-looking statements include, but are not limited to, statements about: the progress of our research and development
`programs; the receipt of regulatory approvals; competition in our industry; the impact of pending or future litigation; the impact of any
`future product recalls; changes in, or the failure or inability to comply with, governmental regulation; the opportunities for growth, whether
`through internal development or acquisitions; exchange rate fluctuations; general economic conditions; and trends affecting the ophthalmic
`industry, our financial condition or results of operations.
`
`Words such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "intend," "estimate," "project,"
`"predict," "potential" and similar expressions are intended to identify forward-looking statements. These statements reflect our current
`views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you
`should not place undue reliance on these forward-looking statements. We discuss many of these risks in this report in greater detail under
`the subheadings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." These
`forward-looking statements represent our estimates and assumptions only as of the date of this report and are not intended to give any
`assurance as to future results. Factors that might cause future results to differ include, but are not limited to, the following:
`
`
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`· failure to consummate the merger with Novartis AG may cause volatility in our share price;
`
`
`
`· resources devoted to research and development may not yield new products that achieve commercial success;
`
`· the production and launch of commercially viable products may take longer and cost more than expected;
`
`· competition may lead to worse than expected financial condition and results of operations;
`
`· changes in reimbursement procedures and/or amounts by third-party payors;
`
`· changes caused by regulatory or market forces in the prices we receive for our products;
`
`· changes in the global economic environment in which we operate, as well as changes in the economic conditions in our markets;
`
`· currency exchange rate fluctuations may negatively affect our financial condition and results of operations;
`
`· the impact of any future events with material unforeseen impacts, including, but not limited to, war, natural disasters, or acts of
`terrorism;
`
`· supply and manufacturing disruptions could negatively impact our financial condition or results of operations;
`
`· inability to attract qualified personnel, which could negatively impact our ability to grow our business;
`
`· difficulty protecting our intellectual property rights;
`
`· pending or future litigation may negatively impact our financial condition and results of operations;
`
`· government regulation or legislation may negatively impact our financial condition or results of operations;
`
`· product recalls or withdrawals may negatively impact our financial condition or results of operations;
`
`· the occurrence of environmental liabilities arising from our operations; and
`
`· the occurrence of any losses from property and casualty, general liability, business interruption and environmental liability risks could
`negatively affect our financial condition because we self-insure against those risks through our captive insurance subsidiaries.
`
`You should read this report completely and with the understanding that Alcon's actual future results may be materially different from
`what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except to the extent required under the
`federal securities laws and the rules and regulations promulgated by the United States Securities and Exchange Commission ("SEC"), we
`undertake no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information or future
`events or circumstances or otherwise.
`
`
`IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
`
`PART I
`
`Not Applicable.
`
`OFFER STATISTICS AND EXPECTED TIMETABLE
`
`Not Applicable.
`
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`ITEM 2.
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`KEY INFORMATION
`
`SELECTED FINANCIAL DATA
`
`acl20f2010.htm
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`
`
`The following tables present our selected historical consolidated financial data in accordance with U.S. GAAP. This information
`should be read along with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 5 of
`this report and the consolidated financial statements, including the accompanying notes thereto, included in Item 18 of this report.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
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`
`
`
`Year Ended December 31,
`2007
`2009
`2008
`
`
`(in millions, except per share data)
`
`
`
`
`6,499
`$
`6,294
`$
`1,614
`1,472
`
`
`4,885
`4,822
`1,935
`1,961
`665
`619
`--
`--
`24
`29
`--
`--
`
`
`2,261
`2,213
`46
`76
`(16)
`(51)
`22
`(155)
`
`
`2,313
`2,083
`306
`36
`
`
`2,007
`2,047
`
`
`
`2010
`
`
`
`
`$
`
`
`
`
`
`
`
`
`$
`
`
`
`7,179
`1,675
`
`5,504
`2,070
`747
`--
`60
`152
`
`2,475
`29
`(9)
`32
`
`2,527
`317
`
`2,210
`
`
`301
`
`
`$
`
`
`
`
`
`
`
`
`$
`
`
`
`
`2006
`
`
`
`
`
`4,897
`1,215
`
`3,682
`1,399
`512
`--
`199
`--
`
`1,572
`74
`(43)
`14
`
`1,617
`269
`
`1,348
`
`
`
`$
`
`
`
`
`
`
`
`
`$
`
`
`
`5,599
`1,398
`
`4,201
`1,694
`564
`9
`51
`--
`
`1,883
`69
`(50)
`27
`
`1,929
`343
`
`1,586
`
`
`
`
`
`
`
`
`
`$
`
`
`
`
`
`
`
`
`
`$
`
`
`299
`
`298
`
`298
`
`304
`
`304
`$
`7.34
`$
`7.27
`$
`1,037
`$
`3.44
`3.95 CHF
`
`
`
`
`
`
`2,375
`$
`(1,705)
`(1,150)
`
`
`
`
`$
`$
`$
`$
`CHF
`
`
`
`$
`
`
`
`2010
`
`
`
`
`
`$
`
`$
`
`6,069
`4,278
`10,073
`--
`7,252
`
`301
`301
`$
`6.86
`$
`6.72
`$
`6.79
`$
`6.66
`$
`750
`$
`1,048
`$
`2.50
`$
`3.50
`2. 63 CHF
`3.95 CHF
`
`
`
`
`
`
`
`
`
`
`
`
`2,032
`$
`2,416
`$
`(365)
`(390)
`(1,333)
`(1,481)
`
`
`
`At December 31,
`2008
`
`(in millions)
`$
`5,219
`3,029
`7,551
`61
`4,691
`
`2009
`
`5,833
`3,858
`8,686
`56
`5,905
`
`
`
`$
`
`302
`$
`5.32
`$
`5.25
`$
`613
`$
`2.04
`2.50 CHF
`
`
`
`
`
`
`1,470
`$
`(227)
`(607)
`
`
`
`
`$
`
`2007
`
`4,825
`1,963
`7,016
`52
`3,375
`
`309
`4.43
`4.37
`417
`1.38
`1.68
`
`
`
`1,406
`(166)
`(1,225)
`
`
`2006
`
`3,462
`1,461
`5,427
`49
`2,914
`
`11/232
`
`
`
`
`Statement of Earnings Data:
`Sales
`Cost of goods sold
`
`
`
`
`
`
`
`
`
`
`
`Gross profit
`Selling, general and administrative
`Research and development
`In process research and development
`Amortization of intangibles
`Other operating expenses
`
`Operating income
`Interest income
`Interest expense
`Other, net
`
`Earnings before income taxes
`Income taxes
`
`Net earnings
`
`Basic weighted-average common shares
` outstanding
`Diluted weighted-average common shares
` outstanding
`Basic earnings per common share
`Diluted earnings per common share
`Dividends paid on common shares
`Dividends paid per common share: U.S. $
`Dividends paid per common share: Swiss CHF
`
`
`Cash Flow Data:
`Cash provided by (used in):
`Operating activities
`Investing activities
`Financing activities
`
`
`
`
`Balance Sheet Data:
`Current assets
`Working capital
`Total assets
`Long term debt, net of current maturities
`Total shareholders' equity
`
`
`
`
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`Exchange Rates
`
`
`
`Fluctuations in the exchange rate between the Swiss franc and the U.S. dollar will affect the conversions into U.S. dollars of any cash
`dividends paid in Swiss francs on our common shares. In addition, these and other fluctuations in the exchange rates of the currencies of
`our various local operations affect our results of operations and financial condition as presented in our financial statements.
`
`The following table sets forth, for the periods indicated, information concerning the exchange rate between Swiss francs and U.S.
`dollars based upon the spot rate at the close of market, as published by Bloomberg Finance L.P.:
`
`
`Fiscal Year
`
`2006
`2007
`2008
`2009
`2010
`
`
`
`
`
`
`
`
`
`
`Period End (1)
`
`1.2201
`1.1335
`1.0687
`1.0352
`0.9352
`
`Exchange Rate for 1 U.S. Dollar
`High
` Average (1) (2)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1.3228
`1.2535
`1.2254
`1.1852
`1.1631
`
`1.2529
`1.2000
`1.0824
`1.0850
`1.0423
`
`
`
`
`
`
`
`
`
`Low
`
`1.1923
`1.0969
`0.9844
`0.9964
`0.9352
`
`(1) The closing spot rate at each period end and the average rate for each period differed from the exchange rates used in the preparation
`of our financial statements.
`(2) Represents the average of the daily rates as published by Bloomberg Finance L.P. during the period.
`
`The following table sets forth the high and low closing spot rate for the Swiss franc for each of the prior six months:
`
`
`Month
`
`September 2010
`October 2010
`November 2010
`December 2010
`January 2011
`February 2011
`
`
`
` Period End
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`0.9825
`0.9824
`1.0034
`0.9352
`0.9440
`0.9289
`
`
`
`
`
`1.0011
`0.9688
`0.9852
`0.9670
`0.9566
`0.9494
`
`Exchange Rate for 1 U.S. Dollar
`Average
`High
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1.0198
`0.9904
`1.0036
`1.0023
`0.9737
`0.9732
`
`Low
`
`0.9758
`0.9530
`0.9584
`0.9352
`0.9334
`0.9264
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Although we have translated selected Swiss franc amounts in this report into U.S. dollars for convenience, this does not mean that the
`Swiss franc amounts referred to could have been, or could be, converted into U.S. dollars at these rates or any other rate.
`
`B. CAPITALIZATION AND INDEBTEDNESS
`
`Not Applicable.
`
`C. REASONS FOR THE OFFER AND USE OF THE PROCEEDS
`
`Not Applicable.
`
`D. RISK FACTORS
`
`
`
`
`
`
`
`
`If the events discussed in these Risk Factors occur, our business, financial condition, results of operations or cash flows could be
`materially adversely affected. In such a case, the market price of our common shares could decline. The risks described below are not the
`only ones that may exist. Additional risks not currently known by us or that we deem immaterial also may impair our business operations.
`
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`Risks Related to Our Business and Industry
`
`
`
`Resources devoted to research and development may not yield new products that achieve commercial success.
`
`We devote substantial resources to research and development. The research and development process is expensive and prolonged, and
`it entails considerable risk. Development of a new product, from discovery through testing and registration to initial product launch,
`typically takes between eight and fifteen years or more for a pharmaceutical product and between three and seven years or more for a
`medical device. Each of these periods varies considerably depending on the product and the country where registration is sought. Because
`of the risk associated with our research and development, products we are currently developing may not obtain the regulatory approvals
`required for us to market such products successfully or they may take longer than we expect to gain necessary governmental, regulatory or
`other approval. They may cost more to develop and may be less successful than we currently anticipate, or than other therapies that are
`presently or soon may be on the market. We can make no assurances that any of the projects currently in our development pipeline will
`result in commercially successful products.
`
`If we fail to keep pace with advances in our industry or fail to persuade physicians to adopt new products we introduce, customers
`may not buy our products and our sales and profits may decline.
`
`The pharmaceutical, medical device and over-the-counter industries are characterized by continual product development, constant
`innovation in products and techniques, frequent new product introductions and price competition. Our future growth depends, in part, on
`our ability to develop products which are more effective in treating diseases and disorders of the eye or that incorporate the latest
`technologies. In addition, we must be able to manufacture new products and effectively persuade a sufficient number of eye care
`professionals and/or consumers to use the new products we introduce. Sales of our existing products may decline rapidly if a new
`competing product is introduced by one of our competitors or if we announce a new product that, in either case, represents a substantial
`improvement over our existing products. Similarly, if we fail to make sufficient investments in research and development programs, our
`current and planned products could be surpassed by more effective or advanced products.
`
`We may not successfully develop and launch replacements for our products that lose patent protection.
`
`Most of our major products are covered by patents that give us a degree of market exclusivity during the term of the patent. Upon
`patent expiration, our competitors may introduce products using the same technology. As a result, our sales and profits could decline
`significantly due to increased competition. In addition, we may not be able to develop and successfully launch more advanced replacement
`products before these and other patents expire.
`
`For instance, our successful combination ocular anti-infective/anti-inflammatory product, TobraDex® ophthalmic suspension and
`ointment, lost its exclusive marketing position in the United States in January 2009. Both a competitor and our Falcon Pharmaceuticals
`subsidiary launched generic versions of TobraDex® suspension in early January 2009.
`
`We depend on proprietary technologies and may not be able to protect our intellectual property rights adequately.
`
`We currently hold approximately 7,000 patents and have more than 4,000 pending patent applications. We rely on a combination of
`contractual provisions, confidentiality procedures and patent, trademark, copyright and trade secrecy laws to protect the proprietary aspects
`of our technology. These legal measures afford limited protection and may not prevent our competitors from gaining access to our
`intellectual property and proprietary information. Any of our patents may be challenged, invalidated, circumvented or rendered
`unenforceable. From time to time, we have faced challenges of our intellectual property rights and face current challenges to some of our
`key products. Furthermore, we cannot ensure that any pending patent application held by us will result in an issued patent or that, if patents
`are issued to us, such patents will provide meaningful protection against competitors or competitive technologies. Any litigation to protect
`our intellectual property rights could result in substantial expense, may reduce our profits and may not be successful. In addition, we may
`be exposed to future litigation by third parties based on claims that our products infringe their intellectual property rights. This risk is
`exacerbated by the fact that the validity and breadth of patents in our industry frequently involve complex legal issues that are not easily
`resolved.
`
`
`
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