Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA383211
`ESTTA Tracking number:
`12/11/2010
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91193303
`Plaintiff
`Allergan, Inc.
`Kenneth L. Wilton
`Seyfarth Shaw LLP
`2029 Century Park East, Suite 3500
`Los Angeles, CA 90067-3021
`UNITED STATES
`kwilton@seyfarth.com, kelko@seyfarth.com, hinchey_susan@allergan.com
`Plaintiff's Notice of Reliance
`Kenneth L. Wilton
`kwilton@seyfarth.com, kelko@seyfarth.com
`/Kenneth L. Wilton/
`12/11/2010
`Third_Notice_of_Reliance.pdf ( 263 pages )(1192302 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of Application Serial No. 79/061,765
`Published in the Official Gazette of September 8, 2009
`
`ALLERGAN, INC.,
`
`Opposer,
`
`Opposition No. 91193303
`
`v.
`
`BOOT OX PTY LTD,
`
`Applicant.
`
`OPPOSER’S THIRD NOTICE OF RELIANCE, PURSUANT TO RULE 2.122(e), ON
`OPPOSER’S 2006 FORM 10-K
`
`Pursuant to Rule 2.122(e) of the Trademark Rules of Practice, Opposer Allergan, Inc.
`
`(“Opposer) hereby gives notice of its reliance at trial on its Form 10-K (Annual Report) it filed
`
`with the United States Securities and Exchange Commission on February 26, 2007 for the period
`
`ending December 31, 2006. A true and correct copy of the referenced Form 10-K is attached
`
`hereto as Exhibit 3. The Form 10-K was obtained from the Internet, and the printed version
`
`attached as Exhibit 3 identifies the date it was accessed and printed, and the URL from where it
`
`was obtained. See Safer, Inc. v. OMS Invs., Inc., 94 USPQ2d 1031, 1039 (TTAB 2010).
`
`The Form 10-K is relevant to the issue of the fame of the BOTOX® mark, in that it
`
`reflects revenue received by Opposer for sales of goods under the BOTOX® mark for the years
`
`ended 2006, 2005 and 2004. In addition, the Form 10-K discusses Opposer’s direct-to-consumer
`
`

`
`advertising of goods sold under the BOTOX® mark, and provides other information relevant to
`
`the fame of the mark.
`
`Date: December 10, 2010
`
`SEYFARTH SHAW LLP
`
`By:
`
`/Kenneth L. Wilton/
`Kenneth L. Wilton
`Attorneys for Opposer
`ALLERGAN, INC.
`
`2029 Century Park East, Suite 3500
`Los Angeles, CA 90067-3021
`Telephone: (310) 277-7200
`Facsimile: (310) 201-5219
`
`2
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`

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`
`
`EXHIBIT 3
`EXHIBIT 3
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`

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`UNITED STATES SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`Form 10-K
`
`(Mark One)
`
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
`OF THE SECURITIES EXCHANGE ACT OF 1934
`For the Fiscal Year Ended December 31, 2006
`or
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
`OF THE SECURITIES EXCHANGE ACT OF 1934
`Commission File No. 1-10269
`
`Allergan, Inc.
`
`(Exact name of Registrant as Specified in its Charter)
`
`Delaware
`(State of Incorporation)
`2525 Dupont Drive
`Irvine, California
`(Address of principal executive offices)
`
`95-1622442
`(I.R.S. Employer Identification No.)
`92612
`(Zip Code)
`
`(714) 246-4500
`(Registrant’s telephone number)
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common Stock, $0.01 par value
`Preferred Share Purchase Rights
`
`Name of each exchange on
`which each class registered
`New York Stock Exchange
`
`Securities registered pursuant to Section 12(g) of the Act: None
`
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
`Act. Yes Z" 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 Z".
`
`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 Z" No ¸".
`
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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 10-K or any amendment to this Form 10-K. ¸"
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
`See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)
`
`Large accelerated filer Z" Accelerated filer ¸" Non-accelerated filer ¸"
`
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
`¸" No Z".
`
`As of June 30, 2006, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant
`was approximately $16,451 million based on the closing sale price as reported on the New York Stock Exchange.
`
`Common Stock outstanding as of February 23, 2007 — 153,755,944 shares (including 1,675,344 shares held in treasury).
`
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`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 May 1, 2007, which proxy statement will be filed no later than 120 days after the close
`of the registrant’s fiscal year ended December 31, 2006.
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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.
`
`Item 13.
`Item 14.
`
`PART IV.
`Item 15.
`
`SIGNATURES
`
`TABLE OF CONTENTS
`
`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
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accounting Fees and Services
`
`Exhibits and Financial Statement Schedules
`
`i
`
`Page
`1
`1
`24
`38
`38
`38
`38
`
`39
`
`39
`40
`41
`66
`71
`72
`72
`73
`
`73
`73
`73
`
`73
`73
`73
`
`74
`74
`
`80
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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 “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and
`Section 21 of the Securities Exchange Act of 1934. These forward-looking 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
`forward-looking 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
`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 forward-looking 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 forward-looking statements, whether as a result of new information,
`future events, changes in assumptions, or otherwise.
`
`Item 1. Business
`
`General Overview of our Business
`
`PART I
`
`We are a technology-driven, global health care company that discovers, develops and commercializes specialty
`pharmaceutical and medical device products for the ophthalmic, neurological, medical aesthetics, medical
`dermatological, breast aesthetics, obesity intervention and other specialty markets. We are a pioneer in specialty
`pharmaceutical research, targeting products and technologies related to specific disease areas such as glaucoma,
`retinal disease, dry eye, psoriasis, acne and movement disorders. Additionally, we discover, develop and market
`medical devices, aesthetics-related pharmaceuticals and over-the-counter products. Within these areas, we are an
`innovative leader in saline and silicone gel-filled breast implants, dermal facial fillers and obesity intervention
`products, therapeutic and other prescription products, and to a limited degree, over-the-counter products that are sold
`in more than 100 countries around the world. We are also focusing research and development efforts on new
`therapeutic areas, including gastroenterology, neuropathic pain and genitourinary diseases.
`
`In June 2002, we completed the spin-off of our optical medical device business to our stockholders, forming
`Advanced Medical Optics, Inc., or AMO, which is now an independent, publicly-traded company. Our optical
`medical device business consisted of two businesses: our ophthalmic surgical products business and our contact lens
`care products business.
`
`In March 2006, we completed the acquisition of Inamed Corporation, a global healthcare manufacturer and
`marketer of breast implants, a range of dermal products to correct facial wrinkles, and bariatric medical devices for
`approximately $3.3 billion, consisting of approximately $1.4 billion in cash and 17,441,693 shares of our common
`stock.
`
`In January 2007, we acquired all of the outstanding capital stock of Groupe Cornéal Laboratoires, or Cornéal, a
`medical device manufacturer and marketer, for an aggregate purchase price of approximately $233.9 million, subject
`to possible post-closing adjustments based on a final determination of Cornéal’s debt and cash levels. The acquisition
`of Cornéal expanded our marketing rights to Juvéderm TM 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 development of Juvéderm TM .
`
`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 website, free of charge, as soon as reasonably practicable after
`such material is electronically filed with, or furnished to, the Securities and Exchange Commission. The information
`on our Internet website is not incorporated by reference into this Annual Report on Form 10-K.
`
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`Operating Segments
`
`Following our spin-off of AMO and through the first fiscal quarter of 2006, we operated our business on the
`basis of a single reportable segment — specialty pharmaceuticals. Due to the Inamed acquisition, beginning in the
`second fiscal quarter of 2006, we operated 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 glaucoma therapy, ocular inflammation, infection,
`allergy and dry eye; skin care products for acne, psoriasis and other prescription and over-the-counter dermatological
`products; and Botox ® for certain therapeutic and aesthetic indications. The medical devices segment produces breast
`implants for aesthetic augmentation and reconstructive surgery; facial aesthetics products; and the LAP-BAND ®
`Intragastric Banding System, or LAP-BAND ® System, designed to treat severe and morbid obesity and the BIB TM
`BioEnterics ® Intragastric Balloon, or BIB TM System, for the treatment of obesity. We provide global marketing
`strategy teams to coordinate the development and execution of a consistent marketing strategy for our products in all
`geographic regions that share similar distribution channels and customers. The following table sets forth, for the
`periods indicated, product net sales for each of our product lines within our specialty pharmaceuticals segment,
`product net sales for each of our product lines within our 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:
`
`Specialty Pharmaceuticals Segment Product Net Sales by Product Line
`Eye Care Pharmaceuticals
`Botox ® /Neuromodulator
`Skin Care Products
`Other(1)
`Total Specialty Pharmaceuticals Segment Product Net Sales
`
`Specialty Pharmaceuticals Segment Product Net Sales
`Domestic
`International
`
`Medical Devices Segment Product Net Sales by Product Line(3)
`Breast Aesthetics
`Obesity Intervention
`Facial Aesthetics
`Total Medical Devices Segment Product Net Sales
`
`Medical Devices Segment Product Net Sales(3)
`Domestic
`International
`
`Specialty Pharmaceuticals Segment Operating Income(2)
`Medical Devices Segment Operating Income(2)(3)
`
`Consolidated Long-Lived Assets
`Domestic
`International
`
`Year Ended December 31,
`2006
`2005
`2004
`(in millions)
`
`$1,530.6
`982.2
`125.7
`—
`$2,638.5
`
`$1,321.7
`830.9
`120.2
`46.4
`$2,319.2
`
`$1,137.1
`705.1
`103.4
`100.0
`$2,045.6
`
`67.9%
`32.1%
`
`67.5%
`32.5%
`
`69.1%
`30.9%
`
`$ 177.2
`142.3
`52.1
`$ 371.6
`
`$
`
`$
`
`— $
`—
`—
`— $
`
`—
`—
`—
`—
`
`64.2%
`35.8%
`
`—%
`—%
`
`—%
`—%
`
`$ 888.8
`119.9
`
`$ 762.9
`—
`
`$ 684.7
`—
`
`$3,279.0
`244.0
`
`$ 470.7
`199.3
`
`$ 360.7
`197.2
`
`(1) Other sales primarily consist of sales to AMO pursuant to a manufacturing and supply agreement entered into
`as part of the AMO spin-off that terminated as scheduled in June 2005.
`
`2
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`(2) Management evaluates business segment performance on an operating income basis exclusive of general and
`administrative expenses and other indirect costs, restructuring charges, in-process research and development
`expenses, amortization of identifiable intangible assets related to the Inamed acquisition 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 company-
`defined criteria, operating income or expenses associated with our core business activities.
`(3) Due to the Inamed acquisition, beginning in the second quarter of 2006, we operated our business on the basis
`of two reportable segments — specialty pharmaceuticals and medical devices.
`
`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 14, “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 operations.
`
`Specialty Pharmaceuticals Segment
`
`Eye Care Pharmaceuticals Product Line
`
`We develop, manufacture and market a broad range of prescription and non-prescription products designed to
`treat diseases and disorders of the eye, including glaucoma, dry eye, inflammation, infection and allergy.
`
`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 60 million
`people worldwide have glaucoma. According to IMS Health Inc., an independent marketing research firm, our
`products for the treatment of glaucoma, including Alphagan ® (brimonide tartrate ophthalmic solution) 0.2%, or
`Alphagan ® , Alphagan ® P (brimonide tartrate ophthalmic solution) 0.15%, or Alphagan ® P, Alphagan ® P 0.1%
`(brimonide tartrate ophthalmic solution) 0.1%, or Alphagan ® P 0.1%, and Lumigan ® (bimatoprost ophthalmic
`solution) 0.03%, captured approximately 17% of the worldwide glaucoma market for the first nine months of 2006.
`Lumigan ® is now our largest selling eye care product. According to IMS Health, Inc., Lumigan ® was the third
`largest selling glaucoma product in the world for the first nine months of 2006.
`
`Our second largest selling eye care pharmaceutical products are the ophthalmic solutions Alphagan ® , Alphagan
`® P , and Alphagan ® P 0.1%. Alphagan ® , Alphagan ® P and Alphagan ® P 0.1% lower intraocular pressure by
`reducing aqueous humor production and increasing uveoscleral outflow. Alphagan ® P and Alphagan ® P 0.1% are
`improved reformulations of Alphagan ® containing brimonidine, Alphagan ® ’s active ingredient, preserved with
`Purite ® . We currently market Alphagan ® , Alphagan ® P, and Alphagan ® P 0.1% in over 70 countries worldwide.
`
`Alphagan ® , Alphagan ® P , and Alphagan ® P 0.1% combined were the fifth best selling glaucoma products in
`the world for the first nine months of 2006, according to IMS Health Inc. Combined sales of Alphagan ® , Alphagan
`® P and Alphagan ® P 0.1%, and our glaucoma and ocular hypertension product Combigan TM (brimonidine tartrate
`0.2%/timolol maleate ophthalmic solution 0.5%), discussed below, represented approximately 10% of our total
`consolidated product net sales in 2006, 12% of our total consolidated product net sales in 2005 and 13% of our total
`consolidated product net sales in 2004. The decline in the percentage of our total net sales represented by sales of
`Alphagan ® , Alphagan ® P , Alphagan ® P 0.1% and Combigan TM primarily resulted from the significant increase in
`our net sales in 2006 as a result of the Inamed acquisition. In July 2002, based on the acceptance of Alphagan ® P ,
`we discontinued the U.S. distribution of Alphagan ® . In May 2004, we entered into an exclusive licensing agreement
`with Kyorin Pharmaceutical Co., Ltd., under which Kyorin became responsible for the development and
`commercialization of Alphagan ® and Alphagan ® P in Japan’s ophthalmic specialty area. Kyorin subsequently
`sub-licensed its rights under the agreement to Senju Pharmaceutical Co., Ltd. Under the licensing agreement, Senju
`incurs associated costs, makes clinical development and commercialization milestone payments, and makes royalty-
`based payments on product sales. We agreed to work collaboratively with Senju on overall product strategy
`
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`and management. Alphagan ® P 0.1% was launched in the U.S. market in the first quarter of 2006. The marketing
`exclusivity period for Alphagan ® P expired in the United States in September 2004 and the marketing exclusivity
`period for Alphagan ® P 0.1% will expire in August 2008, although we have a number of patents covering the
`Alphagan ® P and Alphagan ® P 0.1% technology that extend to 2021 in the United States and 2009 in Europe, with
`corresponding patents pending in Europe. In May 2003, the FDA approved the first generic form of Alphagan ® .
`Additionally, a generic form of Alphagan ® is sold in a limited number of other countries, including Canada, Mexico,
`India, Brazil, Colombia and Argentina. See Item 3 of Part I of this report, “Legal Proceedings” and Note 12,
`“Commitments and Contingencies,” 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 regarding litigation
`involving Alphagan ® . Falcon Pharmaceuticals, Ltd., an affiliate of Alcon Laboratories, Inc., attempted to obtain
`FDA approval for and to launch a brimonidine product to compete with our Alphagan ® P product. However,
`pursuant to a March 2006 settlement with Alcon, Alcon agreed not to sell, offer for sale or distribute its brimonidine
`product until September 30, 2009, or earlier if specified market conditions occur. The primary market condition will
`have occurred if the extent to which prescriptions of Alphagan ® P have been converted to other brimonidine-
`containing products we market has increased to a specified threshold.
`
`Lumigan ® is a topical treatment indicated for the reduction of elevated intraocular pressure in patients with
`glaucoma or ocular hypertension who are either intolerant or insufficiently responsive when treated with other
`intraocular pressure-lowering medications. We currently sell Lumigan ® in over 50 countries worldwide. Sales of
`Lumigan ® represented approximately 11% of our total consolidated product net sales in 2006, 12% of our total
`consolidated product net sales in 2005 and 11% of our total consolidated product net sales in 2004. The decline in the
`percentage of our total net sales in 2006 compared to 2005 represented by sales of Lumigan ® primarily resulted from
`the significant increase in our net sales in 2006 as a result of the Inamed acquisition. In March 2002, the European
`Commission approved Lumigan ® through its centralized procedure. In January 2004, the European Union’s
`Committee for Proprietary Medicinal Products approved Lumigan ® as a first-line therapy for the reduction of
`elevated intraocular pressure in chronic open-angle glaucoma and ocular hypertension. In June 2006, the FDA
`approved Lumigan ® as a first-line therapy. In May 2004, we entered into an exclusive licensing agreement with
`Senju Pharmaceutical Co., Ltd., under which Senju became responsible for the development and commercialization
`of Lumigan ® in Japan. Senju incurs associated costs, makes clinical development and commercialization milestone
`payments and makes royalty-based payments on product sales. We agreed to work collaboratively with Senju on
`overall product strategy and management. In November 2003, we filed a New Drug Application with the FDA for a
`Lumigan ® and timolol combination designed to treat glaucoma or ocular hypertension. In August 2004, we
`announced that the FDA issued an approvable letter regarding Ganfort ® , the Lumigan ® and timolol combination,
`setting out the conditions, including additional clinical investigation, that we must meet in order to obtain final FDA
`approval. In May 2006, we received a license from the European Commission to market Ganfort ® in the European
`Union.
`
`In addition to our Alphagan ® and Lumigan ® products, we have developed the ophthalmic solution Combigan
`TM , a brimonidine and timolol combination designed to treat glaucoma and ocular hypertension (high pressure in the
`eye) in people who are not responsive to treatment with only one medication and are considered appropriate
`candidates for combination therapy. Outside the United States, Combigan TM is now approved and has been launched
`in over 30 countries worldwide, including Canada, Australia, New Zealand, across Latin America and Asia, as well
`as Europe. In September 2005, we received a positive opinion from the European Union by way of the Mutual
`Recognition Process for Combigan TM in all twenty-one concerned member states in which we filed. In March 2005,
`the FDA issued an approvable letter for our brimonidine and timolol combination and in December 2006, the FDA
`issued an approvable letter for Combigan TM . The approvable letter outlines the remaining conditions that we must
`meet in order to obtain FDA final marketing approval.
`
`Ocular Surface Disease. Restasis ® (cyclosporine ophthalmic emulsion) 0.05% is the first and currently the
`only prescription therapy for the treatment of chronic dry eye disease. Dry eye disease is a painful and irritating
`condition involving abnormalities and deficiencies in the tear film initiated by a variety of causes. The incidence of
`dry eye disease increases markedly with age, after menopause in women and in people with systemic diseases such
`as Sjogren’s syndrome and rheumatoid arthritis. Until the approval of Restasis ® , physicians used lubricating tears as
`a temporary measure to provide palliative relief of the debilitating symptoms of dry eye disease. We launched
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`Restasis ® in the United States in April 2003 under a license from Novartis for the ophthalmic use of cyclosporine.
`Restasis ® is currently approved in 26 countries. In April 2005, we entered into a royalty buy-out agreement with
`Novartis related to Restasis ® and agreed to pay $110 million to Novartis in exchange for Novartis’ worldwide rights
`and obligations, excluding Japan, for technology, patents and products relating to the topical ophthalmic use of
`cyclosporine A, the active ingredient in Restasis ® . Under the royalty buy-out agreement, we no longer make royalty
`payments to Novartis in connection with our sales of Restasis ® .
`
`In June 2001, we entered into a licensing, development and marketing agreement with Inspire Pharmaceuticals,
`Inc. under which we obtained an exclusive license to develop and commercialize Inspire’s INS365 Ophthalmic, a
`treatment to relieve the signs of dry eye disease by rehydrating conjunctival mucosa and increasing non-lacrimal tear
`component production, in exchange for our agreement to make royalty payments to Inspire on sales of both Restasis
`® and, ultimately, INS365, and for Inspire to promote Restasis ® in the United States. In December 2003, the FDA
`issued an approvable letter for INS365 and also requested additional clinical data. In February 2005, Inspire
`announced that INS365 failed to demonstrate statistically significant improvement as compared to a placebo for the
`primary endpoint of the incidence of corneal clearing. Inspire also announced that INS365 achieved improvement
`compared to a placebo for a number of secondary endpoints. Inspire filed a New Drug Application amendment with
`the FDA in the second quarter of 2005. In December 2005, Inspire announced that it had received a second
`approvable letter from the FDA in connection with INS365.
`
`Ophthalmic Inflammation. Our leading ophthalmic anti-inflammatory product is Acular ® (ketorolac
`ophthalmic solution) 0.5%. Acular ® is a registered trademark of and is licensed from its developer, Syntex (U.S.A.)
`Inc., a business unit of Hoffmann-LaRoche Inc. Acular ® is indicated for the temporary relief of itch associated with
`seasonal allergic conjunctivitis, the inflammation of the mucus membrane that lines the inner surface of the eyelids,
`and for the treatment of post-operative inflammation in patients who have undergone cataract extraction. Acular PF
`® was the first, and currently remains the only, unit-dose, preservative-free topical non-steroidal anti-inflammatory
`drug, or NSAID, in the United States. Acular PF ® is indicated for the reduction of ocular pain and photophobia
`following incisional refractive surgery. The Acular ® franchise was the highest selling ophthalmic NSAID in the
`world during the first nine months of 2006, according to IMS Health, Inc. Our Acular LS ® (ketorolac ophthalmic
`solution) 0.4% product is a version of Acular ® that has been reformulated for the reduction of ocular pain, burning
`and stinging following corneal refractive surgery.
`
`Our product Pred Forte ® remains a leading topical steroid worldwide based on 2006 sales. Pred Forte ® has no
`patent protection or marketing exclusivity and faces generic competition.
`
`Ophthalmic Infection. Our Ocuflox ® /Oflox ® /Exocin ® ophthalmic solution is a leading product in the
`ophthalmic anti-infective market. Ocuflox ® has no patent protection or marketing exclusivity and faces generic
`competition.
`
`We license Zymar ® (gatifloxacin ophthalmic solution) 0.3% from Kyorin Pharmaceutical Co. Ltd., and have
`worldwide ophthalmic rights excluding Japan, Korea, Taiwan and certain other countries in Asia. We launched
`Zymar ® in the United States in April 2003. Zymar ® is a fourth-generation fluoroquinolone for the treatment of
`bacterial conjunctivitis and is currently approved in 21 countries. Laboratory studies have shown that Zymar ® kills
`the most common bacteria that cause eye infections as well as specific resistant bacteria. According to Verispan, an
`independent research firm, Zymar ® was the number one ophthalmic anti-infective prescribed by ophthalmologists in
`the United States in 2006. Zymar ® was the third best selling ophthalmic anti-infective product in the world (and
`second in the United States) for the first nine months of 2006, according to IMS Health, Inc.
`
`Allergy. The allergy market is, by its nature, a seasonal market, peaking during the spring months. We market
`Alocril ® ophthalmic solution for the treatment of itch associated with allergic conjunctivitis. We license Alocril ®
`from Fisons Ltd., now a business unit of Sanofi-Aventis, and hold worldwide ophthalmic rights excluding Japan.
`Alocril ® is approved in the United States, Canada and Mexico. We license Elestat ® from Boehringer Ingelheim AG,
`and hold worldwide ophthalmic rights excluding Japan. We co-promote Elestat ® (epinastine ophthalmic solution)
`0.05% in the United States under an agreement with Inspire within the ophthalmic specialty area and to allergists.
`Elestat ® is used for the prevention of itching associated with allergic conjunctivitis. Under the terms of our
`agreement with Inspire, Inspire provided us with an up-front 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
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`has primary responsibility for selling and marketing activities in the United States related to Elestat ® . We have
`retained all international marketing and selling rights. We launched Elestat ® in Europe under the brand names
`Relestat ® and Purivist ® during 2004, and Inspire launched Elestat ® in the United States during 2004. Elestat ® /
`Relestat ® / Purivist ® is currently approved in 38 countries and was the third best selling ophthalmic allergy product
`in the world (and second in the United States) for the first nine months of 2006, according to IMS Health, Inc.
`
`Neuromodulator
`
`Our neuromodulator product, Botox ® (Botulinum Toxin Type A), is used for a wide variety of treatments that
`continue to expand. Botox ® is accepted in many global regions as the standard therapy for indications ranging from
`therapeutic neuromuscular disorders and related pain to cosmetic facial aesthetics. There are currently in excess of
`100