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8-K - 8-K - ALLERGAN INC | d810464d8k.htm |
October 27, 2014
Allergan
A Specialist in the Biopharmaceutical
& Medical Device Industries
Exhibit 99.1 |
Forward-Looking Statements
®
&
Marks owned by Allergan, Inc.
JUVÉDERM
®
is
a
registered
trademark
of
Allergan
Industrie
SAS
All
other
products
are
registered
trademarks
of
their
respective
companies
This
presentation
contains
forward-looking
statements,
including
statements
regarding
product
acquisition
and
development,
regulatory
approvals, market potential, expected growth, operational efficiencies, a proposed
offer made by Valeant, and Allergans expected, estimated
or
anticipated
future
results,
including
Allergans
earnings
per
share
and
revenue
forecasts,
among
other
statements.
All
forward-looking statements herein are based on Allergans current
expectations of future events and represent Allergans judgment only as
of the date of this presentation. If underlying assumptions prove inaccurate or
unknown risks or uncertainties materialize, actual results could vary
materially from Allergan's expectations and projections. Therefore, you are cautioned not to rely on any of these forward-looking
statements and Allergan expressly disclaims any intent or obligation to update
these forward-looking statements except as required to do so by
law. Actual results may differ materially from Allergans current
expectations based on a number of factors affecting Allergans businesses,
including
changing
competitive,
market
and
regulatory
conditions;
the
timing
and
uncertainty
of
the
results
of
both
the
research
and
development and regulatory processes; domestic and foreign health care and cost
containment reforms, including government pricing, tax and reimbursement
policies; revisions to regulatory policies related to the approval of competitive generic products; technological advances
and
patents
obtained
by
competitors;
the
ability
to
obtain
and
maintain
adequate
protection
of
intellectual
property
rights;
the
performance
of new products, including obtaining government approval and consumer and physician
acceptance, the continuing acceptance of currently marketed products, and
consistency of treatment results among patients; the effectiveness of promotional and advertising campaigns; the
potential for negative publicity concerning any of Allergans products; the
timely and successful implementation of strategic initiatives, including
expansion of new or existing products into new markets; the results of any pending or future litigation, investigations or claims; the
uncertainty associated with the identification of, and successful consummation,
execution and integration of, external corporate development initiatives and
strategic partnering transactions; potential difficulties in manufacturing; and Allergans ability to obtain and
successfully maintain a sufficient supply of products to meet market demand in a
timely manner. In addition, matters generally affecting the U.S. and
international economies, including consumer confidence and debt levels, changes in interest and currency exchange rates,
political
uncertainty,
international
relations,
the
status
of
financial
markets
and
institutions,
impact
of
natural
disasters
or
geo-
political
events and the state of the economy worldwide, may materially affect
Allergans results. These and other risks and uncertainties affecting
Allergans businesses and operations may be found in Allergans most recently filed
Annual Report on Form 10-K and any subsequent Quarterly Reports on Form
10-Q, including under the heading Risk Factors. These
filings, as well as Allergan's other public filings with the U.S. Securities and
Exchange Commission (SEC), can be obtained without charge at
the
SEC's
web
site
at
www.sec.gov.
These
SEC
filings
are
also
available
at
Allergans
web
site
at
www.allergan.com
along
with
copies
of Allergans press releases and additional information about Allergan. For
further information, you can contact the Allergan Investor Relations
Department by calling 714-246-4636. ©
2014 Allergan, Inc.
All rights reserved.
2 |
Allergan Continues to Execute &
Deliver
Increased Value to Stockholders
(1)
Represents local currency sales growth
(2)
Non-GAAP Diluted Earnings per Share
Continued strong performance and business momentum
Q3 sales growth of 18%
(1)
driven by strength across nearly all product lines and
geographies
Q3 EPS
(2)
growth of 45%
Increase in both Sales & EPS
(2)
guidance for full year 2014
On June 30, 2014 we announced the following R&D Pipeline candidates progressing
forward
DARPin®
Bimatoprost Sustained-Release Implant for Glaucoma
OZURDEX®
DME
approval
(U.S.)
On July 21, 2014 we announced a plan to drive further operational efficiencies
(~$475M) & create a robust platform for long-term sustainable growth
Additional value from ongoing business development & capital return
3 |
Another Outstanding Quarter Highlights the Strength of
Allergans Business Model
Q3 2014 Guidance
(Issued July 21, 2014)
$1,675M -
$1,750M
10% -
15%
$1.44 -
$1.47
17% -
20%
Actual Q3 2014
Results
$1,791M
18%*
$1.78
45%
Product Net Sales
Non-GAAP Diluted
EPS
Non-GAAP Diluted
YOY EPS Growth
Strong business momentum continued in third quarter with record dollar sales
growth Depth and breadth of contribution made by nearly all businesses and
geographies Leverage of SG&A investments in a thoughtful & disciplined
approach Product Net Sales
YOY Growth
4
* Represents local currency sales growth |
Strong Business Momentum Continues to Accelerate
Sales & EPS Growth
FY 2012
FY 2013
YTD Q3 2014
Sales Growth
(1)
10%
12%
16%
EPS Growth
(2)
15%
16%
31%
Quarterly Sales & EPS Performance
5
11%
14%
16%
15%
16%
18%
14%
17%
18%
20%
24%
45%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Q2'13
Q3'13
Q4'13
Q1'14
Q2'14
Q3'14
Sales Growth*
EPS Growth
(1)
Sales growth in local currency retrospectively adjusted to exclude Obesity
Intervention Business. (2)
2012
EPS
growth
includes
the
2012
Obesity
impact
of
$0.10
and
the
2012
R&D
Tax
Credit
impact
of
$0.06.
2013
EPS
Growth
restating
2012
to
exclude the 2012 Obesity impact of $0.10 and including the 2012 R&D Tax Credit
impact of $0.06. |
6
* All years exclude sales from the Obesity Intervention business
Sales Momentum Continues to Accelerate |
Strong Gross Margins
*
7
Record Gross Margin* Driven by Favorable Product Mix and Recently
Launched Higher Margin
Products / Indications * Gross
Margins
as
a
percentage
of
sales
are
presented
excluding
amortization
of
intangible
assets
on
a
non-GAAP
basis
and
exclude
the
Obesity
Intervention
business
for
all
years
presented.
A
reconciliation
of
non-GAAP
items
may
be
found
under
the
heading
Non-GAAP
Financial
Reconciliation
and in the Companys earnings releases in the Investor Relations section of
the www.allergan.com website. |
FY
2014 Product Net
Sales
Non-GAAP
Diluted EPS
Non-GAAP
Diluted EPS
YOY Growth
$6.8bn -
$7.0bn
$5.64 -
$5.73
18% -
20%
$6.7bn -
$7.0bn
$5.36 -
$5.48
12% -
15%
February 5
Guidance
May 12
Guidance
July 21
Guidance
$6.9bn -
$7.1bn
$5.74 -
$5.80
20% -
22%
Allergans 2014 Full Year Sales and Earnings Outlook
Continues to Improve
8
October 27
Guidance
$7.1bn -
$7.2bn
$6.27 -
$6.30
31% -
32% |
Allergan Operates in Large, Growing Markets
Built & Developed by Strategic Investment
9
* Market projections based on Allergan estimates
WW Ophthalmic Market ($B)
WW Neuromodulator Therapeutic
Market ($B)
WW Aesthetics Market ($B)
$14.7
$20.9
$26.6
2009A
2013A
2017E
*
$0.9
$1.5
$2.6
2009A
2013A
2017E
*
$2.3
$3.6
$5.0
2009A
2013A
2017E
* |
Neuromodulators and Eye Care
Growing the Market and Sustaining Market Leadership Positions
10
Allergan is growing in-line with market @ 10%
(Q214 YTD)
Maintaining leading market share in rapidly
growing therapeutic and cosmetic markets,
despite new entrants
Allergan is gaining market share and is
currently #2 behind Novartis
Allergan is growing faster than the market
Global
Eye
Care
Growth
1
Sources: Mixture of public information (earnings releases, earnings calls,
10Ks, 10Qs), AGN internal data, syndicated marketing research
reports, analyst reports, GuidePoint Global. 1
Excludes retina
2
Includes therapeutic and cosmetic
Global
Neuromodulator
Market
Share
2 |
11
Q214 YTD market growth of 3% with Allergan
growing 4%
Maintaining market share while emphasizing
profitability
Global Breast Aesthetics Market Share
Global Dermal Facial Fillers Market Share
Q214 YTD market growth of 10% with Allergan
growing 40%
Rapid market share gains driven by game
changing innovation
Dermal Facial Fillers and Breast Aesthetics
Growing the Market and Building Market Share
Sources: Mixture of public information (earnings releases, earnings calls,
10Ks, 10Qs), AGN internal data, syndicated marketing research
reports, analyst reports, GuidePoint Global. Note: Valeant completed the
sale of its facial injectable businesses to Galderma in July 2014. 1
Merz includes BioForm (pre Merz purchase) and Anteis
2
Mentor owned by J&J and also includes La Perouse Plastie
|
Long-Term Focus and Investment Has Built Global
Leading Market Share Positions & Brands
2014 Full Year Allergan
Guidance
Q2 2014 Allergan
$ Market Share
Allergan Brands
Eye Care
Neuromodulators
Dermal Facial
Fillers
Breast Aesthetics
~$3.3B
23%
2
Q2 2014 Allergan
Market Position
#2
~$2.2B
76%
#1
~$0.7B
48%
#1
~$0.4B
41%
#1
12
1
Mixture of public information (earnings releases, earnings calls, 10Ks,
10Qs), AGN internal data, syndicated marketing research reports,
analyst reports, GuidePoint Global. 2
Excluding Retina
1
1 |
Allergan
operates
in
large,
growing
markets
built
&
developed
by
strategic
investment
Allergan Continues to Optimize its Business Model
13
Allergans sophisticated selling model transcends traditional sales
models Allergan has a recipe for building and sustaining leading brands
Allergan has a robust R&D pipeline and industry leading R&D
productivity |
Worldwide
SG&A Investment and Sales Growth Our Investments are Focused on
Generating Sustainable Sales Growth
14
* Sales CAGR 2009 to 2014E (mid point of Oct. 27, 2014 guidance).
1
2014 estimated sales growth and SG&A as a percentage of sales based on
mid-point of guidance provided on October 27, 2014. 2012 excludes Obesity
business which was divested in Q4 2013. SG&A has been adjusted for
non-GAAP SG&A items for all years presented. A reconciliation of non-GAAP items may be found under the heading Non-
GAAP
Financial
Reconciliation
in
the
Investor
Relations
section
of
the
www.allergan.com
website.
Allergan creates and builds markets with
focused investments resulting in a sales
CAGR of ~11%*
Historically high strategic investments have
provided foundation for long-term sales
growth
Initial product launch investments
significant in 2010-2013
Targeted expansion into emerging markets
Leveragability of strategic investment in
Direct-To-Consumer advertising
Advertising spend for newer products partially
offset as optimal levels of advertising
effectiveness are reached on existing products
Well established sales force
Ability to grow SG&A @ ~3% through 2019
while continuing to drive double-digit sales
growth
1
1
1
~
~ |
Allergans Sophisticated Selling Model Transcends
Traditional Sales Models
The Allergan Customer Ecosystem
15
Core expense base required to support complex business model |
Allergan Has a Recipe for Building and Sustaining
Leading Brands -
RESTASIS
®
Consumer Promotion
Professional Promotion
Peer-to-peer programs
Customer
Relationship Management
Data Generation
Advocacy
Reimbursement/
Managed Care
The first and only Rx
product approved to
treat dry eye disease
16
$1B Brand with Double-Digit Sales Growth |
Allergan Has a Recipe for Building and Sustaining Leading
Brands
BOTOX
®
Chronic Migraine
Consumer Promotion
Physician Promotion
Professional Education
/ Training
Access
Advocacy
Medical Education
Disease Awareness
Reimbursement
17
Sales Expected to Double by 2019 |
Allergan Has a Recipe for Building and Sustaining
Leading Brands
BOTOX
®
Urology
Physician Promotion
Consumer Promotion
Access
Advocacy
Professional Education /
Training
Urology
Practice Consultation
PR / Patient Advocacy
18
~30% Sales CAGR Expected Through 2019*
* Sales CAGR 2014E to 2019E. |
Allergan Has a Recipe for Building and Sustaining
Leading Brands
BOTOX
®
Cosmetic
Consumer Promotion
Professional
Promotion
Injector Training
Public Relations
Physician Loyalty
Program
Patient Programs
Patient Loyalty
Program
19
$1B Brand and Undisputed Market Leader with Robust Growth Potential
APC Practice
Consulting Services |
Allergan Has a Recipe for Building Leading Brands
Dedicated Specialty Salesforce
Focused
introduction to
experienced
injectors
Optimal training
paradigm to
support filler
franchise
Creating awareness
of etiology of mid-
face volume loss
Generate buzz and
accolades thru PR
Patient Education
and Awareness
thru DTC
Learning from other
countries
real
world experience
Robust expansion
of comprehensive
hands-on training
platform
20
JUVÉDERM
VOLUMA
XC
U.S.
|
US
12 FDA Approvals
EU
ROW
BOTOX
®
Chronic Migraine
BOTOX
®
Cosmetic
Crows
Feet
Lines
BOTOX
®
Overactive Bladder
BOTOX
®
Neurogenic Detrusor Overactivity
BOTOX
®
Spasticity (UL)
JUVÉDERM
®
+ Lidocaine
JUVÉDERM VOLUMA
XC
LUMIGAN
®
0.01%
NATRELLE
®
410 Highly Cohesive
Anatomically Shaped Silicone-Filled Breast
Implants
OZURDEX
®
Uveitis
OZURDEX
®
DME
ZYMAXID
®
BOTOX
®
Chronic Migraine
BOTOX
®
Idiopathic Overactive Bladder
(Positive Opinion)
BOTOX
®
Neurogenic Detrusor Overactivity
GANFORT
Unit Dose
LUMIGAN
®
0.01%
LUMIGAN
®
0.03%
Preservative
Free
Unit
Dose
OZURDEX
®
RVO
OZURDEX
®
DME
VISTABEL
®
Crows Feet Lines (Positive
Opinion)
ALPHAGAN
®
P 0.01% (Japan)
BOTOX
®
Chronic Migraine (Canada, LA &
Asia)
BOTOX
®
Overactive Bladder (Canada &
Asia)
BOTOX
®
Neurogenic Detrusor Overactivity
(Canada, LA & Asia)
BOTOX
®
Spasticity (Japan)
LATISSE
®
NATRELLE
®
Round Silicone Gel-Filled Breast
Implants and Style 133 Tissue Expanders
(Japan)
RESTASIS
®
(Canada)
Many Key Regulatory Approvals Since 2010
Driving Mid-Term and Long-Term Growth
21
Canada
Brazil
Parts of East Asia |
Employ efficient R&D model with probability of success higher than the
industry
Specialty focused
Local drug delivery
Fully integrated R&D
Rigorous portfolio review and management
Allergan remains committed to an industry leading R&D engine
Pre-operational
efficiency
plan,
we
expected
$1.5B
of
R&D
investment
by
2018
Post-operational efficiency plan, we now expect $1.5B of R&D investment by
2019 Allergans R&D Investment Consistently Fuels the Pipeline
22 |
Allergan Maintains a Rich, Highly
Diversified
Clinical R&D Pipeline
Post
Approval
Pre-Clinical
Phase I
Phase II
POC
Phase II
Confirmatory
Phase III
Registration
23
Discontinued as part of Operational Efficiency Plan
1 rosacea programs
ph1
2 acne programs
ph1
One early preclinical acne
program
One early pre
-clinical derm
program for a new indication
AGN-1857 Migraine
ph1
BTX CFL
LATISSE
®
US
LATISSE
®
Japan
BTX OAB
BTX NDO
BTX
Chronic
Migraine
OZURDEX
®
RVO
OZURDEX
®
DME
3B
LUMIGAN
®
UD
LUMIGAN
®
0.01%
EU
GANFORT
UD
GANFORT
China
AGN-1763 BTX
LL Spasticity
SEMPRANA
Headache
®
BTX PE
LiRIS
®
SER-120
NCE Dry Eye
Bimatoprost SR
OZURDEX
®
RVO
China
BTX
Spasticity Adult
LL, Adult UL, Ped LL,
Ped UL
Androgen Front of
Eye
RESTASIS
®
X
Medytox
Therapeutic
DARPin
®
AMD
DARPin
Brimo
DDS Dry
AMD
®
Bim Hair Growth
BTX Masseter
Derma-
tology
Medytox Aesthetic
JUVEDERM
Volbell
®
(US)
JUVEDERM
Volfit
®
(US)
BTX CFL Asia
BTX Forehead Lines
LATISSE
®
Brow
Oxymetazoline
Rosacea
ACZONE
®
X
Urology
Neurology
& Pain
BTX X with potential for higher
dose and/or longer duration
ph1
Senrebotase (TEM)
Pain
BTX Depression
BTX OA Pain
BTX New
Indication
Retina
Dual anti
-PDGF/VEGF
DARPin
®
AMD
ph2
1 retina
program
ph1
2 early preclinical retina
programs
Anterior
Segment
1 NCE for Dry Eye
ph1
1 cpd for new
indication
ph2
1 cpd for new indication
ph1
LASTACAFT
®
Japan
RESTASIS
®
EU
1 cpd
for front of eye
indication
Glaucoma
NCE Glaucoma
ph2
Combo glaucoma Japan
ph3
DME
Limited number of pre-clinical projects were cancelled as a result of our operational
efficiency plan (all with projected approval dates after 2020)
|
Allergan Has Industry Leading R&D Productivity
Allergan Ranked Top 5 in R&D Productivity
Source: Bloomberg. AcclaimIP; SSR Health Hidden Pipeline Analysis and
assumptions. *Rolling 5-year average. Even among R&D powerhouses,
Allergan helps define productivity 24 |
BOTOX
®
Therapeutic
BOTOX
®
Cosmetic
RESTASIS
®
JUVÉDERM
®
/
VYCROSS
®
Franchise
OPTIVE
®
OZURDEX
®
Bimatoprost Sustained Release (Glaucoma)*
SEMPRANA
®*
DARPin
®
AMD
*
(Approval expected at the end of the planning period)
In the Next Five Years, Allergan Expects Multiple Major
Product Drivers of Growth
25
* Indications / compounds under investigation
Limited regulatory approval risk during 5 year planning period |
Allergans Cost Structure was Optimized Through a
Careful Bottoms-Up Build To Save $475M
Bottoms-up approach
Protect investment in key
programs
Structured, thoughtful process
over several months
Maintain sales and profit
Optimizing Our Cost Structure
Sustainable
Source of Savings
$475M
Reduction
By P&L Line Item
By Approach
26
Retained core expense base required to support complex business model
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
SG&A
$310M
Research and
Development
$138M
Gross Margin $27M
Focus on High
Value
O
pportunities
$180M
Streamline
Organization
$182M
Processes $26M
Strategic
Sourcing $65M
Sites $22M |
Allergan Business Model is Sophisticated and Optimized
Allergans Formula For Success
Blockbuster brands
Customer-centric approach
Highly experienced management team
Investment in sophisticated
high-value R&D programs
Investment in large, mature markets as well
as in emerging markets
Emphasis on organic growth
Market creation and leadership
Sophisticated And Optimized Model
27 |
Allergans Promising Outlook on Long-Term Organic Growth
Driven by New Product Innovation and Operational Excellence
2013A
2014E
Guidance
2019E
2015E
Guidance
Revenue
$7.1 -
$7.2bn
EPS
$6.27 -
$6.30
EPS Growth
31% -
32%
Revenue
Growth
Double Digit
EPS
~$8.60
Revenue
$6.2bn
EPS
$4.77
2016E
Guidance
2017E
2018E
* As a percentage of sales.
Additional stockholder value generated from strong business momentum & further
operational efficiencies
Revenue
Growth
Double Digit
EPS
~$10.25
28 |
Strategic Options Available to Further Increase
Stockholder Value
Specialty-care focused
Innovative/differentiated products
Strong revenue & earnings growth
rate
Leading market share positions
Accretive in 2015 & 2016
Similar company values
Platform for further acquisitions
Additional free cash flow of ~$18bn generated over strategic planning period
Stock repurchases
Special
dividend
Business Development
Capital Return
29 |
Value Drivers Available to Standalone Allergan to
Further Increase Stockholder Value
Potential
Future
Standalone
Stock Price
Value from Momentum in the Business
Value from Capital Return
Value from Pipeline Assets
Value from Ongoing Business Development
Current Stock
Price
Value Drivers Available to Allergan:
Value from Operational Efficiencies
30 |
Important Information
Allergan, its directors and certain of its officers and employees are participants
in solicitations of Allergan stockholders. Information regarding the names
of Allergan's directors and executive officers and their respective interests in Allergan
by security holdings or otherwise is set forth in Allergan's proxy statement for
its 2014 annual meeting of stockholders, filed with the SEC on March 26,
2014, as supplemented by the proxy information filed with the SEC on April 22, 2014.
Additional information can be found in Allergan's Annual Report on Form 10-K
for the year ended December 31, 2013, filed
with
the
SEC
on
February
25,
2014
and
its
Quarterly
Report
on
Form
10-Q
for
the
quarter
ended
June
30,
2014,
filed with the SEC on August 5, 2014. To the extent holdings of Allergan's
securities have changed since the amounts printed in the proxy statement for
the 2014 annual meeting of stockholders, such changes have been reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership
on Form 4 filed with the SEC.
These
documents
are
available
free
of
charge
at
the
SECs
website
at
www.sec.gov.
STOCKHOLDERS
ARE
ENCOURAGED
TO
READ
ANY
ALLERGAN
PROXY
STATEMENT
(INCLUDING
ANY
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ALLERGAN MAY FILE WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders will be able to obtain, free of charge, copies of
any proxy statement and any other documents filed by Allergan
with
the
SEC
at
the
SEC's
website
at
www.sec.gov.
In
addition,
copies
will
also
be
available
at
no
charge
at
the
Investors
section
of
Allergan's
website
at
www.allergan.com.
31 |
Reconciliation of Selected Non-GAAP Financial Measures
GAAP
refers to financial information presented in accordance with generally accepted
accounting principles in the United States.
In this presentation, Allergan included historical non-GAAP financial measures,
as defined in Regulation G promulgated by the Securities and Exchange
Commission, with respect to estimates for the year ended December
31, 2013, and the corresponding periods for 1999 through 2012. The information for
2012 and 2011 has been retrospectively adjusted to reflect the obesity
intervention unit, which was sold on December 2, 2013, as discontinued
operations. Allergan believes that its presentation of historical non-GAAP financial measures provides
useful
supplementary
information
to
investors.
The
presentation
of
historical
non-GAAP
financial
measures
is
not
meant to be considered in isolation from or as a substitute for results prepared in
accordance with GAAP. In this presentation, Allergan reported certain
financial measures including Adjusted Sales, Adjusted SG&A,
Adjusted
R&D,
Adjusted
EPS,
Pro
forma
Growth
and
Sales
Growth
at
constant
exchange
rates
as
adjusted
for
Non-GAAP items. Allergan uses these financial measures to enhance the
investors overall understanding of the financial performance and
prospects for the future of Allergans core business activities. Specifically, Allergan
believes that a report of these financial measures provides consistency in
Allergans financial reporting and facilitates the comparison of
results of core business operations between its current, past and future periods. Adjusted Sales,
Adjusted SG&A, Adjusted R&D, Adjusted EPS, Pro forma Growth and Sales
Growth are the primary indicators management
uses
for
planning
and
forecasting
in
future
periods.
Allergan
also
uses
Adjusted
Sales,
Adjusted
R&D
and Adjusted EPS for evaluating management performance for compensation
purposes. A reconciliation
of
non-GAAP
items
may
be
found
under
the
heading
Non-GAAP
Financial
Reconciliation
in
the
investor
relations
section
of
the
www.Allergan.com
website.
32 |
October 27, 2014
Allergan
A Specialist in the Biopharmaceutical
& Medical Device Industries |