DELAWARE 95-1622442
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(State of Incorporation) (I.R.S. Employer
Identification No.)
2525 DUPONT DRIVE
IRVINE, CALIFORNIA 92612
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(Address of principal executive offices) (Zip Code)
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Name of each exchange on
Title of each class which each class registered
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Common Stock, $0.01 par value New York Stock Exchange
Preferred Share Purchase Rights
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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, and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
The aggregate market value of the registrant's voting stock held by non-affiliates was approximately $7,256,000,000 on January 28, 2000, based upon the closing price on the New York Stock Exchange on such date.
Common Stock outstanding as of January 28, 2000 - 134,254,772 shares (including 4,606,555 shares held in treasury).
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. [X]
Parts I, II, III and IV incorporate certain information by reference from the registrant's proxy statement for the annual meeting of stockholders to be held on April 26, 2000, which proxy statement was filed with the Securities and Exchange Commission on March 16, 2000.
PART I PAGE
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Item 1. Business...........................................................1
Item 2. Properties........................................................15
Item 3. Legal Proceedings.................................................15
Item 4. Submission of Matters to a Vote of Security Holders...............15
Item I-A. Executive Officers of Allergan, Inc...............................16
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters...............................................19
Item 6. Selected Financial Data...........................................19
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...............................19
Item 7A. Quantitative and Qualitative Disclosures About Market Risk........19
Item 8. Financial Statements and Supplementary Data.......................19
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure...............................19
PART III
Item 10. Directors and Executive Officers of Allergan, Inc.................20
Item 11. Executive Compensation ...........................................20
Item 12. Security Ownership of Certain Beneficial Owners and Management....20
Item 13. Certain Relationships and Related Transactions....................20
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K...21
SIGNATURES .................................................................S-1
INDEX OF EXHIBITS ..........................................................S-3
SCHEDULE .................................................................S-8
EXHIBITS ..............................(Attached to this Report on Form 10-K)
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GENERAL DEVELOPMENT OF BUSINESS
Allergan, Inc. ("Allergan" or the "Company") is a leading provider of eye care and specialty pharmaceutical products throughout the world with products in the eye care pharmaceutical, ophthalmic surgical device, over-the-counter contact lens care, movement disorder, and dermatological markets. Its worldwide consolidated revenues are principally generated by prescription and non-prescription pharmaceutical products in the areas of ophthalmology and skin care, neurotoxins, intraocular lenses and other ophthalmic surgical products, and contact lens care products.
Allergan was originally incorporated in California in 1948, became known as Allergan Corporation in 1950, and reincorporated in Delaware in 1977. In 1980, the Company was acquired by SmithKline Beecham plc (then known as "SmithKline Corporation" and herein "SmithKline"). The Company operated as a wholly-owned subsidiary of SmithKline from 1980 until 1989 when Allergan again became a stand-alone public company through a spin-off distribution by SmithKline.
In November 1992, the Company sold its contact lens business in North and South America. In August 1993, the Company sold its contact lens business outside of the Americas.
During 1994, the Company acquired the Ioptex Research worldwide intraocular lens product line. During 1995, the Company completed four acquisitions. In January 1995, the Company acquired Optical Micro Systems, Inc., a U.S.-based developer and manufacturer of phacoemulsification surgical equipment. In June 1995, the Company acquired Laboratorios Frumtost, S.A., a manufacturer of ophthalmic and other pharmaceutical products in Brazil. In August 1995, the Company purchased the assets of Herald Pharmacal, Inc., a U.S.-based developer and manufacturer of glycolic acid-based, aesthetic skin care products. In November 1995, the Company purchased the worldwide contact lens care product business of Pilkington Barnes Hind. Also in 1995, Allergan acquired 100% ownership interest in Santen-Allergan, its Japanese contact lens care joint venture.
On December 9, 1999 the Company implemented a two-for-one stock split effected as a dividend to stockholders of record on November 18, 1999. All historical information contained in this report has been adjusted to reflect the 1999 stock split.
The following table sets forth, for the periods indicated, the net sales from continuing operations for each of the Company's specialty therapeutics businesses and product lines:
YEAR ENDED DECEMBER 31
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1999 1998 1997
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(IN MILLIONS)
Specialty Pharmaceuticals:
Eye Care Pharmaceuticals $ 571.2 $ 505.3 $ 408.5
Skin Care 76.6 80.6 80.6
Botox(R)/Neuromuscular 175.8 125.3 90.1
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Total 823.6 711.2 579.2
Medical Devices and OTC Product Lines:
Ophthalmic Surgical 222.9 193.6 182.2
Contact Lens Care 359.7 356.9 376.6
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Total 582.6 550.5 558.8
Total Product Net Sales $1,406.2 $1,261.7 $1,138.0
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Domestic 48.1% 46.2% 42.8%
International 51.9% 53.8% 57.2%
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See Note 13 of Notes to Consolidated Financial Statements on pages A-39 to A-41 of the Company's Proxy Statement filed on March 16, 2000 for further information concerning foreign and domestic operations.
SPECIALTY PHARMACEUTICAL BUSINESS
Eye Care Pharmaceutical Product Line
Allergan develops, manufactures and markets a broad range of prescription and non-prescription products designed to treat diseases and disorders of the eye, including glaucoma, inflammation, infection and allergy. In addition, the specialty over-the-counter product line consists of products designed to treat ocular surface disease, including artificial tears and ocular decongestants.
The largest segment of the market for ophthalmic prescription drugs is for the treatment of glaucoma, a sight-threatening disease characterized by elevated intraocular pressure. Allergan's largest selling eye care pharmaceutical product is Alphagan(R) ophthalmic solution, which was approved by the United States Food and Drug Administration ("FDA") in September 1996 for the treatment of open-angle glaucoma and ocular hypertension. Sales of Alphagan(R) ophthalmic solution represented 4%, 9% and 12% of total Company sales in 1997, 1998 and 1999, respectively. The period of new chemical entity exclusivity in the United States for Alphagan(R) ophthalmic solution extends for five years from the date of approval. In March 1997, Alphagan(R) was also approved in the United Kingdom, and in October 1997, the Company received approval to market Alphagan(R) ophthalmic solution in 14 of the 15 member states of the European Union through the mutual recognition filing process. At the end of 1999, Alphagan(R) was approved in over 50 countries worldwide. In July 1998, the Company entered into an agreement with Santen Pharmaceutical Co., Ltd., granting Santen exclusive distribution rights for brimonidine (the compound marketed by Allergan under the Alphagan(R) brand name) in Japan. Under this agreement, Santen agreed to assume responsibility for future product development of
The Company also markets Betagan(R) ophthalmic solution, a topical beta blocker used in the treatment of glaucoma, and Propine(R) ophthalmic solution, which is used alone or in combination with other drugs when initial drug therapy for glaucoma becomes inadequate. Patent protection for both products expired in the United States in 1991 and they both face generic competition from several companies including Bausch & Lomb and Alcon Laboratories, Inc. (a division of Nestle). In addition, the Company markets its own generic version of these two products.
In December 1999, the FDA approved the marketing of Alocril(TM) ophthalmic solution for the treatment of itch associated with allergic conjunctivitis. In February 2000, the Company entered into an agreement with Dura Pharmaceuticals, Inc. to commercialize Alocril(TM) ophthalmic solution, with Allergan promoting to ophthalmologists and Dura promoting primarily to primary care practitioners and respiratory specialists. Allergan launched the product in March 2000.
The Company also markets several leading ophthalmic products to treat ocular inflammation and infection. Pred Forte(R) and FML(R) Liquifilm(R) ophthalmic suspensions are leading products in the ocular corticosteroid inflammation market. Allergan's Acular(R)1 ophthalmic solution is indicated for the relief of itch associated with seasonal allergic conjunctivitis and for the treatment of postoperative inflammation in patients who have undergone cataract extraction. In November 1997, the Company received approval from the FDA to market Acular(R) PF, the first unit-dose, preservative-free topical nonsteroidal anti-inflammatory drug (NSAID) in the United States, for the reduction of ocular pain and photophobia following incisional refractive surgery.
Allergan's major products in the anti-infective market are Ocuflox(R)/Oflox(R)/Exocin(R) ophthalmic solution, a fluroquinolone which treats bacterial conjunctivitis and corneal ulcers, Blephamide(R) ophthalmic suspension, a topical anti-inflammatory and anti-infective, and Polytrim(R) ophthalmic solution, a synthetic antimicrobial which treats surface ocular bacterial infections. Blephamide(R), Pred Forte(R) and Polytrim(R) ophthalmic solutions no longer have patent protection and face generic competition. In September 1999 Allergan entered into a multi-year agreement with McNeil Consumer Healthcare, a subsidiary of Johnson & Johnson, to commercialize Ocuflox(R) ophthalmic solution in the U.S. pediatric and selected general practitioner markets.
Allergan has filed a new drug application with the FDA for Restasis(TM) ophthalmic emulsion for the treatment of chronic dry eye disease. An advisory committee to the FDA voted against recommending approval of the drug in July 1999, a decision that is not binding on the FDA. In August 1999, the FDA issued an "approvable letter" to the Company, indicating several points the Company must address before the application will be approved. The Company submitted a formal response to the FDA in the fourth quarter of 1999 and awaits the FDA's final determination. Also during the fourth quarter of 1999, the Company filed a Marketing Authorization Application for Restasis(TM) through the Mutual Recognition Process in Europe.
In addition to its eye care pharmaceuticals, Allergan markets a variety of artificial tear products for various needs, under a range of brand names worldwide, led by the Refresh(R) brand. In the United States, the Refresh(R) brand includes Refresh Plus(R), the category unit dose leader, Refresh Tears(R), the leading multi-dose product, and Refresh P.M.(R), for overnight relief of dry eye. Allergan also markets Celluvisc(R) in the United States
(1) Acular(R) is a registered trademark of and is licensed from its developer Syntex (U.S.A.) Inc.
Skin Care Product Line
Building upon its strength in marketing to medical specialties and
taking advantage of synergies in research and development, Allergan's skin care
business develops, manufactures and markets therapeutic as well as cosmetic skin
care products, primarily in the United States. In June 1997, the Company
received approval from the FDA to market Tazorac(R) (tazarotene topical gel)
0.05% and 0.1% (the trade name for Zorac(R) topical gel in the United States and
Canada) for the treatment of plaque psoriasis and acne. In November 1999, the
Company entered into an agreement with 3M Pharmaceuticals to co-promote
Tazorac(R) gel in the U.S. dermatology market.
Outside of the U.S., the Company entered into an agreement in February 1999 with Pierre Fabre Dermatologie, an affiliate of the private French company, Pierre Fabre, to commercialize tazarotene (Zorac(R)) in continental Europe and nearby territories. And, in April 1999 Allergan formed a marketing, sales and development partnership with Bioglan Pharma Plc to commercialize Zorac(R) gel in the United Kingdom, Ireland, Denmark, Sweden, Finland and other international markets, including certain countries in the Middle East and Africa.
Azelex(R) cream for the topical treatment of mild to moderate inflammatory acne vulgaris was launched in the U.S. in December 1995 and has been well received in the market. The therapeutic product line also includes Elimite(R) cream for the treatment of scabies, and Gris-Peg(R) tablets, a systemic anti-fungal product. Patent protection for Elimite(R) cream in the United States has expired, and the product now faces generic competition. In 1999 the Company divested three older pharmaceutical products which were not being actively promoted: Naftin(R) gel, Erygel(R) topical gel and Erymax(R) topical solution. The Company also develops, manufactures and markets glycolic acid-based skin care products. In 1999 the Company divested its aesthetician salon and retail-based alpha hydroxy acid products as part of an initiative to focus on the M.D. Forte(R) line of products marketed to and dispensed by physicians.
Botox(R)/Neuromuscular
Allergan's Botox(R) (Botulinum Toxin Type A) Purified Neurotoxin Complex is used in the treatment of certain neuromuscular disorders which are characterized by involuntary muscle contractions or spasms. Sales of Botox(R) Purified Neurotoxin Complex represented 8%, 9.9% and 13% of total Company sales in 1997, 1998 and 1999, respectively. The Company markets Botox(R) Purified Neurotoxin Complex in the United States and in 66 other countries. The approved indications for Botox(R) in the United States are for the treatment of blepharospasm (the uncontrollable contraction of the eyelid muscles which can force the eye closed and result in functional blindness) and strabismus (misalignment of the eyes) in people 12 years of age and over.
The Company is working to expand the approved indications for Botox(R) Purified Neurotoxin Complex in the United States. In 1998, the Company exercised its option to acquire the exclusive worldwide rights to U.S. and foreign patents for the use of botulinum toxin to treat migraine headaches, and the Company has filed an investigational new drug application with the FDA for the migraine headache indication for Botox(R). Clinical development for the migraine and tension headache indications are currently in Phase 2. In addition, the Company has orphan drug designations from the FDA for two indicated uses for Botox(R) Purified Neurotoxin Complex: cervical dystonia and juvenile cerebral palsy. The Company initiated Phase 3 clinical trials in 1999 in the United States for the juvenile cerebral palsy indication, and the Company sought supplemental approval for the cervical
Outside of the United States, the Company is marketing Botox(R) Purified Neurotoxin Complex in 66 countries around the world. The Company continues to pursue expanded indications for Botox(R) outside of the U.S. Botox(R) Purified Neurotoxin Complex has been approved in 39 countries outside of the U.S. for the treatment of cervical dystonia and hemifacial spasm and in 31 countries outside of the U.S. for the treatment of lower limb spasticity in pediatric cerebral palsy patients, two years of age or older. In 1999, the Company received approval in Switzerland to market Botox(R) Purified Neurotoxin Complex for the treatment of upper limb spasticity associated with debilities occurring after a stroke. Subsequent filings throughout Europe for this indication are expected in 2000. In addition, in January 2000 the Company received regulatory approval in Japan for the hemifacial spasm indication. And, the Company has initiated a Phase 3 program in Europe for the treatment of axillary hyperhidrosis (excessive sweating).
There are intrinsic uncertainties associated with Research & Development efforts and the regulatory process. There is no assurance that any of the research projects or pending drug marketing approval applications mentioned above will result in new approved indications for Botox(R) Purified Neurotoxin Complex. Delays or failures in one or more significant research projects and pending drug marketing approval applications could have a material adverse impact on the future results of the Company's Botox(R) business.
The Company manufactures its own bulk toxin raw material necessary to produce Botox(R) Purified Neurotoxin Complex. The process to create bulk toxin is technically complicated and difficult. Any failure of the Company to maintain an adequate supply of bulk toxin could result in an interruption in the supply of Botox(R) Purified Neurotoxin Complex with a resulting decrease in sales of the product.
MEDICAL DEVICES AND OTC PRODUCT LINES
Ophthalmic Surgical Product Line
Allergan's ophthalmic surgical business develops, manufactures and markets intraocular lenses ("IOLs"), surgically related pharmaceuticals, phacoemulsification equipment and other ophthalmic refractive surgical products.
The largest segment of the surgical market is for the treatment of cataracts. Cataracts are a condition, usually age related, in which the natural lens of the eye becomes progressively clouded. This clouding obstructs the passage of light and can eventually lead to blindness. Most patients affected by cataracts can be surgically treated by removing the clouded lens and replacing it with an IOL. The Company currently offers a full line of products used in the performance of cataract surgery, including PMMA, silicone monofocal and multi-focal and an acrylic IOL.
Sales of all models of the Company's IOLs represented 11%, 10% and 10% of total Company sales in 1997, 1998 and 1999, respectively. Intraocular lenses marketed by Allergan for small incision cataract surgery include the PhacoflexII(R)SI-30NB(R) foldable small incision IOL, introduced in April 1993, the SI-40NB(R) foldable small incision IOL, introduced in 1995, the PhacoflexII(R)SI-55NB(R), introduced in 1997, and the Sensar(R) IOL, which was introduced in Europe in 1998 and was approved for marketing in the United States in
Small incision IOLs continue to grow in popularity along with increasing use of phacoemulsification, a method of cataract extraction that uses ultrasound waves to break the natural lens into small fragments that can be removed through a hollow needle. Phacoemulsification requires only a three to four millimeter incision, compared to incisions of up to 12 millimeters for other techniques. According to a 1997 survey of members of the American Society of Cataract and Refractive Surgery, phacoemulsification is currently utilized in more than 90% of cataract procedures in the United States. In 1993 Allergan introduced the Prestige(R) phacoemulsification machine. Prestige(R) makes small-incision cataract surgery easier than other phacoemulsification machines by using a sophisticated microprocessor that monitors vacuum and fluid in the eye. In January 1995, Allergan acquired Optical Micro Systems, Inc. ("OMS"). This acquisition, along with the acquisition of the Ioptex business in 1994, provided the Company with additional IOL and phacoemulsification equipment product offerings and proprietary technologies. The AMO(R)Diplomax(R) phacoemulsification machine, launched in the U.S. by the Company in November 1995, is the first OMS phaco-technology system introduced since the acquisition. In 1999, the Company launched the Sovereign(TM) phacoemulsification system, which offers advanced fluidics technology and enhanced power modulations. Allergan also markets AMO(R)Vitrax(R), a viscoelastic used to maintain the anterior chamber and protect endothelial cells during cataract surgery. And, in 1998, the Company became a distributor of BioLon(TM)2 viscoelastic in the United States under an agreement with Akorn, Inc. The Company has partnered with Allegiance Healthcare Corporation to provide custom surgical procedure packs to its U.S. customers and intends to offer this service in Europe in 2000.
Contact Lens Care Product Line
The Company has been doing business in the contact lens care market since 1960. On a worldwide basis, it develops, manufactures and markets a broad range of products for use with every available type of contact lens. These products include disinfecting solutions to destroy harmful microorganisms in and on the surface of contact lenses; daily cleaners to remove undesirable film and deposits from contact lenses; and enzymatic cleaners to remove protein deposits from contact lenses. In the area of disinfecting products, the Company offers products that can be used in both the hydrogen peroxide and convenient chemical systems. Allergan's leading hydrogen peroxide system products are the Oxysept 1Step(R)/UltraCare(R) hydrogen peroxide neutralizer/disinfection system, with a color indicator which turns the solution pink to indicate the disinfectant tablet has dissolved. Complete(R) brand Multi-Purpose solution is the Company's convenient, one-bottle chemical disinfection system for soft contact lenses. The Company currently markets Complete(R) brand Multi-Purpose solution worldwide, including Japan as of 1999. Complete(R) brand ComfortPLUS(TM) Multi-Purpose solution, the Company's latest product upgrade, contains a proprietary comfort formulation for longer, more comfortable contact lens wear. One-bottle systems, including the Company's product, continue to gain popularity with consumers.
Sales of the Company's hydrogen peroxide disinfection systems represented 11%, 10% and 7% of total Company sales in 1997, 1998 and 1999, respectively. The Company's Contact Lens Care business continues to be impacted by trends in the contact lens and lens care marketplace, including technological and medical advances in surgical techniques for the correction of vision impairment. Cheaper one-bottle chemical disinfection systems have gained popularity among soft contact lens wearers instead of peroxide-based lens care products which have historically been Allergan's strongest family of lens care products. Also, the growing use and acceptance of daily contact lenses, along with the other factors above, could have the effect of reducing demand for lens care products generally. While the Company believes it has established appropriate marketing and sales plans to mitigate the impact of these trends upon its Contact Lens Care business, no assurance can be given in this regard.
In 2000 Allergan is launching a new eye drop for contact lens wearers called Refresh Contacts(R) to help provide comfort and protection from dryness and irritation.
EMPLOYEE RELATIONS
At December 31, 1999, the Company employed 5,969 persons throughout the world, including 2,296 in the United States. None of the Company's U.S.-based employees are represented by unions. The Company considers that its relations with its employees are, in general, very good.
INTERNATIONAL OPERATIONS
The Company believes that international markets represent a significant opportunity for continued growth. International sales have represented approximately 57.2%, 53.8% and 51.9% of total sales for the years ended December 31, 1997, 1998, and 1999 respectively. Allergan believes that its well-established international market presence provides it with an advantage, enabling the Company to maximize the return on its investment in research, product development and manufacturing.
Allergan established its first foreign subsidiary in 1964 and currently sells products in approximately 100 countries. Marketing activities are coordinated on a worldwide basis and resident management teams provide leadership and infrastructure for customer focused rapid introduction of new products in the local markets.
SALES AND MARKETING
Allergan maintains global marketing and regional sales organizations. Supplementing the sales efforts and promotional activities aimed at eye care professionals, as well as neurologists outside the U.S., who use, prescribe and recommend its products, Allergan has been focusing increasingly on managed care providers. In addition, Allergan advertises in professional journals and has an extensive direct mail program of descriptive product literature and scientific information to specialists in the ophthalmic, dermatological and movement disorder fields. The Company's specialty therapeutic products are sold to drug wholesalers, independent and chain drug stores, commercial optical chains, mass merchandisers, food stores, hospitals, ambulatory surgery centers and medical practitioners, including neurologists. At December 31, 1999, the Company employed approximately 1,400 sales representatives throughout the world.
The Company's global research and development efforts focus on eye care, skin care and neuromuscular products that are safe, effective, convenient and have an economic benefit. The Company's own research and development activities are supplemented by a commitment to identifying and obtaining new technologies through in-licensing, technological collaborations, joint ventures and acquisition efforts, including the establishment of research relationships with academic institutions and individual researchers.
At December 31, 1999, there were, in the aggregate, over 930 people involved in the Company's research and development efforts. The Company's research and development expenditures for 1997, 1998, and 1999 were $131.2 million, $125.4 million, and $168.4 million respectively, excluding amounts spent by the Company on behalf of Allergan Ligand Retinoid Therapeutics, Inc. and Allergan Specialty Therapeutics, Inc. In April 1999, the Company announced plans for a $70 million expansion of its research and development facilities in Irvine, California, enabling the Company to hire approximately 300 new research scientists and other professionals by 2003.
Research and development efforts for the ophthalmic pharmaceuticals business focus primarily on new therapeutic products for glaucoma, inflammation, dry eye and allergy and on new anti-infective pharmaceuticals for eye care. The Company is conducting research on new compounds that control intraocular pressure by either reducing the inflow or production, or improving the outflow, of aqueous humor. The Company is also conducting research and clinical trials on a class of compounds called hypotensive lipids. Unlike beta-blockers that decrease the inflow or production of aqueous humor, hypotensive lipids reduce intraocular pressure by improving its outflow. The Company is also developing Restatis(TM) cyclosporine ophthalmic emulsion for the treatment of moderate to severe dry eye.
Research and development activities for the surgical business concentrate on improved cataract surgical systems, implantation instruments and methods, and new IOL materials and designs.
Research and development efforts for neuromuscular disorders focus on expanding the uses for Botox(R) (Botulinum Toxin Type A) Purified Neurotoxin Complex to include treatment for cervical dystonia, juvenile cerebral palsy, spasticity, migraine and tension headache pain, back pain, brow furrow and hyperhidrosis.
Research and development in the contact lens care business is aimed at systems that are effective and more convenient for patients to use, and thus lead to a higher rate of compliance with recommended lens care procedures. Improved compliance can enhance safety and extend the time a patient will be a contact lens wearer. The Company believes that continued development and commercialization of disinfection systems that are both easy-to-use and efficacious will be important for the future success of this part of the Company's business.
From 1992 to 1994, the Company and Ligand Pharmaceuticals Incorporated ("Ligand") operated a joint venture for the purpose of performing certain research and development activities. In December 1994, Allergan and Ligand formed a new research and development company, Allergan Ligand Retinoid Therapeutics, Inc. ("ALRT") to function as the successor to the joint venture. In November 1997, pursuant to the exercise of its stock purchase option, Ligand acquired all of the stock of ALRT. At the same time, pursuant to the exercise of its asset purchase option, Allergan acquired an interest in one-half of all technologies, cash and other assets of ALRT. The initial agreements between Allergan and Ligand provided for a joint research, development and commercialization arrangement following such option exercises. In connection with the option exercises,
In 1997 the Company formed a new subsidiary, Allergan Specialty Therapeutics, Inc. ("ASTI"), to conduct research and development of potential pharmaceutical products based on the Company's retinoid and neuroprotective technologies. In March 1998, the Company distributed all ASTI Class A Common Stock to the Company's stockholders, who received one share of ASTI Class A Common Stock for each 20 shares of Allergan common stock held as of the record date.
As the sole holder of ASTI's outstanding Class B Common Stock following the distribution and under the terms of ASTI's Restated Certificate of Incorporation, the Company has the option to repurchase all of the outstanding shares of ASTI Class A Common Stock under specified conditions. Under the terms of a technology license agreement and a license option agreement between the Company and ASTI, the Company has also granted certain technology licenses and agreed to make specified payments on sales of certain products in exchange for the payment by ASTI of a technology fee and the option to independently develop certain compounds funded by ASTI prior to the filing of an Investigational New Drug application with the FDA with respect thereto and to license any products and technology developed by ASTI. The Company will recognize the technology fee as revenue as it is earned and received.
ASTI's technology and product research and development activities take place under a research and development agreement with the Company. The Company will recognize revenues and related costs as services are performed under such contracts. It is currently expected that substantially all of ASTI's funds will be directed toward continuing the research and development of products based on retinoid and neuroprotective technologies. In addition, ASTI may fund the research and development of pharmaceutical products in therapeutic categories of interest to the Company other than those based on retinoid and neuroprotective technologies, but that complement the Company's product pipeline or otherwise are believed to provide a potential commercialization opportunity for the Company.
The Company has also entered into a series of collaboration agreements to further its research and development efforts:
o In November 1996, the Company entered into a collaboration agreement with Cambridge NeuroScience, Inc. ("CNSI") to develop new treatments for glaucoma and other serious ophthalmic diseases. CNSI specializes in glutamate ion channel-blocker and sodium channel technology. In 1999, the Company extended this agreement to November 2000.
o In September 1997, the Company entered into an exclusive collaboration agreement with ACADIA Pharmaceuticals Inc. (formerly Receptor Technologies) to identify receptor-selective compounds with respect to certain targets, develop receptor arrays and probes specific for G-protein coupled and other receptors and facilitate the establishment of drug discovery programs.
o In July 1998, the Company entered into a multi-year research and development collaboration with the Parke-Davis Pharmaceutical Research Division of Warner-Lambert Company to identify, develop and commercialize up to two RXR subtype selective retinoid compounds for the treatment of metabolic diseases, including adult onset diabetes, insulin resistant syndromes and dyslipidemias.
o In June 1999, Allergan entered into a license agreement with XOMA Ltd. under which Allergan obtained exclusive rights to globally develop and commercialize XOMA's recombinant, bactericidal/permeability increasing protein in combination with other anti-infectives in products to treat ophthalmic infections.
o In July 1999, the Company entered into a license and research collaboration agreement with ACADIA Pharmaceuticals Inc. to discover, develop and commercialize compounds for glaucoma based on receptor subtype-selective muscarinic lead compounds.
o In October 1999, the Company announced an agreement with AXYS Advanced Technologies, Inc. to provide Allergan with a diverse compound screening library consisting of small molecule compounds and with technologies for reproducing and expanding the library chemistries.
o In December 1999, the Company and Boehringer Ingelheim entered into a license for Allergan to develop and commercialize epinastine for the treatment of ocular allergies.
The continuing introduction of new products supplied by the Company's research and development efforts and in-licensing opportunities is critical to the success of the Company. There is no assurance that any of the research projects or pending drug marketing approval applications will result in new products that the Company can commercialize. Delays or failures in one or more significant research projects and pending drug marketing approval applications could have a material adverse impact on the future operations of the Company.
COMPETITION
Allergan faces strong competition in all of its markets worldwide. Numerous companies are engaged in the development, manufacture and marketing of health care products competitive with those manufactured by Allergan. Major eye care competitors include Alcon Laboratories, Inc. (a subsidiary of Nestle), Bausch & Lomb and its acquired businesses, Chiron Vision and Storz Ophthalmics, CIBA Vision Ophthalmics (a division of Novartis), Merck & Co., Inc. and Pharmacia Ophthalmics (a subsidiary of Pharmacia & Upjohn). These competitors have equivalent or, in most cases, greater resources than Allergan. The Company's skin care business competes against a number of companies, including, among others, Bristol-Myers Squibb, Schering-Plough Corporation, Johnson & Johnson and Hoffman-La Roche Inc., which all have greater resources than Allergan. In the market for neurotoxins, the Company has one competitor in Europe, Asia and New Zealand, Beaufour Ipsen, and anticipates competition in the United States and Europe in 2000 from Athena Neurosciences, Inc., a subsidiary of Elan Corporation, PLC. In marketing its products to health care professionals, pharmacy benefits management companies, health care maintenance organizations, and various other national and regional health care providers and managed care entities, the Company competes primarily on the basis of product technology, value-added services and price. The Company believes that it competes favorably in its product markets.
Drugs, biologics and medical devices, including intraocular lenses (IOLs) and contact lens care products, are subject to regulation by the FDA, state agencies and, in varying degrees, by foreign health agencies. Government regulation of most of the Company's products generally requires extensive testing of new products and filing applications for approval by the FDA prior to sale in the United States and by some foreign health agencies prior to sale as well. The FDA and foreign health agencies review these applications and determine whether the product is safe and effective. The process of developing data to support a premarket application and governmental review is costly and takes many years to complete.
In general, manufacturers of drugs, medical devices and biologicals are operating in an increasingly more rigorous regulatory environment than has been the case in previous years. The total cost of providing health care services has been and will continue to be subject to review by governmental agencies and legislative bodies in the major world markets, including the United States, which are faced with significant pressure to lower health care costs.
In 1996, Congress examined the regulatory burdens imposed on drug and medical device manufacturers by the FDA in its product approval processes. In 1997, Congress enacted legislation intended to ameliorate those burdens. Among other things, the Food and Drug Administration Modernization Act of 1997 ("FDAMA") extends the Prescription Drug User Fee Act for another five years; expands access to investigational drugs; authorizes FDA to approve a new drug application on the basis of the results of one clinical trial, if the results are sufficient to establish effectiveness; provides incentives in the form of extended market exclusivity for companies who conduct qualified pediatric clinical studies; otherwise seeks to streamline and facilitate the drug approval process; permits the dissemination of scientific and medical information regarding a product's unapproved uses under specific circumstances; and expands FDAMA inspectional authority over non-prescription drugs. FDAMA also seeks to improve the regulation of medical devices. Much of FDAMA became effective in 1998, with implementation regulations effective in late 1998 and early 1999. The Company has not experienced material effects of FDAMA to date.
Internationally, the regulation of drugs and medical devices is likewise becoming increasingly complex. In Europe, the Company's products are subject to extensive regulatory requirements. As in the United States, the marketing of medicinal products has for many years been subject to the granting of marketing authorizations by medicine agencies. Particular emphasis is also being placed on more sophisticated and faster procedures for reporting of adverse events to the competent authorities. Additionally, new rules have been introduced or are under discussion in several areas such as the recognition by the authorities in one Member State of the European Union ("EU") of the assessment and approval to market provided in another Member State and the harmonization of clinical research laws and labeling and patient package information, which collectively are expected to assist companies such as Allergan to bring products to market quickly once the first European approval is received.
A new EU regulatory regime has been installed to cover medical devices. This regulatory process became mandatory in June 1998. It requires that medical devices may only be placed on the market if they do not compromise safety and health when properly installed, maintained and used in accordance with their intended purpose. National laws conforming to this EU legislation regulate the Company's IOLs and contact lens care products under the medical devices regulatory system rather than the more extensive system for medicinal products under which they were formerly regulated. The EU regulatory system for cosmetics, which covers many of the Company's skin care products,
In the United States, a significant percentage of the patients who receive the Company's IOLs are covered by the federal Medicare program. When a cataract extraction with IOL implantation is performed in an ambulatory surgery center ("ASC"), Medicare provides the ASC with a fixed facility fee which includes a $150 allowance to cover the cost of the IOL. When the procedure is performed in a hospital outpatient department, the hospital's reimbursement is determined using a complex formula that blends the hospital's costs with the $150 allowance paid to ASCs. In its effort to reduce Medicare expenditures, Congress may lower the IOL allowance below $150. The Medicare Technical Corrections Bill of 1994 directed the U.S. Health Care Financing Administration ("HCFA") to establish a system through which the agency would pay ASCs and hospitals a rate above $150 for "new technology IOLs." HCFA has issued final rules which implement this mandate. Allergan has filed for "new technology" status for the Array (R) multifocal IOL and the SI-40NB(R) and SI-55NB(R) monofocal IOLs.
The Company's pharmaceutical products are not currently covered by Medicare, but proposals to amend Medicare coverage to include pharmaceuticals are currently in debate in the United States. Such coverage could impose price controls on the Company's products. If implemented, price controls could materially and adversely affect the Company's revenues and financial condition.
The Company cannot predict the likelihood or pace of any significant legislative action in these areas, nor can it predict whether or in what form health care legislation being formulated by various governments will be passed. The Company also cannot predict exactly what effect such governmental measures would have if they were ultimately enacted into law. However, in general, the Company believes that such legislative activity will likely continue, and the adoption of such measures can be expected to have some impact on the Company's business.
PATENTS, TRADEMARKS AND LICENSES
Allergan owns, or is licensed under, numerous patents relating to its products, product uses and manufacturing processes. It has numerous patents issued in the United States and corresponding foreign patents issued in many of the major countries in which it does business. Allergan believes that its patents and licenses are important to its business, but that with the exception of those relating to Alphagan(R) ophthalmic solution and to hydrogen peroxide disinfection systems, no one patent or license is currently of material importance in relation to its overall sales. Allergan markets its products under various trademarks and considers these trademarks to be valuable because of their contribution to the market identification of the various products.
ENVIRONMENTAL MATTERS
The Company is subject to federal, state, local and foreign environmental laws and regulations. The Company believes that its operations comply in all material respects with applicable environmental laws and regulations in each country where the Company has a business presence. Although Allergan continues to make capital expenditures for environmental protection, it does not anticipate any significant expenditures in order to comply with such laws and regulations which would have a material impact on the Company's capital expenditures, earnings or competitive position. The Company is not aware of any pending litigation or significant financial obligations arising from current or past environmental practices that are likely to have a material adverse impact on the Company's financial position. There can be no assurance, however, that environmental
CERTAIN FACTORS AND TRENDS AFFECTING ALLERGAN AND ITS BUSINESSES
The Company believes that certain statements made by the Company in this report and in other reports and statements released by the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as comments which express the Company's opinions about trends and factors which may impact future operating results. Disclosures which use words such as the Company "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from expectations. Any such forward-looking statements, whether made in this report or elsewhere, should be considered in context with the various disclosures made by the Company about its businesses including, without limitation, the factors discussed below.
o The pharmaceutical industry and other health care-related industries continue to experience consolidation, resulting in larger, more diversified companies with greater resources than the Company. Among other things, these larger companies can spread their research and development costs over much broader revenue bases than Allergan and can influence customer and distributor buying decisions.
o Two of the Company's ophthalmic pharmaceutical products, Betagan(R) and Propine(R), are off patent in the U.S. and continue to face competition from generic versions of these compounds as well as from recently introduced new technology glaucoma products. Other significant products such as Elimite(R) cream, Blephamide(R) ophthalmic suspension and Pred-Forte(R) ophthalmic suspension are also off patent and may face similar generic competition.
o The Company is currently the only manufacturer of an FDA-approved neurotoxin. The Company is aware, however, of another company seeking FDA approval of a neurotoxin. If such approval is granted, the Company's sales of Botox(R) Purified Neurotoxin Complex could be materially and negatively impacted.
o The manufacturing process to create bulk toxin raw material necessary to produce Botox(R) Purified Neurotoxin Complex is technically complicated. Any failure of the Company to maintain an adequate supply of bulk toxin and finished product could result in an interruption in the supply of Botox(R) Purified Neurotoxin Complex with a resulting decrease in sales of the product.
o The Company's Contact Lens Care business continues to be impacted by trends in the contact lens and lens care marketplace, including technological and medical advances in surgical techniques for the correction of vision impairment. Cheaper one-bottle chemical disinfection systems have gained popularity among soft contact lens wearers instead of peroxide-based lens care products which historically have been Allergan's strongest family of lens care products. Also, the growing use and acceptance of daily contact lenses, along with the other factors above, could have the effect of reducing demand for lens care products generally. While the Company believes it has established appropriate marketing and sales plans to mitigate the impact of these trends upon its Contact Lens Care business, no assurance can be given in this regard.
o Sales of the Company's surgical and pharmaceutical products have been and are expected to continue to be impacted by continuing pricing pressures resulting from various government initiatives as well as from the purchasing and operational decisions made by managed care organizations. Failure of the Array(R) multifocal IOL to be designated as a "new technology IOL" by HCFA will adversely affect the Company's profit margin for the product.
o A current political issue of debate in the United States is the propriety of expanding Medicare coverage to include pharmaceutical products. If measures to accomplish that coverage become law, and if these measures impose price controls on the Company's products, the Company's revenues and financial condition are likely to be materially and adversely affected.
o The Company collects and pays a substantial portion of its sales and expenditures in currencies other than the U.S. dollar. Therefore, fluctuations in foreign currency exchange rates affect the Company's operating results. The Company can provide no assurance that future exchange rate movements will not have a material adverse effect on the Company's sales, gross profit or operating expenses.
o The Company's business is also subject to other risks generally associated with doing business abroad, such as political unrest and changing economic conditions with countries where the Company's products are sold or manufactured. Management cannot provide assurances that it can successfully manage these risks or avoid their effects.
o The Company sells its pharmaceutical products primarily through wholesalers. Wholesaler purchases may exceed customer demand, resulting in reduced wholesaler purchases in later quarters. The Company can give no assurances that wholesaler purchases will not decline as a result of this potential excess buying.
o In past years, the Company has taken steps designed to improve its gross profit margin, including continued emphasis on new products as well as the closure of certain plants and other cost-cutting measures. In particular, the Company announced comprehensive plans in the third quarter of 1998 to streamline operations and reduce costs through global G&A restructuring and manufacturing consolidation. Whether these steps will succeed in improving gross profit margin depends in part on whether sales of new products will result in a more favorable mix of products, and on whether the anticipated cost savings can be achieved and sustained.
o Future performance will be affected by the introduction of new products. The Company has allocated significant resources to the development and introduction of new products. The successful development, regulatory approval and market acceptance of the products cannot be assured.
o There are intrinsic uncertainties associated with Research & Development efforts and the regulatory process both of which are discussed in greater details in the "Research and Development" and the "Government Regulation" sections, respectively, which are incorporated herein by reference.
Allergan's operations are conducted in owned and leased facilities located throughout the world. The Company believes its present facilities are adequate for its current needs. Its headquarters and primary administrative and research facilities are located in Irvine, California. The Company has three additional facilities in California, two for raw material support (one leased and one owned) and one leased administrative facility. The Company owns one facility in Texas for manufacturing and warehousing, and the Company operates two facilities in Puerto Rico for manufacturing and warehousing. One of the Puerto Rico facilities is leased and the other is owned. As previously announced, the Company intends to close the facility that it owns in 2001.
Outside of the United States and Puerto Rico, the Company owns and operates three manufacturing and warehousing facilities located in Brazil, Ireland and China. Other material facilities include one owned facility for administration and warehousing in Argentina; leased warehouse facilities in Mexico and Japan; leased administrative facilities in Australia, Brazil, Canada, France, Germany, Hong Kong, Ireland, Italy, Japan, Spain and the United Kingdom; and one leased facility in Japan used for administration and research and development.
The Company and its subsidiaries are involved in various litigation and claims arising in the ordinary course of business which Allergan considers to be normal in view of the size and nature of its business.
Although the ultimate outcome of any pending litigation and claims cannot be precisely ascertained at this time, Allergan believes that any liability resulting from the aggregate amount of uninsured damages for outstanding lawsuits, investigations and claims will not have a material adverse effect on its consolidated financial position and results of operation. However, in view of the unpredictable nature of such matters, no assurances can be given in this regard.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matter during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.
The executive officers of the Company and their ages as of March 1, 2000 are as follows:
David E.I. Pyott 46 President and Chief Executive Officer
F. Michael Ball 44 Corporate Vice President and President, North
America Region and Global Eye Rx Business
Eric K. Brandt 37 Corporate Vice President and Chief Financial
Officer (Principal Financial Officer)
David A. Fellows 43 Corporate Vice President and President,
Asia Pacific Region
James M. Hindman, CPA 39 Senior Vice President and Controller
Lester J. Kaplan, Ph.D. 49 Corporate Vice President and President, Research
and Development and Global BOTOX(R)
George M. Lasezkay, Pharm.D., J.D. 48 Corporate Vice President, Corporate Development
Nelson R. A. Marques 48 Corporate Vice President and President, Latin
America Region
James V. Mazzo 42 Corporate Vice President and President,
Europe/Africa/Middle East Region and Global Lens
Care Products
Jacqueline Schiavo 51 Corporate Vice President, Worldwide Operations
Francis R. Tunney, Jr. 52 Corporate Vice President - Administration, General
Counsel and Secretary
Dwight J. Yoder, CPA 54 Senior Vice President (Principal Accounting Officer)
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Officers are appointed by and hold office at the pleasure of the Board of Directors.
Mr. Pyott became President and Chief Executive Officer in January 1998. Previously, he was head of the Nutrition Division and a member of the executive committee of Novartis AG from 1995 until December 1997. From 1992 to 1995 Mr. Pyott was President and Chief Executive Officer of Sandoz Nutrition Corp., Minneapolis, Minnesota and General Manager of Sandoz Nutrition, Barcelona, Spain from 1990 to 1992. Prior to that Mr. Pyott held various positions within Sandoz Nutrition group from 1980.
Mr. Ball has been Corporate Vice President and President, North America Region and Global Eye Rx Business since May 1998 and prior to that was Corporate Vice President and President, North America Region since April 1996. He joined the Company in 1995 as Senior Vice President, U.S. Eye Care after 12 years with Syntex Corporation,
Mr. Brandt has been Corporate Vice President and Chief Financial Officer since May 1999. Prior to joining the Company, Mr. Brandt held various positions with the Boston Consulting Group ("BCG") from 1989, culminating in Vice President and Partner, and a senior member of the BCG Health Care practice. While at BCG, Mr. Brandt was involved in high level consulting engagements with top global pharmaceutical, managed care and medical device companies, focusing on corporate finance, shareholder value and post-merger integration. Mr. Brandt joined the Company in 1999.
Mr. Fellows has been Corporate Vice President and President of the Asia Pacific Region since June 1997 and prior thereto, was Senior Vice President, U.S. Eye Care Marketing since June 1996. From 1993 to 1996, he was Senior Vice President, Therapeutics Strategic Marketing, and from 1991 until 1993, he was Vice President, Pharmaceuticals Strategic Marketing. Mr. Fellows joined the Company in 1980.
Mr. Hindman has been Senior Vice President and Controller since January 2000 and prior thereto was Vice President, Financial Planning & Analysis since February 1997. Prior to that he served 12 years in a variety of positions at the Company, including Plant Controller, Director of Manufacturing Planning and Reporting, Director of Finance (Northwest Europe), and Assistant Corporate Controller. Mr. Hindman first joined the Company in 1984.
Dr. Kaplan has been Corporate Vice President and President, Research and Development and Global BOTOX(R) since May 1998 and had been Corporate Vice President, Science and Technology since July 1996. From 1992 until 1996, he was Corporate Vice President, Research and Development. He had been Senior Vice President, Pharmaceutical Research and Development since 1991 and Senior Vice President, Research and Development since 1989. Dr. Kaplan first joined the Company in 1983.
Dr. Lasezkay has been Corporate Vice President, Corporate Development since October 1998 and had been Vice President, Corporate Development since July 1996. He had been Assistant General Counsel of the Company since 1995 and Senior Counsel to the Company since 1989 when he first joined the Company.
Mr. Marques has been Corporate Vice President and President, Latin America since October 1998. Prior to that he served 18 years with Alcon, where he held a variety of positions, including President, Alcon Laboratories do Brasil Ltda. from 1994 until 1998. Mr. Marques joined the Company in 1998.
Mr. Mazzo has been Corporate Vice President and President, Europe/Africa/Middle East Region since April 1998 and in May 1998 he also assumed the duties of President of Global Lens Care Products. He had been Senior Vice President Eyecare/Rx Sales and Marketing, U.S. since June 1997 during which time he served as acting President Europe/Africa/Middle East Region from October - December 1997. Prior to that he served 11 years in a variety of positions at the Company, including Director, Marketing (Canada), Vice President and Managing Director (Italy) and Senior Vice President Northern Europe. Mr. Mazzo first joined the Company in 1980.
Ms. Schiavo has been Corporate Vice President, Worldwide Operations since 1992. She was Senior Vice President, Operations from 1991 and Vice President, Operations from 1989. Ms. Schiavo first joined the Company in 1980.
Mr. Yoder has been Senior Vice President from January 2000, prior to which he had been Senior Vice President and Controller from July 1996 and Vice President and Controller since joining the Company in 1990. Mr. Yoder will retire in June 2000. He is also the Chief Financial Officer of Allergan Specialty Therapeutics, Inc.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The section entitled "Market Prices of Common Stock and Dividends" on page A-47 of the Proxy Statement is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The table entitled "Selected Financial Data" on page A-47 of the Proxy Statement is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three-Year Period Ended December 31, 1999" on pages A-2 to A-17 of the Proxy Statement is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The section entitled "Quantitative and Qualitative Disclosures About Market Risk" on pages A-13 to A-16 of the Proxy Statement is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements, including the notes thereto, included on pages A-18 to A-43 of the Proxy Statement, together with the sections entitled "Independent Auditors' Report" and "Quarterly Results (Unaudited)" of the Proxy Statement included on pages A-45 and A-46, respectively, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF ALLERGAN, INC.
Information under this Item is included on pages 2-4 of the Proxy Statement in the section entitled "Election of Directors" and is incorporated herein by reference. Information with respect to executive officers is included on pages 16-18 of this Form 10-K.
The information required by Item 405 of Regulation S-K is included on page 8 of the Proxy Statement under the section entitled "Section 16(a) Beneficial Ownership Reporting Compliance" and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation," and the subsection entitled "Director Compensation" included in the Proxy Statement on pages 15-24 and pages 6-7, respectively, are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The common stock information in the section entitled "Security Ownership of Certain Beneficial Owners and Management" on pages 13-14 of the Proxy Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The sections entitled "Other Matters" and "Compensation Committee Interlocks and Insider Participation" on pages 7-8 and page 23, respectively, of the Proxy Statement are incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Index to Financial Statements*
PAGE(S) IN
PROXY STATEMENT
---------------
1. Financial Statements included in Part II of this report:
Independent Auditors' Report ............................................... A-45
Consolidated Balance Sheets at December 31, 1999 and December 31, 1998...... A-18
Consolidated Statements of Operations for Each of the Years
in the Three Year Period Ended December 31, 1999 ........................... A-19
Consolidated Statements of Stockholders' Equity for Each of the Years
in the Three Year Period Ended December 31, 1999............................ A-20
Consolidated Statements of Cash Flows for Each of the Years
in the Three Year Period Ended December 31, 1999 ........................... A-21
Notes to Consolidated Financial Statements .................................A-22 to A-43
------------------
* Incorporated by reference from the indicated pages of the Company's Proxy Statement
filed with the Securities and Exchange Commission on March 16, 2000.
2. Schedules Supporting the Consolidated Financial Statements:
PAGE IN
THIS REPORT
-----------
Schedule numbered in accordance with Rule 5-04 of Regulation S-X:
II Valuation and Qualifying Accounts....................................... S-8
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All other schedules have been omitted for the reason that the required information is presented in financial statements or notes thereto, the amounts involved are not significant or the schedules are not applicable.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the last quarter of 1999.
(c) Item 601 Exhibits
Reference is made to the Index of Exhibits beginning at page S-3 of this report.
(d) Other Financial Statements
There are no financial statements required to be filed by Regulation S-X which are excluded from the Proxy Statement by Rule 14 a-3(b)(1).
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 16, 2000 ALLERGAN, INC.
By: /s/ DAVID E.I. PYOTT
----------------------------------
David E.I. Pyott
President, Chief Executive Officer
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
Date: March 16, 2000 By: /s/ DAVID E.I. PYOTT
----------------------------------
David E.I. Pyott
President, Chief Executive Officer
Date: February 17, 2000 By: /s/ ERIC K. BRANDT
----------------------------------
Eric K. Brandt
Corporate Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: March 16, 2000 By: /s/ DWIGHT J. YODER
----------------------------------
Dwight J. Yoder
Senior Vice President
(Principal Accounting Officer)
Date: February 18, 2000 By: /s/ HERBERT W. BOYER
----------------------------------
Herbert W. Boyer, Ph.D.,
Chairman of the Board
Date: March 16, 2000 By: /s/ RONALD M. CRESSWELL
----------------------------------
Ronald M. Cresswell, Director
Date: February 28, 2000 By: /s/ HANDEL E. EVANS
----------------------------------
Handel E. Evans, Director
Date: March 16, 2000 By: /s/ MICHAEL R. GALLAGHER
----------------------------------
Michael R. Gallagher, Director
Date: March 16, 2000 By: /s/ WILLIAM R. GRANT
----------------------------------
William R. Grant, Director
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Date: March 16, 2000 By: /s/ GAVIN S. HERBERT
----------------------------------
Gavin S. Herbert, Director and
Chairman Emeritus
Date: March 16, 2000 By: /s/ LESTER J. KAPLAN
----------------------------------
Lester J. Kaplan, Ph.D., Director
Date: March 16, 2000 By: /s/ KAREN R. OSAR
----------------------------------
Karen R. Osar, Director
Date: March 16, 2000 By: /s/ LOUIS T. ROSSO
----------------------------------
Louis T. Rosso, Director
Date: March 16, 2000 By: /s/ LEONARD D. SCHAEFFER
----------------------------------
Leonard D. Schaeffer, Director
Date: March 16, 2000 By: /s/ HENRY WENDT
----------------------------------
Henry Wendt, Director
|
EXHIBIT
NUMBER DESCRIPTION
------ -----------
3.1 Restated Certificate of Incorporation of the Company as filed
with the State of Delaware on May 22, 1989 (incorporated by
reference to Exhibit 3.1 to Registration Statement on Form S-1
No. 33-28855, filed May 24, 1989)
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3 to
the Company's Report on Form 10-Q for the Quarter ended June 30,
1995)
3.3 First Amendment to Allergan, Inc. Bylaws (incorporated by
reference to Exhibit 3.1 to the Company's Report on Form 10-Q for
the Quarter ended September 24, 1999)
4.1 Certificate of Designations of Series A Junior Participating
Preferred Stock as filed with the State of Delaware on February
1, 2000
4.2 Rights Agreement, dated January 25, 2000, between Allergan, Inc.
and First Chicago Trust Company of New York (incorporated by
reference to Exhibit 4 to the Company's Current Report on Form
8-K filed on January 28, 2000)
10.1 Form of director and executive officer Indemnity Agreement
(incorporated by reference to Exhibit 10.4 to the Company's
Report on Form 10-K for the Fiscal Year ended December 31, 1992)*
10.2 Allergan, Inc. 1989 Nonemployee Director Stock Plan, as amended
and restated (incorporated by reference to Exhibit 10.1 to the
Company's Report on Form 10-Q for the Quarter ended March 27,
1998)*
10.3 First Amendment to Allergan, Inc. 1989 Nonemployee Director Stock
Plan, as amended and restated (incorporated by reference to
Exhibit 10.9 to the Company's Current Report on Form 8-K filed on
January 28, 2000)*
10.4 Allergan, Inc. Deferred Directors' Fee Program amended and
restated as of November 15, 1999 (incorporated by reference to
Exhibit 4 to Registration Statement on Form S-8 No. 333-94155,
filed January 6, 2000)*
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INDEX OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.5 Allergan, Inc. 1989 Incentive Compensation Plan, as amended and
restated (incorporated by reference to Exhibit 10.4 to the
Company's Current Report on Form 8-K filed on January 28, 2000)*
10.6 Restated Allergan, Inc. Employee Stock Ownership Plan
(incorporated by reference to Exhibit 10.1 to the Company's
Report on Form 10-Q for the Quarter ended March 31, 1996)
10.7 First Amendment to Restated Allergan, Inc. Employee Stock
Ownership Plan (incorporated by reference to Exhibit 10.3 to the
Company's Report on Form 10-Q for the Quarter ended June 30,
1996)
10.8 Second Amendment to Restated Allergan, Inc. Employee Stock
Ownership Plan (incorporated by reference to Exhibit 10.7 to the
Company's Report on Form 10-K for the Fiscal Year ended December
31, 1997)
10.9 Third Amendment to the Restated Allergan, Inc. Employee Stock
Ownership Plan (incorporated by reference to Exhibit 10.4 to the
Company's Report on Form 10-Q for the Quarter ended June 26,
1998)
10.10 Fourth Amendment to Restated Allergan, Inc. Employee Stock
Ownership Plan (incorporated by reference to Exhibit 10.6 to the
Company's Report on Form 10-Q for the Quarter ended September 24,
1999)
10.11 Fifth Amendment to Restated Allergan, Inc. Employee Stock
Ownership Plan (incorporated by reference to Exhibit 10.3 to the
Company's Current Report on Form 8-K filed on January 28, 2000)
10.12 Restated Allergan, Inc. Savings and Investment Plan (incorporated
by reference to Exhibit 10.6 to the Company's Current Report on
Form 8-K filed January 28, 2000)
10.13 First Amendment to the Allergan, Inc. Savings and Investment Plan
(incorporated by reference to Exhibit 10.5 to the Company's
Report on Form 10-Q for the Quarter ended September 24, 1999)
10.14 Second Amendment to the Allergan, Inc. Savings and Investment
Plan (incorporated by reference to Exhibit 10.5 to the Company's
Current Report on Form 8-K filed on January 28, 2000)
10.15 Form of Allergan change in control severance agreement
(incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed on January 28, 2000)*
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INDEX OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.16 $250,000,000 Credit Agreement dated as of December 22, 1993 and
amended and restated as of May 10, 1996 among the Company, as
Borrower and Guarantor, the Eligible Subsidiaries Referred to
Therein, the Banks Listed Therein, Morgan Guaranty Trust Company
of New York, as Agent and Bank of America National Trust and
Savings Association, as Co-Agent (the "Credit Agreement")
(incorporated by reference to Exhibit 10.7 to the Company's
Report on Form 10-Q for the Quarter ended March 31, 1996)
10.17 Amendment No. 1 to the Credit Agreement (incorporated by
reference to Exhibit 10.1 to the Company's Report on Form 10-Q
for the Quarter ended June 26, 1998)
10.18 Restated Allergan, Inc. Pension Plan (incorporated by reference
to Exhibit 10.3 to the Company's Report on Form 10-Q for the
Quarter ended March 31, 1996)
10.19 First Amendment to the Allergan, Inc. Pension Plan (incorporated
by reference to Exhibit 10.14 to the Company's Report on Form
10-K for the Fiscal Year ended December 31, 1997)
10.20 Second Amendment to the Allergan, Inc. Pension Plan (incorporated
by reference to Exhibit 10.2 to the Company's Report on Form 10-Q
for the Quarter ended June 26, 1998)
10.21 Third Amendment to the Allergan, Inc. Pension Plan (incorporated
by reference to Exhibit 10.2 to the Company's Report on Form 10-Q
for the Quarter ended September 24, 1999)
10.22 Fourth Amendment to the Allergan, Inc. Pension Plan (incorporated
by reference to Exhibit 10.10 to the Company's Current Report on
Form 8-K filed on January 28, 2000)
10.23 Restated Allergan, Inc. Supplemental Retirement Income Plan
(incorporated by reference to Exhibit 10.5 to the Company's
Report on Form 10-Q for the Quarter ended March 31, 1996)*
10.24 First Amendment to Allergan, Inc. Supplemental Retirement Income
Plan (incorporated by reference to Exhibit 10.4 to the Company's
Report on Form 10-Q for the Quarter ended September 24, 1999)*
10.25 Second Amendment to Allergan, Inc. Supplemental Retirement Income
Plan (incorporated by reference to Exhibit 10.12 to the Company's
Current Report on Form 8-K filed on January 28, 2000)*
10.26 Restated Allergan, Inc. Supplemental Executive Benefit Plan
(incorporated by reference to Exhibit 10.6 to the Company's
Report on Form 10-Q for the Quarter ended March 31, 1996)*
|
INDEX OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.27 First Amendment to Allergan, Inc. Supplemental Executive Benefit
Plan (incorporated by reference to Exhibit 10.3 to the Company's
Report on Form 10-Q for the Quarter ended September 24, 1999)*
10.28 Second Amendment to Allergan, Inc. Supplemental Executive Benefit
Plan (incorporated by reference to Exhibit 10.11 to the Company's
Current Report on Form 8-K filed on January 28, 2000)*
10.29 Allergan, Inc. Executive Bonus Plan (incorporated by reference to
Exhibit C to the Company's Proxy Statement dated March 23, 1999,
filed in definitive form on March 22, 1999) *
10.30 First Amendment to Allergan, Inc. Executive Bonus Plan
(incorporated by reference to Exhibit 10.2 to the Company's
Current Report on Form 8-K filed on January 28, 2000)*
10.31 Allergan, Inc. 2000 Management Bonus Plan (incorporated by
reference to Exhibit 10.8 to the Company's Current Report on Form
8-K filed on January 28, 2000)*
10.32 Distribution Agreement dated March 4, 1994 between Allergan, Inc.
and Merrill Lynch & Co. and J.P. Morgan Securities Inc.
(incorporated by reference to Exhibit 10.14 to the Company's
Report on Form 10-K for the fiscal year ended December 31, 1993)
10.33 Allergan, Inc. Executive Deferred Compensation Plan amended and
restated, effective January 1, 2000 (incorporated by reference to
Exhibit 4 to Registration Statement on Form S-8 No. 333-94157,
filed January 6, 2000)*
10.34 Allergan, Inc. Stock Price Incentive Plan (incorporated by
reference to Exhibit 10.21 to the Company's Report on Form 10-K
for the Fiscal Year ended December 31, 1997)*
10.35 Letter Agreement between Allergan, Inc. and William C. Shepherd
dated September 27, 1997 (incorporated by reference to Exhibit
10.22 to the Company's Report on Form 10-K for the Fiscal Year
ended December 31, 1997)*
10.36 Technology License Agreement dated as of March 6, 1998 among
Allergan, Inc. and certain of its affiliates and Allergan
Specialty Therapeutics, Inc. ("ASTI") (incorporated by reference
to Exhibit 10.23 to the Company's Report on Form 10-K for the
Fiscal Year ended December 31, 1997)
10.37 Research and Development Agreement dated as of March 6, 1998
between Allergan, Inc. and ASTI (incorporated by reference to
Exhibit 10.2 to the Company's Report on Form 10-Q for the Quarter
ended March 27, 1998)
|
INDEX OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.38 License Option Agreement dated as of March 6, 1998 between
Allergan, Inc. and ASTI (incorporated by reference to Exhibit
10.25 to the Company's Report on Form 10-K for the Fiscal Year
ended December 31, 1997)
10.39 Distribution Agreement dated as of March 6, 1998 between
Allergan, Inc. and ASTI (incorporated by reference to Exhibit
10.26 to the Company's Report on Form 10-K for the Fiscal Year
ended December 31, 1997)
21 List of Subsidiaries of the Company
23 Report and consent of KPMG LLP to the incorporation of their
reports herein to Registration Statements Nos. 33-29527,
33-29528, 33-44770, 33-48908, 33-66874, 333-09091, 333-04859,
333-25891, 33-55061, 33-69746, 333-64559, and 333-70407,
333-94155 and 333-94157.
27 Financial Data Schedule
----------
|
BALANCE AT BALANCE
BEGINNING AT END
OF YEAR ADDITIONS DEDUCTIONS OF YEAR
---------- --------- ---------- -------
1999 $6.7 $0.3(a) $1.6(b) $5.4
---- ---- ---- ----
1998 $6.8 $1.1(a) $1.2(b) $6.7
---- ---- ---- ----
1997 $7.5 $1.8(a) $2.5(b) $6.8
---- ---- ---- ----
|
(b) Accounts written off.
S-8
Allergan, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the "Corporation"), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation as required by Section 151 of the General Corporation Law at a meeting duly called and held on January 25, 2000.
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the "Board of Directors" or the "Board") in accordance with the provisions of the Certificate of Incorporation of this Corporation, the Board of Directors hereby creates a series of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the Corporation and hereby states the designation and number of shares, and fixes the relative rights, powers and preferences, and qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" (the "Series A Preferred Stock") and the number of shares constituting the Series A Preferred Stock shall be 1,500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; PROVIDED, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any class or series of stock of this Corporation ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock, par value $.01 per share (the "Common Stock"), of the Corporation, and of any other stock ranking junior to the Series A Preferred Stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as
(B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section 2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (both as to dividends and upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received an amount per share (the "Series A Liquidation Preference") equal to $100 per
(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series A Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series A Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the Corporation into or with another corporation nor the merger or consolidation of any other corporation into or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Common Stock (by
Section 8. No Redemption. The shares of Series A Preferred Stock shall not be redeemable by the Company.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up, junior to all series of any other class of the Corporation's Preferred Stock, except to the extent that any such other series specifically provides that it shall rank on a parity with or junior to the Series A Preferred Stock.
Section 10. Amendment. At any time any shares of Series A Preferred Stock are outstanding, the Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting separately as a single class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its Corporate Vice President - Administration, General Counsel and Secretary, this 28th day of January, 2000.
/s/ Francis R. Tunney, Jr.
----------------------------------------------
Francis R. Tunney, Jr.,
Corporate Vice President - Administration,
General Counsel and Secretary
|
EXHIBIT 21
ENTITIES OF ALLERGAN, INC.
PLACE OF
INCORPORATION
NAME OF SUBSIDIARY OR ORGANIZATION
------------------ ---------------
Allergan-Loa S.A. Argentina
Allergan S.A.I.C. y F. Argentina
Allergan Australia Pty Limited Australia
Amawind Pty Limited Australia
Pacific Eyecare Pty Limited Australia
Allergan N.V. Belgium
Allergan Produtos Farmaceuticos Ltda. Brazil
Allergan Inc. Canada
CrownPharma Canada Inc. Canada
Allergan Laboratorios Limitada Chile
Allergan (Hangzhou) Pharmaceutical Co., Ltd. China
Allergan de Colombia S.A. Colombia
Allergan A/S Denmark
Allergan France S.A. France
Pharm-Allergan GmbH Germany
Allergan Asia Limited Hong Kong
Allergan Botox Limited Ireland
Allergan Sales, Limited Ireland
Allergan Services International, Limited Ireland
Allergan Trading International, Limited Ireland
CrownPharma Limited Ireland
Allergan S.p.A. Italy
Allergan K.K. Japan
Allergan Korea Ltd. Korea
Allergan Afrasia Limited Malta
Allergan, S.A. de C.V. Mexico
Pharmac, S.A.M. Monaco
Allergan B.V. Netherlands
Allergan New Zealand Limited New Zealand
Allergan AS Norway
Allergan Pakistan (Private) Limited Pakistan
Allergan Pharmaceuticals (Ireland) Ltd., Inc. Panama
Allergan Pte. Ltd. Singapore
Allergan, S.A. Spain
Allergan Norden AB Sweden
Allergan AG Switzerland
Allergan Optik Mamulleri Sanayi Ve Ticaret Limited Turkey
Allergan Farnborough Limited United Kingdom
Allergan Holdings Limited United Kingdom
Allergan Limited United Kingdom
Allergan Optical Irvine, Inc. United States/CA
Allergan Sales, Inc.(formerly Allergan Medical Optics) United States/CA
AMO Puerto Rico, Inc. (formerly Allergan America) United States/CA
Herbert Laboratories United States/CA
Allergan America, Inc. (formerly Allergan Caribe, Inc.) United States/DE
Allergan Holdings, Inc. United States/DE
AMO Holdings, Inc. United States/DE
Pacific Pharma, Inc. (formerly Pacific I Limited, Inc.) United States/DE
Allergan de Venezuela, S.A. Venezuela
Allergan India Limited (Joint Venture) India
|
To the Board of Directors and Stockholders Allergan, Inc.:
Under date of January 24, 2000, we reported on the consolidated balance sheets of Allergan, Inc. and subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1999, included in Exhibit A to the Allergan, Inc. Notice of Annual Meeting and Proxy Statement. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1999. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in the index of exhibits to the annual report on Form 10-K for the fiscal year 1999. The financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statement schedule based on our audits. In our opinion, such schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth herein.
We consent to the incorporation by reference of our report dated January 24, 2000, in the Company's Registration Statements on Form S-8 (Nos. 33-29527, 33-29528, 33-44770, 33-48908, 33-66874, 333-09091, 333-04859, 333-25891, 333-64559, 333-70407, 333-94155 and 333-94157) and Registration Statements on Form S-3 (Nos. 33-55061 and 33-69746).
/s/ KPMG LLP Costa Mesa, California March 15, 2000 |
ARTICLE 5
MULTIPLIER: 1,000
PERIOD TYPE
12 MOS
FISCAL YEAR END
DEC 31 1999
PERIOD START
JAN 01 1999
PERIOD END
DEC 31 1999
CASH
162,900
SECURITIES
0
RECEIVABLES
258,600
ALLOWANCES
5,400
INVENTORY
130,700
CURRENT ASSETS
697,500
PP&E
610,800
DEPRECIATION
280,500
TOTAL ASSETS
1,339,100
CURRENT LIABILITIES
419,900
BONDS
0
PREFERRED MANDATORY
0
PREFERRED
0
COMMON
1,300
OTHER SE
633,200
TOTAL LIABILITY AND EQUITY
1,339,100
SALES
1,406,200
TOTAL REVENUES
1,452,400
CGS
406,400
TOTAL COSTS
449,700
OTHER EXPENSES
162,300
LOSS PROVISION
284
INTEREST EXPENSE
15,100
INCOME PRETAX
269,000
INCOME TAX
80,700
INCOME CONTINUING
188,200
DISCONTINUED
0
EXTRAORDINARY
0
CHANGES
0
NET INCOME
188,200
EPS BASIC
1.42
EPS DILUTED
1.39