We are a multi-specialty health care company focused on developing and commercializing innovative pharmaceuticals, biologics and medical devices that enable people to live life to its greatest potential — to see more clearly, move more freely and express themselves more fully. Our diversified approach enables us to follow our research and development into new specialty areas where unmet needs are significant.
We discover, develop and commercialize specialty pharmaceutical, medical device and over-the-counter products for the ophthalmic, neurological, medical aesthetics, medical dermatology, breast aesthetics, obesity intervention, urological and other specialty markets in more than 100 countries around the world. Our diversified business model includes products for which consumers may be eligible for reimbursement and cash pay products that consumers pay for directly. Based on internal information and assumptions, we estimate that in fiscal year 2009, approximately 72% of our net product sales were derived from reimbursable products and 28% of our net product sales were derived from cash pay products.
We are a pioneer in specialty pharmaceutical, biologic and medical device research and development, with global efforts targeting products and technologies related to eye care, skin care, neuromodulators, medical aesthetics, obesity intervention, urology and neurology. In 2009, our research and development expenditures were approximately 15.9% of our product net sales or approximately $706.0 million. We supplement our own research and development activities with our commitment to identify and obtain new technologies through in-licensing, research collaborations, joint ventures and acquisitions.
In March 2006, we acquired Inamed Corporation, or Inamed, a global health care manufacturer and marketer of breast implants, a range of dermal filler products to correct facial wrinkles, and bariatric medical devices for approximately $3.3 billion, consisting of approximately $1.4 billion in cash and 34,883,386 shares of our common stock.
In the first quarter of 2007, we acquired Groupe Cornéal Laboratoires, or Cornéal, a health care company that develops, manufactures and markets dermal fillers, for approximately $209.2 million, net of cash acquired. The acquisition of Cornéal expanded our marketing rights to Juvéderm® and a range of hyaluronic acid dermal fillers from the United States, Canada and Australia to all countries worldwide and provided us with control over the manufacturing process and future research and development of Juvéderm® and other dermal fillers.
In the fourth quarter of 2007, we acquired Esprit Pharma Holding Company, Inc., or Esprit, for approximately $370.8 million, net of cash acquired. By acquiring Esprit, we obtained an exclusive license to market Sanctura® (trospium chloride), or Sanctura®, and Sanctura XR® (trospium chloride extended release capsules), or Sanctura XR®, anticholinergics approved for the treatment of overactive bladder, or OAB, in the United States and its territories from Indevus Pharmaceuticals, Inc., or Indevus. We launched Sanctura XR® in the United States in the first quarter of 2008. In the second quarter of 2008, we entered into a license agreement with Indevus and Madaus GmbH, which grants us the right to seek approval for and to commercialize Sanctura XR® in Canada. In the first quarter of 2010, Health Canada, the Canadian national regulatory body, approved Sanctura XR®.
In the third quarter of 2008, we acquired Aczone® (dapsone) gel 5% from QLT USA, Inc., or QLT, a wholly-owned subsidiary of QLT Inc. for approximately $150 million. Aczone®, approved for sale in both the United States and Canada, is indicated for the treatment of acne vulgaris in patients 12 and older. Aczone® contains the first new FDA-approved chemical entity (dapsone) for acne treatment since Tazorac® (tazarotene) gel was approved in 1997. We launched Aczone® in the United States in the fourth quarter of 2008.
In the fourth quarter of 2008, we entered into a strategic collaboration arrangement with Spectrum Pharmaceuticals, Inc., or Spectrum, to develop and commercialize apaziquone, an antineoplastic agent currently being investigated for the treatment of non-muscle invasive bladder cancer by intravesical instillation. Under the collaboration, Spectrum is conducting two Phase 3 clinical trials to explore apaziquone’s safety and efficacy as a potential treatment for non-muscle invasive bladder cancer following surgery. We made an initial payment of $41.5 million to Spectrum and will make additional payments of up to $304 million based on the achievement of certain development, regulatory and commercialization milestones. Spectrum retained exclusive rights to apaziquone in Asia, including Japan and China. Allergan received exclusive rights to apaziquone for the treatment of bladder cancer in the rest of the world, including the United States, Canada and Europe. In the United States, Allergan and Spectrum will co-promote apaziquone and share in its profits and expenses. Allergan will also pay Spectrum royalties on all of its apaziquone sales outside of the United States. In the third quarter of 2009, the U.S. Food and Drug Administration, or FDA, granted Fast Track Designation for the investigation of apaziquone for the treatment of non-muscle invasive bladder cancer. Fast Track Designation was designed to facilitiate drug development and expedite the review of drugs intended to treat serious conditions. In the fourth quarter of 2009, Spectrum completed enrollment in the two Phase 3 clinical trials.
In the third quarter of 2009, we entered into a co-promotion agreement with Quintiles Transnational Corp., or Quintiles, under which Quintiles will co-promote Sanctura XR®, Latisse® and Aczone®, generally targeting primary care physicians. We will continue to promote Sanctura XR®, Latisse® and Aczone® using our existing sales forces to specialty physicians.
In the first quarter of 2010, we acquired Serica Technologies, Inc., a medical device company focused on the development of biodegradable silk-based scaffolds for use in tissue regeneration, including breast augmentation, revision and reconstruction and bariatric applications, for an aggregate purchase price of approximately $70.0 million.
We were founded in 1950 and incorporated in Delaware in 1977. Our principal executive offices are located at 2525 Dupont Drive, Irvine, California, 92612, and our telephone number at that location is (714) 246-4500. Our Internet website address is www.allergan.com1. We make our periodic and current reports, together with amendments to these reports, available on our Internet website, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission, or SEC. The SEC maintains an Internet site at www.sec.gov that contains the reports, proxy and information statements and other information that we file electronically with the SEC.
Operating Segments
We operate our business on the basis of two reportable segments — specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces a broad range of pharmaceutical products, including: ophthalmic products for chronic dry eye, glaucoma therapy, ocular inflammation, infection, allergy and retinal diseases; Botox® for certain therapeutic and aesthetic indications; skin care products for acne, psoriasis, other prescription and over-the-counter skin care products and, beginning in the first quarter of 2009, eyelash growth products; and, beginning in the fourth quarter of 2007 urologics products. The medical devices segment produces a broad range of medical devices, including: breast implants for augmentation, revision and reconstructive surgery; obesity intervention products, including the Lap-Band® System and the Orbera™ Intragastric Balloon System and facial aesthetics products.
Specialty Pharmaceuticals Segment
Eye Care Pharmaceuticals Product Line
We develop, manufacture and market a broad range of prescription and non-prescription products designed to treat diseases and disorders of the eye, including chronic dry eye, glaucoma, inflammation, infection and allergy.
Chronic Dry Eye. Restasis® (cyclosporine ophthalmic emulsion) 0.05%, or Restasis®, is the first, and currently the only, prescription therapy for the treatment of chronic dry eye worldwide. Restasis® is our best selling eye care product. Chronic dry eye is a painful and irritating condition involving abnormalities and deficiencies in the tear film initiated by a variety of causes. The incidence of chronic dry eye increases markedly with age, after menopause in women and in people with systemic diseases such as Sjögren’s syndrome and rheumatoid arthritis. Until the approval of Restasis®, physicians used lubricating tears to provide palliative relief of the debilitating symptoms of chronic dry eye. We launched Restasis® in the United States in 2003 under a license from Novartis AG, or Novartis, for the ophthalmic use of cyclosporine. Restasis® is currently approved in 34 countries.
Artificial Tears. Our artificial tears products, including the Refresh® and Refresh® Optive™ brands, treat dry eye symptoms including irritation and dryness due to pollution, computer use, aging and other causes. Refresh®, launched in 1986, is the best selling over-the-counter artificial tears brand in the United States and includes a wide range of preserved and non-preserved drops as well as ointments to treat dry eye symptoms. According to IMS Health Incorporated, an independent marketing research firm, our artificial tears products, including the Refresh® and Refresh® Optive™ brands, were again the number one selling artificial tears products worldwide for the first nine months of 2009.
Glaucoma. The largest segment of the market for ophthalmic prescription drugs is for the treatment of glaucoma, a sight-threatening disease typically characterized by elevated intraocular pressure leading to optic nerve damage. Glaucoma is currently the world’s second leading cause of blindness, and we estimate that over 70 million people worldwide have glaucoma. According to IMS Health Incorporated, our products for the treatment of glaucoma, including Lumigan® (bimatoprost ophthalmic solution) 0.03%, or Lumigan® 0.03%, Lumigan® 0.01%, Alphagan® (brimonidine tartrate ophthalmic solution) 0.2%, or Alphagan®, Alphagan® P 0.15%, Alphagan® P 0.1%, Combigan® (brimonidine tartrate/timolol maleate ophthalmic solution) 0.2%/0.5%, or Combigan®, and Ganfort™ (bimatoprost/timolol maleate ophthalmic solution), or Ganfort™, captured approximately 19% of worldwide glaucoma market sales for the first nine months of 2009.
Lumigan® 0.03% and Lumigan® 0.01% are topical treatments indicated for the reduction of elevated intraocular pressure in patients with glaucoma or ocular hypertension. Lumigan® 0.01% is an improved reformulation of Lumigan® 0.03% for sale in certain countries outside of the United States. We are also seeking approval of Lumigan® 0.01% in the United States. We currently sell Lumigan® 0.01% and Lumigan® 0.03% in over 75 countries worldwide and, together, they are our second best selling eye care products. According to IMS Health Incorporated, Lumigan® 0.01% and Lumigan® 0.03% were the fourth best selling glaucoma products in the world for the first nine months of 2009. In 2002, the European Commission approved Lumigan® 0.03%. In 2004, the European Union’s Committee for Proprietary Medicinal Products approved Lumigan® 0.03% as a first-line therapy for the reduction of elevated intraocular pressure in chronic open-angle glaucoma and ocular hypertension. In 2006, the FDA approved Lumigan® 0.03% as a first-line therapy. In 2004, we entered into an exclusive licensing agreement with Senju Pharmaceutical Co., Ltd., or Senju, under which Senju became responsible for the development and commercialization of Lumigan® 0.03% in Japan. In the third quarter of 2009, Senju received approval of Lumigan® 0.03% in Japan. In the second quarter of 2009, Health Canada approved Lumigan® 0.01%. Lumigan® 0.01% was also approved in Brazil in 2009. In the first quarter of 2010, the European Commission granted a Marketing Authorization for Lumigan® 0.01% in the 27 European Union member states.
In 2006, we received a license from the European Commission to market Ganfort™ in the European Union. Combined sales of Lumigan® 0.03%, Lumigan® 0.01% and Ganfort™ represented approximately 10% of our total consolidated product net sales in 2009, 2008 and 2007. Ganfort™ is now sold in over 29 countries outside the United States.
Our third best selling eye care products are the ophthalmic solutions Alphagan®, Alphagan® P 0.15% and Alphagan® P 0.1%. These products lower intraocular pressure by reducing aqueous humor production and increasing uveoscleral outflow. Alphagan® P 0.15% and Alphagan® P 0.1% are improved reformulations of Alphagan® containing brimonidine, the active ingredient in Alphagan®, preserved with Purite®. We currently market Alphagan®, Alphagan® P 0.15% and Alphagan® P 0.1% in over 70 countries worldwide.
Alphagan®, Alphagan® P 0.15% and Alphagan® P 0.1% combined were the fourth best selling glaucoma products in the world for the first nine months of 2009, according to IMS Health Incorporated. Combined sales of Alphagan®, Alphagan® P 0.15% and Alphagan® P 0.1% and Combigan® represented approximately 9% of our total consolidated product net sales in 2009, 2008 and 2007. In 2002, based on the acceptance of Alphagan® P 0.15%, we discontinued the U.S. distribution of Alphagan®. In 2004, we entered into an exclusive licensing agreement with Kyorin Pharmaceutical Co., Ltd., or Kyorin, under which Kyorin became responsible for the development and commercialization of Alphagan® and Alphagan® P 0.15% in Japan. Kyorin subsequently sublicensed its rights under the agreement to Senju. Alphagan® P 0.1% was launched in the United States in 2006. The marketing exclusivity period for Alphagan® P 0.1% expired in the third quarter of 2008, although we have a number of patents covering the Alphagan® P 0.1% and Alphagan® P 0.15% technology that extend to 2022 in the United States. In 2003, the FDA approved the first generic of Alphagan®. Additionally, a generic form of Alphagan® is sold in a limited number of other countries, including Canada, Mexico, India, Brazil, Colombia, Argentina and other countries in the European Union.
In addition to our Alphagan® and Lumigan® products, we developed the ophthalmic solution Combigan®, a brimonidine and timolol combination designed to treat glaucoma and ocular hypertension in people who are not responsive to treatment with only one medication and are considered appropriate candidates for combination therapy. In 2005, we received positive opinions for Combigan® from 20 concerned member states included in the Combigan® Mutual Recognition Procedure for the European Union, and we launched Combigan® in the European Union during 2006. In the fourth quarter of 2007, the FDA approved Combigan® and we launched Combigan® in the United States. Combigan® is now sold in over 55 countries worldwide.
Inflammation. Our leading ophthalmic anti-inflammatory product is Acular LS® (ketorolac ophthalmic solution) 0.4%, or Acular LS®. Acular LS® is a version of Acular® that has been reformulated for the reduction of ocular pain, burning and stinging following corneal refractive surgery. Acular® PF was the first preservative-free topical non-steroidal anti-inflammatory drug, or NSAID, in the United States. Acular® PF is indicated for the reduction of ocular pain and photophobia following incisional refractive surgery. The Acular® franchise was the best selling ophthalmic NSAID in the world during the first nine months of 2009, according to IMS Health Incorporated. In the third quarter of 2009, the FDA approved Acuvail® (ketorolac tromethamine ophthalmic solution) 0.45%, or Acuvail®, an advanced unit-dose preservative-free formulation of ketorolac for the treatment of pain and inflammation following cataract surgery and we began marketing Acuvail®. In the fourth quarter of 2009, the FDA approved four Abbreviated New Drug Applications, or ANDAs, for ketorolac tromethamine ophthalmic solution 0.5%, a generic version of Acular®, and four companies launched generic versions of Acular® in the United States. Our ophthalmic anti-inflammatory product Pred Forte® remains a leading topical steroid worldwide based on 2009 sales. Pred Forte® has no patent protection or marketing exclusivity and faces generic competition.
Infection. Our leading anti-infective is Zymar® (gatifloxacin ophthalmic solution) 0.3%, or Zymar®, which we license from Kyorin and have worldwide ophthalmic commercial rights excluding Japan, Korea, Taiwan and certain other countries in Asia and Europe. We launched Zymar® in the United States in 2003. Zymar® is a fourth-generation fluoroquinolone for the treatment of bacterial conjunctivitis and is currently approved in 33 countries. Laboratory studies have shown that Zymar® kills the most common bacteria that cause eye infections as well as specific resistant bacteria. We completed our Phase 3 clinical studies of an enhanced formula of Zymar® for bacterial conjunctivitis and filed a New Drug Application, or NDA, with the FDA in the third quarter of 2009. According to Verispan, an independent research firm, Zymar® was the number two ophthalmic anti-infective prescribed by ophthalmologists in the United States in 2009. Zymar® was the third best selling ophthalmic anti-infective product in the world for the first nine months of 2009, according to IMS Health Incorporated.
Allergy. The allergy market is, by its nature, a seasonal market, peaking during the spring months. We market Alocril® ophthalmic solution for the treatment of itch associated with allergic conjunctivitis. We license Alocril® from Fisons Ltd., a business unit of Sanofi-Aventis, and hold worldwide ophthalmic commercial rights excluding Japan. Alocril® is approved in the United States, Canada and Mexico. We license Elestat® from Boehringer Ingelheim AG, and hold worldwide ophthalmic commercial rights excluding Japan. Elestat® is used for the prevention of itching associated with allergic conjunctivitis. We co-promote Elestat® in the United States under an agreement with Inspire Pharmaceuticals, Inc., or Inspire, within the ophthalmic specialty area and to allergists. Under the terms of our agreement with Inspire, Inspire provided us with an up-front payment and we make payments to Inspire based on Elestat® net sales. In addition, the agreement reduced our existing royalty payment to Inspire for Restasis®. Inspire has primary responsibility for selling and marketing activities in the United States related to Elestat®. We have retained all international marketing and selling rights. We launched Elestat® in Europe under the brand names Relestat® and Purivist® during 2004, and Inspire launched Elestat® in the United States during 2004. Elestat® (together with sales under its brand names Relestat® and Purivist®) is currently approved in 47 countries and was the fifth best selling ophthalmic allergy product in the world (and fourth in the United States) for the first nine months of 2009, according to IMS Health Incorporated.
Retinal Disease. In the second quarter of 2009, the FDA approved Ozurdex™ (dexamethasone intravitreal implant) 0.7 mg, or Ozurdex™, as the first drug therapy indicated for the treatment of macular edema following branch retinal vein occlusion or central retinal vein occlusion. Ozurdex™ is a novel bioerodable formulation of dexamethasone in Allergan’s proprietary Novadur™ sustained-release drug delivery system that can be used to locally and directly administer medications to the retina. We launched Ozurdex™ in the United States in the third quarter of 2009.
Neuromodulator
Our neuromodulator product, Botox® (onabotulinumtoxinA), or Botox®, has a long-established safety profile and has been approved by the FDA for more than 20 years to treat a variety of medical conditions, as well as for aesthetic use since 2002. With more than 2,000 publications on Botox® and Botox® Cosmetic in scientific and medical journals, results of approximately 50 randomized, placebo-controlled, clinical trials involving more than 11,000 patients, Botox® is a widely researched medicine with more than 100 potential therapeutic and aesthetic uses reported in the medical literature. Nearly 17 million treatment sessions have been recorded with Botox® and Botox® Cosmetic in the United States alone over the past 15 years (1994-2008). Marketed as Botox®, Botox® Cosmetic, Vistabel® or Vistabex®, depending on the indication and country of approval, the product is currently approved in approximately 80 countries for up to 21 unique indications. In the second quarter of 2009, following the approval of Dysport™ in the United States, we adopted a Risk Evaluation and Mitigation Strategies program, or REMS, including a boxed warning about the potential spread of botulinum toxins from the site of injection and the lack of interchangeability among botulinum toxin products. Sales of Botox® represented approximately 29%, 30% and 31% of our total consolidated product net sales in 2009, 2008 and 2007, respectively. The decline in the percentage of our total net sales represented by sales of Botox® primarily resulted from the growth in our eyecare franchises and the significant increase in our total consolidated product net sales as a result of the Inamed acquisition. Botox® is used therapeutically for the treatment of certain neuromuscular disorders which are characterized by involuntary muscle contractions or spasms. The approved therapeutic indications for Botox® in the United States are as follows:
• blepharospasm, the uncontrollable contraction of the eyelid muscles which can force the eye closed and result in functional blindness;
• strabismus, or misalignment of the eyes, in people 12 years of age and over;
• cervical dystonia, or sustained contractions or spasms of muscles in the shoulders or neck in adults, along with associated neck pain; and
• severe primary axillary hyperhidrosis (underarm sweating) that is inadequately managed with topical agents.
In many countries outside of the United States, Botox® is also approved for treating hemifacial spasm, spasticity associated with pediatric cerebral palsy and upper limb spasticity in post-stroke patients. We are currently in development for Botox® in the United States and Europe for new indications, including chronic migraine, upper limb spasticity, lower limb spasticity, neurogenic overactive bladder, idiopathic overactive bladder and benign prostate hyperplasia. In 2005, we announced plans to conduct two Phase 3 clinical trials to investigate the safety and efficacy of Botox® as a prophylactic therapy in patients with chronic migraine. In the third quarter of 2008, we announced completion of a top-line analysis of our Phase 3 clinical trials, which found that Botox® treatment decreased the number of headache days patients with chronic migraines suffered compared to patients receiving placebo injections. In addition, Botox® treatments were well tolerated in the trials in patients suffering from chronic migraines and patients receiving Botox® scored statistically significantly higher improvement in quality of life compared to patients receiving placebo injections. Based on this data, we filed a supplemental Biologics License Application, or sBLA, with the FDA for the use of Botox® to treat chronic migraine in the third quarter of 2009 and submitted regulatory files in the fourth quarter of 2009 to the authorities in the United Kingdom, France, Switzerland and Canada. In the second quarter of 2009, we received a complete response letter from the FDA regarding our sBLA for use of Botox® to treat upper limb spasticity, and we submitted additional data requested by the FDA in its complete response letter in the third quarter of 2009. In 2005, we reached agreement with the FDA to enter Phase 3 clinical trials for the use of Botox® to treat neurogenic overactive bladder and Phase 2 clinical trials for the use of Botox® to treat idiopathic overactive bladder. We fully enrolled our Phase 3 clinical trials for the use of Botox® to treat neurogenic overactive bladder in 2009. We completed the Phase 2 clinical trials for the use of Botox® to treat idiopathic overactive bladder in 2008 and began enrolling patients in our Phase 3 clinical trials for the use of Botox® to treat idiopathic overactive bladder in 2009. In 2005, we initiated Phase 2 clinical trials outside the United States for the use of Botox® to treat benign prostate hyperplasia. In the second quarter of 2009, we filed an Investigational New Drug Application with the FDA relating to the use of Botox® to treat benign prostate hyperplasia.
Botox® Cosmetic. The FDA approved Botox® Cosmetic for the temporary improvement in the appearance of moderate to severe glabellar lines in adult men and women age 65 or younger in 2002. Referred to as Botox®, Botox® Cosmetic, Vistabel® or Vistabex®, depending on the country of approval, this product is administered in small injections to temporarily reduce the muscle activity that causes the formation of glabellar lines between the eyebrows that often develop during the aging process. Currently, more than 60 countries have approved facial aesthetic indications for Botox®, Botox® Cosmetic, Vistabel® or Vistabex®. In 2002, we launched comprehensive direct-to-consumer marketing campaigns, including television commercials, radio commercials, print advertising and interactive media aimed at dermatologists, plastic and reconstructive surgeons and other aesthetic specialty physicians, as well as consumers, in the United States. We also continue to sponsor aesthetic specialty physician training in approved countries to further expand the base of qualified physicians using Botox®, Botox® Cosmetic, Vistabel® or Vistabex®.
In 2005, we entered into a long-term arrangement with GlaxoSmithKline, or GSK, under which GSK agreed to develop and promote Botox® in Japan and China and we agreed to co-promote GSK’s products Imitrex STATdose System® (sumatriptan succinate), or Imitrex STATdose System®, and Amerge® (naratriptan hydrochloride), or Amerge®, in the United States. Under the terms of the arrangement, we licensed to GSK all clinical development and commercial rights to Botox® in Japan and China, markets in which GSK has extensive commercial, regulatory and research and development resources, as well as expertise in neurology. We received an up-front payment, and we receive royalties on GSK’s Botox® sales in Japan and China. We also manufacture Botox® for GSK as part of a long-term supply agreement and collaboratively support GSK in its new clinical developments for Botox® and its strategic marketing in those markets, for which we receive payments. In the first quarter of 2009, GSK received approval of Botox® in Japan for the treatment of glabellar lines and equinus foot due to lower limb spasticity in juvenile cerebral palsy patients and launched Botox® in Japan for these indications with the glabellar lines indication marketed as Botox Vista®. GSK also received approval of Botox® for the treatment of glabellar lines in China in the first quarter of 2009. In addition, we obtained the right to co-promote GSK’s products Imitrex STATdose System® and Amerge® in the United States to neurologists for a 5-year period, for which we receive fixed and performance payments from GSK. Imitrex STATdose System® is approved for the treatment of acute migraine in adults and for the acute treatment of cluster headache episodes. Amerge® is approved for the acute treatment of migraine attacks with and without an aura in adults.
Skin Care Product Lines
Our skin care product lines focus on the acne, psoriasis, physician-dispensed skin care and eyelash growth markets, particularly in the United States and Canada.
Acne/Psoriasis
Aczone®. Our product Aczone® (dapsone) gel 5%, approved for sale in both the United States and Canada, is indicated for the treatment of acne vulgaris in patients 12 and older. Aczone® contains the first new FDA-approved chemical entity (dapsone) for acne treatment since Tazorac® (tazarotene) gel was approved in 1997. We launched Aczone® in the United States in the fourth quarter of 2008. In the third quarter of 2009, we entered into a co-promotion agreement with Quintiles under which Quintiles will co-promote Aczone®, targeting primary care physicians.
Azelex®. Azelex® cream is approved by the FDA for the topical treatment of mild to moderate inflammatory acne and is licensed from Intendis GmbH, or Intendis, a division of Bayer Schering Pharma AG. We market Azelex® cream primarily in the United States.
Tazarotene Products. We market Tazorac® (tazarotene) gel in the United States for the treatment of acne and plaque psoriasis, a chronic skin disease characterized by dry red patches. We also market a cream formulation of Tazorac® in the United States for the topical treatment of acne and for the treatment of psoriasis. We have also engaged Pierre Fabre Dermatologie as our promotion partner for Zorac® (tazarotene) in certain parts of Europe, the Middle East and Africa. In the third quarter of 2007, we entered into a strategic collaboration agreement with Stiefel Laboratories, Inc., which was acquired by GSK in 2009, to develop and market new products involving tazarotene for dermatological use worldwide.
Topical Aesthetic Skin Care
Avage®. Our product Avage® (tazarotene) cream is indicated for the treatment of facial fine wrinkling, mottled hypo- and hyperpigmentation (blotchy skin discoloration) and benign facial lentigines (flat patches of skin discoloration) in patients using a comprehensive skin care and sunlight avoidance program. We launched Avage® in the United States in 2003.
M.D. Forte®. We develop and market glycolic acid-based skin care products. We market our M.D. Forte® line of alpha hydroxy acid products to physicians in the United States.
Prevage® and Prevage® MD. In 2005, we launched Prevage® cream, containing 1% idebenone, a clinically tested antioxidant designed to reduce the appearance of fine lines and wrinkles, as well as provide protection against environmental factors, including sun damage, air pollution and cigarette smoke. In 2005, we entered into an exclusive license agreement with Elizabeth Arden, Inc., or Elizabeth Arden, granting Elizabeth Arden the right to globally market a new formulation of Prevage® containing 0.5% idebenone, to leading department stores and other prestige cosmetic retailers. In 2005, we began marketing Prevage® MD, containing 1% idebenone, to physicians in the United States.
Vivité®. In the second quarter of 2007, we launched Vivité®, an advanced anti-aging skin care line that uses proprietary GLX Technology™, creating a highly specialized blend of glycolic acid and natural antioxidants. We market our Vivité® line of skin care products to physicians in the United States.
Eyelash Growth
Latisse® (bimatoprost ophthalmic solution) 0.03%, or Latisse®, is the first, and currently the only, FDA-approved prescription treatment of eyelash hypotrichosis, or inadequate eyelashes. The FDA approved Latisse® in the fourth quarter of 2008 and we launched Latisse® in the United States in the first quarter of 2009. Latisse® is a once-daily prescription treatment applied to the base of the upper eyelashes with a sterile, single-use-per-eye disposable applicator. Patients using Latisse® typically experience noticeable eyelash growth in eight to 16 weeks. Continued treatment with Latisse® is required to maintain its effect. In the third quarter of 2009, Latisse® was approved by the Korea Food and Drug Administration. In the third quarter of 2009, we entered into a co-promotion agreement with Quintiles under which Quintiles will co-promote Latisse®, targeting primary care physicians.
Urologics
Sanctura® and Sanctura XR®. Following our acquisition of Esprit in the fourth quarter of 2007, we began marketing Sanctura®, a twice-a-day anticholinergic approved for the treatment of OAB. In the third quarter of 2007, the FDA approved Sanctura XR®, a once-daily anticholinergic for the treatment of OAB, and we launched Sanctura XR® in the first quarter of 2008. Sanctura XR® is well tolerated by patients and has demonstrated improvements in certain adverse side effects common in existing OAB treatments, including dry mouth. We obtained an exclusive license to market Sanctura® and Sanctura XR® in the United States and its territories from Indevus. We pay royalties to Indevus based upon our sales of Sanctura® and Sanctura XR® and assumed Esprit’s obligations to pay certain other third-party royalties, also based upon sales of Sanctura® and Sanctura XR®. In the second quarter of 2008, we entered into a license agreement with Indevus and Madaus GmbH, which grants us the right to seek approval for and to commercialize Sanctura XR® in Canada. In the first quarter of 2010, Health Canada approved Sanctura XR®. In 2008, we announced plans to seek a partner to promote Sanctura® and Sanctura XR® to general practitioners in the United States, and in the first quarter of 2009, we announced a restructuring plan to focus our sales efforts on the urology specialty, which resulted in a significant reduction in our urology sales force. We substantially completed our restructuring and merged our medical dermatology and urology specialty sales forces into one combined sales force in 2009. In the third quarter of 2009, we entered into a co-promotion agreement with Quintiles under which Quintiles promotes Sanctura XR®, generally targeting primary care physicians. We continue to promote Sanctura XR® to the urology specialty channel using our existing sales force.
Medical Devices Segment
Breast Aesthetics
For more than 25 years, our silicone gel and saline breast implants, consisting of a variety of shapes, sizes and textures, have been available to women in more than 60 countries for breast augmentation, revision and reconstructive surgery. Our breast implants consist of a silicone elastomer shell filled with either a saline solution or silicone gel with varying degrees of cohesivity. This shell can consist of either a smooth or textured surface. We market our breast implants under the trade names Natrelle®, Inspira™, McGhan™ and CUI™ and the trademarks BioCell® , MicroCell™, BioDimensional® and Inamed®. We currently market over 1,000 breast implant product variations worldwide to meet our customers’ preferences and needs.
Saline Breast Implants. We sell saline breast implants in the United States and worldwide for use in breast augmentation, revision and reconstructive surgery. The U.S. market is the primary market for our saline breast implants. Following the approval of silicone gel breast implants by Health Canada in October 2006 and the FDA in November 2006, the U.S. and Canadian markets have been undergoing a transition from saline breast implants to silicone gel breast implants.
Silicone Gel Breast Implants. We sell silicone gel breast implants in the United States and worldwide for use in breast augmentation, revision and reconstructive surgery. The safety of our silicone gel breast implants is supported by our extensive preclinical device testing, their use in over one million women worldwide and 20 years of U.S. clinical experience involving more than 150,000 women. The FDA approved our silicone gel breast implants in November 2006 based on the FDA’s review of interim data from our 10-year core clinical study and our preclinical studies, its review of studies by independent scientific bodies and the deliberations of advisory panels of outside experts. Following approval, we are required to comply with a number of conditions, including our distribution of labeling to physicians and the distribution of our patient planner, which includes our informed consent process to help patients fully consider the risks associated with breast implant surgery. In addition and pursuant to the conditions placed on the FDA’s approval of our silicone gel breast implants, we continue to monitor patients in the 10-year core clinical study and the 5-year adjunct clinical study and, in the first quarter of 2007, we initiated the Breast Implant Follow-Up Study, or BIFS, a 10-year post-approval clinical study. The 10-year core clinical study, which we began in 1999 and had fully enrolled in 2000 with approximately 940 augmentation, revision or reconstructive surgery patients, was designed to establish the safety and effectiveness of our silicone gel breast implants. We plan to continue to monitor patients in the 10-year core clinical study through the end of the study. In November 2006, we terminated new enrollment into our 5-year adjunct study, which was designed to further support the safety and effectiveness of silicone gel breast implants and which includes over 80,000 revision or reconstructive surgery patients. We plan to continue to monitor patients in the 5-year adjunct study through the end of the study. Finally, pursuant to the conditions placed on the FDA’s approval of our silicone gel breast implants, we initiated BIFS, a new 10-year post-approval study of approximately 40,000 augmentation, revision or reconstructive surgery patients with silicone gel implants and approximately 20,000 augmentation, revision or reconstructive surgery patients with saline implants acting as a control group. In the fourth quarter of 2008, the FDA approved a modification to BIFS, which reduced the number of patients with saline breast implants from 20,000 to approximately 15,000. BIFS is designed to provide data on a number of endpoints including, for example, long-term local complications, connective tissue disease issues, neurological disease issues, offspring issues, reproductive issues, lactation issues, cancer, suicide, mammography issues and to study magnetic resonance imaging compliance and rupture results.
Tissue Expanders. We sell a line of tissue expanders for breast reconstruction and as an alternative to skin grafting to cover burn scars and correct birth defects.
Facial Aesthetics
We develop, manufacture and market dermal filler products designed to improve facial appearance by smoothing wrinkles and folds. Our primary facial aesthetics products are the Juvéderm® dermal filler family of products, Zyderm® and Zyplast® and CosmoDerm® and CosmoPlast®.
Juvéderm®. Our Juvéderm® dermal filler family of products, including Juvéderm®, Voluma®, Softline®, Hydrafill™ and Surgiderm®, are developed using our proprietary Hylacross™ technology, a technologically advanced manufacturing process that results in a smooth consistency gel formulation. This technology is based on the delivery of a homogeneous gel-based hyaluronic acid, as opposed to a particle gel-based hyaluronic acid technology, which is used in other hyaluronic acid dermal filler products. In 2006, the FDA approved Juvéderm® Ultra and Ultra Plus, indicated for wrinkle and fold correction, for sale in the United States. In Europe, we market various formulations of Juvéderm®, Voluma®, Softline®, Hydrafill™ and Surgiderm® for wrinkle and fold augmentation. The Juvéderm® dermal filler family of products are currently approved or registered in over 34 countries, including all major European markets.
In the second quarter of 2007, the FDA approved label extensions in the United States for Juvéderm® Ultra and Ultra Plus based on new clinical data demonstrating that the effects of both products may last for up to one year, which is a longer period of time than was reported in clinical studies that supported FDA approval of other hyaluronic acid dermal fillers. We began selling Juvéderm® Ultra 2, 3 and 4, containing lidocaine, an anesthetic that alleviates pain during injections, in Europe in the first quarter of 2008, and in Canada we began selling Juvéderm® Ultra and Ultra Plus with lidocaine in the fourth quarter of 2008. In 2008, we filed a Premarket Approval Supplement, or sPMA, with the FDA for Juvéderm® Ultra and Ultra Plus with lidocaine. The FDA approved our sPMA and we launched our lidocaine containing Juvéderm® Ultra XC and Ultra Plus XC in the first quarter of 2010.
Zyderm® and Zyplast®. Zyderm® and Zyplast® dermal fillers are injectable formulations of bovine collagen. The Zyderm® family of dermal fillers is formulated for people with fine line wrinkles or superficial facial contour defects. Zyderm® and Zyplast® dermal fillers require a skin test, with a requisite 30-day period to observe the possibility of allergic reaction in the recipient. Both of these products are formulated with lidocaine. Zyderm® and Zyplast® are approved for marketing in the United States and Europe.
CosmoDerm® and CosmoPlast®. CosmoDerm® and CosmoPlast® dermal fillers are a line of injectable human skin-cell derived collagen products. CosmoDerm® and CosmoPlast® dermal fillers are formulated for people with fine line wrinkles or superficial facial contour defects. CosmoDerm® and CosmoPlast® implants do not require a skin test pre-treatment. Both of these products are formulated with lidocaine. CosmoDerm® and CosmoPlast® are approved for marketing in the United States, Canada and a number of European countries.
In the first quarter of 2007, our board of directors approved a plan to restructure and eventually sell or close the collagen manufacturing facility in Fremont, California that we acquired in the Inamed acquisition based on the anticipated reduction in market demand for human and bovine collagen products as a result of the introduction of our hyaluronic acid dermal filler products. Specifically, the plan involved a workforce reduction of approximately 59 positions, consisting principally of manufacturing positions at the facility, and lease termination and contract settlements. We began to record costs associated with the closure of the collagen manufacturing facility in the first quarter of 2007 and substantially completed all restructuring activities and closed the collagen manufacturing facility in the fourth quarter of 2008. Before closing the collagen manufacturing facility, we manufactured a sufficient quantity of collagen products to meet estimated market demand through 2010.
Obesity Intervention
We develop, manufacture and market several medical devices for the treatment of obesity. Our principal product in this area, the Lap-Band® System, is designed to provide minimally invasive long-term treatment of severe obesity and is used as an alternative to more invasive procedures such as gastric bypass surgery or sleeve gastrectomy. The Lap-Band® System is an adjustable silicone band that is laparoscopically placed around the upper part of the stomach through a small incision, creating a small pouch at the top of the stomach. The new pouch fills faster, making the patient feel full sooner and, because the adjustable component of the band slows the passage of food, patients retain a feeling of fullness for longer periods of time. In addition to the anatomic effect of the pouch, data also suggests that patients with a properly adjusted band are less hungry due to neurological feedback to the brain.
The Lap-Band® System has achieved widespread acceptance in the United States and worldwide. In 2001, the FDA approved the Lap-Band® System to treat severe obesity in adults who have failed more conservative weight reduction alternatives. The Lap-Band® VG, a version of the Lap-Band® System with a larger band circumference, was approved by the FDA in 2004, and meets the needs of a wider range of patients. In the second quarter of 2007, we launched the Lap-Band AP® System, a next-generation of the Lap-Band® System. The Lap-Band AP® System has proprietary 360-degree Omniform® technology, which is designed to evenly distribute pressure throughout the band’s adjustment range. The Lap-Band AP® also comes in two sizes, standard and large, to better serve patients who are physically larger, have thicker gastric walls or have substantial abdominal fat. Over 550,000 Lap-Band® System bands have been sold worldwide since 1993. In the first quarter of 2008, we completed enrollment in our pivotal adolescent study of Lap-Band® in patients aged 14 to 17 and submitted a sPMA to the FDA in the third quarter of 2009 seeking approval to market the Lap-Band®for the treatment of obesity in patients aged 14 to 17. Also in the first quarter of 2008, we completed enrollment of our lower body mass index, or BMI, pivotal study for Lap-Band® patients with a BMI of 30 to 40 and plan to review and submit data to the FDA in 2010.
In the fourth quarter of 2007, we entered into a co-promotion agreement with a subsidiary of Covidien Ltd., or Covidien, a leading global provider of health care products, under which Covidien co-promotes the Lap-Band® System to bariatric and other surgeons in the United States. Under the multi-year agreement, which became effective in the fourth quarter of 2007, Covidien utilizes its surgical devices sales force and other specialized staff, as an adjunct to our bariatric sales force and other specialized staff, to promote, educate and train surgeons on the Lap-Band® System. In the fourth quarter of 2009, we extended the co-promotion agreement with Covidien.
In the first quarter of 2007, we completed the acquisition of Swiss medical technology developer EndoArt SA, or EndoArt, a pioneer in the field of telemetrically-controlled (or remote-controlled) gastric bands used to treat morbid obesity and other conditions. We paid approximately $97.1 million, net of cash acquired, for all of the outstanding EndoArt shares. The EndoArt acquisition gave us ownership of EndoArt’s proprietary technology platform, including FloWatch® technology, which powers the EasyBand™ Remote Adjustable Gastric Band System, or EasyBand™, a next-generation, telemetrically-adjustable gastric banding device for the treatment of morbid obesity.
The EasyBand™, like the Lap-Band® System, is implanted laparoscopically through a small incision. Clinical benefits of the EasyBand™ are similar to the Lap-Band® System’s clinical benefits, except that adjustments to the EasyBand™ are done telemetrically rather than hydraulically, allowing for greater ease in adjustments and greater patient comfort.
We also sell the Orbera™ Intragastric Balloon System, which is a non-surgical alternative for the treatment of overweight and obese adults. Approved for sale in more than 60 countries but not in the United States, the Orbera™ System includes a silicone elastomer balloon that is filled with saline after transoral insertion into the patient’s stomach to reduce stomach capacity and create an earlier sensation of fullness. The Orbera™ System is removed endoscopically within six months of placement, and is designed to be utilized in conjunction with a comprehensive diet and exercise program.
Other Products
Contigen®. Contigen® is our collagen product used for treatment of urinary incontinence due to intrinsic sphincter deficiency. C. R. Bard, Inc., or Bard, licenses from us the exclusive worldwide marketing and distribution rights to Contigen®. Prior to closing the Fremont manufacturing facility, we manufactured a sufficient supply of collagen to meet our contractual obligations to Bard through the expiration of our agreement with Bard in August 2011.
International Operations
Our international sales represented 34.6%, 35.4% and 34.3% of our total consolidated product net sales for the years ended December 31, 2009, 2008 and 2007, respectively. Our products are sold in over 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
We sell our products directly and through independent distributors in over 100 countries worldwide. We maintain a global marketing team, as well as regional sales and marketing organizations, to support the promotion and sale of our products. We also engage contract sales organizations to promote certain products. Our sales efforts and promotional activities are primarily aimed at eye care professionals, neurologists, dermatologists, plastic and reconstructive surgeons, aesthetic specialty physicians, bariatric surgeons and urologists who use, prescribe and recommend our products. We advertise in professional journals, participate in medical meetings and utilize direct mail and Internet programs to provide descriptive product literature and scientific information to specialists in the ophthalmic, dermatological, medical aesthetics, bariatric, neurology, movement disorder and urology fields. We have developed training modules and seminars to update physicians regarding evolving technology in our products. In 2009, we also utilized direct-to-consumer advertising for our Botox® Cosmetic, Juvéderm®, the Lap-Band® System, Latisse® and Restasis® products.
Our products are sold to drug wholesalers, independent and chain drug stores, pharmacies, commercial optical chains, opticians, mass merchandisers, food stores, hospitals, group purchasing organizations, integrated direct hospital networks, ambulatory surgery centers and medical practitioners, including ophthalmologists, neurologists, dermatologists, plastic and reconstructive surgeons, aesthetic specialty physicians, bariatric surgeons, pediatricians, urologists and general practitioners. As of December 31, 2009, we employed approximately 2,650 sales representatives throughout the world. We also utilize distributors for our products in smaller international markets.
U.S. sales, including manufacturing operations, represented 65.4%, 64.6% and 65.7% of our total consolidated product net sales in 2009, 2008 and 2007, respectively. Sales to Cardinal Health, Inc. for the years ended December 31, 2009, 2008 and 2007 were 13.9%, 12.0% and 11.2%, respectively, of our total consolidated product net sales. Sales to McKesson Drug Company for the years ended December 31, 2009, 2008 and 2007 were 12.8%, 12.3% and 11.1%, respectively, of our total consolidated product net sales. No other country, or single customer, generated over 10% of our total consolidated product net sales.
We supplement our marketing efforts with exhibits at medical conventions, advertisements in trade journals, sales brochures and national media. In addition, we sponsor symposia and educational programs to familiarize physicians with the leading techniques and methods for using our products.
In the first quarter of 2009, we announced a restructuring plan that included a workforce reduction of approximately 460 employees, primarily from among our U.S. urology sales and marketing personnel as a result of our decision to focus on the urology specialty and to seek a partner to promote Sanctura XR® to general practitioners, and marketing personnel in the United States and Europe as we adjusted our back-office structures to a reduced short-term sales outlook for some of our businesses. We substantially completed our restructuring in 2009.
Research and Development
Our global research and development efforts currently focus on eye care, skin care, neuromodulators, medical aesthetics, obesity intervention, urology and neurology. We have a fully integrated research and development organization with in-house discovery programs, including medicinal chemistry, high throughput screening and biological sciences. We supplement our own research and development activities with our commitment to identify and obtain new technologies through in-licensing, research collaborations, joint ventures and acquisitions.
As of December 31, 2009, we had approximately 1,600 employees involved in our research and development efforts. Our research and development expenditures for 2009, 2008 and 2007 were approximately $706.0 million, $797.9 million and $718.1 million, respectively. Research and development expenditures in 2009 were less than 2008 and 2007. The decrease in research and development expenses primarily resulted from a reduction in spending on certain new technology discovery programs, the completion of several late-stage eye care pharmaceutical development programs, and a reduction in research and development expenses associated with in-licensing of in-process research and development technologies, partially offset by an increase in expenses for the development of certain medical devices and urology products. Excluding in-process research and development expenditures related to company acquisitions, we have increased our annual investment in research and development by over $363.1 million in the past five years.
Our strategy includes developing innovative products to address unmet medical needs and conditions associated with aging, and otherwise assisting patients in reaching life’s potential. Our top priorities include furthering our leadership in ophthalmology, medical aesthetics and neuromodulators, identifying new potential compounds for sight-threatening diseases such as glaucoma, age-related macular degeneration and other retinal disorders and developing novel therapies for chronic dry eye, pain and genitourinary diseases as well as next-generation breast implants, dermal fillers and obesity intervention devices. We plan to continue to build on our strong market positions in ophthalmic pharmaceuticals, medical aesthetics, medical dermatology, obesity intervention and neurology, and to explore new therapeutic areas that are consistent with our focus on specialty physician groups.
Our research and development efforts for the ophthalmic pharmaceuticals business focus primarily on new therapeutic products for retinal disease, glaucoma and chronic dry eye. As part of our focus on diseases of the retina, we acquired Oculex Pharmaceuticals, Inc. in 2003. With this acquisition, we obtained a novel posterior segment drug delivery system for use with compounds to treat eye diseases, including age-related macular degeneration and other retinal disorders. We concluded our Phase 3 studies for Ozurdex™ to treat macular edema following retinal vein occlusion, or RVO, utilizing our proprietary Novadur™ sustained-release drug delivery system that slowly releases dexamethasone, a potent steroid, to the back of the eye. In the second quarter of 2009, the FDA approved Ozurdex™ for the treatment of macular edema following RVO. In the fourth quarter of 2009, we filed a supplemental New Drug Application with the FDA for the approval of Ozurdex™ to treat non-infectious intermediate and posterior uveitis.
In 2005, we entered into an exclusive licensing agreement with Sanwa Kagaku Kenkyusho Co., Ltd., or Sanwa, to develop and commercialize Ozurdex™ for the ophthalmic specialty market in Japan. Under the terms of the agreement, Sanwa is responsible for the development and commercialization of Ozurdex™ in Japan and associated costs. Sanwa will pay us a royalty based on net sales of Ozurdex™ in Japan, makes clinical development and commercialization milestone payments and reimbursed us for certain expenses associated with our Phase 3 studies outside of Japan. We are working collaboratively with Sanwa on the clinical development of Ozurdex™, as well as overall product strategy and management.
In the second quarter of 2008, the FDA approved Trivaris™, a steroid with an anti-inflammatory action used for the treatment of retinal disease. Delivered via intravitreal injection, the ophthalmic indications for Trivaris™ include sympathetic ophthalmia, temporal arteritis, uveitis and ocular inflammatory conditions unresponsive to topical corticosteroids.
In the third quarter of 2009, we entered into a collaboration agreement with Pieris AG, or Pieris, a biopharmaceutical company engaged in the discovery and development of a novel class of targeted human proteins designed to diagnose and treat serious human disorders. The agreement combines Pieris’ proprietary technology with our expertise in drug delivery and ophthalmic drug development, with a goal of developing agents for the treatment of serious ocular disorders.
We continue to invest heavily in the research and development of neuromodulators, primarily Botox®and Botox® Cosmetic. We focus on both expanding the approved indications for Botox® and pursuing next-generation neuromodulator-based therapeutics. This includes expanding the approved uses for Botox® to include treatment for spasticity, chronic migraine, OAB and benign prostate hyperplasia. In collaboration with Syntaxin Ltd, whose technology was contributed by the United Kingdom government’s Health Protection Agency, we are focused on engineering new neuromodulators for the treatment of severe pain. We are also continuing our investment in the areas of biologic process development and manufacturing and the next-generation of neuromodulator products, and we are conducting a Phase 4 study of Botox® for the treatment of palmar hyperhidrosis, as part of our conditions of approval for axillary hyperhidrosis by the FDA. In addition, GSK received approval of Botox® in Japan for the treatment of glabellar lines and equinus foot due to lower limb spasticity in juvenile cerebral palsy patients and launched Botox® in Japan for these indications in the first quarter of 2009 with the glabellar lines indication marketed as Botox Vista®. GSK also received approval of Botox® in China for the treatment of glabellar lines during the first quarter of 2009.
We have a strategic research collaboration and license agreement with ExonHit Therapeutics, or ExonHit. The goals of this collaboration are to identify new molecular targets based on ExonHit’s gene profiling DATAS™ technology and to work collaboratively to develop unique compounds and commercial products based on these targets. Our strategic alliance with ExonHit provides us with the rights to compounds developed in the fields of neurodegenerative disease, pain and ophthalmology. In 2007, we began development of a compound for a neurological indication as part of our collaboration with ExonHit. In the first quarter of 2009, we extended and expanded the scope of our collaboration with ExonHit.
In the fourth quarter of 2008, we entered into a strategic collaboration arrangement with Spectrum to develop and commercialize apaziquone, an antineoplastic agent currently being investigated for the treatment of non-muscle invasive bladder cancer. Under the collaboration, Spectrum is conducting two Phase 3 clinical trials to explore apaziquone’s safety and efficacy as a potential treatment for non-muscle invasive bladder cancer following surgery. In the third quarter of 2009, the FDA granted Fast Track Designation for the investigation of apaziquone for the treatment of non-muscle invasive bladder cancer. Spectrum completed enrollment in the two Phase 3 clinical trials in the fourth quarter of 2009. Spectrum is conducting the apaziquone clinical trials pursuant to a joint development plan, and we bear the majority of these expenses. We will also make certain additional payments to Spectrum based on the achievement of certain development, regulatory and commercialization milestones and, following approval in countries outside of the United States and Asia, will make certain royalty payments on sales in such countries.
We also continue to invest in research and development around our Juvéderm® family of dermal filler products, including preparation for and ongoing clinical trials. In 2009, we filed a sPMA with the FDA for Juvéderm® Ultra and Ultra Plus with lidocaine, and in the first quarter of 2010, the FDA approved our lidocaine containing Juvéderm® Ultra XC and Ultra Plus XC.
In connection with our obesity intervention products, we are planning to conduct clinical trials of the EasyBand™ and have initiated a pivotal study of the Orbera™ System, with the goal of obtaining approval in the United States. In addition, in the first quarter of 2008, we completed enrollment in a pivotal adolescent study of Lap-Band® patients aged 14 to 17 and submitted a sPMA to the FDA in the third quarter of 2009 seeking approval to market the Lap-Band® for the treatment of obesity in patients aged 14 to 17. In the first quarter of 2008, we completed enrollment of our lower BMI pivotal study for Lap-Band® patients with a BMI of 30 to 40 and plan to review and submit data to the FDA in 2010.
The continuing introduction of new products supplied by our research and development efforts, including our clinical development projects, and in-licensing opportunities are critical to our success. There are intrinsic uncertainties associated with research and development efforts and the regulatory process. We cannot assure you that any of the research projects, clinical development projects or pending drug marketing approval applications will result in new products that we can commercialize. Delays or failures in one or more significant research or clinical development projects and pending drug marketing approval applications could have a material adverse affect on our future operations.
Manufacturing
We manufacture the majority of our commercial products in our own plants located at the following locations: Westport, Ireland; San José, Costa Rica; Annecy, France; Waco, Texas; and Guarulhos, Brazil. We maintain sufficient manufacturing capacity at these facilities to support forecasted demand as well as a modest safety margin of additional capacity to meet peaks of demand and sales growth in excess of expectations. We increase our capacity as required in anticipation of future sales increases. In the event of a very large or very rapid unforeseen increase in market demand for a specific product or technology, supply of that product or technology could be negatively impacted until additional capacity is brought on line. Third parties manufacture a small number of commercial products for us, including Sanctura®, Sanctura XR® and Aczone® gel. For a discussion of the risks relating to the use of third party manufacturers, see Item 1A of Part I of this report, “Risk Factors — We could experience difficulties obtaining or creating the raw materials or components needed to produce our products and interruptions in the supply of raw materials or components could disrupt our manufacturing and cause our sales and profitability to decline.”
In the first quarter of 2007, we announced the closing of the collagen manufacturing facility in Fremont, California that we acquired in the Inamed acquisition, and we substantially completed all restructuring activities and closed the facility in the fourth quarter of 2008. Before closing the facility, we manufactured a sufficient quantity of our collagen products to meet estimated market demand through 2010. In 2009, we closed our Arklow, Ireland breast implant manufacturing facility and transferred manufacturing to our San José, Costa Rica manufacturing plant.
We are vertically integrated into the production of plastic parts and produce our own bottles, tips and caps for use in the manufacture of our ophthalmic solutions. Additionally, we ferment, purify and characterize the botulinum toxin used in our product Botox®. With these two exceptions, we purchase all other significant raw materials from qualified domestic and international sources. Where practical, we maintain more than one supplier for each material, and we have an ongoing alternate program that identifies additional sources of key raw materials. In some cases, however, most notably with active pharmaceutical ingredients and silicone raw materials, we are a niche purchaser, which, in certain cases, are sole sourced. These sources are identified in filings with regulatory agencies, including the FDA, and cannot be changed without prior regulatory approval. In these cases, we maintain inventories of the raw material itself and precursor intermediates to mitigate the risk of interrupted supply. A lengthy interruption of the supply of one of these materials could adversely affect our ability to manufacture and supply commercial product. A small number of the raw materials required to manufacture certain of our products are derived from biological sources which could be subject to contamination and recall by their suppliers. We use multiple lots of these raw materials at any one time in order to mitigate such risks. However, a shortage, contamination or recall of these products could disrupt our ability to maintain an uninterrupted commercial supply of our finished goods.
Manufacturing facilities producing pharmaceutical and medical device products intended for distribution in the United States and internationally are subject to regulation and periodic review by the FDA, international regulatory authorities and European notified bodies for certain of our medical devices. All of our facilities are currently approved by the FDA, the relevant notified bodies and other foreign regulatory authorities to manufacture pharmaceuticals and medical devices for distribution in the United States and international markets.
Employee Relations
At December 31, 2009, we employed approximately 8,300 persons throughout the world, including approximately 4,300 in the United States. None of our U.S.-based employees are represented by unions. We believe that our relations with our employees are generally good.