We are a leading global specialty pharmaceutical company currently focused on the gastroenterology, women’s healthcare, dermatology and urology segments of the North American and Western European pharmaceuticals markets. We are a fully integrated company with internal resources dedicated to the development, manufacture and promotion of our products. Our franchises are comprised of complementary portfolios of established branded and development-stage products that we actively manage throughout their life cycle. Our success is not tied to any single product, as multiple products make up our existing sales base and several of these provide opportunities for future growth.
2009 was a transformative year for our Company. On October 30, 2009, we acquired the global branded pharmaceuticals business (“PGP”) of The Procter & Gamble Company (“P&G”) for approximately $2,919.3 million in cash and the assumption of certain liabilities (the “PGP Acquisition”). The purchase price remains subject to certain post-closing adjustments. Under the terms of the purchase agreement, we acquired PGP’s portfolio of branded pharmaceutical products (including its two primary products ASACOL and ACTONEL), PGP’s prescription drug pipeline and its manufacturing facilities in Puerto Rico and Germany. ASACOL is the leading treatment for ulcerative colitis in the U.S. market for orally administered 5-aminosalicylic acid (“5-ASA”) products, with approximately 41% of the market share based on filled prescriptions and approximately 47% of the market share based on revenues, each according to IMS Health, Inc. (“IMS”). ACTONEL is the leading branded product in the U.S. non-injectable osteoporosis market for the prevention and treatment of osteoporosis in women, according to IMS. ACTONEL is marketed under our global collaboration agreement with Sanofi-Aventis US LLC (“Sanofi”).
The PGP Acquisition has transformed us into a global pharmaceutical company with significant scale and geographic reach. Prior to the PGP Acquisition, our women’s healthcare franchise was anchored by our strong presence in the U.S. oral contraceptive market (where we market LOESTRIN 24 FE and FEMCOM FE), U.S. hormone therapy (“HT”) market (where our commercialized products include ESTRACE Cream, FEMHRT and other products) and the U.S. dermatology market (where we promote and sell DORYX, an oral anti-infective for acne). The PGP Acquisition added a highly attractive specialty segment in gastroenterology (ASACOL), expanded our presence in women’s healthcare (ACTONEL) and established us in the urology market (ENABLEX) as our development work continues on two new erectile dysfunction (“ED”) products. The combined company has an expanded sales force and infrastructure to better promote products in the United States, Canada, most of the major Western European markets and Australia, increased diversity of revenue sources, enhanced product development capabilities and a deeper pipeline. Moreover, the PGP Acquisition provides an opportunity for us to apply our demonstrated expertise in the management of pharmaceutical product life cycles to PGP’s market-leading products.
In addition to the PGP Acquisition, we completed two other significant transactions during 2009. First, on August 20, 2009 we completed the redomestication of our principal holding company from Bermuda to Ireland, following the approval of a scheme of arrangement by our shareholders and the Supreme Court of Bermuda. As a result of the transaction, Warner Chilcott plc, a public limited company organized in, and a tax resident of, Ireland, became the principal holding company of the Warner Chilcott group and each holder of Warner Chilcott Limited’s outstanding Class A common shares, par value $0.01 per share, received ordinary shares of Warner Chilcott plc, par value $0.01 per share, on a one-for-one basis. Finally, on September 23, 2009, we agreed to terminate our exclusive product licensing rights from LEO Pharma A/S (“LEO”) in the United States to TACLONEX, TACLONEX SCALP, DOVONEX and all other dermatology products in LEO’s development pipeline, and sold the related assets to LEO, for $1,000.0 million in cash (the “LEO Transaction”).
Our primary strategy is to continue to develop our specialty pharmaceutical products business by focusing on therapeutic areas dominated by specialist and other high-prescribing physicians. We remain committed to driving long-term revenue and profit growth by continuing to improve upon our portfolio of products and market those products through our precision marketing techniques. Furthermore, we intend to supplement this growth and broaden our market position in our existing franchises through ongoing product development and selectively reviewing potential product in-licensing, acquisition and partnership opportunities.
Focus on selected therapeutic markets. While large pharmaceutical companies have focused on developing “blockbuster” drugs, we concentrate our efforts on branded products that are prescribed by high-prescribing physicians, as well as developing products that complement those products and therapeutic segments.
Drive long-term growth. We seek to drive organic growth in product franchises by employing precision marketing techniques. More specifically, we seek to identify the high-prescribing physicians in our therapeutic categories and then target the activities of our sales representatives to reach those specific physicians. We believe this strategy results in an efficient and effective return on our marketing efforts. The PGP Acquisition has expanded our therapeutic and geographic reach, primarily in North America and Western Europe, and provides a platform from which our sales force will seek to drive market share by promoting complementary products.
Execute focused, efficient R&D effort. Our product development efforts are focused primarily on new products with established regulatory guidance and extending proprietary protection of our existing products through product improvements that may include new and enhanced dosage forms. These development efforts tend to be lower-cost endeavors with a higher probability of success than typical development programs run by other pharmaceutical and biotechnology companies. Our R&D efforts benefit from an experienced team of scientists, clinicians and regulatory professionals with proven product development expertise. Since March 2003, our internal development efforts have yielded a number of approvals from the U.S. Food and Drug Administration (“FDA”), including those for the following products:
•DORYX delayed-release tablets
•LOESTRIN 24 FE
•Low Dose FEMHRT
We expect to continue to pursue this strategy following the PGP Acquisition by leveraging the experience of our and PGP’s R&D teams to bring new products to market.
In addition to transformative transactions such as the PGP Acquisition and our recent in-licensing arrangements with companies such as Paratek and Dong-A described under “—Research and Development” below, we have built our pharmaceutical products business through a number of product acquisitions. These transactions include our acquisition of the OVCON oral contraceptive franchise and ESTRACE Cream from Bristol-Myers Squibb Company (“Bristol-Myers”) in 2000, our acquisition of ESTRACE Tablets from Bristol-Myers in 2001, our acquisition of the U.S. sales and marketing rights for SARAFEM from Eli Lilly and Company in 2003, our acquisition of LOESTRIN, ESTROSTEP FE and FEMHRT from Pfizer Inc. (“Pfizer”) in 2003 and our acquisition of the U.S. rights to NexMed’s topically applied alprostadil cream under development for the treatment of ED in February 2009.
We became the exclusive licensee of TACLONEX in the United States in 2005 and acquired the exclusive U.S. sales and marketing rights to DOVONEX from Bristol Myers in 2006. On September 23, 2009, we announced that, in exchange for a one-time cash payment of $1,000.0 million to us, LEO reacquired our exclusive product licensing rights in the United States to our topical psoriasis treatment products TACLONEX, TACLONEX Scalp and DOVONEX, as well as rights to all dermatology products in LEO’s development pipeline, and acquired certain assets related to our distribution of DOVONEX and TACLONEX in the United States. Our agreement with LEO contains customary representations, warranties and covenants in the transaction agreement. These include, among other things, customary indemnification obligations. We also entered into related transaction agreements at the closing, including an interim distribution agreement and a transition services agreement.
Patents, Proprietary Rights and Trademarks
Protecting our intellectual property, such as trademarks and patents, is a key part of our strategy.
Our results of operations are minimally affected by seasonality.
Prior to the PGP Acquisition, we had approximately 1,000 employees and no unionized employees. As of December 31, 2009, giving effect to the PGP Acquisition, we had approximately 2,700 employees, approximately 1,850 in North America and approximately 850 in Europe and the rest of the world. None of our employees in the United States are unionized. Certain of our employees in Europe are represented by works councils and certain employees are members of industry, trade and professional associations. We believe that our employee relations are satisfactory.