Allergan Q4 2008 Earnings Call Transcript

| About: Allergan plc (AGN)

Allergan, Inc. (NYSE:AGN)

Q4 2008 Earnings Call

February 04, 2009 11:00 AM ET


Jim Hindman - Senior Vice President, Treasury, and Investor Relations

David E.I. Pyott - Chairman and Chief Executive Officer

Jeffrey L. Edwards - Executive Vice President, Finance and Business Development and Chief Financial Officer

Scott M. Whitcup, M.D. - Executive Vice President, Research and Development

Joann Bradley - Investor Relations


Gregg Gilbert - Merrill Lynch

Gary Nachman - Leerink Swann

Ken Cacciatore - Cowen and Company

Aaron Gal - Bernstein Research

Larry Biegelsen - Wachovia Capital Markets LLC

Amit Hazan - Oppenheimer & Co., Inc.

Peter Bye - Jeffries & Company

Corey David - Natexis Bleichroeder


Hello, and welcome to the Allergan Fourth Quarter 2008 Earnings Call. Following today's presentation, there will be a formal question-and-answer session. Today's conference call is scheduled to conclude at 9:00 AM Pacific Time. To ensure that we are able to accommodate questions from as many participants as possible, we ask that each of you limit to a maximum of two questions. (Operator Instructions). At the request of the company, today's conference is being recorded. If anyone has any objections you may disconnect at this time.

I would like to introduce today's conference host, Mr. Jim Hindman, Senior Vice President, Treasury Risk and Investor Relations. Sir, you may begin.

Jim Hindman

Thank you, Marianne. Good morning. With me for today's conference call is David Pyott, Chairman of the Board and Chief Executive Officer; Jeff Edwards, Executive Vice President, Finance and Business Development and Chief Financial Officer; Dr. Scott Whitcup, Executive Vice President, Research and Development; and Jim Barlow, Senior Vice President and Corporate Controller.

Before we move ahead, I would like to remind you that certain statements that we'll make in this presentation are forward-looking statements. These forward-looking statements reflect Allergan's judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting Allergan's businesses.

Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding the forward-looking statements that is included in our fourth quarter and year-end 2008 earnings release, which was furnished to the SEC today on Form 8-K, as well as our filings with the SEC referenced in that disclaimer.

We will follow-up the question-and-answer session of this call with a short listen-only segment. We'll then provide additional miscellaneous information that relates to our business. Under Regulation FD, in order to be able to discuss this information freely during the quarter, we must be sure that this is in the public domain. This conference call and accompanying webcast are being simultaneously broadcast over the internet with replays available for one week. You can access this information on our website at

At this point, I would like to turn the call over to David Pyott.

David E.I. Pyott

Thank you, Jim. Good morning, ladies and gentlemen. With the increasing impact to the global recession, overall sales in the fourth quarter decreased by 3.2% in dollars versus the fourth quarter of 2007; also being affected by the strength of U.S. dollar relative to other leading currencies.

In local currencies, sales increased by 1.6%. We were pleased that we exceeded the guidance given for BOTOX and the facial aesthetics businesses, both of which are sensitive to this cautionary consumer spending.

For the full year we enjoyed growth over 2007 or 11.9% in dollars and 10.6% to local currencies, reflecting the strength of the businesses particularly in the first half of 2008. Regarding profitability, we applied great discipline and attention to execution, and delivered in the fourth quarter adjusted diluted earnings per share of $0.76, which was at the top end of the guidance given in November and a remarkable 26.7% growth over the fourth quarter of 2007. The strong increase was boosted by the cut-short in the federal R&D tax credit which occurred in the fourth quarter.

For the full year, in spite of all of the economic challenges, we generated adjusted diluted EPS growth of 17.9%. Thus once again realizing our long-term aspiration of mid to high teens adjusted EPS growth.

The key tool was our ability to leverage our historically high levels of SG&A expenditure as we focused sales and marketing expenditures on the highest return programs. In the fourth quarter, we actually lowered adjusted SG&A expenditure in dollar terms versus the prior year quarter by 14%, with a slightly higher decrease in promotion, selling and marketing spend alone.

Adjusted R&D spend was also 12% lower than the prior year as we had completed Phase III trials for POSURDEX or retinal vein occlusion, BOTOX for chronic daily headache and LATISSE, and also reduced spending on discovery. Non-U.S. R&D expenditure also lowered the number in dollar terms due to the foreign exchange impact of this foreign expenditure.

Looking forward to 2009, it remains our aspiration to fulfill our goal of continuing to deliver shareholder value. At the time of our third quarter earnings release, we set our broad preliminary guidance in a range of 5 to 12% over the final adjusted diluted EPS number for 2008. In this release, we're giving guidance of adjusted diluted EPS in a range of $2.69 to $2.75 for 2009, which is 5% to 7% over 2008.

Given the strength of the U.S dollar, low return on our cash balances and the uncertain global economic outlook, we feel that this reflects prudence and the realistic plan. Given all the economic challenges, we've taken the difficult decision to restructure the company and we'll terminate approximately 460 employees or about 5% of our global headcount. The cost of this personnel restructuring is about 40 to $45 million, all of which is cash and will yield savings that produce a payback in less than a year. Jeff Edwards will cover the economics of acceleration of the 2008 option grant.

The bulk of the restructuring impacts falls on the U.S. urology organization and marketing positions in the U.S. and Europe as we adjust back office structures to the reduced outlook for some businesses. Regarding U.S. urology, we'll focus our remaining sales team on the urology specialty and are in discussions with partners to promote SANCTURA XR to the general practitioner market. We are pleased with the performance of SANCTURA XR in the urology specialty, but that not prepared to continue investing in the GP channel, where we do not enjoy critical mass. Especially, in the context of many other attractive investment opportunities for scarce sales and marketing spend.

As a reflection of our continuing strategic intend to expand in urology, we entered into the corporation with Spectrum Pharmaceuticals to develop and commercialize for Apaziquone for bladder cancer, and are excited about our clinical development programs for BOTOX for neurogenic and Idiopathic overactive bladder.

With the exception of the U.S. urology sales force and some low productivity sales territories in Europe, our sales force positions are unaffected. As we strive to increase productivity and efficiencies in all areas and functions of the company, we're also making other modest personnel reductions.

When you look at our guidance for SG&A, it is clear that we intend to drive growth whilst we spend less money on marketing and selling in 2009 than in the past. This reflects our plan to concentrate on the highest value programs and products, and furthermore capture the savings from our restructuring program announced today.

Looking at R&D expenditure in 2009, we're pleased that we're able to increase our mix of clinical programs conducted outside of the U.S. in lower cost environments and the detailed plans to increase productivity of our clinical development organization, so that we can keep expanding our number of programs even as we moderate the increase in expenditure and R&D in dollar terms.

We're also reloading our pipeline, both with internally discovered compounds such as the next generation of intraocular pressure lowering compounds, but also through collaboration such as Apaziquone, Ole 4 (ph) Asterand and BAROnova.

Regarding the Sirna compound 027, this compound which was in development for age-related macular degeneration had no safety issues, but did not meet its efficacy hurdle. Pursuant to our collaboration with Sirna, we planned to consider other targets for further development.

Now commenting our performance in the fourth quarter. I wish first of all to comment the performance of eye care. Ex-factory sales looks somewhat weak, with a decline in sales in dollar terms of 3.6% and a growth of 1.2% in local currencies with all of our key brands showing this ex-factory weakness. This term is in stark contrast to full year growth versus 2007, of 13.1% in dollars and 11.6% in constant currency.

Most of the recent lies in the U.S. business where we reduced pharmaceutical wholesale trade inventory from the third quarter to the fourth quarter.

In addition, we also estimate that retail pharmacies and mail-order houses reduced inventory in the fourth quarter in response to the credit squeeze.

In terms of in market demand Verispan shows acquisition dollar growth for the total U.S. ophthalmic pharmaceutical market in the fourth quarter year-over-year of 11.0%, with Allergan growing in market by a very healthy 15.7%. The year ended even stronger with the market in December growing 16.0% and Allergan increasing 21.4% and enjoying an all time record market share of 31.2%. In the ophthalmology channel alone, Allergan is now at a record share of 35.2%.

A subsidiary reason for the weaker ex-factory sales was the slowdown of the U.S. tears market from 8% growth in 2007 to 1.5% in 2008 as this category is based on art of pocket spending. Outside of the U.S. we've seen slowing of the tears market in some European countries, although Allergan's tear business remains strong. And I'll comment this again in a few minutes.

Now looking back on the full year, Verispan shows total U.S. ophthalmic pharmaceutical market, growing 10.1% and Allergan growing 13.5%. This matches our ex-factory sales very closely.

Turning to the global market year-to-date September, IMS first shows the ophthalmology market growing 9% and 7% if one excludes the rapidly growing market for retinal therapeutics. IMS states Allergan growing at 12% in constant currency year-to-date September, which slightly lags our ex-factory sales as of the end of September of 15.5% in constant currency.

Allergan is the fastest growing global ophthalmic pharmaceutical company worldwide, and is hitting record market shares in many markets in Europe, Latin America, and Asia outside Japan.

Allergan's global share in Q3 was 16.6% versus 16.1% in Q3 of 2007. Despite the slowing of the tears market which I commented earlier, IMS still shows year-to-date September a global tears market, growing at 10% and Allergan growing at 12%.

Across the world, our ophthalmic growth is being driven principally by three franchises: RESTASIS, artificial tears, and our portfolio of glaucoma products. All of these categories have superior growth characteristics compared to the overall market. We're also looking forward to entering the retinal therapeutics market with POSURDEX and TRIVARIS in the second half of this year.

Regarding our Brimonidine products, we're pleased with the unpick of COMBIGAN and ALPHAGAN P 0.1% in the U.S. and note that ALPHAGAN P 0.1% now represents 47% of the ALPHAGAN brand franchise.

As previously discussed, we provided a license to Alcon to market a generic Brimonidine 0.15%, an older version of ALPHAGAN commencing on or after September the 30, 2009.

In addition to the requirement that Alcon pay ALPHAGAN a royalty on sales of this product, the license is limited to a 0.15% product and is not generically substitutable with their ALPHAGAN P 0.1% or COMBIGAN.

While the license with Alcon provides that Alcon could launch it's Brimonidine 0.15% earlier depending on certain mix ratios in Allergan's Brimonidine products. Based on our analysis of prescriptions trends, we do not believe that this condition would arise before September 30, 2009 license date.

Outside the U.S. now, GANFORT is the fastest growing fixed prostaglandin or prostamide combination. We're also looking forward to the approval of LUMIGAN X, which is been delayed for administrative reasons of the FDA to give a new boost to LUMIGAN prescriptions in the U.S.

Our program to bring the next generation ACULAR to market is on track as the file for ACULAR X was accepted by the FDA in Q4 and we expect to receive approval in Q3 of 2009.

Regarding RESTASIS, end market growth remains strong with acquisition dollar growth around 25% in recent months as a higher number of units are filled per prescription and also by a price increase.

We continued to push into new emerging markets. GANFORT was recently approved in Turkey, Malaysia and Singapore; COMBIGAN was licensed in Egypt, and we're just launching COMBIGAN in Poland and Korea.

Regarding skin care, sales in the fourth quarter increased 16.8% supported by the successful launch of Axon in the acne category. We are very pleased with the acceptance of the product and its uptick. A very high number of physicians visited by our sales force have already prescribed Axon, also due to a very high level of formula recoverage with already over 70% of all managed care lines.

In the urology area, sales in Q4 were $17 million, inline with the 17 million of sales we recorded in Q3. We continued to be pleased with the performance of SANCTURA XR in the urology channel.

In terms of trailing prescriptions per month since launch, SANCTURA XR is performing inline with ENABLEX and only slightly behind that of VESIcare. Improving managed care coverage in Tier II both for commercial and Part D plans will assist sales grow in 2009 and also our discussions for partnering in the general practitioner channel. We've also extended our co-promotion agreement with Endevis (ph) until September 2009.

Moving onto BOTOX. We were pleased that sales were better than we had expected when we renewed our guidance for the fourth quarter in November of last year. Sales in the quarter four decreased 3.1% in dollars and increased by 1.9% in local currencies. For the full year, sales increased over 2007 by 8.2% in dollars and 7.2% in local currencies.

Regarding the split of aesthetic and therapeutic sales, the mix remained 50-50 as aesthetic sales increased 8% and therapeutic sales increased also by 8%.

Clearly the cash pay aesthetic sales were affected by the declines in consumer spending, particularly in the U.S. and Europe and patient stretching out the time between BOTOX cosmetic treatments.

In the therapeutic category, however, is also not immune to economic conditions for the following reasons: in the U.S, one of the largest uses of BOTOX is for cervical dystonia where a co-pay can run up to around $250. And here we received reports that patients are also stretching out the time between visits.

In several European countries such as Italy and Spain, we've seen national and regional governments restricting access to BOTOX and other neuromodulators due to the crisis in public finances.

Outside North America and Europe, the majority of BOTOX treatments for therapeutics are effectively paid out to pocket due to the lack of publicly financed healthcare or availability of private insurance.

Regarding market share, we have lost almost two points of market share in the global neuromodulator market, year-to-date September 2008, versus the corresponding period in 2009. Losing more market share in therapeutics than aesthetics would estimate that we still enjoy almost 83% share in Q3 of 2008.

At the margin we chose to seeds therapeutic share in some secondary markets, as we elected to not to reduce prices to match competition in some government tenders in Scandinavia, Brazil and Mexico.

Positively, BOTOX is still gaining share in the top five markets of Europe. In both the therapeutic and cosmetic segments, despite the arrival of Zeomin which is now suffering from rather stagnant market share in its German home market, with Zeomin's historical gains coming at the expense of Dysport. Across the world, we generally see low price fighting amongst themselves.

As we plan to execute our plan for BOTOX for 2009, we know that competition has suffered some delays, as the FDA has demanded submission of a REMS plan for Dysport and the producer date for Roloxin has been extended.

In Korea, we renegotiated a distribution contract with our distributor and have now set up our own commercial organization for BOTOX, JUVEDERM and other facial aesthetic products.

Regarding regulatory approvals for BOTOX, we continue with great momentum. In December BOTOX was approved in Korea for greater alliance. In January, GlaxoSmithKline received approval for BOTOX, also for greater alliance in Japan and will launch the product in the first quarter of 2009.

In Brazil, we received approval for BOTOX for neurogenic overactive bladder, following an earlier approval in Mexico. In the U.S., we've been notified by the FDA that action on our spasticity file has been moved back from Q1 to Q2.

Regarding our chronic migraine program, pending feedback from the FDA, we intend to file by mid-2009. Given the importance of the spasticity implication, which is an approved indication in almost all markets outside the United States, and the major unmet medical need of chronic migraine, we're encouraged that we have major new drugs drivers on the horizon, if we secure FDA approval for these new indications.

Now turning to facial aesthetics. Our sales of dermal fillers declined 8.8% in the quarter in dollars and declined 2.6% in local currencies. Sales were dragged down by double-digit declines in the U.S. market, where we believe that dermal fillers are more economically sensitive than BOTOX.

As we did not participate in the major price discounting by some competitors, we probably gave out some limited market share in the quarter. The declines in the U.S. were offset by continuation of very strong growth in local currencies outside the U.S., particularly in Europe, Canada and in Latin America. In Europe we invested in direct to consumer advertising in the UK, and France, which produce good results.

In Canada, we've seen an extraordinary uptick of the JUVEDERM plus Lidocaine products and believe that we have also gained market share. Also VOLUMA was launched in Canada in January.

In Asia-Pacific we've been registering JUVEDERM in many markets and they are launching the JUVEDERM Ultra and Ultra plus products incorporating Lidocaine in Australia, Singapore, and Hong Kong this month. The VOLUMA was also launched in Australia in January. Given the success of JUVEDERM plus Lidocaine around the world, we are very much looking forward to launching this product in the U.S. later in 2009.

We're also pleased to announce that we started shipping LATESSE both to the wholesalers and direct to physicians last week. From the level of consumer interest that we've received, it is clear that LATESSE will be a great traffic builder for aesthetic physicians, and will bring in a new demographic of patients into the office just when physicians marketing budgets are under pressure.

This strong portfolio of product enhances our ability to compete successfully. We plan to deploy direct to consumer advertising later in the year once LATESSE has established major distribution.

Moving on to breast aesthetics. Sales decreased by 12.0% in dollars and 7.9% in local currencies. We believe that the contraction of the U.S. market in Q4 in terms of number of surgeries was even greater than Q3, offset by the pickup and value as the market continues to transition from lower value saline to higher value gel implants.

Given our greater exposure to gel mix relative to Mentor, we believe that we gained share during the fourth quarter even as we refrained from competing on price. Outside the U.S., we experienced depressed market conditions in Europe.

Regarding innovation, we launched re-sterilizable sizers in the U.S. as well as a new tissue expander. And are hopeful that we can launch in a trial 410 form stable gel implant later this year.

Regarding obesity intervention, we report a decline of 7.7% in dollars and 3.1% to local currencies. A decline in U.S. sales was offset by double-digit growth in local currencies ex-U.S. We are pleased with our sales growth in Australia, the UK, and Canada and in some nascent markets in Latin America.

In the U.S., we are satisfied that we have contained the competitive intrusion from Ethicon's REALIZE Band and have broadly maintained market shares since the summer.

With an out of pocket cost of roughly $15,000, the cash pay segment of the market declines steeply in 2008 and even the reimburse segment of the market with co-pays ranging from $2,000 to $4,000 was impacted by economic conditions.

With the partnerships which we've just established with Curves and Lindora, we are delighted that we've enhanced our ability to provide long lasting weight loss results to our patients after the LAP-BAND procedure through diet and exercise programs.

So in summary, we have set real plans to address the continuation of challenging economic conditions around the world and to focus our spending on those products and geographies that will yield the best returns. In Asia and parts of Latin America, we are continuing to invest in these attractive growth markets.

Also we are fortunate to have many products under review for approval, both at the U.S. FDA and other regulatory agencies around the world.

I'll now pass over to Jeff Edwards, who'll comment with financials.

Jeffrey L. Edwards

Thanks David. As was the case in the third quarter of 2008, Allergan demonstrated it's ability to generate strong earnings performance, despite a challenging economic environment and strong currency headwinds during the fourth quarter of 2008.

During the quarter our diversified basic business and ability to control our expenses allowed the company to deliver at the top end of both our product net sales and earnings per share guidance for the quarter. We continued to make targeted investments in the components of our business where the likely financial returns are significant to our leveraging areas that were deemed to generate less favorable financial returns. This focused approach enabled the company to deliver adjusted EPS results at the top end of our guidance range. Adjusted diluted earnings per share for the fourth quarter were $0.76, marking a 26.7% increase over 2007 results for the same quarter.

Excluding the affects of the R&D tax credit catch-up, adjusted diluted earnings per share growth for the fourth quarter approximated 20%. A reconciliation of all of the adjustments to GAAP earnings is set out in our earnings release.

Allergan demonstrated its ability to leverage it's expense base by delivering an adjusted diluted earnings per share for the full year of $2.57, even as revenue came under pressure due to the shifting economic environment. An EPS resulted the high end of the initial range of guidance provided in January 2008 of $2.54 to $2.58.

Adjusted selling, general and administrative expenses were 38.2% of product net sales for the quarter, totaling $397 million. This percentage and dollar value of SG&A spend represents our lowest level in five quarters, reflecting our commitment to leverage, expenses were necessary to meet our goals.

In an economic environment such as the one we are operating in today, certain investments that were logical and generators of significant value and stronger economic cycle simply do not meet our return on investments hurdles in this economic environment.

Excluding the effects of non-GAAP adjustments and amortization of acquired intangibles, Allergan's Q4, 2008 gross margin of 82.4% decreased 110 basis points when compared to prior year but was flat sequentially compared to the prior quarter. The primary driver of this decline is the slowing of sales growth across the medical device area and the loss of what I'd refer to as absorption efficiency. We're also very focused on maintaining appropriate levels of in-house inventory that are consistent with external demand levels.

With respect to our balance sheet, consolidated Allergan day sales outstanding was 47 days while consolidated Allergan inventories days on hand was a 128 days. In-house inventory levels are slightly greater than our current comfort level. However, much of this build up was required to address the transfer breast production from Arklow, Ireland to Costa Rica. The production of our final college in dermal filler lots as we closed our Northern California base production facility. The creation of appropriate safety stocks of BOTOX and RESTASIS to ensure we can always meet market demand of these growth products. And the preparation for the launch of Axon, our recently introduce acne product and LATISSE, our recently approved eyelash growth pharmaceutical.

As it relates to 2009, we expect that our absolute levels of inventory and inventory days on hand would be reduced over the course of the year.

At the end of the fourth quarter, Allergan's cash and cash of net of debt positions totaled approximately 1.11 billion, and a negative 5.29 million respectively. 2008 operating cash flow after CapEx was approximately $135 million for the quarter. As we look forward into 2009, Allergan plan is to continued to carefully monitor our markets and manage business expenses as necessary to a appropriate leverage with the goal of delivering our bottom-line EPS guidance.

As I'd mentioned in the past, we continued to be very thoughtful on our valuation of our expense base to ensure we are leveraging in the appropriate areas and are operating the business with the most efficient and appropriate cost structure necessary to remain competitive in today's markets.

With the focus of meeting our short and long-term aspirations and a commitment to maintaining a dynamic in operating environment, Allergan makes periodic adjustments to it's structure and organization to ensure there is a level of consistency and logic between our model and the state of the markets we operate within. Today's announced restructuring is a result of this philosophy.

Also as David mentioned earlier, as part of this restructuring process, Allergan has reviewed its stock option related cost structure. In early 2008, our regular employee stock option grants were made with a strike price of $64.47. Pursuant to FAS 123R, we conduct a Black-Scholes analysis on the pool of options at the time of the grant and take an amortization charge over the four year vesting period associated with that original value.

One of the purposes of the stock option grant is to motivate and retain employees. As the strike price for the 2008 grant is substantially in excess of the current company stock price, they are not currently acting as significant retention tool, yet the company continues to amortize the expense associated with the original value ascribed to those options upon grant.

We are aware that face with this dilemma, other public companies have explored, exchanged and/or repricing programs to address the disconnect between the ongoing charge in the current value and impact of options. Allergan has decided not to institute one of these programs. Alternatively, the company has accelerated divesting of this option grant and modified certain stock option exploration features for the option grant.

While these changes do not increase the current value of the 2008 regular employee stock options, they accelerate the future amortization and remove that amortization from future quarters.

In addition to the above, Allergan modified certain options other than the 2008 regular employee grant for those employees impacted by the restructure. Accordingly, Allergan will not... or will incur a onetime entirely non-cash charge of approximately 68 to $69 million in the first quarter of 2009, related to the combined effect from the modification of these options.

As a result of the current restructuring and the accelerated amortization of the options and other items, Allergan estimates that it will incur a non-recurring pre-tax charges between 110 and $117 million, of which only 40 to $45 million will be actual cash expenses.

The savings realized as a result of restructuring process included the modification... including the modification of certain stock options will prevent the need to undertake additional significant cost cutting measures into strategic investment areas such as key research and development and sales and marketing programs in order to satisfy our earnings goals. And we estimate that we will recoup the cash charge amount in savings within one year of the restructure.

Turning to 2009 guidance, the guidance provided today accounts for Allergan's current perspective on the state of economic conditions in foreign currency markets for 2009. We will do our very best to meet the target, provided we have some capacity to make further adjustments to our spending plan. However, if negative macro movements within the broader economy outstrip our reasonable capacity to respond or should there be a significant movement within the foreign currency markets that vary meaningfully from our current assumptions, the guidance provided will be impacted.

Given the current subdued outlook over the short-term growth of our markets, we are fortunate that we have many new growth drivers, which were expected to contribute to 2009 revenue growth.

Many products which we hope to receive regulatory approval for, between now and the end of 2009 have been filed or about to be filed with the U.S. FDA and other regulatory agencies. Obviously, if these products are significantly delayed or unsuccessful on the regulatory process, we would be required to make adjustments to guidance provided.

For the first quarter of 2009, included the estimated impact of currency, Allergan estimates product net sales in the range of $960 million to $1 billion and adjusted diluted earnings per share to be in a range of 50 to $0.52.

Consistent with the pattern of spend in prior years, the first half of the year will produce a higher level of spending as measured in both dollars and percent of sales while the second half of the year should produce some moderation of these investment levels. This higher spending level during the first half of 2009 is reflective of many launched activities and pre-launched cost associated with expected product approvals.

In addition to these launched activities, the first quarter will only realize the partial benefit from the restructuring efforts announced today. And therefore produce a higher spending level than the remainder of the year.

Allergan is very focused on leveraging the spending against our core traditional products and focusing the benefits of leverage on our newer higher growth short and long-term opportunities. We project the full year adjusted SG&A ratio to product net sales to be approximately 39%.

Regarding full year guidance for 2009 consistent with the preliminary EPS growth expectations we had provided during our Q3 earnings call, Allergan expects 2009 adjusted diluted earnings per share guidance to be between $2.69 and $2.75, which represents growth of between 5% and 7%. This guidance excludes the impact of our incremental, non-cash interest expense related to our convertible note resulting from our adoption of the FASB accounting change for convertible debt. This interest expense is a non-cash item and will be excluded from Allergan's adjusted numbers going forward.

Regarding full year 2009 total sales guidance, Allergan expects total product net sales in the range of between $4.100 billion and $4.300 billion. For your information, specific product sales guidance is included within our earnings release.

Looking across 2009, we're assuming the currency as a negative impact between 4 and 8% on sales growth. As you know, the ongoing dramatic fluctuations in foreign currency exchange rate has created a challenging hurdle when comparing total dollar growth in 2009 for the prior year.

During the first three quarters of 2009, we will be facing a significantly negative foreign currency overlap environment where the U.S. dollar is substantially stronger than were it traded during this period in 2008. Although Allergan's position is net imported into the U.S. lessens the impact of foreign currency movement, we also rely on the use of an option base strategy of hedging approximately 50% of our net non-dollar pre-tax earnings exposure. Fortunately Allergan executed its option position for 2009 during the third quarter of 2008, which enabled the company to secure favorable rates.

With respect to R&D investment in 2009, Allergan will continue to make substantial commitments to spending across both our medical device and pharmaceutical technology portfolios, while we drive cost reductions through efficiency programs in R&D. We'll project adjusted R&D ratio to product net sales to be approximately 17% for 2009.

With respect to the 2009 effective tax rate, we'll project the tax rate on adjusted earnings of approximately 29% for the full year, an increase over 2008's adjusted effective tax rate due to the projected mix of revenue and the domestic versus offshore mix of R&D expenditures. For your information, we have included guidance for other lines on the income statement within our earnings release.

With respect to 2009 capital expenditures, we project capital expenditures approximately $120 million for the year. You will note that the 2009 level of capital expenditures is significantly lower than the 2008 CapEx level of approximately $190 million.

In today's economic environment maintaining a strong level of liquidity is very important. Allergan is fortunate to have the ability to generate significant levels of cash which allows us to maintain a strong and healthy balance sheet, with over $1 billion in cash and a strong A category credit rating, giving us access to credit. Allergan is able to maintain its financial flexibility which is strategic advantage in today's market.

With respect to 2009 cash flow, Allergan will continue to sustain strong cash generating capabilities. For the full year we project operating cash flow after CapEx of approximately $650 million. We have assumed very moderate levels of share repurchase activity in 2009, with our repurchase objectives limited to only match expected employee stock option base compensation programs.

Our solid results during the fourth quarter is another testament to the value of the depth and breath of Allergan's diversified lines of businesses as well as Allergan's ability to effectively mange its businesses through difficult markets. Allergan prides itself on it's disciplined approach taken with respect to how dollars are spent and what kind of investment return to require to justify this spending. We believe that this focused approach and our commitment to leverage our cost structure will continue to place Allergan in a position of strength within our markets and enable us to emerge strong from this economic downturn.

So with that operator, I'd like now to open the call to questions.

Question-and-Answer Session


Thank you. (Operator Instructions). Our first question comes from Gregg Gilbert of Bank of America-Merrill Lynch.

Gregg Gilbert - Merrill Lynch

Thanks, good morning. I'll ask my two product areas upfront. First for Scott on POSURDEX, do you haven't action date yet and can you offer us a perspective on how the product should be used initially, but some of the negating factors will be from a reimbursement or a logistic point of view? And then for David, can you comment on your pricing strategy for BOTOX in 2009 versus prior years in light of new competition and the economic environment? Thanks.

Scott Whitcup, M.D.

So Gregg, I'll answer your POSURDEX question. So we announced that we filed bit of rolling NDA for the last clinical margin filed by the end of year. We don't have this official action date yet. We assume that we'll get that shortly, given that it's the first product for the indication. We assume that we could get a priority review, but we haven't heard and so we can't really comment on that.

As you know there is a fair bit of already experienced with corticosteroids in the retinal disease market. So there is, from the efficacy standpoint a lot of knowledge about how corticosteroids work. I think what people are waiting to see is whether the safety... we need safety profile of POSURDEX. And so as we get ready to publish and get those data out, I think that will the key factor that determines how well that that's used.

In addition to our pivotal studies in macular edema retinal vein occlusion, we have a pretty robust Phase III-B program, specifically looking at its and use and combination with Lucentis for age-related macular degeneration as well.

David E.I. Pyott

Okay. I'll take the second question. For the first time for many years and I think really in light of the tough economic conditions, there was no price increase in the U.S. for BOTOX, either at the end of last year or beginning of this year. And I think it's fairly, broadly known in the marketplace that we believe that coupons for encouraging uses of product is a useful tool. And right now there is a coupon available $50 off for BOTOX, cosmetic treatment. If this treatment is except... basically the treatment is conducted before the end of February.

You'll also see allied to this, the patient rebate on JUVEDERM on the second syringe worth $100. So, you can see that we're responding to market conditions and I think this is the good way to get patients to comeback into the office to our aesthetic physician customers.

Gregg Gilbert - Merrill Lynch



Next question from Gary Nachman of Leerink Swann.

Gary Nachman - Leerink Swann

Hi, good morning. First question is for Jeff. Do you have an estimate of how much inventories contributed in the fourth quarter? It sounds like it hit of bunch of the line items. Could you try and give us little more color on that?

Jeffrey Edwards

Well, I don't think inventory contributed to the fourth quarter in terms of sales growth. Is that what you're referring to?

Gary Nachman - Leerink Swann


Jeffrey Edwards

In fact --

David E.I. Pyott

On the contrary because when you release that back and listened, we apologize that our prepared statements were long. But there is a lot of things going on. And really when you look at the sales answer in the press release, I was really trying to point out. When you look at eye care worldwide for the quarter that was minus 3.6% in dollars. There is a total disconnect with what's going on in terms of end market consumption and in that expect what I was attempting to set out that when you see Verispan stating that we're growing some 15, just finding number again 15.7 I think I said, just finding the number. So I don't get it wrong, 15.7% end market, it's clear that the level of inventory in the channel by the end of September came down to the amount of inventory and channel end of December.

Jeffrey Edwards

Yes. So Gary, my comments about inventory, some of which were in-house inventory relates to our goal in 2009 to lower our in-house level of the inventory to better match the business environment. But as David appropriately noted, inventory levels in the wholesaler channels between Q3 end and Q4 end actually came down.

Gary Nachman - Leerink Swann

Okay. Wasn't there some comment about the retail pharmacies that they increased their level?

David E.I. Pyott

Yeah, I also remarked about that. I would say that is even more of an art form than the science because of the way we try and get all the information. But all the signals pointed that way. And of course that back and say right across the retailing environment, everybody is trying to conserve cash and we think it even occurred with the pharmacies.

Gary Nachman - Leerink Swann

Okay. That's helpful. And then second question, I guess for David, the 2009 guidance for BOTOX, when are you assuming that competition enters the market given the delays of Dysport over Roloxin, and are you assuming a contribution from spasticity from that indication in your number? Thanks.

David E.I. Pyott

Well obviously, we look at the new producer date for Roloxin being the middle of April. So we based our plans on that. I think I'd be better if you asked Ibsen what they think regarding the approval date for Dysport. Clearly responding to the need for a REMS program does take some time. Also the agency requires once the dates has been submitted, time to review it. So it looks around, the couple of months away is our assumption. That's the way we are getting ready.

And moving to the other side to us, as I've stated in my remarks, the FDA extended the producer date for the spasticity file and the action date is now in Q2. So they pushed it by one quarter.

Gary Nachman - Leerink Swann

Okay. And in terms of the contribution for that indication given that my understanding is a lot off-label use is for spasticity. So, do you think you're going to get a piece of benefit that potentially if you've got an approval for that indication by mid year. Is that factored into your two numbers?

David E.I. Pyott

Well, I think first of all if one goes around the world, spasticity is one of the biggest uses of BOTOX. Clearly in this country there is some limited off-label use. I need to point out that we are absolutely acidulous in the way the all forms of or any form off-label activity is strictly prohibited. Our sales and marketing personnel, the whole company is extremely well trained on this. So, I see this as a considerable opportunity, because this market really is very poorly served.

Clearly, also you should factor in, that probably in the numbers for this year it doesn't have that big an impact just because in BOTOX therapeutic, the level of sales hilt is always slow. It's good like a glaucoma product and ophthalmology. But then in the out years say 2010 and '11, this gets bigger and bigger. And there is really a very important driver of mid-term growth.

Gary Nachman - Leerink Swann

Okay. Thank you.


Our next question is from Ken Cacciatore with Cowen and Company.

Ken Cacciatore - Cowen and Company

Hi. Thanks guys. Just, David on your commentary surrounding the migraine indication, you said pending feedback from the FDA understand you had your post Phase III meeting. Can you give us some color on that meeting? Are they still contemplating, potentially asking you to do another study?

And then also for Jeff on the spending. Now that we're at these levels, can we hold them here? Why would we ever have to go back? Can we just now leverage off of this or should we be assuming in the out years a tick-up in some kind of meaningful way? Thank you.

Scott Whitcup, M.D.

Sure, this is Scott. I'll answer the chronic migraine question. So we've been interacting with the agency to ensure that we have all the data they need in the BLA. We hope closer to the time of filing which we announced would be approximately mid-year that we have a formal meeting. And to-date they have not commented and requested to such additional studies.

Jeffrey Edwards

With respect to spending, my view is we'd love to hold them here or even do better over the long-term. I think over the course of the last five years, I've been asked that question a lot. And our answer has been consistently that our expectations for and SG&A ratio is for a lower ratio. So, I think what you're seeing now is consistent with that comment. Now we've gotten there a different way, but our perspective over the long-term hasn't changed.

David E.I. Pyott

I think at a very high level I'd answer the comment by saying you've obviously seen us build very considerable sales organizations over the years. Typically, we have the largest sales force in each of our categories. And clearly now it's time to seek a return from that.

And clearly I think when you reflect in all our remarks about restructuring, we're really forcing the organization to find new ways of doing our business. And so, once we're out of this troubling time, we plan to use what we've learned during the tough times to our advantage. We really think we can separate the levels of degrees of separation between us and our competitors as we get ready for emerging out of this economic recession.

Ken Cacciatore - Cowen and Company

Thank you.


Our next question is Ronny Gal of Bernstein.

Aaron Gal - Bernstein Research

Good morning guys. First to Scott, couple of quick data points. Can you just potentially give us the percentage of patient that had a three line correction with POSURDEX and if you can comment on your discussion with the FDA on shortening the OAB Phase III trial?

And for David that $50 coupon. If I kind of think about three patient using every while BOTOX use, you're really looking about a third of revenue discount on a bottle of BOTOX but people use those coupons. How do you think this will be used and if you can also comment on attempts to create some loyalty with patients through long-term use royalty programs before the reluctant launch?

Scott Whitcup, M.D.

So Ronny, I'll answer your two questions. On the POSURDEX, other than the data we included we're not giving out any additional data until we publish but you can take a look at the Phase II program was pretty robust and it gives you an idea across the board on what you might see with the product.

In terms of OAB, we're still working with the agencies. I don't really have any an update on that.

David E.I. Pyott

On the issue of coupons, I need to be really clear that this is a coupon of the procedure and the doctor's office. So if you're thinking that glabellar lines treatment is probably 450 or $500, its $50 off that.

The second thing for economists, truly in all coupon activity there is never a 100% redemption. So, when you're trying to think what that means in terms of revenue deduction, there are industry norms of how many coupons actually got used and obviously, we're going to watch that really carefully.

In terms of multi programs, we have built-up over the years a huge database of users both of BOTOX, more recently JUVEDERM and clearly people who are interested in BOTOX cosmetic interior, highly interest dermal filler hopefully JUVEDERM. And now of course we're seeing a new area called LATISSE. And so clearly, people who are opted into our database, now receiving information and we will continue to build on those programs.

And I remarked on LATISSE what's very exciting about that, is in terms of the product, it's going to bring-in a completely new demographic of patient and also people who may be some concerned about injectabales. Now this is something where there is no injection involved by brains and yet another type of consumer.

Aaron Gal - Bernstein Research

Thank you.


Our next question is from Larry Biegelsen with Wachovia.

Larry Biegelsen - Wachovia Capital Markets LLC

Hi, good morning. Thanks for taking my call. The POSURDEX RVO data, when will that be presented and the BOTOX headache data, when will that be presented as well? And secondly, LATISSE OUS status, I don't know if you've told us about the filing outside the U.S.

Scott Whitcup, M.D.

So Larry, for both POSURDEX and for the chronic migraine data, our plan is really try to get those published in top tier journals. And we would expect enough difficulty to predict exactly when it's stuff hits in print, but I would say, sort of mid year or early second part of the year when you'd expect to see data.

Larry Biegelsen - Wachovia Capital Markets LLC

So, we wont see the migraine dated AAN in April?

Scott Whitcup, M.D.

The plan really is to try to get it published. Knowing publication times, my guess is it will a little bit after that.

Larry Biegelsen - Wachovia Capital Markets LLC

And LATISSE outside the U.S.?

David E.I. Pyott

Well, first of all there is a whole range of markets that follow what goes on in the U.S. And so there will be markets in Latin America and Asia that should follow in the course of the next six to 18 months, and let's not comment about Europe.

Scott Whitcup, M.D.

It's really good interacting with the agencies in Europe. It's the what additional data they may or may not require and assuming that additional data required we get those trials going to file as quickly as we could.

Larry Biegelsen - Wachovia Capital Markets LLC

When will you know Scott?

Scott Whitcup, M.D.

Well, we're getting all the feedback and making decisions probably in the next month.

Larry Biegelsen - Wachovia Capital Markets LLC

Thank you.


Our next is from Amit Hazan of Oppenheimer.

Amit Hazan - Oppenheimer & Co., Inc.

Hi, thanks. Good morning. Can you hear me okay?

David E.I. Pyott


Scott Whitcup, M.D.


Amit Hazan - Oppenheimer & Co., Inc.

First question is on gross margins for 2009. It looks like you're guiding to about flat gross margin. I'm wondering if you just kind of help us think about the product mix, I thought it might be moving away from you in terms of the high margin products and what might be positively impacting you there to keep the guidance the same? And then I just have one follow-up.

Jeffrey Edwards

Well there is a few things. LATISSE is a nice gross margin product as is Axon. So certainly they are benefitors. The real challenge comes on the medical device side where we're seeing lesser volumes as such. We have fever products to spread or absorb those costs.

But in the aggregate, as a function of manufacturing efficiencies, for instance the movement of breast manufacturing from Arklow, Ireland to Costa Rica, the closing in Northern California filler plant that focused predominantly on collagen, continued growth across our pharmaceutical line of business. We've been able to cover those costs and bring in a gross margin that's roughly flat year-over-year.

Amit Hazan - Oppenheimer & Co., Inc.

Okay, terrific. And then one follow-up on the rebates. I think I heard you say that to think about in terms of on the BOTOX side, $50 off of the price of the procedure. Are you saying that the doctor is going to take some of the hit from the coupon himself or are you reimbursing the entire thing and we should think about it in terms of a discount to what you're charging the doctor? Thanks.

David E.I. Pyott

Yeah, well obviously, we're putting the full $50, but you're not going to see all procedures with the $50 reduction. Just think about the stuff we all get through the mailbox home. How many coupons should actually get used. And so we have models of that from the past and obviously we're watching just how this redemption rates works in practice. And we think it's exactly the right thing to do in this kind of economic climate where people are encouraged to not postpone, but to get into the doctors' office. And of course then come all the other cross-selling opportunities as well.


The next question is from Peter Bye of Jeffries & Company.

Peter Bye - Jeffries & Company

Hey, thanks guys. So, just on the, on BOTOX on the market and the share loss in '08, what's your assumptions for growth in the market? I think maybe constant currency was roughly 8.5 to 9% last year for BOTOX and market. Are you operating on assumption that's organically at two or negative three, or sort of what's your base line assumptions for the market?

David E.I. Pyott

Well, I think the biggest confounder in all of these, especially for you, because you don't have the degree of models that we have is currency. So when you're looking at dollar numbers.

Peter Bye - Jeffries & Company

I just meant constant currency.

David E.I. Pyott

Yeah, I know I understands, but that's why I'm trying to back in, because that's why Jeff remarked when you think about currency across the year, you should think about the impact of being somewhere between 4 and 8%. Obviously, the first half of the year is much worse in the sense that you still have a year ago, a strong euro whereas now you have a weak euro relative to the dollar, and many of the currencies mitering that.

And so, with them when you look at the guidance we gave for BOTOX, clearly you see a down in dollar terms of in a range of minus 9 to minus 12, then you got to think about the currency part of that. Then, of course, until now you can say BOTOX is almost the market, when we have 83% we estimate not world market share in Q3. So I think we're now sort of backing into the comment, the thing that you have to think most carefully about is how do you model the market share intrusion of Roloxin on the one side and Dysports on the other. And clearly we've got very, very detailed calculations models on that, which we think are very realistic. Because we know from many markets around the world, our competition is occurred both in the therapeutic field as well as the cosmetic field.

Peter Bye - Jeffries & Company

So your organic growth assumptions for the market is --

David E.I. Pyott

Well, I haven't given you the answer.

Peter Bye - Jeffries & Company


David E.I. Pyott

so I understand, I was trying to give you the pieces and clearly as we will on calls. We have a pretty good fix on market growth worldwide, always one quarter in arrears, ensuring we will response to those question to try and help you understand what is going on historically.

Peter Bye - Jeffries & Company

Alright, great. And then just Jim or Dave, you mentioned in other, you've got lot of obviously products in the pipeline that are filed and expecting some contributions in '09. And, if it doesn't happen there is maybe some risk. Can you kind of maybe quantify what you are expecting from new indication flash, new products embedded in your total product guidance revenue?

David E.I. Pyott

Right sure. When we kind of stand back and say for short-term influence, which are the things that have the biggest impact. Clearly, I was celebrating a round of our Christmas day with Scott Whitcup and his team got LATISSE approved. So it was clearly, that's a fast take-off of product.

When I think forward, one of the earlier questions was about spasticity in the U.S. And I stated very clearly, our belief for this is a highly under penetrated market. We really look forward to being able to train doctors on the appropriate use of BOTOX in spasticity.

That being said, in overall sense where you have a revenue base over 4 billion, it won't make that much difference in '09 but can make a very considerable difference in 2010, '11 and so on because of the slow build characteristics.

I'd say other ones, clearly it will be very nice to get LUMIGAN X approved. There, of course, you've got a switch effect. So what is the incremental affect is what you have to think about. You have to also think about the incremental affect of Lidocaine on JUVEDERM. In my remarks, I've said that product has done very well in Europe and Canada. I gave you a long list of countries where it's being launched.

So when you kind of stand back from that, then you can say there is another corollary will be POSURDEX, where the initial sales will be quite modest. I've stated several times that in some ways, the results being published of the III-B trial are as important as the actual approval of POSURDEX. So people see what are the economic benefits of POSURDEX and improving lines of vision in combination primarily with Lucentis and other products.

So when you think about revenue build. The good news is that the ones we've got approved already are the key ones: LATISSE, Axon is doing quite well. That was clearly a launch back in October. And the one I haven't mentioned is the Gel 410 implant which again is an incremental opportunity where you have to think about what does they add to the round silicon gel implants, both in terms of market expansion but also it will be a product that is premium priced to the round gels.

And what you don't see in our sales numbers are the benefits from approvals in Japan. BOTOX just approved their launching shortly. That will show up in the other revenue line. And later in the year, we should also see the approval of LUMIGAN for our partners Senju in Japan. And again that will show up in the other revenue line.

Peter Bye - Jeffries & Company

Great. Just two quick ones if you don't mind. Just on the Gel 410. I might have missed it earlier, or just overall subsidy, the program for the FDA, the follow-up study, post-approval study, I think February is the date that had to be concluded, right? In mid-February some time around, is that fully enrolled?

David E.I. Pyott

Now if you're talking about the follow-up study that has actually nothing to do with the 410-PMA application at all. I am not sure if Scott can really give you anymore color on the 410; kind of, is there anything you could say there Scott?

Scott Whitcup, M.D.

Yeah, in the 410, we continued to have, I would say a good interactive review with the agency. But as with the initial silicon breast implant approval, it has a complex dataset and difficult to predict.

Peter Bye - Jeffries & Company

Sure. I know they are not directly related. I was just more saying maybe perhaps it was the characteristic to get the value. I mean, can you say about the post-approval study, the enrolment of that, are you pretty much lining that down?

David E.I. Pyott

No, that's still enrolling and going in a very good speed. And a lot of emphasis is placed upon that internally. And we're fine.

Peter Bye - Jeffries & Company

Okay, great. Thanks guys.

Jim Hindman

Marry, and we have time for one more question.


Thank you. Your final question comes from Corey Davis with Natexis.

Corey David - Natexis Bleichroeder

Thanks very much. And the first question or two is about 2010. And David you stated in your opening remarks, basically repeating what you guys said a quarter ago that you hope to return to mid to high teens EPS growth. But you didn't attach your timeframe to it. So, how committed are you to getting there in 2010 I guess is the question?

David E.I. Pyott

Well, I'm hoping that every President, Prime Minister and Treasury, Secretary around the world is really stimulating their economies, because of course, if we knew the answer to the world's economy in 2010, then I'd probably working in their own job.

Our views are, first of all, we're going to do with, deal with 2009. We're clearly being cautious as we think about 2010 from an economic environment point of view. And then I will say while we don't get paid for managing the economy. There is others who I mentioned that get paid for that job. Our job is to manage the company. And our job therefore is to market our products. I am very proud of the fact that we've gained market share in many of our businesses.

If you look at breast prosthetics in the U.S. we gained share loss year. We gained share in dermal fillers both in the U.S. and around the world. And in terms of share losses that I commented on, very modest when one thinks how hard it is to maintain share in BOTOX when you have 80 something percent. And we now have really three competitors XUS, Dysport, Zeomin and the Chinatoxin and a very little share loss indeed. And as I remarked on LAP-BAND again very modest share loss.

So, we want manage our businesses properly in the market and truly a huge emphasis on R&D to make sure that we continued to be productive as we have been highly productive in '08 and a lot of things on the dockyard for 2009. So, it's all about pipeline in the long-term.

Corey David - Natexis Bleichroeder

Okay, fair enough. And then last question would just be and I really don't mean to be too ticky-tack about this, but you did have a lot of onetime items that were excluded this quarter. My count 16 footnotes and except for the restructuring charges that you just announced, are these really true onetime line items that won't be repeated? The one that stands out to me is the 10 million legal fees for the DOJ Subpoena and isn't that kind of thing just the real cost of doing business in this industry?

Jeffrey Edwards

Yeah we view the one... we have a very specific policy here a the company on what qualifies and what doesn't. All of these obviously qualify in a review, but our Board of Directors on a regular basis.

With respect to the DOJ cost, we call that out with you earlier last year and told you at that point in time that this would continue to be called out as a onetime item. Our view is this is a complete one timer. You really don't want to be going through this again Corey. So that one and specifically or that one specifically, a clear one timer from our point of view and a very disciplined policy in place to ensure that we managed this process appropriately.

Corey David - Natexis Bleichroeder

Fair enough. Thanks guys.

Jim Hindman

Thanks. We'd like to thank you for your participation today. If you have any further questions Joann Bradley, Emil Schultz and I will be available immediately following the call. Joann will now take five minutes to give you market share data.

Joann Bradley

Thank you, Jim. The following market share data we are providing is Allergan's good faith estimates based upon the best available resources for data such as IMS, as well as Allergan's internal estimates. The market share and growth rate information is a moving annual total for trailing 12 months as of the end of December 2008.

The market for ophthalmics is approximately $12.5 billion growing at a rate of 9% and Allergan's market share is 16%. The market for glaucoma approximates $4.9 billion, growing at a rate of 8% and Allergan's market share approximates 18%. The market for ocular allergy approximates 1.1 billion, growing at a rate of 2% and Allergan's market share approximates 5%.

The plain ocular anti-infective market is roughly 1.1 billion, growing at a rate of 4%, and Allergan's share is 13%. The market for ophthalmic non-steroidal anti-inflammatory is about 390 million, growing at a rate of 13%, and Allergan's market share is 35%.

The artificial tears market inclusive of ointments is approximately 1.2 billion, growing at a rate of 10% and Allergan's share is 22%. The U.S. topical market to for acne and psoriasis is roughly 1.8 billion, with an annual growth rate of about 2% and Allergan's market share is around 6%.

The top ten markets for neuromodulators are roughly 1.3 billion, growing at a rate of around 11% and BOTOX has approximately a 91% market share. The worldwide market for neuromodulators is roughly $1.6 billion, growing at a rate of roughly 18% and BOTOX has approximately an 83% market share.

The worldwide market for facial filler substance aesthetics products is roughly 730 million, growing at a rate of roughly 17%, and Allergan has approximately a 31% market share. The U.S. market for facial filler substance aesthetics product is roughly 330 million.

The worldwide breast aesthetics market, including aesthetic and reconstructive is roughly 800 million, growing at a rate of roughly 13%, and Allergan has approximately a 39% market share.

The U.S breast aesthetics market is roughly 390 million and Allergan has between 45 and 50% market share. And the worldwide bariatric surgery markets for the band and balloon segments only is roughly 370 million, growing at a rate of roughly 30 to 35%, and Allergan has approximately a 75 to 80% market share.

And that concludes our call today. Thank you very much.

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