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SECOND QUARTER 2017

EARNINGS CONFERENCE CALL

Focused, Sustainable Growth

Pharma Leader

SECOND QUARTER 2017 EARNINGS CONFERENCE CALL Focused, Sustainable Growth Pharma Leader
SECOND QUARTER 2017 EARNINGS CONFERENCE CALL Focused, Sustainable Growth Pharma Leader

ALLERGAN CAUTIONARY STATEMENTS

Forward Looking Statements This communication includes statements that refer to estimated or anticipated future events and are forward-looking statements. We have based our forward-looking statements on management’s beliefs and assumptions based on information available to our management at the time these statements are made. Such forward-looking statements reflect our current perspective of our business, future performance, existing trends and information as of the date of this filing. These include, but are not limited to, our beliefs about future revenue and expense levels and growth rates, prospects related to our strategic initiatives and business strategies, including the integration of, and synergies associated with, strategic acquisitions, express or implied assumptions about government regulatory action or inaction, anticipated product approvals and launches, business initiatives and product development activities, assessments related to clinical trial results, product performance and competitive environment, and anticipated financial performance. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “intend,” “could,” “would,” “should,” “estimate,” “continue,” or “pursue,” or the negative or other variations thereof or comparable terminology, are intended to identify forward-looking statements. The statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. We caution the reader that these statements are based on certain assumptions, risks and uncertainties, many of which are beyond our control. In addition, certain important factors may affect our actual operating results and could cause such results to differ materially from those expressed or implied by forward-looking statements. These factors include, among others the inherent uncertainty associated with financial projections; the anticipated size of the markets and continued demand for Allergan’s existing products; Allergan’s ability to successfully develop and commercialize new products; Allergan’s ability to conform to regulatory standards and receive requisite regulatory approvals; availability of raw materials and other key ingredients; uncertainty and costs of legal actions and government investigations; the inherent uncertainty associated with financial projections; fluctuations in Allergan’s operating results and financial condition, particularly given our manufacturing and sales of branded products; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs, and adverse tax consequences; expectations regarding contingent payments, including regarding litigation and related liabilities, purchase price adjustment or transaction consideration payments; the results of the ongoing business following the completion of the divestiture of Allergan’s generics business to Teva; the adverse impact of substantial debt and other financial obligations on the ability to fulfill and/or refinance debt obligations; risks associated with relationships with employees, vendors or key customers as a result of acquisitions of businesses, technologies or products; our compliance with federal and state healthcare laws, including laws related to fraud, abuse, privacy security and others; generic product competition with our branded products; uncertainty associated with the development of commercially successful branded pharmaceutical products; costs and efforts to defend or enforce technology rights, patents or other intellectual property; expiration patents on our branded products and the potential for increased competition from generic manufacturers; competition between branded and generic products; Allergan’s ability to obtain and afford third-party licenses and proprietary technology we need; Allergan’s potential infringement of others’ proprietary rights; our dependency on third-party service providers and third-party manufacturers and suppliers that in some cases may be the only source of finished products or raw materials that we need; Allergan’s competition with certain of our significant customers; the impact of our returns, allowance and chargeback policies on our future revenue; successful compliance with governmental regulations applicable to Allergan’s and Allergan’s respective third party providers’ facilities, products and/or businesses; the difficulty of predicting the timing or outcome of product development efforts and regulatory agency approvals or actions, if any; Allergan’s vulnerability to and ability to defend against product liability claims and obtain sufficient or any product liability insurance; Allergan’s ability to retain qualified employees and key personnel; the effect of intangible assets and resulting impairment testing and impairment charges on our financial condition; Allergan’s ability to obtain additional debt or raise additional equity on terms that are favorable to Allergan; difficulties or delays in manufacturing; our ability to manage environmental liabilities; global economic conditions; Allergan’s ability to continue foreign operations in countries that have deteriorating political or diplomatic relationships with the United States; Allergan’s ability to continue to maintain global operations and the exposure to the risks and challenges associated with conducting business internationally; risks associated with tax liabilities, or changes in U.S. federal or international tax laws to which we are subject, including the risk that the Internal Revenue Service disagrees that Allergan is a foreign corporation for U.S. federal tax purposes; risks of fluctuations in foreign currency exchange rates; risks associated with cyber-security and vulnerability of our information and employee, customer and business information that Allergan stores digitally; Allergan’s ability to maintain internal control over financial reporting; changes in the laws and regulations, affecting among other things, availability, pricing and reimbursement of pharmaceutical products; the highly competitive nature of the pharmaceutical industry; Allergan’s ability to successfully navigate consolidation of our distribution network and concentration of our customer base; the difficulty of predicting the timing or outcome of pending or future litigation or government investigations; developments regarding products once they have reached the market; risks related to Allergan’s incorporation in Ireland, such as changes in Irish law and such other risks and other uncertainties detailed in Allergan’s periodic public filings with the Securities and Exchange Commission, including but not limited to Allergan’s Annual Report on Form 10-K for the year ended December 31, 2016 and Quarterly Report on Form 10- Q for the quarter ended March 31, 2017; and from time to time in Allergan’s other investor communications. Except as expressly required by law, Allergan disclaims any intent or obligation to update or revise these forward-looking statements.

NonGAAP Financial Measures This document contains nonGAAP financial measures. The Appendix hereto presents reconciliations of certain nonGAAP financial measures to the most directly comparable GAAP measures. The nonGAAP measures include non-GAAP performance net income, non-GAAP performance net income per share, adjusted EBITDA, non-GAAP operating income and other non-GAAP financial statement line items.

The Company believes that its non-GAAP measures provide useful information to investors because these are the financial measures used by our management team to evaluate our operating performance, make day to day operating decisions, prepare internal forecasts, communicate external forward looking guidance to investors, compensate management and allocate the Company’s resources. We believe this presentation also increases comparability of period to period results.

The Company’s determination of significant charges or credits may not be comparable to similar measures used by other companies and may vary from period to period. The Company uses both GAAP financial measures and the disclosed non-GAAP adjusted financial measures internally. These non-GAAP adjusted financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

ALLERGAN CAUTIONARY STATEMENTS Forward Looking Statements This communication includes statements that refer to estimated or anticipated

2

AGENDA

  • 1 Q2 2017 Highlights Brent Saunders, Chairman & CEO

  • 2 Commercial Highlights Bill Meury, Chief Commercial Officer

  • 3 R&D Update

David Nicholson, Chief R&D Officer

  • 4 Q2 2017 Financial Results

AGENDA Q2 2017 Highlights Brent Saunders, Chairman & CEO 2 Commercial Highlights Bill Meury, Chief Commercial

Tessa Hilado, Chief Financial Officer

  • 5 Q&A

3

BRENT

SAUNDERS

Chairman & CEO

BRENT SAUNDERS Chairman & CEO
BRENT SAUNDERS Chairman & CEO

2017 IS A PIVOTAL YEAR 1 ST HALF ON TRACK


EFFECTIVE EXECUTION AT THE CORE OF A PIVOTAL YEAR
EFFECTIVE
EXECUTION
AT THE CORE OF
A PIVOTAL YEAR

Continue to execute on strong revenue growth



Integration well on track for LifeCell and Zeltiq



Managing expenses in light of LOE headwinds



Continue to advance the 6 Stars and prioritize our pipeline investments



Raising revenue guidance to $15,850-$16,050M from $15,800-$16,000M and performance net income per

share guidance to $16.05-$16.45 from $15.85-$16.35

2017 IS A PIVOTAL YEAR – 1 HALF ON TRACK  EFFECTIVE EXECUTION AT THE CORE

Net revenue, net revenue growth and performance net income per share refer to non-GAAP

5

Q2 2017 RESULTS STRONG EXECUTION

Growth Pipeline Strong Execution Margins Capital Allocation
Growth
Pipeline
Strong
Execution
Margins
Capital
Allocation

Strong Net Revenues and Performance Net Income per Share Growth

Further Advanced Pipeline and 6 Stars

Net Revenues = $4.0B

+9% growth

Completed 8 major pharma & device

approvals year to date

5 of 6 Stars in Phase 3

Performance Net Income

per Share of $4.02

+20% growth

Margins Remained Strong

Gross Margin of 87.3% *

Deploying Capital Efficiently

Share repurchase remains on track to be settled in Q3

Operating Margin of 47.1%**

Total net debt reduced by $1.5B in Q2’17

Q2 2017 RESULTS – STRONG EXECUTION Growth Pipeline Strong Execution Margins Capital Allocation Strong Net Revenues

*

Gross margin in the three months ended June 30, 2017 includes a reimbursement of $15M for costs previously expensed through cost of sales.

** Includes unfavorable transactional Fx impact of $71M

Net revenue growth, gross margin, operating margin and performance net income per share refer to non-GAAP

6

BILL

MEURY

Chief Commercial Officer

BILL MEURY Chief Commercial Officer
BILL MEURY Chief Commercial Officer

Q2 COMMERCIAL EXECUTION CONTINUES TO FOCUS ON

OUR KEY PRIORITIES

Q2 COMMERCIAL EXECUTION CONTINUES TO FOCUS ON OUR KEY PRIORITIES Fueling Medical Aesthetics Growth Keeping the

Fueling Medical

Aesthetics

Growth

Q2 COMMERCIAL EXECUTION CONTINUES TO FOCUS ON OUR KEY PRIORITIES Fueling Medical Aesthetics Growth Keeping the

Keeping the

Focus on

Eye Care

Q2 COMMERCIAL EXECUTION CONTINUES TO FOCUS ON OUR KEY PRIORITIES Fueling Medical Aesthetics Growth Keeping the

Building a CNS

flagship with

Vraylar

Q2 COMMERCIAL EXECUTION CONTINUES TO FOCUS ON OUR KEY PRIORITIES Fueling Medical Aesthetics Growth Keeping the

Strengthening

IBS

Leadership

Q2 COMMERCIAL EXECUTION CONTINUES TO FOCUS ON OUR KEY PRIORITIES Fueling Medical Aesthetics Growth Keeping the

Growing the

International

Business

MA = Medical Aesthetics; EC = Eye Care, CNS = Central Nervous System, GI = Gastrointestinal; INTL = International

Q2 COMMERCIAL EXECUTION CONTINUES TO FOCUS ON OUR KEY PRIORITIES Fueling Medical Aesthetics Growth Keeping the

8

STRONG, DURABLE GROWTH PARTIALLY OFFSET BY

DECLINE FROM PRODUCTS LOSING EXCLUSIVITY

($ millions)

8 4 0.3 0.5 10 9 12 11 +$322M 19 7 13 36 Y/Y 41 48
8
4
0.3
0.5
10
9
12
11
+$322M
19
7
13
36
Y/Y
41
48
4,007
108
9% 1
144
21.0
43
-7%
104
18%
18%
17%
-9%
15%
12%
12%
12%
-24%
6%
14%
221
-29%
3,685
5%
-67%
0.1%
0.3%
STRONG, DURABLE GROWTH PARTIALLY OFFSET BY DECLINE FROM PRODUCTS LOSING EXCLUSIVITY ($ millions) 8 4 0.3

Q2’16

STRONG, DURABLE GROWTH PARTIALLY OFFSET BY DECLINE FROM PRODUCTS LOSING EXCLUSIVITY ($ millions) 8 4 0.3

Rev

STRONG, DURABLE GROWTH PARTIALLY OFFSET BY DECLINE FROM PRODUCTS LOSING EXCLUSIVITY ($ millions) 8 4 0.3
STRONG, DURABLE GROWTH PARTIALLY OFFSET BY DECLINE FROM PRODUCTS LOSING EXCLUSIVITY ($ millions) 8 4 0.3
STRONG, DURABLE GROWTH PARTIALLY OFFSET BY DECLINE FROM PRODUCTS LOSING EXCLUSIVITY ($ millions) 8 4 0.3
STRONG, DURABLE GROWTH PARTIALLY OFFSET BY DECLINE FROM PRODUCTS LOSING EXCLUSIVITY ($ millions) 8 4 0.3

Q2’17

Rev

  • 1. 8.7% growth excluding FX, Namenda IR and including ($24M) of revenues in Q2,16 related to the portion of Allergan product revenues sold by our former Anda Distribution Business which is reported in discontinued operations

  • 2. Reflects 2 months from Coolsculpting

  • 3. Viberzi (Q2’17 revenues $41M), Vraylar (Q2’17 revenues $66M), Kybella (Q2’17 revenues $15M), Namzaric (Q2’17 revenues $33M),XEN (Q2’17 revenues $6M), and Rhofade (Q2’17 revenues $5M)

  • 4. Juvederm Collection refers to the sales of all fillers including Juvederm and Voluma

  • 5. Represents all other products with less than $200M annual revenues, approximately <20% of total Q2

STRONG, DURABLE GROWTH PARTIALLY OFFSET BY DECLINE FROM PRODUCTS LOSING EXCLUSIVITY ($ millions) 8 4 0.3

Net revenue and revenue growth refer to non-GAAP

9

MEDICAL AESTHETICS: STRONG, SUSTAINABLE GROWTH ACROSS 3 PILLARS

Facial

Aesthetics

Plastics / Regenerative

Body

Contouring

+15%
+15%

Q2’17 Growth Y/Y

+8% +40%
+8%
+40%

Q2’17 Pro-forma Growth Y/Y

Q2’17 Pro-forma Growth Y/Y

Botox and Juvederm lines show strong growth across all geographies Juvederm Collection share at all time high of ~52% in US Kybellamarket development and co-positioning with CoolSculpting

Alloderm continues to exceed expectations driven by new pre-pec procedure

Sales for breast implants increased versus prior year with launch of Inspira

Business is accelerating System placements are at a high Consumable demand is very strong

MEDICAL AESTHETICS: STRONG, SUSTAINABLE GROWTH ACROSS 3 PILLARS Facial Aesthetics Plastics / Regenerative Body Contouring +15%
MEDICAL AESTHETICS: STRONG, SUSTAINABLE GROWTH ACROSS 3 PILLARS Facial Aesthetics Plastics / Regenerative Body Contouring +15%
MEDICAL AESTHETICS: STRONG, SUSTAINABLE GROWTH ACROSS 3 PILLARS Facial Aesthetics Plastics / Regenerative Body Contouring +15%
MEDICAL AESTHETICS: STRONG, SUSTAINABLE GROWTH ACROSS 3 PILLARS Facial Aesthetics Plastics / Regenerative Body Contouring +15%

Pro-forma growth rates in Q2 versus prior year are worldwide and exclude Fx

MEDICAL AESTHETICS: STRONG, SUSTAINABLE GROWTH ACROSS 3 PILLARS Facial Aesthetics Plastics / Regenerative Body Contouring +15%

10

MEDICAL AESTHETICS IS A BIG AND LONG TERM OPPORTUNITY

FURTHER PENETRATION AND EXPANSION POTENTIAL

Summary

US Consumer penetration is still low, between 5% and 10% across our business

The market has potential to expand four to five fold,

totaling ~30MM Americans

Growth from men outpacing women by 2:1 margin

Millennial growth >30% and represents the single largest consumer segment by potential

Significant Opportunity ~30MM Americans unhappy with their appearance Segments significantly under-penetrated Not Facial considering 14% Aesthetics
Significant Opportunity
~30MM Americans unhappy with their
appearance
Segments significantly
under-penetrated
Not
Facial
considering
14%
Aesthetics
aesthetic
procedure
Consumer Penetration
~5%
66%
20%
Plastics /
Regenerative
Body
Contouring
User of
Aesthetic
procedures
Will consider
an aesthetic
procedure
Consumer Penetration
Consumer Penetration
~10%
~5%
Millennial Movement (Procedures, 000) ~31% 1,101 843 2015 2016
Millennial Movement (Procedures, 000)
~31%
1,101
843
2015
2016
Male Movement (Procedures, 000) ~14% 672 649 594 560 482 370 313 2010 2011 2012 2013
Male Movement (Procedures, 000)
~14%
672
649
594
560
482
370
313
2010
2011
2012
2013
2014
2015
2016
11
MEDICAL AESTHETICS IS A BIG AND LONG TERM OPPORTUNITY FURTHER PENETRATION AND EXPANSION POTENTIAL Summary US

Source: 2017 FI Market data source: 2017 Pan-Aesthetic Study; Males and millennials data source: Cosmetic Surgery National Data Bank Statistics, ASAPS, 2007-2016.

TMOTs Share

EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA

TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume

Restasis Volume Holds

Restasis Q2 volume demand stable vs prior year o Revenues impacted by trade buying patterns

Allergan maintains promotional leadership and strong formulary coverage o MDPF share of total volume at ~10%

\
\

Growth Continues to Accelerate

Strong, double-digit growth continues +15% YoY in Q2 excluding Fx Primary source of growth is anti-VEGF failures

NET REVENUES IN 2 YEARS $80 $75 $70 $575M in global net revenues over 2 years
NET REVENUES IN 2 YEARS
$80
$75
$70
$575M in global
net revenues
over 2 years
$65
$60
$55
$50
$45
($Millions)

Revenues and revenue growth refers to non-GAAP

DRY EYE MARKET UNIT SHARE (52 WEEKS)

Restasis (total); 81%
Restasis (total); 81%

Competitor; 19%

Competitor; 19%
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume

100%

80%

60%

40%

20%

0%

TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume
TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume

Source: IMS RAPID, All Channels, *Units is 1 Month of Therapy based on Extended Units. QuintilesIMS lost visibility to a mail order supplier and restated historical data starting July 2016 by removing data from that supplier. Current QuintilesIMS data is reduced by ~2.3% to previous QuintilesIMS Total Restasis demand volume

TMOTs Share EYE CARE: FOCUS ON MAINTAINING LEADERSHIP IN DRY EYE WHILE EXPANDING RETINA Restasis Volume

12

CNS LAUNCHES: VRAYLAR & NAMZARIC CONTINUE TO BE THE FOCUS

CNS LAUNCHES: VRAYLAR & NAMZARIC CONTINUE TO BE THE FOCUS Exceeding Expectations • Demand growth ahead

Exceeding Expectations

Demand growth ahead of oral atypical antipsychotic market and competitor brands (Rexulti and Latuda)

Vraylar’s managed care coverage continues to build - covered on all top 10 commercial plans

Short-term growth catalyst is psychiatry Offers long-term revenue stream built on multi-indication strategy

VRAYLAR WEEKLY TRX
VRAYLAR WEEKLY TRX

Source: IMS weekly data Revenue growth refers to non-GAAP

CNS LAUNCHES: VRAYLAR & NAMZARIC CONTINUE TO BE THE FOCUS Exceeding Expectations • Demand growth ahead

Launch Trajectory Remains Strong

Still on track to exit year at 25%-30% of Namenda franchise Formulary access to remain strong through 2018 Namzaric demand: 46% is coming from Aricept monotherapy, 31% from XR, and 23% from IR and other AChEIs

NAMZARIC NRX Days of Therapy (DOT) Growth

CNS LAUNCHES: VRAYLAR & NAMZARIC CONTINUE TO BE THE FOCUS Exceeding Expectations • Demand growth ahead

13

GI: LINZESS & VIBERZI DEMONSTRATE STRENGTH IN IBS

GI: LINZESS & VIBERZI DEMONSTRATE STRENGTH IN IBS Linzess Demand Remains Strong After 5 Years •

Linzess Demand Remains Strong After 5 Years

~19% increase in volume demand

72 mcg is expanding use beyond 145 mcg and 290 mcg:

~17% of all new Linzess patients are starting on 72mcg

Key to growth includes:

Maintaining promotional leadership Preserving formulary coverage

30,000 LINZESS TRX 28,700 27,400 26,100 24,800 23,500 22,200 20,900 19,600 18,300 17,000
30,000
LINZESS TRX
28,700
27,400
26,100
24,800
23,500
22,200
20,900
19,600
18,300
17,000
GI: LINZESS & VIBERZI DEMONSTRATE STRENGTH IN IBS Linzess Demand Remains Strong After 5 Years •

Source: IMS weekly data

GI: LINZESS & VIBERZI DEMONSTRATE STRENGTH IN IBS Linzess Demand Remains Strong After 5 Years •
GI: LINZESS & VIBERZI DEMONSTRATE STRENGTH IN IBS Linzess Demand Remains Strong After 5 Years •

Demand Has Stabilized

Moderate impact to demand as health care professionals were educated on label change Primary care has been the strongest growth segment Focus is on GI specialists and expanding beyond severe segment Promotional levels (including DTC) and formulary coverage are on track

VIBERZI TRX SINCE LAUNCH

6,000 5,600 FDA Label Change 5,200 4,800 4,400 4,000 3,600 3,200 2,800 2,400 2,000
6,000
5,600
FDA Label Change
5,200
4,800
4,400
4,000
3,600
3,200
2,800
2,400
2,000

14

INTERNATIONAL BUSINESS CONTINUES

STRONG GROWTH

Europe +10% LACAN APAC+ Canada & LATAM MEA +16% +20%
Europe
+10%
LACAN
APAC+
Canada & LATAM
MEA
+16%
+20%

International Sales +16.2% (excluding Fx)

Growth in Every Region Fastest growing countries:

APAC+MEA: China +61%

LACAN: Brazil +18%, Canada +14%

Europe: Sweden +27%; Spain +25%

Medical Aesthetics and Botox Tx Key Drivers

of International Growth

Juvederm Collection of fillers +30% YoY Botox Cx +16% YoY

Botox Tx +14% YoY

INTERNATIONAL BUSINESS CONTINUES STRONG GROWTH Europe +10% LACAN APAC+ Canada & LATAM MEA +16% +20% International

Growth rates in chart reflect Q2 2017 growth vs prior year excluding FX impact LACAN: Latin America and Canada APAC / MEA: Asia Pacific / Middle East and Africa

Revenue growth refer to non-GAAP

15

DAVID

NICHOLSON

Chief R&D Officer

DAVID NICHOLSON Chief R&D Officer
DAVID NICHOLSON Chief R&D Officer

DEVELOPMENT PROGRESS OF 6 STAR PROGRAMS

Ubrogepant

Acute Migraine

Atogepant

Migraine Prophylaxis

Rapastinel

MDD

ESMYA

Uterine Fibroids

Abicipar

AMD

Cenicriviroc

NASH

Recruitment on two Phase 3 trials in US progressing well Topline results expected 1H 2018 Phase 3 program agreed with FDA*

Phase 2b trial in US on track. Topline results 1H 2018

Phase 3 trials on track Topline results from short-term studies expected 2019

NDA submission for treatment of abnormal uterine fibroid bleeding on track 2H 2017 Approval expected 1H/2H 2018

Two Phase 3 trials underway. Topline results 2H 2018

Phase 3 initiated. Phase 2 CENTAUR year 2 data on track for 2H 2017

6 STAR PROGRAMS
6
STAR
PROGRAMS

Relamorelin

Diabetic Gastroparesis

Initiate Phase 3 2H 2017 Topline data expected 2020

DEVELOPMENT PROGRESS OF 6 STAR PROGRAMS Ubrogepant Acute Migraine Atogepant Migraine Prophylaxis Rapastinel MDD ESMYA Uterine

* Two pivotal studies, UBR-MD-01/02: N=1,650 patients per study, randomized (1:1:1) to 3 treatment groups. ‘01: placebo, 50mg, 100mg; ‘02: placebo, 25mg, 50mg. Long-term safety study, UBR-MD-04: N=1,250 patients, extension study for patients in ‘01/’02 pivotals. Additional N=400 patient study randomized (1:1), placebo: 100mg, treated for two months with at least 15 treatments per month.

17

TESSA

HILADO

Chief Financial Officer

TESSA HILADO Chief Financial Officer
TESSA HILADO Chief Financial Officer

Q2 2017 FINANCIAL PERFORMANCE

$ millions, except per

share amount

(Non GAAP)*

Q2 2017

Q2 2016

Y/Y

Net Revenue

Gross Margin %

R&D Expense

S&M

G&A

4,007

3,685

8.8%

87.3%

88.0%

-0.7%

394

345

14.2%

9.8%

9.4%

0.4%

886

829

6.9%

331

210

57.1%

1,217

1,039

17.1%

30.4%

28.2%

30.4% 28.2% 2.2%

2.2%

1,887

1,858

1.6%

47.1%

50.4%

-3.3%

(237)

(354)

-33.0%

$4.02

$3.35

20.0%

13.1%

7.1%

6.0%

1,629

1,380

18.1%

% of Revenue

SG&A

% of Revenue

Operating Income

Op. Margin %

Net Interest

(Expense)

/Other

Performance Net

Income per

Share

Tax Rate

Cash Flow From

Ops

Strong revenue growth of 9% 1 versus prior year

Growth mainly driven by the addition of Regenerative Medicine products and Coolsculpting and continued double-digit growth of key brands and new product launches

Offset by Asacol HD and Minastrin loss of exclusivity, continued decline in Namenda XR and declines in Restasis and Aczone

Margins remained strong

Maintained strong gross margin; negative impact from product mix offset by royalty buy-outs and a reimbursement of $15M for costs previously expensed through cost of sales

Operating spend managed tightly despite FX headwinds:

> Additional expenses for Regenerative Medicine products and Coolsculpting and promotional spend on key brands offset by lower selling costs in General Medicines segment

> Higher G&A mainly due to unfavorable transactional Fx impact year over year. Excluding this impact, G&A increased

~2%

Lower net interest expense versus prior year mainly attributed to debt reduction and Teva dividend

Paid down net debt of $9.4B since Q2 2016

Strong cash flow from operations of $1.63B

~$1.60B adjusted cash flow excluding R&D asset acquisitions, restructuring charges and other one-time payments and receipts

Q2 2017 FINANCIAL PERFORMANCE $ millions, except per share amount (Non GAAP)* Q2 2017 Q2 2016

* All metrics are as a % of Net Revenues. Please refer to the GAAP to non-GAAP tables in the appendix for a reconciliation of our non-GAAP results. 1. 8.7% excluding Fx, Namenda IR, and including ($24) M of revenues in Q2 2016 related to the portion of Allergan product revenues sold by our former Anda Distribution Business which is reported in discontinued operations.

19

Q2 2017 PERFORMANCE BY SEGMENT

1,715

($M) 1,489 1,449 1,428 15.2% -1.5% (Ex Fx) 16.2% 757 859 13.4% (10) 6 Q2'16 Q2'17
($M)
1,489
1,449
1,428
15.2%
-1.5%
(Ex Fx)
16.2%
757
859
13.4%
(10)
6
Q2'16
Q2'17
Q2'16
Q2'17
Q2'16
Q2'17
Q2'16
Q2'17
US Specialized Therapeutics
US General Medicine
International
Corporate
Contribution
72.5%
68.8%
59.2%
62.7%
53.4%
54.3%
N/A
Margin

US Specialized Therapeutics revenues grew 15% driven by new acquisitions and growth in key brands offset by reductions in Restasis and Aczone

Contribution margin decline attributed to lower margins from LifeCell and Zeltiq acquisitions, as well as increase in promotional spending on key brands and new products Rhofade and Xen

US General Medicine revenues decline due to Asacol HD and Minastrin loss of exclusivity, coupled with Namenda XR decline offset by strong growth in Vraylar, Linzess and Lo Loestrin

Contribution margin improvement versus prior year due to royalty buy back and lower promotional and selling expenses

International segment continues to experience double digit revenue growth and improving contribution margin

Contribution margin improved due to sales growth coupled with favorable mix

Q2 2017 PERFORMANCE BY SEGMENT 1,715 ($M) 1,489 1,449 1,428 15.2% -1.5% (Ex Fx) 16.2% 757

Revenue growth and contribution margins refer to non-GAAP

20

CAPITALIZATION AS OF JUNE 30TH 2017

Capitalization ($B)

Q2 2017

Cash and Marketable Securities 1

$5.8

Total Debt 2

$30.2

Debt to Adjusted EBITDA

4.0x

Net Debt to Adjusted EBITDA

3.2x

Cash and Marketable Securities impacted by recent deals 3

Total debt reduced by $1.5B in Q2 2017 and expected to decrease by an additional ~$3.8B in contractual maturities in 2018

  • Paid down YTD net debt of $2.6B

    • 1. Includes Teva shares of ~$3.3B. Teva holdings lock-up expiration August 3rd

CAPITALIZATION AS OF JUNE 30TH 2017 Capitalization ($B) Q2 2017 Cash and Marketable Securities $5.8 Total
  • 2. Includes $30.3B in Senior Notes

  • 3. Cash paid for deals in Q2 2017 was ~$2.4B

EBITDA refers to non-GAAP

21

2017 GUIDANCE UPDATE

In millions, except for share amounts

 

Previous Guidance

Revised Guidance

Assumptions

   

Assumes Namenda XR generic entry in Q1 2018

Total Reported Net Revenue

$15,800 $16,000

$15,850 $16,050

Assumes Fx impact negligible 1

 

Other assumptions remain unchanged 2

Non-GAAP Gross Margin

86.0% 87.0%

86.5% 87.0%

Reflects 1H better than expected gross margin

Non-GAAP SG&A

$4,450 $4,550

$4,500 $4,600

Increase in G&A reflects unfavorable

transactional Fx

Non-GAAP R&D Spend

~$1,600

~$1,600

No Change

Non-GAAP Tax Rate %

~13.0%

~13.0%

No Change

Non-GAAP Net Interest Expense/Other

~$1,075

~$1,000

Assumes Teva dividend in Q3 and lower net interest expense 3

Non-GAAP Average Share Count

~356M

~356M

No change

 

Subject to ASR settlement in Q3

Non-GAAP Performance Net Income per Share

$15.85 $16.35

$16.05 $16.45

2017 GUIDANCE UPDATE In millions, except for share amounts Previous Guidance Revised Guidance Assumptions • Assumes
  • 1. Prior guidance included ~$100M of Fx headwind

  • 2. Stable Restasis, no Estrace Gx assumed for the year

  • 3. Reflects Teva announcement of reduced dividend by 75%

22

23
23
23

23

APPENDIX

APPENDIX 24
APPENDIX 24

24

CONTINUE TO ADVANCE THE PIPELINE …

2017 AND KEY 2018 HIGHLIGHTS

THERAPEUTIC AREAS APPROVALS SUBMISSIONS DEVELOPMENT MILESTONES MEDICAL Volbella lips  Volift  RORyt agonist  
THERAPEUTIC AREAS
APPROVALS
SUBMISSIONS
DEVELOPMENT MILESTONES
MEDICAL
Volbella lips
Volift
RORyt agonist
Sarecycline
Japan
Japan
Sarecycline
AESTHETICS/
Rhofade
Acne 2H
Psoriasis
Entry Ph 2b 2H
Ph 3 topline 1H
Rosacea
DERMATOLOGY
Botox CFL
Sarecycline
China 2H
Acne 2H
Abicipar
Pilo/Oxy
Bimatoprost SR Ph 3
enrollment completion
DME
Ph 2b topline 1H
Restaysis
MDPF
Omega 3 OTC
2H
Ph 3 Entry
EYE CARE
True Tear
EU dry eye
Ganfort
Dry Eye 2H EU
1H
Dry Eye
1H
EU 1H
Abicipar AMD
Bimatoprost ring
Ph 3 topline 2H
Entry Ph 3 2H
Brimo DDS
Atrophic AMD
Ph 2 topline 2H
CVC
Ph 3 Initiated
Linzess Delayed Release
IBS-C Entry Phase 3 2H
Linzess
GI
72mcg
CVC + LJN452
Relamorelin
Entry Ph 2b 1H
Start Ph 3 2H
ESMYA
ESMYA
ESMYA
Uterine fibroids
WH
Uterine fibroids
2nd Ph 3 topline results
2H
1H/2H
Muscarinic Receptor M1
and M4 Agonist
Rapastinel
Ubrogepant
Saphris
Ph 2 Suicidality
Topline Ph 3
Vraylar
Vraylar
Vraylar
Study Initiation
1H
Negative
Schizophrenia
CNS
Schizophrenia
Maintenance
Bipolar
Depression
maintenance &
Ph 1 2H ; Entry Ph 1 2H
respectively
2H
Symptoms
Maintenance
Cariprazine
Atogepant
2H
launch effective
dose
2H
Botox MDD
Ph 2 Results
Topline Ph
2b 1H
Bipolar Dep
Ph 3 Results 2H
URO, AI,
OTHER
Avycaz
Avycaz
Avycaz
HABP/VABP US
cUTI with
HABP/VABP
1H
Ph3 US
US
 Achieved YTD 2017 2018
Achieved YTD
2017
2018
CONTINUE TO ADVANCE THE PIPELINE … 2017 AND KEY 2018 HIGHLIGHTS THERAPEUTIC AREAS APPROVALS SUBMISSIONS DEVELOPMENT

25

Q2 2017 RECONCILIATION TABLES

Table 1:

Table 2:

Table 3:

Table 4:

Table 5:

Table 6:

Table 7:

Table 8:

Table 9:

Table 10:

Table 11:

Table 12:

Allergan plc’s statement of operations for the three and six months ended June 30, 2017 and 2016

Allergan plc's product revenue for the three and six months ended June 30, 2017 and 2016

Allergan plc’s Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016

Allergan plc’s Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2017 and

2016

GAAP to non-GAAP reconciliation for the three and six months ended June 30, 2017 and 2016

Reconciliation of reported net (loss) from continuing operations attributable to shareholders and diluted earnings per share to non-GAAP performance net income and performance net income per share for the three and six months ended June 30, 2017 and 2016

Reconciliation of reported net (loss) from continuing operations attributable to shareholders for the three and six months ended June 30, 2017 and 2016 to adjusted EBITDA and adjusted operating income

Net Revenues and contribution margin for US Specialized Therapeutics Segment, US General Medicine Segment, International Segment and Corporate for the three and six months ended June 30, 2017 and 2016

Net Revenues for US Specialized Therapeutics Segment for the three and six months ended June 30, 2017 and 2016

Net Revenues for US General Medicine Segment for the three and six months ended June 30, 2017 and 2016

Net Revenues for International Segment for the three and six months ended June 30, 2017 and 2016

GAAP to non-GAAP reconciliation of FY 2017 performance net income attributable to shareholders

Q2 2017 RECONCILIATION TABLES Table 1: Table 2: Table 3: Table 4: Table 5: Table 6:

26

TABLE 1:ALLERGAN PLC’S STATEMENT OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

The following presents Allergan plc s statement of operations for the three and six months ended June 30, 2017 and

2016:

Table 1

ALLERGAN PLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

Three Months Ended

Six Months Ended

June 30 June 30, 2017 2016 2017 2016 Net revenues $ 4,007.4 $ 3,684.8 $ 7,580.3
June 30
June 30,
2017
2016
2017
2016
Net revenues
$
4,007.4
$
3,684.8
$
7,580.3
$
7,084.1
Operating expenses:
Cost of sales (excludes amortization and impairment of
acquired intangibles including product rights)
550.2
441.5
1,000.6
918.9
Research and development
489.4
636.5
1,249.3
1,039.6
Selling, general and administrative
1,395.0
1,210.0
2,580.2
2,306.3
Amortization
1,757.9
1,633.1
3,493.9
3,222.8
In-process research and development impairments
703.3
268.9
1,043.3
274.9
Asset sales and impairments, net
14.0
(17.6 )
21.4
(19.3 )
Total operating expenses
4,909.8
4,172.4
9,388.7
7,743.2
Operating (loss)
(902.4 )
(487.6 )
(1,808.4 )
(659.1 )
Non-operating income (expense):
Interest income
16.6
2.5
41.9
5.4
Interest
(expense)
(277.4 )
(345.8 )
(567.1 )
(678.6 )
Other income (expense), net
(133.5 )
150.1
(2,056.3 )
150.6
Total other income (expense), net
(394.3 )
(193.2 )
(2,581.5 )
(522.6 )
(Loss) before income taxes and noncontrolling interest
(1,296.7 )
(680.8 )
(4,389.9 )
(1,181.7 )
(Benefit) for income taxes
(581.2 )
(258.2 )
(1,113.3 )
(666.9 )
Net (loss) from continuing operations, net of tax
(715.5 )
(422.6 )
(3,276.6 )
(514.8 )
(Loss) / income from discontinued operations, net of tax
(8.4 )
(77.3 )
(11.5 )
271.3
Net (loss)
(723.9 )
(499.9 )
(3,288.1 )
(243.5 )
(Income) attributable to noncontrolling interest
(2.0 )
(1.8 )
(3.0 )
(2.5 )
Net (loss) attributable to shareholders
(725.9 )
(501.7 )
(3,291.1 )
(246.0 )
Dividends on preferred shares
69.6
69.6
139.2
139.2
Net (loss) attributable to ordinary shareholders
$
(795.5 )
$
(571.3 )
$
(3,430.3 )
$
(385.2 )
TABLE 1:ALLERGAN PLC’S STATEMENT OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017

(Loss) / income per share attributable to ordinary shareholders -

basic:

Continuing operations $ (2.35 ) $ (1.25 ) $ (10.20 ) $ (1.66 ) Discontinued operations
Continuing operations
$
(2.35 )
$
(1.25 )
$
(10.20 )
$
(1.66 )
Discontinued operations
(0.02 )
(0.19 )
(0.03 )
0.69
Net (loss) per share - basic
$
(2.37 )
$
(1.44 )
$
(10.23 )
$
(0.97 )
(Loss) / income per share attributable to ordinary shareholders -
diluted:
Continuing operations
$
(2.35 )
$
(1.25 )
$
(10.20 )
$
(1.66 )
Discontinued operations
(0.02 )
(0.19 )
(0.03 )
0.69
Net (loss) per share - diluted
$
(2.37 )
$
(1.44 )
$
(10.23 )
$
(0.97 )
Dividends per ordinary share
$
0.70
$
-
$
1.40
$
-
Weighted average shares outstanding:
Basic
335.2
395.6
335.2
395.2
Diluted
335.2
395.6
335.2
395.2

27

TABLE 2: ALLERGAN PLC'S PRODUCT REVENUE FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 2: ALLERGAN PLC'S PRODUCT REVENUE FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017

28

TABLE 2 (CONT’D): ALLERGAN PLC'S PRODUCT REVENUE FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 2 (CONT’D): ALLERGAN PLC'S PRODUCT REVENUE FOR THE THREE A ND SIX MONTHS ENDED JUNE

29

TABLE 3: ALLERGAN PLC’S CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2017 AND DECEMBER 31, 2016

The following table presents Allergan plc s Condensed Consolidated Balance Sheets as of June 30,

2017 and December 31, 2016.

Table 3

ALLERGAN PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

June 30,

December 31,

 
2017 2016

2017

2017 2016

2016

 

Assets

Cash and cash equivalents

$

886.9

$

1,724.0

Marketable securities

4,939.0

11,501.5

Accounts receivable, net

2,795.9

2,531.0

Inventories

935.9

718.0

Other current assets

875.5

1,383.4

Assets held for sale

11.1

27.0

Property, plant and equipment, net

1,750.1

1,611.3

Investments and other assets

578.5

515.4

Product rights and other intangibles, net

62,369.7

62,618.6

Goodwill

Goodwill 49,592.2 46,356.1

49,592.2

Goodwill 49,592.2 46,356.1

46,356.1

 

Total assets

$

124,734.8

$

128,986.3

 
 
 
 
   
   
   
   
 
 
 

Liabilities & Equity

Current liabilities

$

4,843.3

$

5,076.8

Current and long-term debt and capital leases

30,238.3

32,768.7

Deferred income taxes and other liabilities

14,420.4

14,940.3

Total equity

75,232.8

Total equity 75,232.8 76,200.5

76,200.5

 

Total liabilities and equity

$

124,734.8

$

128,986.3

 
TABLE 3: ALLERGAN PLC’S CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2017 AND DECEMBER 31,

30

TABLE 4: ALLERGAN PLC’S CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

The following table presents Allergan plc s Condensed Consolidated Statements of Cash Flows for the three and six

months ended June 30, 2017 and 2016.

Table 4

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

TABLE 4: ALLERGAN PLC’S CONDENSED CONSOLIDATED STATEMENTS OF CAS H FLOWS FOR THE THREE AND SIX

(Unaudited; in millions)

Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Cash Flows
Three Months Ended June 30,
Six Months Ended June 30,
2017
2016
2017
2016
Cash Flows From Operating Activities:
Net (loss)
$
(723.9 )
$
(499.9 )
$
(3,288.1 )
$
(243.5 )
Reconciliation to net cash provided by operating activities:
Depreciation
39.6 34.8
81.2
76.9
Amortization
1,757.9
1,635.5
3,493.9
3,227.6
Provision for inventory reserve
24.8
57.7
48.7
116.9
Share-based compensation
85.8
89.8
148.5
188.8
Deferred income tax benefit
(766.0 )
192.1
(1,478.8 )
(327.1 )
In-process research and development impairments
703.3
268.9
1,043.3
274.9
Loss on asset sales
and
impairments, net
14.0 (17.6
)
21.4
(19.3 )
Net income impact of other-than-temporary loss
on investment in Teva securities
-
-
1,978.0
-
Amortization of inventory step up
59.9
-
87.8
42.4
Non-cash extinguishment of debt
(8.2 )
-
(8.2 )
-
Amortization of deferred financing costs
6.5
11.0
13.2
21.0
Contingent consideration adjustments,
including
accretion
(15.5 )
27.2
15.2
60.8
Other, net
(3.8 )
(17.3 )
(22.6 )
(26.4 )
Changes in assets and liabilities (net of effects
of acquisitions):
Decrease
/
(increase)
in
accounts receivable, net
(192.2 )
(352.6 )
(139.0 )
(501.2 )
Decrease
/
(increase)
in
inventories
(44.6 )
(34.7 )
(95.1 )
(183.2 )
Decrease / (increase) in prepaid expenses
and other current assets
8.0
231.0
10.5
245.4
Increase / (decrease) in accounts payable
and accrued expenses
156.2
392.7
(207.5 )
424.0
Increase / (decrease) in income and other
taxes payable
549.9
(425.4 )
673.7
(477.6 )
Increase / (decrease) in other assets and liabilities
(22.4 )
(213.4 )
(23.5 )
(267.5 )
Net cash provided by operating activities
1,629.3
1,379.8
2,352.6
2,632.9
Cash Flows From Investing Activities:
Additions
to
property, plant and equipment
(104.0 )
(97.9 )
(137.2 )
(182.8 )
Additions to product rights and other intangibles
(240.0 )
-
(586.3 )
-
Additions
to
investments
(400.0 )
-
(6,787.9 )
-
Proceeds from sale of investments and other assets
3,542.2
6.5
13,197.5
25.5
Proceeds from sales of property, plant and equipment
3.6
2.4
4.3
14.5
Acquisitions of businesses, net of cash acquired
(2,416.0 )
-
(5,290.4 )
-
Net cash provided by / (used in)
investing activities
385.8
(89.0 )
400.0
(142.8 )
Cash Flows From Financing Activities:
Proceeds from borrowings on long-term indebtedness, including
credit facility
3,023.0
-
3,023.0
900.0
Debt issuance and other financing costs
(17.5 )
-
(17.5 )
-
Payments on debt, including capital lease obligations
(4,563.3 )
(2,981.4 )
(5,579.2 )
(3,835.6 )
Proceeds from stock plans
72.1 37.7
124.7
107.3
Payments of contingent consideration and other financing
(428.8 )
(31.5 )
(505.1 )
(63.8 )
Repurchase of ordinary shares
(5.7 )
(14.1 )
(35.2 )
(67.3 )
Dividends
(306.1 )
(69.6 )
(611.9 )
(139.2 )
Net cash (used in) financing activities
(2,226.3 )
(3,058.9 )
(3,601.2 )
(3,098.6 )
Effect of currency exchange rate changes on cash
and cash equivalents
5.2 (3.2
)
11.5
2.0
Net (decrease) in cash and cash equivalents
(206.0 )
(1,771.3 )
(837.1 )
(606.5 )
Cash and cash equivalents at beginning of period
1,092.9
2,260.8
1,724.0
1,096.0
Cash and cash equivalents at end of period
$
886.9
$
489.5 $
886.9
$
489.5

31

TABLE 5: GAAP TO NON-GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2017 AND 2016

TABLE 5: GAAP TO NON-GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017

32

TABLE 5 (CONT’D): GAAP TO NON-GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 5 (CONT’D): GAAP TO NON -GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED JUNE

33

TABLE 5 (CONT’D): GAAP TO NON-GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 5 (CONT’D): GAAP TO NON -GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED JUNE

34

TABLE 5 (CONT’D): GAAP TO NON-GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 5 (CONT’D): GAAP TO NON -GAAP RECONCILIATION FOR THE THREE AND SIX MONTHS ENDED JUNE

35

TABLE 6: RECONCILIATION OF REPORTED NET (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SHAREHOLDERS AND DILUTED EARNINGS PER SHARE TO NON-GAAP PERFORMANCE NET INCOME AND PERFORMANCE NET INCOME PER SHARE FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2017 AND 2016

The following table presents a reconciliation of Allergan plc's reported net (loss) from continuing

operations attributable to shareholders and diluted earnings per share to non -GAAP performance net

income and non-GAAP performance net income per share for the three and six months ended June 30,

2017 and 2016:

Table 6

ALLERGAN PLC

RECONCILIATION TABLE

TABLE 6: RECONCILIATION OF REPORTED NET (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SHAREHOLDERS AND DILUTED EARNINGS

(Unaudited; in millions except per share amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

2017 2016 2017 2016
2017
2016
2017 2016
GAAP to Non-GAAP Performance net income calculation
GAAP to Non-GAAP Performance net income calculation

GAAP to Non-GAAP Performance net income

calculation
calculation
$ (717.5 ) $ (424.4 ) $ (3,279.6 ) $ (517.3 )
$ (717.5 ) $ (424.4 ) $ (3,279.6 ) $ (517.3 )
$
(717.5 )
$
(424.4 )
$ (3,279.6 )
$ (517.3 )

shareholders

GAAP (loss) from continuing operations attributable to

Adjusted for:

Amortization

3,493.9 1,757.9 1,633.1 3,222.8
3,493.9
1,757.9
1,633.1
3,222.8
Acquisition and licensing charges (1) 273.2 232.2 2,631.6 471.7 Accretion and fair -value adjustments to contingent
Acquisition and licensing charges (1)
273.2
232.2
2,631.6
471.7
Accretion and fair -value adjustments to contingent
consideration
(15.5 )
29.6
15.2 63.4
Impairment/asset sales and related costs
717.3
251.3
1,064.7
255.6
Non-recurring (gain) / losses
174.1 (8.6
)
174.1
0.2
Legal settlements
42.5 49.7
41.4 59.2
Income taxes on items above and other income
tax adjustments
(796.9 )
(364.9 )
(1,510.4 )
(907.8 )
Non-GAAP performance net income attributable to
shareholders
$
1,435.1
$ 1,398.0
$ 2,630.9
$ 2,647.8
Diluted earnings per share
Diluted (loss) per share from continuing operations
attributable to
shareholders - GAAP
$
(2.14 )
$
(1.07 ) $
(9.78 ) $
(1.31 )
Non-GAAP performance net income per share
attributable to shareholders
$
4.02
$
3.35
$
7.37
$
6.34
Basic weighted average ordinary shares outstanding
335.2
395.6
335.2
395.2
Effect of dilutive securities:
Dilutive shares
21.5 21.8
21.8 22.3
Diluted weighted average ordinary shares outstanding
356.7
417.4
357.0
417.5

(1) Includes stock -based compensation due to the Zeltiq, Allergan and Forest acquisitions as well as the

valuation accounting impact in interest expense, net.

36

TABLE 7: RECONCILIATION OF REPORTED NET (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SHAREHOLDERS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 TO ADJUSTED EBITDA AND ADJUSTED OPERATING INCOME

We define adjusted EBITDA as an amount equal to consolidated net income / (loss) from continuing

operations attributable to shareholders for such period adjusted for the following: (i) interest expense, (ii)

interest income, (iii) (benefit) for income taxes, (iv) depreciation and amortization expenses, (v) stock -

based compensation expense, (vi) asset impairment charges and losses / (gains) and expenses

associated with the sale of assets, including the exclusion of discontinued opera tions, (vii) business

restructuring charges associated with Allergan s global supply chain and operational excellence

initiatives or other restructurings of a similar nature, (viii) costs and charges associated with the

acquisition of businesses and assets including, but not limited to, milestone payments, integration

charges, other charges associated with the revaluation of assets or liabilities and charges associated

with the revaluation of acquisition related contingent liabilities that are based in whol e or in part on future

estimated cash flows, (ix) litigation charges and settlements and (x) other unusual charges or expenses.

We define non-GAAP adjusted operating income as adjusted EBITDA including depreciation and certain

stock-based compensation char ges and excluding dividend income.

The following table presents a reconciliation of Allergan plc's reported net (loss) from continuing

operations attributable to shareholders for the three and six months ended June 30, 2017 and 2016 to

adjusted EBITDA and adjusted operating income:

Table 7

ALLERGAN PLC

ADJUSTED EBITDA and ADJUSTED OPERATING INCOME, RECONCILIATION TABLE

(Unaudited; in millions)

Three Months Ended

Six Months Ended

TABLE 7: RECONCILIATION OF REPORTED NET (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SHAREHOLDERS FOR THE THREE
 

June 30,

 

June 30,

 
 

2017

2016

2017

2016

 
 

GAAP (loss) from continuing operations attributable to

shareholders

$

(717.5 )

$

(424.4 ) $ (3,279.6 )

$

(517.3 )

Plus:

Interest expense

277.4

345.8

567.1

678.6

Interest income

(16.6 )

(2.5 )

 

(41.9 )

 

(5.4 )

(Benefit) for income taxes

(581.2 )

(258.2 )

 

(1,113.3 )

 

(666.9 )

Depreciation

39.6

32.8

81.2

73.8

Amortization

1,757.9

1,633.1

3,493.9

3,222.8

EBITDA

$

759.6

$ 1,326.6

$

(292.6 ) $

2,785.6

Adjusted for:

Acquisition and licensing and other charges

231.9

201.0

2,578.6

410.2

Impairment/asset sales and related costs

717.3

251.3

1,064.7

255.6

Non-recurring (gain) / losses

174.1

(8.6 )

 

174.1

0.2

Legal settlements

42.5

49.7

41.4

59.2

Accretion and fair -value adjustments to contingent

consideration

(15.5 )

29.6

15.2

63.4

Share-based compensation including cash

settlements

117.3

85.2

180.0

176.0

Adjusted EBITDA

$

2,027.2

$ 1,934.8

$

3,761.4

$

3,750.2

Adjusted for:

Depreciation

(39.6 )

(32.8 )

 

(81.2 )

 

(73.8 )

Dividend income

(34.1 )

-

(68.2 )

 

-

Share-based compensation not related to

restructuring charges and purchase accounting

impact on stock -based compensation for acquired

awards

(66.3 )

(43.8 )

 

(107.0 )

 

(84.8 )

Adjusted Operating Income

$

1,887.2

$ 1,858.2

$

3,505.0

$

3,591.6

37

TABLE 8: NET REVENUES AND CONTRIBUTION MARGIN FOR US SPECIALIZED THERAPEUTICS SEGMENT, US GENERAL MEDICINE SEGMENT, INTERNATIONAL SEGMENT AND CORPORATE FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 8: NET REVENUES AND CONTRIBUTION MARGIN FOR US SPECIALIZED THERAPEUTICS SEGMENT, US GENERAL MEDICINE SEGMENT,

38

TABLE 9: NET REVENUES FOR US SPECIALIZED THERAPEUTICS SEGMENT FOR THE THREE AND SIX

MONTHS ENDED JUNE 30, 2017 AND 2016

The following table details Allergan plc's product revenue for significant promoted products within the

US Specialized Therapeutics segment for the three and six months ended June 30, 2017 and 2016.

TABLE 9: NET REVENUES FOR US SPECIALIZED THERAPEUTICS SEGMENT FOR THE THREE AND SIX MONTHS ENDED
 

Table 9

 
 

ALLERGAN PLC

 

US Specialized Therapeutics Product Revenue

 
 

(Unaudited; in millions)

 
 
 

Three Months Ended June

 
 

30,

Change

 
 
2017 2016 (1) Dollars %

2017

2017 2016 (1) Dollars %

2016 (1)

2017 2016 (1) Dollars %

Dollars

%

 

Total Eye Care

$

600.1

$

636.1

$

(36.0 )

 

(5.7 )%

 

Restasis ®

336.4

371.3

(34.9 )

 

(9.4 )%

Alphagan ® /Combigan ®

96.4

96.0

0.4

0.4 %

Lumigan ® /Ganfort ®

79.0

80.6

(1.6 )

 

(2.0 )%

Ozurdex ®

24.9

21.5

3.4

15.8 %

Eye Drops

50.7

49.1

1.6

3.3 %

Other Eye Care

12.7

17.6

(4.9 )

 

(27.8 )%

Total Medical Aesthetics

643.9

419.8

224.1

53.4 %

Facial Aesthetics

349.2

320.2

29.0

9.1 %

Botox ® Cosmetics

210.3

189.9

20.4

10.7 %

Juvederm Collection

126.2

117.6

8.6

7.3 %

Kybella ®

12.7

12.7

-

0.0 %

Plastic Surgery

61.3

52.8

8.5

16.1 %

Breast Implants

61.3

51.7

9.6

18.6 %

Other Plastic Surgery

-

1.1

(1.1 )

 

(100.0 )%

Regenerative Medicine

115.8

-

115.8

n.a.

Alloderm ®

84.6

-

84.6

n.a.

 

Other Regenerative Medicine

31.2

-

31.2

n.a.

Body Contouring

78.9

-

78.9

n.a.

 

Coolsculpting ® Systems & Add On

Applicators

31.0

-

31.0

n.a.

Coolsculpting ® Consumables

47.9

-

47.9

n.a.

 

Skin Care

38.7

46.8

(8.1 )

 

(17.3 )%

SkinMedica ®

25.4

29.1

(3.7 )

 

(12.7 )%

Latisse ®

13.3

17.7

(4.4 )

 

(24.9 )%

Total Medical Dermatology

81.8

97.1

(15.3 )

 

(15.8 )%

Aczone ®

41.0

54.1

(13.1 )

 

(24.2 )%

Tazorac ®

12.8

23.4

(10.6 )

 

(45.3 )%

Botox ® Hyperhidrosis

16.8

16.3

0.5

3.1 %

Other Medical Dermatology

11.2

3.3

7.9

n.m.

Total Neuroscience & Urology

372.6

326.3

46.3

14.2 %

Botox ® Therapeutics

346.9

296.0

50.9

17.2 %

Rapaflo ®

25.7

29.4

(3.7 )

 

(12.6 )%

Other Neuroscience & Urology

-

0.9

(0.9 )

 

(100.0 )%

Other Revenues

Other Revenues 16.6 9.6 7.0 72.9 %

16.6

Other Revenues 16.6 9.6 7.0 72.9 %

9.6

Other Revenues 16.6 9.6 7.0 72.9 %

7.0

Other Revenues 16.6 9.6 7.0 72.9 %

72.9 %

 

Net revenues

$

1,715.0

$

1,488.9

$

226.1

15.2 %

 
 

39

(1) Includes revenues earned that were distributed through our former Anda Distribution business to third party customers.

TABLE 9 (CONT’D): NET REVENUES FOR US SPECIALIZED THERAPEUTICS SEGMENT FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 9 (CONT’D): NET REVENUES FOR US SPECIALIZED THERAPEUTICS S EGMENT FOR THE THREE AND SIX
 

Six Months Ended June 30,

 

Change

 
 
2017 2016 (1) Dollars %

2017

2017 2016 (1) Dollars %

2016 (1)

2017 2016 (1) Dollars %

Dollars

%

 

Total Eye Care

$

1,153.2

$

1,169.1

$

(15.9 )

 

(1.4 )%

 

Restasis ®

645.2

670.0

(24.8 )

 

(3.7 )%

Alphagan ® /Combigan ®

182.8

180.9

1.9

1.1 %

Lumigan ® /Ganfort ®

153.3

162.1

(8.8 )

 

(5.4 )%

Ozurdex ®

47.4

40.9

6.5

15.9 %

Eye Drops

98.5

89.9

8.6

9.6 %

Other Eye Care

26.0

25.3

0.7

2.8 %

Total Medical Aesthetics

1,134.0

793.7

340.3

42.9 %

Facial Aesthetics

667.9

599.6

68.3

11.4 %

Botox ® Cosmetics

394.1

355.3

38.8

10.9 %

Fillers

246.0

220.3

25.7

11.7 %

Kybella ®

27.8

24.0

3.8

15.8 %

Plastic Surgery

115.6

100.9

14.7

14.6 %

Breast Implants

115.6

98.1

17.5

17.8 %

Other Plastic Surgery

-

2.8

(2.8 )

 

(100.0 )%

Regenerative Medicine

191.3

-

191.3

n.a.

Alloderm ®

138.7

-

138.7

n.a.

 

Other Regenerative Medicine

52.6

-

52.6

n.a.

Body Contouring

78.9

-

78.9

n.a.

 

Coolsculpting ® Systems & Add On

Applicators

31.0

-

31.0

n.a.

Coolsculpting ® Consumables

47.9

-

47.9

n.a.

 

Skin Care

80.3

93.2

(12.9 )

 

(13.8 )%

SkinMedica ®

53.4

55.7

(2.3 )

 

(4.1 )%

Latisse ®

26.9

37.5

(10.6 )

 

(28.3 )%

Total Medical Dermatology

168.4

166.1

2.3

1.4 %

Aczone ®

81.6

87.1

(5.5 )

 

(6.3 )%

Tazorac ®

36.2

40.5

(4.3 )

 

(10.6 )%

Botox ® Hyperhidrosis

33.6

32.6

1.0

3.1 %

Other Medical Dermatology

17.0

5.9

11.1

188.1 %

Total Neuroscience & Urology

707.3

633.1

74.2

11.7 %

Botox ® Therapeutics

655.7

569.8

85.9

15.1 %

Rapaflo ®

51.6

62.4

(10.8 )

 

(17.3 )%

Other Neuroscience & Urology

-

0.9

(0.9 )

 

(100.0 )%

Other Revenues

Other Revenues 34.1 25.6 8.5 33.2 %

34.1

Other Revenues 34.1 25.6 8.5 33.2 %

25.6

Other Revenues 34.1 25.6 8.5 33.2 %

8.5

Other Revenues 34.1 25.6 8.5 33.2 %

33.2 %

 

Net revenues

$

3,197.0

$

2,787.6

$

409.4

14.7 %

 
 

40

(1) Includes revenues earned that were distributed through our former Anda Distribution business to third party customers.

 

TABLE 10: NET REVENUES FOR US GENERAL MEDICINE SEGMENT FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

The following table details Allergan plc's product revenue for significant promoted products within the US General

Medicine segment for the three and six months ended June 30, 2017 and 2016.

TABLE 10: NET REVENUES FOR US GENERAL MEDICINE SEGMENT FOR THE THREE AND SIX MONTHS ENDED
 

Table 10

 
 
 

ALLERGAN PLC

 

US General Medicine Product Revenue

 
 

(Unaudited; in millions)

 
 
 

Three Months Ended June 30,

 

Change

 
 
2017 2016 (1) Dollars %

2017

2017 2016 (1) Dollars %

2016 (1)

2017 2016 (1) Dollars %

Dollars

2017 2016 (1) Dollars %

%

 

Total Central Nervous System (CNS)

$

346.6

$

317.5

29.1

9.2 %

Namenda XR ®

118.7

166.5

(47.8 )

 

(28.7 )%

Namzaric ®

33.4

12.8

20.6

160.9 %

Viibryd ® /Fetzima ®

85.2

81.7

3.5

4.3 %

Vraylar

66.3

11.1

55.2

n.m.

Saphris ®

43.0

41.3

1.7

4.1 %

Namenda ® IR

-

4.1

(4.1 )

 

(100.0 )%

Total Gastrointestinal (GI)

410.8

442.0

(31.2 )

 

(7.1 )%

Linzess ®

167.8

150.5

17.3

11.5 %

Asacol ® /Delzicol ®

45.6

119.8

(74.2 )

 

(61.9 )%

Carafate ® /Sulcrate ®

59.2

50.3

8.9

17.7 %

Zenpep ®

50.5

43.0

7.5

17.4 %

Canasa ® /Salofalk ®

38.4

46.7

(8.3 )

 

(17.8 )%

Viberzi ®

41.3

20.4

20.9

102.5 %

Other GI

8.0

11.3

(3.3 )

 

(29.2 )%

Total Women's Health

248.0

296.1

(48.1 )

 

(16.2 )%

Lo Loestrin ®

113.0

101.0

12.0

11.9 %

Estrace ® Cream

90.1

97.2

(7.1 )

 

(7.3 )%

Minastrin ® 24

11.4

83.0

(71.6 )

 

(86.3 )%

Liletta ®

6.6

5.7

0.9

15.8 %

Other Women's Health

26.9

9.2

17.7

192.4 %

Total Anti-Infectives

67.8

63.1

4.7

7.4 %

Teflaro ®

33.0

35.2

(2.2 )

 

(6.3 )%

Dalvance ®

15.2

10.2

5.0

49.0 %

Avycaz ®

14.5

13.7

0.8

5.8 %

Other Anti-Infectives

5.1

4.0

1.1

27.5 %

Diversified Brands

305.5

308.5

(3.0 )

 

(1.0 )%

Bystolic ® /Byvalson ®

150.7

150.3

0.4

0.3 %

Armour Thyroid

42.0

40.6

1.4

3.4 %

Savella ®

26.0

22.3

3.7

16.6 %

Lexapro ®

13.1

16.5

(3.4 )

 

(20.6 )%

Enablex ®

1.0

-

1.0

n.a.

PacPharma

3.7

14.7

(11.0 )

 

(74.8 )%

Other Diversified Brands

69.0

64.1

4.9

7.6 %

Other Revenues

Other Revenues 49.0 21.9 27.1 123.7 %

49.0

Other Revenues 49.0 21.9 27.1 123.7 %

21.9

Other Revenues 49.0 21.9 27.1 123.7 %

27.1

Other Revenues 49.0 21.9 27.1 123.7 %

123.7 %

 

Net revenues

$

1,427.7

$

1,449.1

$

(21.4 )

 

(1.5 )%

 

(1) Includes revenues earned that were distributed through our former Anda Distribution business to third party customers.

41

TABLE 10 (CONT’D): NET REVENUES FOR US GENERAL MEDICINE SEGMENT FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

TABLE 10 (CONT’D): NET REVENUES FOR US GENERAL MEDICINE SEGMENT FOR THE THREE AND SIX MONTHS
 

Six Months Ended June 30,

 

Change

 
 
2017 2016 (1) Dollars %

2017

2017 2016 (1) Dollars %

2016 (1)

2017 2016 (1) Dollars %

Dollars

2017 2016 (1) Dollars %

%

 

Total Central Nervous System (CNS)

$

655.7

$

639.1

16.6

2.6 %

Namenda XR ®

240.7

339.6

(98.9 )

 

(29.1 )%

Namzaric ®

57.0

23.1

33.9

146.8 %

Viibryd ® /Fetzima ®

157.7

165.0

(7.3 )

 

(4.4 )%

Saphris ®

80.3

82.8

(2.5 )

 

(3.0 )%

Vraylar

119.9

18.7

101.2

n.m.

Namenda ® IR

0.1

9.9

(9.8 )

 

(99.0 )%

Total Gastrointestinal (GI)

798.3

845.6

(47.3 )

 

(5.6 )%

Linzess ®

315.4

287.6

27.8

9.7 %

Asacol ® /Delzicol ®

103.2

225.7

(122.5 )

 

(54.3 )%

Carafate ® /Sulcrate ®

117.9

111.3

6.6

5.9 %

Zenpep ®

97.0

92.6

4.4

4.8 %

Canasa ® /Salofalk ®

76.7

87.8

(11.1 )

 

(12.6 )%

Viberzi ®

72.8

24.4

48.4

198.4 %

Other GI

15.3

16.2

(0.9 )

 

(5.6 )%

Total Women's Health

492.7

559.8

(67.1 )

 

(12.0 )%

Lo Loestrin ®

212.8

190.3

22.5

11.8 %

Estrace ® Cream

163.5

177.8

(14.3 )

 

(8.0 )%

Minastrin ® 24

52.5

162.6

(110.1 )

 

(67.7 )%

Liletta ®

13.8

10.6

3.2

30.2 %

Other Women's Health

50.1

18.5

31.6

170.8 %

Total Anti-Infectives

123.5

114.6

8.9

7.8 %

Teflaro ®