0001551152 false Common Stock, $0.01 Par Value ABBV 0001551152 2019-11-06 2019-11-07 0001551152 us-gaap:CommonStockMember exch:XNYS 2019-11-06 2019-11-07 0001551152 exch:XCHI us-gaap:CommonStockMember 2019-11-06 2019-11-07 0001551152 abbv:Sec1.375SeniorNotesDue2024Member exch:XNYS 2019-11-06 2019-11-07 0001551152 abbv:Sec0.750SeniorNotesDue2027Member exch:XNYS 2019-11-06 2019-11-07 0001551152 abbv:Sec2.125SeniorNotesDue2028Member exch:XNYS 2019-11-06 2019-11-07 0001551152 abbv:Sec1.250SeniorNotesDue2031Member exch:XNYS 2019-11-06 2019-11-07 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 7, 2019

 

ABBVIE INC.

(Exact Name of Registrant as Specified in its Charter)

_______________________________________________

 

Delaware   001-35565   32-0375147

(State or other Jurisdiction

of Incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

_______________________________________________

 

1 North Waukegan Road

North Chicago, Illinois 60064-6400

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (847) 932-7900

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)  

Name of each exchange on which

registered

Common Stock, $0.01 Par Value   ABBV  

New York Stock Exchange

Chicago Stock Exchange

1.375% Senior Notes due 2024   ABBV24   New York Stock Exchange
0.750% Senior Notes due 2027   ABBV27   New York Stock Exchange
2.125% Senior Notes due 2028   ABBV28   New York Stock Exchange
1.250% Senior Notes due 2031   ABBV31   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 8.01. Other Events.

 

Financial Information Related to Allergan Acquisition

 

AbbVie Inc. (“AbbVie”) is filing this Current Report on Form 8-K to provide certain financial information with respect to Allergan plc (“Allergan”) and AbbVie’s proposed acquisition of Allergan (the “Acquisition”). As previously disclosed in its Current Report on Form 8-K filed on June 25, 2019, AbbVie and Venice Subsidiary LLC (“Acquirer Sub”), a direct wholly-owned subsidiary of AbbVie, entered into a Transaction Agreement (the “Transaction Agreement”) with Allergan. The Transaction Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Acquirer Sub will acquire all of the outstanding ordinary shares of Allergan. As a result, Allergan will become a wholly-owned subsidiary of AbbVie.

 

Included in this Current Report on Form 8-K are (a) Allergan’s unaudited consolidated financial statements and related notes for the three and nine months ended September 30, 2019 and September 30, 2018, which are included as Exhibit 99.1, and (b) AbbVie’s unaudited pro forma condensed combined financial information giving effect to the Acquisition (the “pro forma financial information”), which includes the unaudited pro forma condensed combined balance sheet as of September 30, 2019, the unaudited pro forma condensed combined statements of earnings for the year ended December 31, 2018 and for the nine months ended September 30, 2019 and the related notes, which are included as Exhibit 99.2.

 

The pro forma financial information included in this Current Report on Form 8-K has been presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations that would have been realized had the Acquisition occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that AbbVie will experience after the Acquisition.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Quarterly financial statements and certain supplemental information of Allergan.

 

Allergan’s unaudited consolidated financial statements and related notes for the three and nine months ended September 30, 2019 and September 30, 2018 are filed herewith as Exhibit 99.1 and included herein.

 

(b) Pro forma financial information of AbbVie.

 

AbbVie’s unaudited pro forma condensed combined financial information, giving effect to the Acquisition, which includes the unaudited pro forma condensed combined balance sheet as of September 30, 2019, the unaudited pro forma condensed combined statements of earnings for the year ended December 31, 2018 and for the nine months ended September 30, 2019 and the related notes, is filed herewith as Exhibit 99.2 and included herein.

 

(c) Exhibits

 

Exhibit No.   Exhibit
99.1   Allergan’s unaudited consolidated financial statements and related notes for the three and nine months ended September 30, 2019 and September 30, 2018.
     
99.2   AbbVie’s unaudited pro forma condensed combined financial information, giving effect to the Acquisition, which includes the unaudited pro forma condensed combined balance sheet as of September 30, 2019, the unaudited pro forma condensed combined statements of earnings for the year ended December 31, 2018 and for the nine months ended September 30, 2019 and the related notes.
     
104   The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).

 

2

 

 

NO OFFER OR SOLICITATION

 

This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this communication is not an offer of securities for sale into the United States. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements. Any securities issued in the Acquisition are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act of 1933, as amended.

 

FORWARD-LOOKING STATEMENTS

 

This communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including forward-looking statements with respect to the Acquisition and AbbVie’s, Allergan’s and/or the combined group’s estimated or anticipated future business, performance and results of operations and financial condition, including estimates, forecasts, targets and plans for AbbVie and, following the acquisition, if completed, the combined group. The words “believe,” “expect,” “anticipate,” “project” and similar expressions, among others, generally identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the possibility that the Acquisition will not be pursued, failure to obtain necessary regulatory approvals or required financing or to satisfy any of the other conditions to the Acquisition, adverse effects on the market price of AbbVie’s shares of common stock or Allergan’s ordinary shares and on AbbVie’s or Allergan’s operating results because of a failure to complete the Acquisition, failure to realize the expected benefits of the Acquisition, failure to promptly and effectively integrate Allergan’s businesses, negative effects relating to the announcement of the Acquisition or any further announcements relating to the Acquisition or the consummation of the Acquisition on the market price of AbbVie’s shares of common stock or Allergan’s ordinary shares, significant transaction costs and/or unknown or inestimable liabilities, potential litigation associated with the Acquisition, general economic and business conditions that affect the combined companies following the consummation of the Acquisition, the combined company’s capital structure post-Acquisition and the nature of any debt issued to fund the Acquisition, changes in global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax laws, regulations, rates and policies, future business acquisitions or disposals and competitive developments. These forward-looking statements are based on numerous assumptions and assessments made in light of AbbVie’s experience and perception of historical trends, current conditions, business strategies, operating environment, future developments and other factors it believes appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this communication could cause AbbVie’s plans with respect to Allergan or AbbVie’s actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this communication are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this communication. Additional information about economic, competitive, governmental, technological and other factors that may affect AbbVie can be found in AbbVie’s filings with the SEC, including the risk factors discussed in AbbVie’s most recent Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and future filings with the SEC.

 

Any forward-looking statements in this communication are based upon information available to AbbVie and/or its board of directors as of the date of this communication and, while believed to be true when made, may ultimately prove to be incorrect. Subject to any obligations under applicable law, neither AbbVie or any member of its board of directors undertakes any obligation to update any forward-looking statement whether as a result of new information, future developments or otherwise, or to conform any forward-looking statement to actual results, future events, or to changes in expectations. All subsequent written and oral forward-looking statements attributable to AbbVie or its board of directors or any person acting on behalf of any of them are expressly qualified in their entirety by this paragraph.

 

3

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ABBVIE INC.
   
 Date: November 7, 2019   By:    /s/ Robert A. Michael
    Robert A. Michael
    Executive Vice President, Chief Financial Officer    

 

4

 

Common Stock, $0.01 Par Value ABBV

Exhibit 99.1

 

TABLE OF CONTENTS

 

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND SEPTEMBER 30, 2018

 

      PAGE
PART I. FINANCIAL INFORMATION  
Item 1.   Consolidated Financial Statements (unaudited) 2
    Consolidated Balance Sheets of Allergan plc as of September 30, 2019 and December 31, 2018 2
    Consolidated Statements of Operations of Allergan plc for the three and nine months ended September 30, 2019 and September 30, 2018 3
    Consolidated Statements of Comprehensive Income / (Loss) of Allergan plc for the three and nine months ended September 30, 2019 and September 30, 2018  4
    Consolidated Statements of Cash Flows of Allergan plc for the nine months ended September 30, 2019 and September 30, 2018 5
    Consolidated Statements of Equity of Allergan plc for the three and nine months ended September 30, 2019 and September 30, 2018 6
    Notes to the Consolidated Financial Statements 7

 

 1 

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

 

ALLERGAN PLC

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except par value)

 

   September 30,   December 31, 
   2019   2018 
ASSETS          
Current assets:          
Cash and cash equivalents  $1,237.5   $880.4 
Marketable securities   3,318.4    1,026.9 
Accounts receivable, net   3,012.3    2,868.1 
Inventories   1,083.1    846.9 
Current assets held for sale   -    34.0 
Prepaid expenses and other current assets   942.3    819.1 
Total current assets   9,593.6    6,475.4 
Property, plant and equipment, net   1,857.0    1,787.0 
Right of use asset - operating leases   478.2    - 
Investments and other assets   367.9    1,970.6 
Non current assets held for sale   32.5    882.2 
Deferred tax assets   487.4    1,063.7 
Product rights and other intangibles   39,526.8    43,695.4 
Goodwill   42,065.5    45,913.3 
Total assets  $94,408.9   $101,787.6 
LIABILITIES AND EQUITY          
Current liabilities:          
Accounts payable and accrued expenses  $5,692.2   $4,787.2 
Income taxes payable   88.9    72.4 
Current portion of long-term debt   3,739.2    868.3 
Current portion of lease liability - operating   118.4    - 
Total current liabilities   9,638.7    5,727.9 
Long-term debt   18,786.0    22,929.4 
Lease liability - operating   437.4    - 
Other long-term liabilities   810.9    882.0 
Other taxes payable   1,718.4    1,615.5 
Deferred tax liabilities   4,519.3    5,501.8 
Total liabilities   35,910.7    36,656.6 
Commitments and contingencies (Refer to Note 20)          
Equity:          
Ordinary shares; $0.0001 par value per share; 1,000.0 million shares authorized,
328.1 million and 332.6 million shares issued and outstanding, respectively
  $-   $- 
Additional paid-in capital   55,882.4    56,510.0 
Retained earnings   1,551.7    7,258.9 
Accumulated other comprehensive income   1,041.1    1,345.2 
Total shareholders’ equity   58,475.2    65,114.1 
Noncontrolling interest   23.0    16.9 
Total equity   58,498.2    65,131.0 
Total liabilities and equity  $94,408.9   $101,787.6 

 

See accompanying Notes to the Consolidated Financial Statements.

 

 2 

 

 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2019   2018   2019   2018 
Net revenues  $4,050.7   $3,911.4   $11,737.9   $11,707.7 
Operating expenses:                    
Cost of sales (excludes amortization and impairment of
acquired intangibles including product rights)
   639.0    596.8    1,789.1    1,601.4 
Research and development   474.5    424.2    1,359.5    1,588.1 
Selling and marketing   901.4    755.6    2,578.7    2,409.0 
General and administrative   1,092.7    289.2    1,725.2    919.2 
Amortization   1,537.7    1,588.5    4,339.1    4,983.2 
Goodwill impairments   -    -    3,552.8    - 
In-process research and development impairments   -    -    436.0    798.0 
Asset sales and impairments, net   2.0    (0.4)   126.2    272.3 
Total operating expenses   4,647.3    3,653.9    15,906.6    12,571.2 
Operating (loss) / income   (596.6)   257.5    (4,168.7)   (863.5)
Interest income   20.5    10.0    51.5    33.6 
Interest (expense)   (193.9)   (220.4)   (591.1)   (701.0)
Other income, net   2.5    130.0    11.6    266.6 
Total other (expense), net   (170.9)   (80.4)   (528.0)   (400.8)
(Loss) / income before income taxes and noncontrolling
   interest
   (767.5)   177.1    (4,696.7)   (1,264.3)
Provision (benefit) for income taxes   18.1    213.4    251.1    (474.0)
Net (loss)   (785.6)   (36.3)   (4,947.8)   (790.3)
(Income) attributable to noncontrolling interest   (1.2)   (1.6)   (6.0)   (6.2)
Net (loss) attributable to shareholders   (786.8)   (37.9)   (4,953.8)   (796.5)
Dividends on preferred shares   -    -    -    46.4 
Net (loss) attributable to ordinary shareholders  $(786.8)  $(37.9)  $(4,953.8)  $(842.9)
(Loss) per share attributable to ordinary shareholders                    
Basic  $(2.40)  $(0.11)  $(15.04)  $(2.50)
Diluted  $(2.40)  $(0.11)  $(15.04)  $(2.50)
Weighted average shares outstanding:                    
Basic   328.0    339.0    329.3    337.6 
Diluted   328.0    339.0    329.3    337.6 

 

See accompanying Notes to the Consolidated Financial Statements.

 

 3 

 

 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

(Unaudited; in millions)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2019   2018   2019   2018 
Net (loss)  $(785.6)  $(36.3)  $(4,947.8)  $(790.3)
Other comprehensive (loss) / income                    
Foreign currency translation (losses)   (241.3)   (87.3)   (302.6)   (352.1)
Unrealized gains / (losses), net of tax   0.7    (1.4)   (1.5)   (1.4)
Total other comprehensive (loss), net of tax   (240.6)   (88.7)   (304.1)   (353.5)
Comprehensive (loss)   (1,026.2)   (125.0)   (5,251.9)   (1,143.8)
Comprehensive (income) attributable to noncontrolling interest   (1.2)   (1.6)   (6.0)   (6.2)
Comprehensive (loss) attributable to ordinary shareholders  $(1,027.4)  $(126.6)  $(5,257.9)  $(1,150.0)

 

See accompanying Notes to the Consolidated Financial Statements.

 

 4 

 

 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 

   Nine Months Ended September 30, 
   2019   2018 
Cash Flows From Operating Activities:          
Net (loss)  $(4,947.8)  $(790.3)
Reconciliation to net cash provided by operating activities:          
Depreciation   150.6    149.7 
Amortization   4,339.1    4,983.2 
Provision for inventory reserve   127.8    74.9 
Share-based compensation   161.7    185.2 
Deferred income tax benefit   (365.3)   (1,362.8)
Goodwill impairments   3,552.8    - 
In-process research and development impairments   436.0    798.0 
Loss on asset sales and impairments, net   126.2    272.3 
Gain on sale of Teva securities, net   -    (60.9)
Gain on sale of businesses   -    (182.6)
Non-cash extinguishment of debt   0.2    17.4 
Cash charge related to extinguishment of debt   -    (18.2)
Amortization of deferred financing costs   13.3    17.4 
Non-cash lease expense   93.5    - 
Contingent consideration adjustments, including accretion   49.5    (113.1)
Other, net   (2.3)   0.5 
Changes in assets and liabilities (net of effects of acquisitions):          
Decrease / (increase) in accounts receivable, net   (184.6)   17.0 
Decrease / (increase) in inventories   (328.9)   (136.2)
Decrease / (increase) in prepaid expenses and other current assets   (36.2)   (5.4)
Increase / (decrease) in accounts payable and accrued expenses   874.9    (46.1)
Increase / (decrease) in income and other net taxes payable   1,638.7    415.5 
Increase / (decrease) in other assets and liabilities   (130.8)   (74.0)
Net cash provided by operating activities   5,568.4    4,141.5 
Cash Flows From Investing Activities:          
Additions to property, plant and equipment   (253.3)   (165.1)
Additions to product rights and other intangibles   (46.0)   - 
Additions to investments   (3,738.0)   (1,456.4)
Proceeds from sale of investments and other assets   1,466.7    6,201.3 
Payments to settle Teva related matters   -    (466.0)
Proceeds from sales of property, plant and equipment   18.5    24.6 
Acquisitions of businesses, net of cash acquired   (80.6)   - 
Net cash (used in) / provided by investing activities   (2,632.7)   4,138.4 
Cash Flows From Financing Activities:          
Proceeds from borrowings of long-term indebtedness, including credit facility   3.3    717.2 
Payments on debt, including finance lease obligations and credit facility   (1,044.9)   (7,115.9)
Payments of contingent consideration and other financing   (6.3)   (21.7)
Proceeds from stock plans   45.0    98.2 
Proceeds from forward sale of Teva securities   -    465.5 
Payments to settle Teva related matters   -    (234.0)
Repurchase of ordinary shares   (834.3)   (2,023.5)
Dividends paid   (731.4)   (808.1)
Net cash (used in) financing activities   (2,568.6)   (8,922.3)
Effect of currency exchange rate changes on cash and cash equivalents   (10.0)   13.1 
Net increase / (decrease) in cash and cash equivalents   357.1    (629.3)
Cash and cash equivalents at beginning of period   880.4    1,817.2 
Cash and cash equivalents at end of period  $1,237.5   $1,187.9 
Supplemental Disclosures of Cash Flow Information          
Cash paid during the year for:          
Income taxes other, net of refunds  $(1,019.8)  $510.1 
Interest  $642.2   $817.6 
Schedule of Non-Cash Investing and Financing Activities:          
Conversion of mandatory convertible preferred shares  $-   $4,929.7 
Settlement of Teva Shares  $-   $465.5 
Settlement of secured financing  $-   $(465.5)
Dividends accrued  $1.1   $1.4 

 

See accompanying Notes to the Consolidated Financial Statements.

 

 5 

 

 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited; in millions)

 

               Retained   Accumulated         
                   Additional   Earnings/   Other         
   Ordinary Shares   Preferred Shares   Paid-in-   (Accumulated   Comprehensive   Noncontrolling     
   Shares   Amount   Shares   Amount   Capital   Deficit)   Income / (Loss)   Interest   Total 
BALANCE, December 31, 2017   330.2   $-    5.1   $4,929.7   $54,013.5   $12,957.2   $1,920.7   $16.0   $73,837.1 
Implementation of new accounting pronouncements   -    -    -    -    -    424.7    (63.0)   -    361.7 
BALANCE, January 1, 2018   330.2   $-    5.1   $4,929.7   $54,013.5   $13,381.9   $1,857.7   $16.0   $74,198.8 
Comprehensive (loss):                                             
Net (loss) attributable to shareholders   -    -    -    -    -    (286.1)   -    -    (286.1)
Other comprehensive income, net of tax   -    -    -    -    -    -    183.8    -    183.8 
Share-based compensation   -    -    -    -    72.5    -    -    -    72.5 
Ordinary shares issued under employee stock plans   0.7    -    -    -    35.5    -    -    -    35.5 
Dividends declared   -    -    -    -    -    (296.3)   -    -    (296.3)
Conversion of Mandatory Preferred Shares   17.8    -    (5.1)   (4,929.7)   4,929.7    -    -    -    - 
Repurchase of ordinary shares under the share repurchase programs   (9.6)   -    -    -    (1,540.0)   -    -    -    (1,540.0)
Repurchase of ordinary shares   (0.1)   -    -    -    (24.3)   -    -    -    (24.3)
Movement in noncontrolling interest   -    -    -    -    -    -    -    2.1    2.1 
BALANCE, March 31, 2018   339.0   $-    -   $-   $57,486.9   $12,799.5   $2,041.5   $18.1   $72,346.0 
Comprehensive (loss):                                             
Net (loss) attributable to shareholders   -    -    -    -    -    (472.5)   -    -    (472.5)
Other comprehensive (loss), net of tax   -    -    -    -    -    -    (448.6)   -    (448.6)
Share-based compensation   -    -    -    -    54.9    -    -    -    54.9 
Ordinary shares issued under employee stock plans   0.3    -    -    -    33.7    -    -    -    33.7 
Dividends declared   -    -    -    -    -    (244.1)   -    -    (244.1)
Repurchase of ordinary shares   -    -    -    -    (7.8)   -    -    -    (7.8)
Movement in noncontrolling interest   -    -    -    -    -    -    -    2.4    2.4 
BALANCE, June 30, 2018   339.3   $-    -   $-   $57,567.7   $12,082.9   $1,592.9   $20.5   $71,264.0 
Comprehensive (loss):                                             
Net (loss) attributable to shareholders   -    -    -    -    -    (37.9)   -    -    (37.9)
Other comprehensive (loss), net of tax   -    -    -    -    -    -    (88.7)   -    (88.7)
Share-based compensation   -    -    -    -    57.8    -    -    -    57.8 
Ordinary shares issued under employee stock plans   0.3    -    -    -    29.0    -    -    -    29.0 
Dividends declared   -    -    -    -    -    (244.4)   -    -    (244.4)
Repurchase of ordinary shares under the share repurchase programs   (2.4)   -    -    -    (450.1)   -    -    -    (450.1)
Repurchase of ordinary shares   -    -    -    -    (1.4)   -    -    -    (1.4)
Movement in noncontrolling interest   -    -    -    -    -    -    -    (7.4)   (7.4)
BALANCE, September 30, 2018   337.2   $-    -   $-   $57,203.0   $11,800.6   $1,504.2   $13.1   $70,520.9 
                                              
BALANCE, December 31, 2018   332.6   $-    -   $-   $56,510.0   $7,258.9   $1,345.2   $16.9   $65,131.0 
Implementation of new accounting pronouncement   -    -    -    -    -    (22.0)   -    -    (22.0)
BALANCE, January 1, 2019   332.6   $-    -   $-   $56,510.0   $7,236.9   $1,345.2   $16.9   $65,109.0 
Comprehensive (loss):                                             
Net (loss) attributable to shareholders   -    -    -    -    -    (2,408.0)   -    -    (2,408.0)
Other comprehensive (loss), net of tax   -    -    -    -    -    -    (128.8)   -    (128.8)
Share-based compensation   -    -    -    -    52.3    -    -    -    52.3 
Ordinary shares issued under employee stock plans   0.7    -    -    -    9.7    -    -    -    9.7 
Dividends declared   -    -    -    -    -    (246.1)   -    -    (246.1)
Repurchase of ordinary shares under the share repurchase programs   (5.3)   -    -    -    (799.7)   -    -    -    (799.7)
Repurchase of ordinary shares   (0.2)   -    -    -    (29.5)   -    -    -    (29.5)
Movement in noncontrolling interest   -    -    -    -    -    -    -    0.7    0.7 
BALANCE, March 31, 2019   327.8   $-    -   $-   $55,742.8   $4,582.8   $1,216.4   $17.6   $61,559.6 
Comprehensive (loss):                                             
Net (loss) attributable to shareholders   -    -    -    -    -    (1,759.0)   -    -    (1,759.0)
Other comprehensive income, net of tax   -    -    -    -    -    -    65.3    -    65.3 
Share-based compensation   -    -    -    -    59.5    -    -    -    59.5 
Ordinary shares issued under employee stock plans   0.1    -    -    -    13.9    -    -    -    13.9 
Dividends declared   -    -    -    -    -    (242.7)   -    -    (242.7)
Repurchase of ordinary shares   -    -    -    -    (4.3)   -    -    -    (4.3)
Movement in noncontrolling interest   -    -    -    -    -    -    -    3.8    3.8 
BALANCE, June 30, 2019   327.9   $-    -   $-   $55,811.9   $2,581.1   $1,281.7   $21.4   $59,696.1 
Comprehensive (loss):                                             
Net (loss) attributable to shareholders   -    -    -    -    -    (786.8)   -    -    (786.8)
Other comprehensive (loss), net of tax   -    -    -    -    -    -    (240.6)   -    (240.6)
Share-based compensation   -    -    -    -    49.9    -    -    -    49.9 
Ordinary shares issued under employee stock plans   0.2    -    -    -    21.4    -    -    -    21.4 
Dividends declared   -    -    -    -    -    (242.6)   -    -    (242.6)
Repurchase of ordinary shares   -    -    -    -    (0.8)   -    -    -    (0.8)
Movement in noncontrolling interest   -    -    -    -    -    -    -    1.6    1.6 
BALANCE, September 30, 2019   328.1   $-    -   $-   $55,882.4   $1,551.7   $1,041.1   $23.0   $58,498.2 

 

See accompanying Notes to the Consolidated Financial Statements.

 

 6 

 

 

 

ALLERGAN PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 — General

 

Allergan plc is a global pharmaceutical leader focused on developing, manufacturing and commercializing branded pharmaceutical, device, biologic, surgical and regenerative medicine products for patients around the world. Allergan markets a portfolio of leading brands and best-in-class products primarily focused on four key therapeutic areas including medical aesthetics, eye care, central nervous system and gastroenterology. The Company has operations in more than 100 countries.

 

Merger Agreement with AbbVie Inc.

 

On June 25, 2019, the Company announced that it entered into a transaction agreement (the “AbbVie Agreement”) under which AbbVie Inc. (“AbbVie”), a global, research-driven biopharmaceutical company, would acquire Allergan plc in a stock and cash transaction (the “AbbVie Transaction”), valued at $188.24 per Allergan share, or approximately $63.0 billion, based on AbbVie’s then-current stock price at the time the AbbVie Transaction was announced. At the closing of the proposed AbbVie Transaction, Company shareholders will receive 0.8660 shares of AbbVie common stock and $120.30 in cash for each of their existing shares. On October 14, 2019, the Company’s shareholders voted to approve the AbbVie Transaction.  The AbbVie Transaction is subject to customary regulatory approvals and other customary closing conditions. The AbbVie Transaction is anticipated to close in early 2020.

 

On October 25, 2019, in connection with the AbbVie Transaction, AbbVie commenced an offer to exchange all Allergan Senior Notes issued by Allergan and maturing from September 15, 2020 through March 15, 2045 for up to approximately $19.6 billion aggregate principal amount of new notes to be issued by AbbVie and cash.  In conjunction with the exchange offer, AbbVie is concurrently soliciting consents from eligible holders of the Allergan Senior Notes to amend each of the indentures governing the Allergan Senior Notes to eliminate substantially all of the restrictive covenants in such indentures and eliminate any guarantees of the related Allergan Senior Notes. The exchange offer and consent solicitations are conditioned upon, among other things, the closing of the AbbVie Transaction.  The exchange offers are expected to close on or about the closing date of the AbbVie Transaction.

 

The accompanying consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of December 31, 2018 and 2017 and for each of the years in the three-year period ended December 31, 2018, included as Exhibit 99.1 to AbbVie's Current Report on Form 8-K filed September 16, 2019 that includes Item 8.01 and 9.01 disclosure. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP”) have been condensed or omitted from the accompanying consolidated financial statements. The accompanying year end consolidated balance sheet was derived from the audited financial statements included as Exhibit 99.1 to AbbVie's Current Report on Form 8-K filed September 16, 2019 that includes Item 8.01 and 9.01 disclosure. The accompanying interim financial statements are unaudited and reflect all adjustments which are in the opinion of management necessary for a fair statement of the Company’s consolidated financial position, results of operations, comprehensive (loss) / income and cash flows for the periods presented. All such adjustments are of a normal, recurring nature. All intercompany transactions and balances have been eliminated in consolidation. The Company’s results of operations, comprehensive (loss) / income and cash flows for the interim periods are not necessarily indicative of the results of operations, comprehensive (loss) / income and cash flows that it may achieve in future periods.

 

References throughout to “we,” “our,” “us,” the “Company” or “Allergan” refer to financial information and transactions of Allergan plc.

 

 7 

 

  

NOTE 2 — Summary of Significant Accounting Policies

 

The following are interim updates to certain of the policies described in “Note 3” of the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2018.

 

Implementation of New Guidance

 

In February 2016, the Financial Accounting Standards Board (“FASB”) established Topic 842, Leases, by issuing Accounting Standards Update (“ASU”) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

 

 8 

 

 

On January 1, 2019, the Company adopted the new standard using the modified retrospective transition approach applied to all leases existing at the effective date of initial application of January 1, 2019. Prior period amounts are not adjusted and continue to be reported in accordance with historical accounting practices and the disclosures under the new standard are not required for dates and periods prior to January 1, 2019.

 

When evaluating whether a contract contains a lease under the new standard, Allergan considers whether (1) the contract explicitly or implicitly identifies assets that are contractually defined and (2) the Company obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company does not have the right to use an identified asset if the supplier has the substantive right to substitute the asset throughout the period without the Company’s approval.

 

The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’ which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter was not applicable to the Company.

 

This standard has a significant impact on our consolidated balance sheet but did not have a significant impact on our consolidated statements of operations. The most significant effects relate to the recognition of ROU assets and lease liabilities on our balance sheet for our real estate and fleet operating leases.

 

Upon adoption, the Company recognized lease liabilities and corresponding ROU assets as follows ($ in millions):

 

   ROU Asset   Lease Liability 
Real estate  $304.2   $370.6 
Fleet   100.4    100.4 
Other   57.5    77.6 
Total operating leases  $462.1   $548.6 

 

The cumulative effective adjustment as of the effective date of $22.0 million was recorded to opening retained earnings.  The Company has an immaterial amount of finance leases.

 

The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the lease recognition exemption for all leases with lease terms of 12 months or less. For leases that qualify under this exception, the Company will not recognize ROU assets or lease liabilities and did not recognize ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non-lease components for leases of real estate, fleet, IT and office equipment.

 

Refer to “NOTE 12 – Leases” for further information related to the Company’s leases.

 

In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update allows for the optional reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (“TCJA”) from accumulated other comprehensive income to retained earnings. The amount of the reclassification is calculated as the difference between the historical and newly enacted tax rates on deferred taxes originally recorded through accumulated other comprehensive income. The Company adopted the standard as of January 1, 2019; however, due to the immaterial amount of the stranded tax effects, the Company elected not to reclassify the income tax effects from accumulated other comprehensive income to retained earnings. Tax effects unrelated to the TCJA are released from accumulated other comprehensive income using either the specific identification approach or the portfolio approach based on the nature of the underlying item.

 

The Company adopted ASU 2016-01, Financial Instruments on January 1, 2018. The new standard required modified retrospective adoption through 2018 beginning Retained Earnings and Accumulated Other Comprehensive Income. This was incorrectly recorded as a loss through Other Comprehensive Income of $63.0 million during the quarter ended March 31, 2018.  This was corrected during 2018 and therefore, has no impact on the annual consolidated financial statements. The Company has determined that the adjustment was not material to any previously reported interim period.  The Consolidated Statement of Comprehensive (Loss) for the nine months ended September 30, 2018 has been adjusted to correct for this error. 

 

 9 

 

 

Revenue Recognition

 

General

 

ASU No. 2014-09, “Revenue from Contracts with Customers” (“Topic 606”) provides that revenues are recognized when control of the promised goods under a contract is transferred to a customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods as specified in the underlying terms with the customer. The Company warrants products against defects and for specific quality standards, permitting the return of products under certain circumstances. Product sales are recorded net of all sales-related deductions including, but not limited to: chargebacks, trade discounts, commercial and government rebates, customer loyalty programs, fee-for-service arrangements with certain distributors, returns, and other allowances which we refer to in the aggregate as sales returns and allowances (“SRA”).

 

The Company’s performance obligations are primarily achieved when control of the products is transferred to the customer. Transfer of control is based on contractual performance obligations, but typically occurs upon receipt of the goods by the customer as that is when the customer has obtained control of significantly all of the economic benefits.

 

Refer to “NOTE 7 – Reportable Segments” for our revenues disaggregated by product and segment and our revenues disaggregated by geography for our international segment.  We believe this level of disaggregation best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.  

 

The following table summarizes the activity from operations in the Company’s major categories of SRA ($ in millions):

 

   Chargebacks   Rebates  

Returns

and

Other

Allowances

  

Cash

Discounts

   Total 
Balance at December 31, 2018  $61.8   $1,908.5   $566.6   $30.7   $2,567.6 
Provision related to sales in 2019   840.1    4,427.4    1,227.0    244.8    6,739.3 
Credits and payments   (835.1)   (4,241.5)   (1,174.9)   (241.2)   (6,492.7)
Balance at September 30, 2019  $66.8   $2,094.4   $618.7   $34.3   $2,814.2 

Contra accounts receivable at September 30, 2019

  $66.8   $94.6   $41.7   $34.3   $237.4 

Accounts payable and accrued expenses at September 30, 2019

  $-   $1,999.8   $577.0   $-   $2,576.8 

 

The following table summarizes the balance sheet classification of our SRA reserves ($ in millions):

 

   September 30, 2019   December 31, 2018 
Contra accounts receivable  $237.4   $207.7 
Accounts payable and accrued expenses   2,576.8    2,359.9 
Total  $2,814.2   $2,567.6 

 

The SRA provisions recorded to reduce gross product sales to net product sales were as follows ($ in millions):

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2019   2018   2019   2018 
Gross product sales  $6,254.7   $6,054.3   $18,210.2   $17,765.9 
Provisions to reduce gross product sales to net product sales   (2,314.8)   (2,214.6)   (6,739.3)   (6,337.0)
Net product sales  $3,939.9   $3,839.7   $11,470.9   $11,428.9 
Percentage of SRA provisions to gross sales   37.0%   36.6%   37.0%   35.7%

 

 10 

 

 

Collectability Assessment

 

At the time of contract inception or customer account set-up, the Company performs a collectability assessment on the creditworthiness of such customer. The Company assesses the probability that the Company will collect the consideration to which it will be entitled in exchange for the goods sold. In evaluating collectability, the Company considers the customer’s ability and intention to pay consideration when it is due. On a recurring basis, the Company estimates the amount of receivables considered uncollectible after sale to the customer to reflect allowances for doubtful accounts.  Provision for bad debts, included in general and administrative expenses, were $19.0 million and $0.8 million in the three months ended September 30, 2019 and 2018, respectively.  Provision for bad debts, included in general and administrative expenses, were $26.3 million and $14.9 million in the nine months ended September 30, 2019 and 2018, respectively.

 

Goodwill and Intangible Assets with Indefinite Lives

 

General

 

The Company tests goodwill and intangible assets with indefinite lives for impairment annually in the second quarter. Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or an indefinite lived intangible asset below its carrying amount. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units.

 

The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including Reporting Unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a Reporting Unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative assessment for some or all of its Reporting Units and perform a quantitative test as of the measurement date of the test.

 

Goodwill is considered impaired if the carrying amount of the net assets exceeds the fair value of the reporting unit. Impairment, if any, would be recorded in operating income / (loss) and this could result in a material impact to net income / (loss) and income / (loss) per share.

 

Prior to Allergan’s 2018 annual impairment test, the Company adopted the new guidance under Accounting Standard Update No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment which eliminated step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment loss.  A goodwill impairment loss under the new guidance is instead measured using a single step test based on the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill.  

 

Acquired in-process research and development (“IPR&D”) intangible assets represent the value assigned to research and development (“R&D”) projects acquired in a business combination that, as of the date acquired, represent the right to develop, use, sell and/or offer for sale a product or other intellectual property that has not been completed or approved. The IPR&D intangible assets are subject to impairment testing until completion or abandonment of each project. Upon abandonment, the assets are impaired if there is no future alternative use or ability to sell the asset. Impairment testing requires management to develop significant estimates and assumptions involving the determination of the fair value of the IPR&D asset, including estimated revenues, the probability of success of the project, determination of the appropriate discount rate, assessment of the asset’s life, potential regulatory risks, and net revenue growth curve assumptions.  The major risks and uncertainties associated with the timely and successful completion of IPR&D projects include legal risk, market risk and regulatory risk. Changes in our assumptions could result in future impairment charges. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change or the timely completion of each project and commercial success will occur. For these and other reasons, actual results may vary significantly from estimated results.

 

Upon successful completion of each project and approval of a product, we will make a separate determination of the useful life of the intangible asset, transfer the amount to currently marketed products (“CMP”) and amortization expense will be recorded over the estimated useful life.

 

Refer to “NOTE 10 –Goodwill, Product Rights, and Other Intangible Assets” for further discussion on the Company’s goodwill and intangible assets balances and impairments.

 

Earnings Per Share (“EPS”)

 

The Company computes EPS in accordance with Accounting Standards Codification (“ASC”) Topic 260, “Earnings Per Share” (“ASC 260”) and related guidance, which requires two calculations of EPS to be disclosed: basic and diluted. Basic EPS is computed by dividing net (loss) by the weighted average ordinary shares outstanding during a period. Diluted EPS is based on the treasury stock method and includes the effect from potential issuance of ordinary shares, such as shares issuable pursuant to the exercise of stock options and restricted stock units. Ordinary share equivalents have been excluded where their inclusion would be anti-dilutive.

 

 11 

 

 

A reconciliation of the numerators and denominators of basic and diluted EPS follows ($ in millions, except per share amounts):

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2019   2018   2019   2018 
Net (loss):                    
Net (loss) attributable to ordinary shareholders  $(786.8)  $(37.9)  $(4,953.8)  $(842.9)
                     
Basic weighted average ordinary shares outstanding   328.0    339.0    329.3    337.6 
                     
Basic EPS:                    
Net (loss) per share  $(2.40)  $(0.11)  $(15.04)  $(2.50)
                     
Dividends per ordinary share  $0.74   $0.72   $2.22   $2.16 
                     
Diluted weighted average ordinary shares outstanding   328.0    339.0    329.3    337.6 
                     
Diluted EPS:                    
Net (loss) per share  $(2.40)  $(0.11)  $(15.04)  $(2.50)

 

Stock awards to purchase 2.2 million and 1.8 million ordinary shares for the three and nine months ended September 30, 2019, respectively, were outstanding, but not included in the computation of diluted EPS, because the awards were anti-dilutive.  No shares were repurchased in the three months ended September 30, 2019.  The impact of the 5.3 million shares repurchased in the nine months ended September 30, 2019 on basic EPS was 3.8 million weighted average shares.  

 

Stock awards to purchase 2.7 million and 2.3 million ordinary shares for the three and nine months ended September 30, 2018, respectively, were outstanding, but not included in the computation of diluted EPS, because the awards were anti-dilutive.  During the three and nine months ended September 30, 2018, the Company repurchased shares under its share repurchase programs.  The impact of the 2.4 million and 12.0 million shares repurchased in the three and nine months ended September 30, 2018 on basic EPS was 0.5 million and 7.2 million, respectively.  

 

The Company’s preferred shares were mandatorily converted to ordinary shares on March 1, 2018.  The weighted average impact of ordinary share equivalents of 3.9 million for the nine months ended September 30, 2018, which would result from the mandatory conversion of the Company’s preferred shares at the beginning of the period, were not included in the calculation of diluted EPS as their impact would be anti-dilutive.

 

Refer to “NOTE 15 –Shareholders’ Equity” for further discussion on the Company’s share repurchase programs.

 

Research and Development Activities

 

Research and development (“R&D”) activities are expensed as incurred and consist of self-funded R&D costs, the costs associated with work performed under collaborative R&D agreements, regulatory fees, and acquisition and license related milestone payments, if any.

 

 12 

 

 

As of September 30, 2019, we are developing a number of products, some of which utilize novel drug delivery systems, through a combination of internal and collaborative programs, and we additionally have products in development as part of our life-cycle management strategy for our existing product portfolio.  These development projects include but are not limited to the following:

 

Product   Therapeutic Area   Indication  

Expected

Launch

Year

  Phase
Cariprazine   Central Nervous System   Bipolar Depression   2019   Approved
Ubrogepant   Central Nervous System   Acute Migraine   2020   Review
Bimatoprost SR   Eye Care   Glaucoma   2020   Review
Abicipar   Eye Care   Age Related Macular Degeneration   2020   Review
Atogepant   Central Nervous System   Prophylaxis Migraine   2021   III
Presbysol   Eye Care   Presbyopia   2021   III
Cenicriviroc   Gastrointestinal   NASH   2022   III
Brimonidine DDS   Eye Care   Geographic Atrophy   2023   II
Relamorelin   Gastrointestinal   Gastroparesis   2024   III
Botox   Medical Aesthetics   Platysma/Masseter   2025/2024   II
Abicipar   Eye Care   Diabetic Macular Edema   2025   II

 

In addition to the projects listed in the table above, the Company continues to develop brazikumab, a gastrointestinal development project for indications of Crohn’s disease and ulcerative colitis.  In connection with the proposed AbbVie Transaction, the Company is actively seeking to divest brazikumab, with any such divestiture contingent on the closing of the AbbVie Transaction.

 

Recent Accounting Pronouncements

 

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606.  The ASU provides more comparability in the presentation of revenue for certain transactions between collaborative arrangement participants and only allows a company to present units of account in collaborative arrangements that are within the scope of the revenue recognition standard together with revenue accounted for under the revenue recognition standard. The parts of the collaborative arrangement that are not in the scope of the revenue recognition standard should be presented separately from revenue accounted for under the revenue recognition standard.  The amendments in ASU No. 2018-18 are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.  The adoption of this guidance is not anticipated to have a material impact on the Company’s financial position and results of operations.  

 

In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), relating to a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a vendor (i.e., a service contract). Under the new guidance, a customer will apply the same criteria for capitalizing implementation costs as it would for an arrangement that has a software license.  The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted.  The Company will adopt the new guidance prospectively to eligible costs incurred on or after the date this guidance is first applied. The adoption of this guidance is not anticipated to have a material impact on the Company’s financial position and results of operations.  

 

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) – Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The revisions to the disclosure requirements affect only the year-end financial statements of plan sponsors, as there are no changes related to interim financial statements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is permitted.  The ASU provisions will be applied on a retrospective basis to all periods presented.  This pronouncement only has an impact to disclosure requirements and does not have an impact on our financial position or results of operations.

 

 13 

 

 

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which removes, adds and modifies certain disclosure requirements for fair value measurements in Topic 820. The Company will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the valuation processes of Level 3 fair value measurements. However, the Company will be required to additionally disclose the changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of assumptions used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.  The amendments relating to additional disclosure requirements will be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments will be applied retrospectively to all periods presented upon their effective date. The Company is permitted to early adopt either the entire ASU or only the provisions that eliminate or modify the requirements.  This pronouncement only has an impact to disclosure requirements and does not have an impact on our financial position or results of operations.

  

NOTE 3 — Business Transactions

 

2019 Transactions

 

The following transaction was announced and completed in the nine months ended September 30, 2019.

 

Envy Medical, Inc.

 

On March 26, 2019, the Company acquired Envy Medical, Inc. (“Envy”), a privately held medical aesthetics company that specializes in non-surgical, non-invasive skin resurfacing systems for an acquisition accounting purchase price of $81.4 million, which includes $67.4 million of product rights and other intangibles, $34.1 million of goodwill and other assets and liabilities.  The transaction was treated as a business combination.  The acquisition combines Envy’s skin care product portfolio with the Company’s leading medical aesthetics business.

 

NOTE 4 — Assets Held for Sale

 

The following represents the assets held for sale ($ in millions):

 

   September 30,   December 31, 
   2019   2018 
Assets held for sale:          
Inventories  $-   $34.0 
Property, plant and equipment, net   32.5    32.8 
Product rights and other intangibles   -    849.4 
Total assets held for sale  $32.5   $916.2 

 

As of December 31, 2018, the Company had concluded that its Anti-Infectives business met the criteria for held for sale based on management’s intent and ability to divest the business within the next twelve months.  Assets held for sale also include miscellaneous properties.  As of June 30, 2019, and as a result of the proposed AbbVie Transaction, the Company concluded that the Anti-Infectives business no longer met the criteria for held for sale.  The Anti-Infectives intangible assets and inventory were reclassified to held in use at the lower of their carrying amount before the assets were recorded as held for sale less any amortization that would have been recognized had the assets been continuously classified as held and used or their fair value at the date of the subsequent decision not to sell.  As a result of the reclassification, the Company recorded a charge of $129.6 million, primarily related to amortization that would have been recorded if the assets were held and used, within Assets, sales and impairments, net for the nine month period the assets were held for sale.

  

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NOTE 5 — Other Income / (Expense)

 

Other income, net consisted of the following ($ in millions):

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2019   2018   2019   2018 
Teva Share Activity  $-   $-   $-   $60.9 
Sale of businesses   -    129.6    -    182.6 
Debt extinguishment other   -    (8.3)   (0.2)   0.8 
Other income, net   2.5    8.7    11.8    22.3 
Other income, net  $2.5   $130.0   $11.6   $266.6 

 

Teva Share Activity

 

During the nine months ended September 30, 2018, the Company recorded the following movements in its investment in Teva securities (“Teva Share Activity”) ($ in millions except per share information):

 

   Shares  

Carrying

Value

per Share

  

Market

Price

  

Proceeds

Received

  

Value of

Marketable

Securities

  

Unrealized

Gain / (Loss) as

a Component

of Other

Comprehensive

Income

  

Gain / (Loss)

Recognized

in Other

Income/

(Expense),

Net

  

Derivative

Instrument

(Liability)/

Asset

  

Retained

Earnings

 
Teva securities as of   December 31, 2017   95.9   $17.60   $18.95    n.a.   $1,817.7   $129.3   $-   $(62.9)  $- 
Impact of ASU No. 2016-01
   during the three months
   ended March 31, 2018
   -    -    -    -    -    (129.3)   -    -    129.3 
Settlement of initial accelerated
   share repurchase ("ASR"), net
   during the three months
   ended March 31, 2018
   (25.0)   18.95    16.53*   413.3    (473.8)   -    2.5    62.9    - 
Settlement of forward sale
   entered into during the
   three months ended
   March 31, 2018, net
   (25.0)   17.09    18.61**   465.5    (427.3)   -    38.2    -    - 
Open market sales during
   the nine months ended
   September 30, 2018
   (45.9)   n.a.    20.41    936.7    (916.6)   -    20.2    -    - 

Teva securities as of

   and for the nine months

   ended September 30, 2018

   -   $-   $-   $1,815.5   $-   $-   $60.9   $-   $129.3 

 

 

 

* Market price represented average price over the life of the contract.  On the January 17, 2018 settlement date, the closing stock price of Teva securities was $21.48.

**Market price represented average price over the life of the contract.  On the May 7, 2018 settlement date, the closing stock price of Teva securities was $18.62.  

  

Sale of Businesses

 

During the three and nine months ended September 30, 2018, the Company recorded a net gain of $129.6 million as a result of the sale of five medical dermatology products to Almirall, S.A.

 

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During the nine months ended September 30, 2018, the Company completed the sale of a non-strategic asset group that qualified as a business, for $55.0 million in cash plus deferred consideration of $20.0 million.  As a result of this transaction, the Company recognized a gain of $53.0 million.

 

Debt Extinguishment Other

 

During the nine months ended September 30, 2019, the Company repurchased $249.8 million of senior notes in the open market.  The net gain / (loss) on the debt extinguishments was not material.    

 

During the three and nine months ended September 30, 2018, the Company repurchased $1,767.2 million and $2,223.1 million, respectively, of senior notes in the open market.  During the three months ended September 30, 2018, as a result of the debt extinguishment, the Company recognized a net loss of $8.3 million, within “Other income / (expense), net” for the discount received upon repurchase of $5.1 million, offset by the non-cash write-off of premiums and debt fees related to the repaid notes of $13.4 million.  During the nine months ended September 30, 2018, as a result of the debt extinguishment, the Company recognized a net gain of $0.8 million within “other income / (expense), net” for the discount received upon repurchase of $18.2 million, offset by the non-cash write-off of premiums and debt fees related to the repaid notes of $17.4 million.

 

During the three and nine months ended September 30, 2019 and 2018, the Company redeemed and retired the following senior notes ($ in millions):

 

    Three Months Ended September 30, 2019   Nine Months Ended September 30, 2019     
Tranche  

Face Value

Retired

  

Cash Paid

for Retirement

  

Face Value

Retired

  

Cash Paid

for Retirement

  

Remaining Face
Value at

September 30, 2019

 
3.000% due 2020   $-   $-   $180.7   $180.7   $2,526.0 
3.450% due 2022    -    -    62.3    62.3    2,878.2 
3.800% due 2025    -    -    6.8    6.8    3,020.7 
Total   $-   $-   $249.8   $249.8   $8,424.9 

  

    Three Months Ended September 30, 2018   Nine Months Ended September 30, 2018     
Tranche  

Face Value

Retired

  

Cash Paid

for Retirement

  

Face Value

Retired

  

Cash Paid

for Retirement

  

Remaining Face
Value at

September 30, 2018

 
2.450% due 2019   $-   $-   $8.8   $8.8   $491.2 
3.000% due 2020    408.6    407.8    449.3    448.4    3,050.6 
3.450% due 2022    -    -    59.5    58.6    2,940.5 
3.850% due 2024    52.1    52.0    63.3    62.9    1,136.7 
3.800% due 2025    787.5    784.4    872.5    867.0    3,127.5 
4.550% due 2035    345.0    344.7    460.0    454.8    2,040.0 
4.850% due 2044    140.1    139.5    199.1    196.8    1,300.9 
4.750% due 2045    33.9    33.7    110.6    107.6    1,089.4 
Total   $1,767.2   $1,762.1   $2,223.1   $2,204.9   $15,176.8 

 

Other Income, Net

 

Other income, net includes the mark to market losses of $5.1 million and $1.9 million, respectively, on equity securities held by the Company during the three and nine months ended September 30, 2019.

  

NOTE 6 — Share-Based Compensation

 

The Company recognizes compensation expense for all share-based compensation awards made to employees and directors based on the fair value of the awards on the date of grant.

  

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The Company grants awards with the following features:

 

  Time-based restricted stock and restricted stock unit awards (including, in certain foreign jurisdictions, cash-settled restricted stock unit awards, which are recorded as a liability);
  Performance-based restricted stock unit awards measured against performance-based targets defined by the Company, including, but not limited to, total shareholder return metrics and R&D milestones, as defined by the Company; and

 

  Non-qualified options to purchase outstanding shares.

 

The Company recognizes share-based compensation expense for granted awards over the applicable vesting period.

 

Fair Value Assumptions

 

All restricted stock and restricted stock units (whether time-based or performance-based) are granted and expensed using the fair value per share on the applicable grant date, over the applicable vesting period. Non-qualified options to purchase ordinary shares are granted to employees at exercise prices per share equal to the closing market price per share on the date of grant. The fair value of non-qualified options is determined on the applicable grant dates using the Black-Scholes method of valuation and that amount is recognized as an expense over the vesting period. Using the Black-Scholes valuation model, the fair value of options is based on the following assumptions:

  

  

2019

Grants

  

2018

Grants

 
Dividend yield   1.7 - 1.8%    1.5% 
Expected volatility   26.4%    27.0% 
Risk-free interest rate   1.9%    2.2 - 2.9% 
Expected term (years)   7.0    7.0 

 

Share-Based Compensation Expense

 

Share-based compensation expense recognized in the Company’s results of operations for the three and nine months ended September 30, 2019 and 2018 was as follows ($ in millions):

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2019   2018   2019   2018 
Equity-based compensation awards  $49.9   $57.8   $161.7   $185.2 
Total share-based compensation expense  $49.9   $57.8   $161.7   $185.2 

 

Unrecognized future share-based compensation expense was $354.9 million as of September 30, 2019. This amount will be recognized as an expense over a remaining weighted average period of 1.5 years. Share-based compensation is being amortized and charged to operations over the same period as the restrictions are eliminated for the participants, which is generally on a straight-line basis.

 

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Share Activity

 

The following is a summary of equity award activity for unvested restricted stock and stock units in the period from December 31, 2018 through September 30, 2019 (in millions, except per share data):

 

    Shares  

Weighted

Average

Grant Date

Fair Value

  

Weighted

Average

Remaining

Contractual

Term

(Years)

  

Aggregate

Grant Date

Fair Value

 
Restricted shares / units outstanding at December 31, 2018    2.5   $190.27    1.6   $472.9 
Granted    1.5    140.11         210.5 
Vested    (0.7)   209.70         (141.5)
Forfeited    (0.1)   176.45         (26.6)
Restricted shares / units outstanding at September 30, 2019    3.2   $161.17    1.6   $515.3 

  

The following is a summary of equity award activity for non-qualified options to purchase ordinary shares in the period from December 31, 2018 through September 30, 2019 (in millions, except per share data):

 

   Options  

Weighted

Average

Exercise

Price

  

Weighted

Average

Remaining

Contractual

Term

(Years)

  

Aggregate

Intrinsic

Value

 
Outstanding, vested and expected to vest at December 31, 2018   6.3   $122.74    4.4   $69.0 
Granted   0.3    140.56           
Exercised   (0.5)   91.45           
Cancelled   (0.1)   220.61           
Outstanding, vested and expected to vest at September 30, 2019   6.0   $125.55    4.0   $255.5 

 

The increase in the aggregate intrinsic value of the options is primarily related to an increase in the Company’s stock from $133.66 as of December 31, 2018 to $168.29 as of September 30, 2019.

  

NOTE 7 — Reportable Segments

 

The Company’s businesses are organized into the following segments: US Specialized Therapeutics, US General Medicine and International. In addition, certain revenues and shared costs, and the results of corporate initiatives, are managed outside of the three segments.  During the second quarter of 2019, the Company changed the operational and management structure for its in-development calcitonin gene-related peptide (“CGRP”) receptors, Ubrogepant and Atogepant.  These development products were previously reported within the US Specialized Therapeutics segment and have been transferred to the US General Medicine segment to align these development products with the management structure and reporting.  The revenues and cost of sales related to these products in the prior periods were zero and any selling and marketing expenses and general and administrative expenses were de minimis and therefore it was not necessary to recast prior periods.

 

The operating segments are organized as follows:

 

  The US Specialized Therapeutics segment includes sales and expenses relating to branded products within the U.S., including Medical Aesthetics, Medical Dermatology through September 20, 2018, Eye Care and Neuroscience and Urology therapeutic products.
  The US General Medicine segment includes sales and expenses relating to branded products within the U.S. that do not fall into the US Specialized Therapeutics business units, including Central Nervous System, Gastrointestinal, Women’s Health, Anti-Infectives and Diversified Brands.

 

  The International segment includes sales and expenses relating to products sold outside the U.S.

 

 18 

 

 

  

The Company evaluates segment performance based on segment contribution. Segment contribution for our segments represents net revenues less cost of sales (defined below), selling and marketing expenses, and select general and administrative expenses. The Company does not evaluate the following items at the segment level:

  Revenues and operating expenses within cost of sales, selling and marketing expenses, and general and administrative expenses that result from the impact of corporate initiatives. Corporate initiatives primarily include integration, restructuring, divestitures, acquisitions, certain milestones and other shared costs.
  General and administrative expenses that result from shared infrastructure, including certain expenses located within the United States.

 

  Other select revenues and operating expenses including R&D expenses, amortization, IPR&D impairments, goodwill impairments and asset sales and impairments, net as not all such information has been accounted for at the segment level, or such information has not been used by all segments.
  Total assets including capital expenditures.

 

The Company defines segment net revenues as product sales and other revenue derived from our products or licensing agreements.

 

Cost of sales within segment contribution includes standard production and packaging costs for the products we manufacture, third party acquisition costs for products manufactured by others, profit-sharing or royalty payments for products sold pursuant to licensing agreements and finished goods inventory reserve charges.  Cost of sales within segment contribution excludes non-standard production costs, such as non-finished goods inventory obsolescence charges, manufacturing variances and excess capacity utilization charges, where applicable. Cost of sales does not include amortization or impairment costs for acquired product rights or other acquired intangibles.

 

Selling and marketing expenses consist mainly of personnel-related costs, product promotion costs, distribution costs, professional service costs, insurance, depreciation and travel costs.

 

General and administrative expenses consist mainly of personnel-related costs, facilities costs, transaction costs, insurance, depreciation, litigation costs and professional services costs which are general in nature and attributable to the segment.

 

Segment net revenues, segment operating expenses and segment contribution information consisted of the following for the three and nine months ended September 30, 2019 and 2018 ($ in millions):

 

   Three Months Ended September 30, 2019 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Net revenues  $1,670.8   $1,518.6   $835.1   $4,024.5 
                     
Operating expenses:                    
Cost of sales(1)   151.1    245.2    144.6    540.9 
Selling and marketing   389.5    261.2    226.9    877.6 
General and administrative   50.1    45.0    26.0    121.1 
Segment contribution  $1,080.1   $967.2   $437.6   $2,484.9 
Contribution margin   64.6%   63.7%   52.4%   61.7%
Corporate(2)                  1,067.3 
Research and development                  474.5 
Amortization                  1,537.7 
Asset sales and impairments, net                  2.0 
Operating (loss)                 $(596.6)
Operating margin                  (14.8)%

 

 

 

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.

(2) Corporate includes net revenues of $26.2 million.  

  

 19 

 

  

   Nine Months Ended September 30, 2019 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Net revenues  $4,998.8   $4,224.2   $2,484.3   $11,707.3 
                     
Operating expenses:                    
Cost of sales(1)   422.2    667.0    399.9    1,489.1 
Selling and marketing   1,114.3    721.8    718.1    2,554.2 
General and administrative   142.3    119.2    80.1    341.6 
Segment contribution  $3,320.0   $2,716.2   $1,286.2   $7,322.4 
Contribution margin   66.4%   64.3%   51.8%   62.5%
Corporate(2)                  1,677.5 
Research and development                  1,359.5 
Amortization                  4,339.1 
Goodwill impairments                  3,552.8 
In-process research and development impairments                  436.0 
Asset sales and impairments, net                  126.2 
Operating (loss)                 $(4,168.7)
Operating margin                  (35.6)%

 

 

 

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.

(2) Corporate includes net revenues of $30.6 million.                                

 

 

   Three Months Ended September 30, 2018 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Net revenues  $1,706.2   $1,381.3   $821.6   $3,909.1 
                     
Operating expenses:                    
Cost of sales(1)   143.0    219.6    130.7    493.3 
Selling and marketing   313.7    233.2    206.0    752.9 
General and administrative   47.3    37.7    35.1    120.1 
Segment contribution  $1,202.2   $890.8   $449.8   $2,542.8 
Contribution margin   70.5%   64.5%   54.7%   65.0%
Corporate(2)                  273.0 
Research and development                  424.2 
Amortization                  1,588.5 
Asset sales and impairments, net                  (0.4)
Operating income                 $257.5 
Operating margin                  6.6%

 

 

 

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.

(2) Corporate includes net revenues of $2.3 million.  

 20 

 

  

   Nine Months Ended September 30, 2018 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Net revenues  $5,111.5   $3,925.0   $2,634.5   $11,671.0 
                     
Operating expenses:                    
Cost of sales(1)   425.9    604.0    391.0    1,420.9 
Selling and marketing   970.2    713.5    697.9    2,381.6 
General and administrative   145.6    111.3    100.4    357.3 
Segment contribution  $3,569.8   $2,496.2   $1,445.2   $7,511.2 
Contribution margin   69.8%   63.6%   54.9%   64.4%
Corporate(2)                  733.1 
Research and development                  1,588.1 
Amortization                  4,983.2 
In-process research and development impairments                  798.0 
Asset sales and impairments, net                  272.3 
Operating (loss)                 $(863.5)
Operating margin                  (7.4)%

 

 

 

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.

(2) Corporate includes net revenues of $36.7 million.  

  

The following table presents our net revenue disaggregated by geography for our international segment for the three and nine months ended September 30, 2019 and 2018 ($ in millions):

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2019   2018   2019   2018 
Europe  $346.5   $329.8   $1,087.1   $1,141.5 
Asia Pacific, Middle East and Africa   266.9    272.4    779.1    796.8 
Latin America and Canada   199.9    203.3    560.2    646.2 
Other*   21.8    16.1    57.9    50.0 
Total International  $835.1   $821.6   $2,484.3   $2,634.5 

 

*Includes royalty and other revenue  

 

 21 

 

 

The following tables present global net revenues for the top products greater than 10% of total revenues of the Company as well as a reconciliation of segment revenues to total net revenues for the three and nine months ended September 30, 2019 and 2018 ($ in millions):

 

   Three Months Ended September 30, 2019 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Botox®  $669.2   $-   $259.5   $928.7 
Restasis®   286.8    -    9.2    296.0 
Juvederm® Collection   134.8    -    144.7    279.5 
Vraylar®   -    234.6    -    234.6 
Linzess®/Constella®   -    214.7    6.7    221.4 
Lo Loestrin®   -    161.4    -    161.4 
Lumigan®/Ganfort®   67.5    -    89.7    157.2 
Bystolic® / Byvalson®   -    152.2    0.6    152.8 
Alphagan®/Combigan®   90.9    -    40.4    131.3 
Eye Drops   62.0    -    63.8    125.8 
Viibryd®/Fetzima®   -    105.1    3.0    108.1 
Ozurdex ®   33.7    -    63.8    97.5 
Alloderm ®   95.0    -    2.1    97.1 
Zenpep®   -    74.2    0.7    74.9 
Breast Implants   58.5    -    5.7    64.2 
Coolsculpting ® Consumables   40.4    -    21.6    62.0 
Carafate ® / Sulcrate ®   -    55.1    0.8    55.9 
Armour Thyroid   -    54.4    -    54.4 
Viberzi®   -    50.1    0.6    50.7 
Teflaro®   -    38.4    2.1    40.5 
Skin Care   36.1    -    4.0    40.1 
Saphris®   -    34.5    -    34.5 
Avycaz®   -    29.6    -    29.6 
Dalvance®   -    23.2    1.4    24.6 
Coolsculpting ® Systems & Add On Applicators   12.6    -    11.4    24.0 
Savella®   -    24.0    -    24.0 
Namzaric®   -    22.4    -    22.4 
Liletta®   -    19.9    -    19.9 
Asacol®/Delzicol®   -    11.9    7.2    19.1 
Canasa®/Salofalk®   -    5.8    4.4    10.2 
Rapaflo®   5.2    -    1.5    6.7 
Kybella® / Belkyra®   5.3    -    0.3    5.6 
Namenda®   -    4.0    -    4.0 
Aczone®   3.4    -    -    3.4 
Other   69.4    203.1    89.9    362.4 
Total segment revenues  $1,670.8   $1,518.6   $835.1   $4,024.5 
Corporate revenues                  26.2 
Total net revenues                 $4,050.7 

  

 22 

 

 

   Nine Months Ended September 30, 2019 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Botox®  $1,995.7   $-   $775.4   $2,771.1 
Juvederm® Collection   421.1    -    475.2    896.3 
Restasis®   829.4    -    31.5    860.9 
Linzess®/Constella®   -    572.0    17.0    589.0 
Vraylar®   -    574.4    -    574.4 
Lumigan®/Ganfort®   187.3    -    265.2    452.5 
Lo Loestrin®   -    432.7    -    432.7 
Bystolic® / Byvalson®   -    431.0    1.5    432.5 
Alphagan®/Combigan®   265.5    -    118.9    384.4 
Eye Drops   169.2    -    176.5    345.7 
Viibryd®/Fetzima®   -    297.9    7.8    305.7 
Ozurdex ®   93.9    -    207.9    301.8 
Alloderm ®   291.2    -    5.9    297.1 
Coolsculpting ® Consumables   148.9    -    59.7    208.6 
Zenpep®   -    207.2    0.7    207.9 
Breast Implants   187.3    -    (14.5)   172.8 
Carafate ® / Sulcrate ®   -    165.6    2.1    167.7 
Armour Thyroid   -    161.1    -    161.1 
Viberzi®   -    138.1    1.2    139.3 
Skin Care   113.4    -    10.4    123.8 
Teflaro®   -    108.9    2.3    111.2 
Saphris®   -    99.0    -    99.0 
Asacol®/Delzicol®   -    68.2    27.2    95.4 
Avycaz®   -    86.0    -    86.0 
Coolsculpting ® Systems & Add On Applicators   45.9    -    33.6    79.5 
Namzaric®   -    68.4    -    68.4 
Savella®   -    67.0    -    67.0 
Dalvance®   -    55.5    3.6    59.1 
Liletta®   -    56.6    -    56.6 
Canasa®/Salofalk®   -    24.0    12.1    36.1 
Rapaflo®   21.5    -    3.5    25.0 
Kybella® / Belkyra®   21.1    -    2.5    23.6 
Namenda®   -    19.6    -    19.6 
Aczone®   6.8    -    -    6.8 
Other   200.6    591.0    257.1    1,048.7 
Total segment revenues  $4,998.8   $4,224.2   $2,484.3   $11,707.3 
Corporate revenues                  30.6 
Total net revenues                 $11,737.9 

 

 23 

 

 

   Three Months Ended September 30, 2018 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Botox®  $623.4   $-   $256.3   $879.7 
Restasis®   298.0    -    13.6    311.6 
Juvederm® Collection   127.2    -    138.6    265.8 
Linzess®/Constella®   -    204.8    5.7    210.5 
Lumigan®/Ganfort®   78.0    -    94.8    172.8 
Bystolic® / Byvalson®   -    151.2    0.5    151.7 
Lo Loestrin®   -    141.5    -    141.5 
Vraylar®   -    138.0    -    138.0 
Alphagan®/Combigan®   95.4    -    40.5    135.9 
Eye Drops   54.8    -    66.8    121.6 
Alloderm ®   105.8    -    1.0    106.8 
Breast Implants   58.2    -    35.6    93.8 
Viibryd®/Fetzima®   -    88.5    1.8    90.3 
Coolsculpting ® Consumables   55.5    -    14.2    69.7 
Zenpep®   -    62.1    -    62.1 
Ozurdex ®   28.6    -    25.8    54.4 
Carafate ® / Sulcrate ®   -    53.4    0.7    54.1 
Canasa®/Salofalk®   -    46.8    4.4    51.2 
Armour Thyroid   -    48.0    -    48.0 
Viberzi®   -    46.8    0.3    47.1 
Asacol®/Delzicol®   -    32.1    10.9    43.0 
Coolsculpting ® Systems & Add On Applicators   29.4    -    8.3    37.7 
Saphris®   -    36.4    -    36.4 
Skin Care   32.2    -    3.7    35.9 
Teflaro®   -    33.4    -    33.4 
Namzaric®   -    28.0    -    28.0 
Avycaz®   -    24.7    -    24.7 
Savella®   -    22.4    -    22.4 
Rapaflo®   20.5    -    1.8    22.3 
Aczone®   17.4    -    0.1    17.5 
Namenda®   -    16.3    -    16.3 
Liletta®   -    12.7    -    12.7 
Dalvance®   -    9.2    -    9.2 
Kybella® / Belkyra®   5.2    -    1.6    6.8 
Other   76.6    185.0    94.6    356.2 
Total segment revenues  $1,706.2   $1,381.3   $821.6   $3,909.1 
Corporate revenues                  2.3 
Total net revenues                 $3,911.4 

 

 24 

 

 

   Nine Months Ended September 30, 2018 
  

US Specialized

Therapeutics

  

US General

Medicine

   International   Total 
Botox®  $1,854.4   $-   $777.1   $2,631.5 
Restasis®   872.0    -    47.9    919.9 
Juvederm® Collection   389.8    -    440.8    830.6 
Linzess®/Constella®   -    555.9    17.7    573.6 
Lumigan®/Ganfort®   217.8    -    295.7    513.5 
Bystolic® / Byvalson®   -    432.1    1.6    433.7 
Alphagan®/Combigan®   277.7    -    129.3    407.0 
Lo Loestrin®   -    383.9    -    383.9 
Eye Drops   154.8    -    208.0    362.8 
Vraylar®   -    336.6    -    336.6 
Alloderm ®   312.4    -    5.5    317.9 
Breast Implants   194.8    -    119.6    314.4 
Viibryd®/Fetzima®   -    246.9    4.9    251.8 
Ozurdex ®   81.7    -    158.1    239.8 
Coolsculpting ® Consumables   180.8    -    40.8    221.6 
Zenpep®   -    170.5    -    170.5 
Carafate ® / Sulcrate ®   -    163.7    2.1    165.8 
Armour Thyroid   -    145.4    -    145.4 
Canasa®/Salofalk®   -    130.4    13.1    143.5 
Asacol®/Delzicol®   -    102.9    35.0    137.9 
Viberzi®   -    127.6    0.7    128.3 
Coolsculpting ® Systems & Add On Applicators   99.5    -    21.8    121.3 
Skin Care   98.4    -    11.6    110.0 
Saphris®   -    102.9    -    102.9 
Teflaro®   -    98.0    0.6    98.6 
Namzaric®   -    93.2    -    93.2 
Avycaz®   -    70.0    -    70.0 
Rapaflo®   63.0    -    4.6    67.6 
Savella®   -    61.4    -    61.4 
Namenda®   -    60.3    -    60.3 
Aczone®   54.5    -    0.3    54.8 
Dalvance®   -    38.8    1.3    40.1 
Liletta®   -    36.3    -    36.3 
Kybella® / Belkyra®   24.6