As a multi-specialty health care company, one of Allergan’s unique strengths is our diversity of product lines that include specialty pharmaceuticals, biologics, medical devices and over-the-counter consumer products. But we are not diverse for diversity’s sake. Rather, we are rigorous in deciding which markets to invest in and grow based on our organic R&D, our track record of leadership, and our assessment of unmet medical needs and consumer wants. At the same time, we recognize there are clear benefits to our multi-specialty focus, especially in today’s challenging health care environment.

For instance, approximately one-third of our revenues are derived from medical aesthetics and health products that are electively paid for out-of-pocket by the patient or consumer. In our experience, these expenditures have shown minimal response to shifts in economic cycles because demand has existed across a wide swath of income levels and demographics. Perhaps more significantly, however, this product mix diversifies our risk by providing some protection from increasingly restrictive pricing and reimbursement practices in the United States, Europe and other leading global markets.

In this environment, we are committed to ensuring patients have access to the best medical therapies they need and deserve. We are proud of our investment and effort in reimbursement and of our results. We have high medical coverage for many of our therapeutic products by Medicare Part D and with other payors in the United States, as well as in national formularies, thanks to our strong market positions in therapeutic areas such as ophthalmology and neurosciences.

Key Product Growth

R&D Expenditures/Growth

* Adjustments to GAAP research and development expense used to calculate research and development expense, adjusted for non-GAAP items, include the following: $72.0 million of in-process research and development expense related to the EndoArt acquisition in 2007, $579.3 million of in-process research and development expense related to the Inamed acquisition, $0.2 million of Inamed integration and transition costs and $0.5 million of transition/duplicate operating expenses in 2006, $1.5 million of transition/duplicate operating expenses and a $3.0 million buy-out of a license agreement in 2005, $458.0 million of in-process research and development expenses in 2003 related to the acquisition of Bardeen Sciences Company, LLC and Oculex Pharmaceuticals, Inc. GAAP research and development expense was $718.1 million, $1,055.5 million, $388.3 million, $342.9 million and $762.6 million in 2007, 2006, 2005, 2004 and 2003, respectively. GAAP research and development expense (decline) growth was (32%), 172%, 13%, (55%) and 228% for 2007, 2006, 2005, 2004 and 2003, respectively.