To Our Investors

Since I was appointed as Allergan’s third CEO 10 years ago, 2007 was the most spectacular year for growth and the achievement of many successes on a broad front. In 2007, we reached almost $3.9 billion in sales and recorded the largest annual sales increase in almost 60 years of operations — with an increase of $869 million over 2006. In the fourth quarter, we also enjoyed our first quarter ever with more than $1 billion in sales.

Our investments into the LAP-BAND^® Adjustable Gastric Banding System, the JUVÉDERM™ dermal filler family of products and the NATRELLE™ Collection and INSPIRA^® silicone gel-filled breast implants yielded strong sales and growth rates that fully justified the price we paid for Inamed Corporation (acquired March 2006) and Groupe Laboratoires Cornéal in France (acquired January 2007). Coupling these products with BOTOX^® Cosmetic (marketed as VISTABEL^®/VISTABEX^® in Europe) made Allergan the largest company in the new medical aesthetics market worldwide, and indeed in every continent. With a broad and unmatched line of attractive products and the largest sales force serving dermatologists, plastic surgeons and other aesthetic specialist physicians, Allergan has played the role of locomotive. We are creating and leading these markets which are responding to the global mega-trends of the desire to remain active and to look better and more youthful as the world’s population ages. The response to our new products, as well as to our investments in direct-to-consumer advertising and many other sales and marketing programs worldwide, has been quite extraordinary. We estimate that the world market has accelerated in growth. (See Market Growth Year-To-Date chart below.)

Overall, the Allergan Medical division we created following the Inamed acquisition in mid-2006 realized 2007 sales of $771 million and grew a spectacular 53 percent on a pro forma basis, which includes Inamed and Cornéal pre-acquisition sales in 2006. (See related chart.) Thanks to strong focus in each individual business, depth of management talent and attention to operational details, the considerable successes of Allergan Medical did not distract from our core pharmaceutical operations. Allergan’s pharmaceutical businesses (including all of BOTOX^® sales) also increased a strong 18 percent over 2006, an enviable result in the global pharmaceutical industry which has been recently challenged with growth problems.

For the sixth consecutive year, Allergan has been the fastest-growing global eye care company,⁽¹⁾ driven by a wide range of products, but principally by the glaucoma and dry eye franchises. For us, the most important U.S. Food and Drug Administration (FDA) approval of the year was COMBIGAN™, a fixed combination of ALPHAGAN^® and timolol, the culmination of no less than five clinical studies by Allergan and the first time that the FDA had approved a fixed combination in nine years. As glaucoma treatment worldwide is migrating to the increased use of fixed combinations, we foresee a unique opportunity in the United States for COMBIGAN™.

Other key research and development (R&D) milestones were the FDA filing of LUMIGAN^® X, a next generation LUMIGAN^®, and filings with the Japanese Ministry of Health, Labor and Welfare of LUMIGAN^®.