Constant Search for Greater Efficiency
Even though we are experiencing a rapidly expanding revenue base, we constantly search for ways to lower our cost of goods and improve operating efficiency.
We acquired three plants in the 2006 Inamed acquisition and have announced plans to streamline manufacturing into one state-of-the-art facility in Costa Rica. Having foreseen the transition of the dermal filler market from collagen to hyaluronic acid fillers, we announced in early 2007 the closure of our collagen manufacturing plant in Fremont, California, effective before the end of 2008 with what we believe will be sufficient supplies manufactured to supply our worldwide needs until 2010. In early 2008, we announced plans to close one of our two breast implant manufacturing sites in Arklow, Ireland, and transition all manufacturing by the end of 2009 to our new, state-of-the-art facility in Costa Rica, which also manufactures the global supply of our LAP-BAND® and BIB™ Systems.
In addition to these manufacturing projects, we announced in early 2008 a long-term contract to outsource our global data centers with one of the leading specialists in the industry, Affiliated Computer Services, Inc., to realize certain cost benefits and focus our information technology resources on our evolving software and business information needs of our growing company. We are also seeking greater cost efficiencies for patients enrolled in clinical trials, having created a global clinical development organization. This will entail a greater number of clinical investigation sites in Eastern Europe, Latin America and Asia. In addition, we established an R&D center in Bangalore, India, in 2007. Furthermore, we are implementing an electronic procurement system in 2008 that is designed to drive purchasing efficiencies.
As we enter 2008, the outlook for Allergan is bright. We have strong growth momentum in our markets and are also preparing to file a record number of New Drug Applications with the FDA — an expression of return on the resources invested in R&D.
DAVID E.I. PYOTT
Chairman of the Board and
Chief Executive Officer
I wish to recognize the exceptional hard work of thousands of employees around the globe. Whether they have joined Allergan from acquired companies, are new members of the team as we strongly expand, or are long-term Allergan employees, they have demonstrated the acumen to deliver on multiple goals as demonstrated by the rapid and smooth integration of multiple acquisitions and the ability to constantly keep up with strategic and operational change. With our strong growth profile relative to our industry, we have with great discipline created and filled new positions with highly qualified management talent in both functions and geographic regions to strengthen our ability to execute our plans.
I wish also to thank our strong and experienced Board of Directors for their insight in connection with our acquisition transactions and projects and their value to our strategic plans as we look for further sources of innovation to fuel our long-term growth. Additionally, I am pleased to welcome our new Board member, Dawn Hudson, formerly President of PepsiCo North America, who will sharpen our consumer marketing skills.
