Allergan : 2018 Irish Annual Report

Allergan Public Limited Company 2018 Irish Annual Report

Allergan Public Limited Company
CONTENTS
Page
DIRECTORS AND OTHER INFORMATION	2
DIRECTORS' REPORT	3
INDEPENDENT AUDITORS' REPORT	74
CONSOLIDATED PROFIT AND LOSS ACCOUNT	83
CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS)/INCOME	84
CONSOLIDATED BALANCE SHEET	85
CONSOLIDATED STATEMENT OF EQUITY	87
CONSOLIDATED STATEMENT OF CASH FLOWS	88
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	89
PARENT COMPANY BALANCE SHEET	215
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY	216
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS	217
1

DIRECTORS AND OTHER INFORMATION

Board of Directors (as of December 31, 2018)

Brenton L. Saunders

Nesli Basgoz, M.D. Joseph H. Boccuzi Christopher W. Bodine Adriane M. Brown Christopher J. Coughlin

Carol Anthony (John) Davidson Michael E. Greenberg, PhD Thomas C. Freyman Catherine M. Klema Peter J. McDonnell, M.D.

Secretary and Registered Office

A. Robert D. Bailey

Clonshaugh Business and Technology Park Coolock

Dublin, D17, E400 Ireland

Registered Number:527629

Auditors

PricewaterhouseCoopers

Chartered Accountants and Statutory Auditor One Spencer Dock

North Wall Quay Dublin 1

Ireland

DIRECTORS' REPORT

The directors present their report together with the audited financial statements of the Company (as defined below) for the year ended December 31, 2018.

Basis of presentation

The accompanying consolidated financial statements reflect the consolidated operations of Allergan Public Limited Company ("Allergan plc") and its subsidiaries. References throughout to "we," "our," "us," the "Company" or "Allergan" refer to financial information and transactions of Allergan plc. The results of the parent company Allergan plc are included in the consolidated financial statements from May 16, 2013, the date of incorporation.

The directors have elected to prepare the consolidated financial statements in accordance with Section 279 of the Companies Act 2014 ("Companies Act"), which provides that a true and fair view of the assets and liabilities, financial position and profit or loss may be given by preparing the financial statements in accordance with US accounting standards ("US GAAP"), as defined in that section to the extent that the use of those principles in the preparation of the financial statements does not contravene any provision of Part 6 of the Companies Act.

Formation of Company

Allergan plc was incorporated in Ireland on May 16, 2013 as a private limited company and re-registered effective September 20, 2013 as a public limited company.

Allergan plc ordinary shares are traded on the NYSE under the ticker symbol "AGN." Pursuant to Rule 12g-3(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Allergan plc's ordinary shares are deemed to be registered under Section 12(b) of the Exchange Act, and Allergan plc is subject to the informational requirements of the Exchange Act, and the rules and regulations promulgated thereunder.

Principal activities

Allergan plc is a global pharmaceutical leader. Allergan is 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. Allergan is an industry leader in Open Science, a model of research and development, which defines our approach to identifying and developing game-changing ideas and innovation for better patient care. The Company has operations in more than 100 countries.

Discontinued Operations

In August 2016 we completed the divestiture of our global generics business and certain other assets to Teva Pharmaceutical Industries Ltd. ("Teva") (the "Teva Transaction") for $33.3 billion in cash, net of cash acquired by Teva, which included estimated working capital and other contractual adjustments, and 100.3 million unregistered Teva ordinary shares (or American Depository Shares with respect thereto). As part of the Teva Transaction, Teva acquired our global generics business, including the United States ("U.S.") and international generic commercial units, our third-party supplier Medis, our global generic manufacturing operations, our global generic research and development ("R&D") unit, our international over-the-counter ("OTC") commercial unit (excluding OTC eye care products) and certain established international brands.

DIRECTORS' REPORT - continued

Discontinued Operations - continued

In October 2016, the Company completed the divestiture of the Anda Distribution business to Teva for $500.0 million. The Anda Distribution business distributed generic, branded, specialty and OTC pharmaceutical products from more than 300 manufacturers to retail independent and chain pharmacies, nursing homes, mail order pharmacies, hospitals, clinics and physician offices across the U.S.

As a result of the Teva Transaction and the divestiture of the Company's Anda Distribution business, and in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-08 "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," the financial results of the businesses held for sale were reclassified to discontinued operations for all periods presented in our consolidated financial statements.

Business review and results

2018 Significant Business Developments

The following are the significant transactions that were completed or announced in the year ended December 31, 2018.

Licenses and Asset Acquisitions

Bonti, Inc.

On October 24, 2018, the Company acquired Bonti, Inc. ("Bonti"), a privately held clinical-stage biotechnology company focused on the development and commercialization of novel, fast-acting neurotoxin programs for aesthetic and therapeutic applications, for $195.0 million upfront plus contingent consideration of up to $90.0 million which may be recorded if the corresponding events become probable. The transaction was accounted for as an asset acquisition as the purchase primarily related to one asset. The aggregate upfront expense of $196.6 million was recorded as a component of R&D expense in the year ended December 31, 2018.

Elastagen Pty Ltd

On April 6, 2018, the Company completed the acquisition of Elastagen Pty Ltd, a clinical stage medical company developing medical and cosmetic treatments including recombinant human tropoelastin, the precursor of elastin, which will be combined with Allergan's existing fillers product lines. The transaction was accounted for as an asset acquisition as the purchase primarily related to one asset. The aggregate upfront expense of $96.1 million was recorded as a component of R&D expense during the year ended December 31, 2018. Under the terms of the agreement, Elastagen Pty Ltd is eligible to receive additional contingent consideration of up to $165.0 million which may be recorded if the corresponding events become probable.

Repros Therapeutics, Inc.

On January 31, 2018, the Company completed the acquisition of Repros Therapeutics, Inc., which was accounted for as an asset acquisition as the purchase primarily related to one asset. The aggregate upfront expense of $33.2 million was recorded as a component of R&D expense during the year ended December 31, 2018.