AGN
#Our commitment to double-digit revenue growth is sincere, it's strong.
We look at our ability to execute on that over the next few years.
And we think given our current assets and current pipeline, on a risk adjusted basis we think we can get there.
Obviously there are always puts and takes that come to that but we have a high degree of confidence that we could do no other deals and deliver that growth over the next few years.
As we think about tuck-ins ---+ or stepping stone deals, as I've been calling them ---+ the intellectual property type of deals or R&D deals are designed to get us well into the 2020s with double-digit growth because that's the name of our business.
It's about new product launches, it's about innovation and looking for medicines that support treatment or cures for unmet need.
So, we're going to continue to do that.
But we're really thinking about well into the 2020s where we have to support our business to maintain the double-digit growth.
I think with respect to our stepping stone approach to marketed products, we're really looking for innovative products that we think really do provide a meaningful differentiation in terms of unmet need, and that fit neatly into our current therapeutic area so that we can get more leverage out of our infrastructure, whether that be G&A or selling and marketing.
That's really how we see.
We have this great commercial engine, both in the US and outside the US, that we want to continue to leverage and make more of, and frankly makes our representatives, it makes our medical affairs teams, it makes our managed care teams more relevant when we talk about those therapeutic areas.
So, there are multiple reasons why we like our therapeutic area leadership approach with multiple products across an entire broad spectrum.
So, so I think we're in pretty good position to continue to deliver double digit or about 10% top-line growth.
<UNK>, anything you'd add.
Yes, thank you.
Great question.
It's interesting, the spec pharma label, which is how I think most people describe us, is purely a creation of many of you in that you're spec pharma analysts ---+ not all of you, but many.
So, that's a Wall Street designation.
We have a few years ago designated ourselves as growth pharma and that's strategically what we want to be known as.
We want to be focused on top-line growth, therapeutic area leadership and a sustained R&D investment through our Open Science approach.
So, that's our strategy.
We've articulated it now for a few years.
I think post Teva it becomes even clearer that we are a focused research-based growth-oriented company with strong therapeutic area leadership in the seven areas that we compete in, with strong pipeline to support each of those areas, and a commitment to being open-minded around opportunities to enhance our leadership and enhance our growth through a stepping stone approach to M&A.
And on SG&A as I mentioned earlier, we have a very efficient operating structure.
As we noted in one of the charts, we think we'll be at roughly 25% exiting the year in the fourth quarter, with higher revenue at the lower rate than that.
And as I also mentioned, I think a good measure to look at, as well, is operating margins given the fact that we have a good number of launches this year.
And on operating margins we continue to improve that sequentially quarter over quarter, and we believe we're in the top of the industry.
I think our BOTOX therapeutic franchise, the proof point is in the numbers that were delivered, and the team is focused.
Obviously there was some issues in our urology area that were related to following Company policy.
We take that very seriously.
We have a very strong compliance and internal audit process inside our Company.
Internal controls are at the forefront of what we do and when people violate that we deal with it very strictly and severely.
So, that's what happened there.
I wouldn't get too caught up on online chatter.
You could drive yourself crazy looking at some of those message boards and think the world was coming to an end, not just at Allergan but across the entire world, if you believe most of the stuff you' see on those things.
But suffice it to say the business is incredibly stable, resilient and growing.
On the generics side ---+ Bob.
I think that perhaps if you picked up a slight change in tone it's because as we've gotten more comfortable with the current business that we have and operate, as we've gotten more comfortable with our pipeline, it goes to how I opened the call ---+ we have the best pharmaceutical business in the world.
It's growing at pro forma 10% branded sales.
It has a deep pipeline of plus 70 mid- to late-stage pipeline opportunities.
We have a strong capital deployment opportunity, both with share buybacks, debt repayment and stepping stone deals.
And we have an investment grade rated balance sheet.
So, we are in the pull position and our focus is going to be on operating and running our Company and continuing to put up quarter-after-quarter performance.
If we can support that or turbo boost that with opportunistic deals that may come along, like Allergan came along in a very unique situation, then I think this is a bold management team that's going to look at what's in the best interest of our shareholders to drive shareholder value creation, and we'll do it.
But the reality is ---+ and I've been saying this for a long time ---+ 99% of our focus, the management team sitting around the phone right now, is on running our business.
And we're going to continue to put up executional excellence as our top goal, and we're going to continue to support the business with growth-oriented stepping stone deals.
But, really, our focus is on running the business.
With regards to the treasury yields, as you can imagine, we analyzed that extensively, and based on our analysis two things have come out.
One is we don't expect any material change in our tax rate.
And then, two, the new treasury rules actually also affirm our status as an Irish-domiciled company.
With regards to a transformational deal, we believe we can continue to maintain our Irish domicile.
As you know, the new rules provide for a three-year look-back in terms of determining what we call good shares for purposes of calculating inversion.
October 2016 is the three-year anniversary date for the Warner Chilcott acquisition, which then gives us more capacity to issue shares to a target company.
The one thing that you have to note, though, that we always have the flexibility to issue shares for cash without actually affecting our status as a foreign company.
Or sell in the open market.
Or sell in the open market, right.
So, there's really nothing in the current Treasury rules today that preclude us from executing on our strategy, whether that's tuck in or transformational deals.
Just to be clear, <UNK>, I'd say two things.
One, the Treasury rules had no impact on this small shift in thinking, as <UNK> just outlined.
With perhaps just some minor maneuvering, we could execute any transformational deal we wanted to do.
I'm not worried about that.
The reality is, why would we issue our stock at this price considering we just announced up to $10 billion of buyback.
We think our stock or that currency is too inexpensive to issue to a target at this point anyway.
Plus even if you look at from a liquidity perspective, even with a $10 billion share repurchase authorization, and if we execute up to that amount and the payment of debt, net-net we still have sufficient liquidity to pursue deals.
Yes, let me answer the back part and <UNK> can talk about status of the programs.
I think the way I think about biosimilars, at least over the next few years, is that, for us, for Allergan, we've made most of the investment already.
And we've seen good success with most of the programs in collaboration with Amgen.
So, for us, at this point, we've made the investment, we should participate in the commercialization and/or sales of those products through our partnership with Amgen.
I think long term I don't think biosimilars will necessarily be a core part of our strategy.
We may decide to continue to invest in the partnership with Amgen, because its been a good collaboration and successful partnership.
We may look at selective opportunities to participate on a one-off basis.
And we do have capabilities in our own organization in Liverpool where we will look to do some unique things.
B think, in fairness, we are focused on supporting our seven therapeutic areas with the vast majority of our R&D dollars, with the vast majority of our investment, to make sure that we can continue to innovate around unmet need and to support our growth pharma agenda.
<UNK>, do you want to touch on the ---+.
<UNK>, would you like to make any closing remarks.
Yes.
I just want to thank everyone.
I know it was a little bit of a longer call than normal but I think it was worth our time.
Obviously, we remain very focused on executional excellence, on continuing to deliver our goals and agenda with respect to growth pharma.
We do look forward to probably our next call with respect to second-quarter earnings in August to update you both on earnings for the remainder of the year and our life post close of the Teva transaction.
So, thank you again for your time and look forward to catching up again.
Thanks, everyone.
