Allergan plc (AGN) Q1 2018 Earnings Conference Call Transcript

Allergan PLC (AGN)
Q1 2018 Earnings Conference Call
April 30, 2018, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2018 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press *1 on your telephone keypad. If you would like to withdraw your question, press #. Thank you. Daphne Karydas, you may begin your conference.

Daphne Karydas -- Senior Vice President of Global Investor Relations and Strategy

Thank you, Teneva, and good morning, everyone. I'd like to welcome you to the Allergan First Quarter 2018 Earnings Conference Call. Earlier this morning, we issued a press release reporting Allergan earnings for the quarter ended March 31, 2018. The press release and our slide deck, which we are presenting this morning, are available on our corporate website at www.allergan.com. We are conducting a live webcast of this call, a replay of which will be available on our website after its conclusion. Please note that today's call is copyrighted material of Allergan and cannot be rebroadcast without the company's express written consent.

Turning to Slide 2, I'd also like to remind you that during the course of this call, management will make projections or other forward-looking remarks regarding future events or the future financial performance of the company. It's important to note that such statements and events are forward-looking statements and reflect our current perspective of the business trends and information as of today's date.

Actual results may differ materially from current expectations and projections depending on a number of factors affecting the Allergan business. These factors are detailed in our periodic public filings with the Securities and Exchange Commission. Allergan disclaims any intent or obligation to update these forward-looking statements except as expressly required by law. All figures discussed during the call refer to non-GAAP. Our GAAP financial metrics and reconciliation from GAAP to non-GAAP metrics can be found in our earnings release issued this morning and posted on our website.

Turning to Slide 3, with us on today's call are Brent Saunders, our Chairman and CEO, Bill Meury, our Chief Commercial Officer, David Nicholson, our Chief R&D Officer, and Matt Walsh, our new Chief Financial Officer. Also on the call and available during the Q&A is Bob Bailey, our Chief Legal Officer. With that, I will turn the call over to Brent.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Thanks, Daphne, and good morning, everyone. We are proud to be starting the year with a strong quarter, continuing the strong momentum we ended with in 2017. Our results underscore the hard work of our Allergan colleagues across the globe and our commitment to executing on both our strategic plans and our annual guidance. Our business continues to perform well, with stable and durable brands driving a growth trajectory that will help offset the expected impacts of LOEs within our portfolio. Overall, we're in a very strong strategic and financial position. We have a great portfolio of integrated and therapeutic areas with some of the best, most durable assets in our industry. The healthy outlook for our core business combined with our pipeline optionality reinforces our confidence that we will be able to deliver an approximately 5% revenue CAGR from 2017 to 2022.

Our margins and cash flows are strong, and we've made significant progress in terms of reducing our leverage. Today, I will briefly review the results from the quarter and our business drivers. Bill and David will go into more detail on our product highlights and R&D portfolio. Matt will review the financials, and then, I will be back to provide an update on the strategic review before turning it over to Q&A.

Turning to Slide 5, in the first quarter of 2018, revenues were up 3% year over year, adjusted operating margin was up 260 basis points, non-GAAP performance net income per share increased 12%, and we had another strong quarter at cash flow generation. Keep in mind that this strong performance was achieved despite approximately $200 million in sales declines due to loss of exclusivity on Estrace, Namenda XR, Minastrin, and Aczone. We anticipate that we will face some additional top-line pressure during the year from LOEs, including Restasis, but we are working hard to meet that pressure head-on.

Our teams have been proactive and hardnosed in reducing our operating cost base, and we are on track to reduce costs by approximately $400 million. While taking costs out of the company, we have also continued to drive development of the R&D pipeline and have hit several key milestones in the past few months. This includes delivering two positive, pivotal Phase III studies for ubrogepant in acute migraine and a third positive pivotal study for Vraylar in bipolar depression.

This is just the beginning of the clinical data readouts and pipeline accomplishments we expect to achieve this year. For example, we also expect Phase III clinical data for abicipar, results from the first Phase III study of Bimatoprost SR, announcement of Phase II data for atogepant, and beginning Phase III styles for brazikumab in Crohn's, to name just a few of the important milestones for 2018. We are also very actively managing the lifecycle of our key products. Vraylar is a great example of how we're continuing to invest in clinical trials for new indications that have the potential to be multipliers of the current market potential for Vraylar.

For Botox, we have five new indications in development: Two in cosmetic and three in therapeutic. The market across cosmetics and therapeutic indications remains significantly underpenetrated, and we see a long runway ahead for us in earnings potential for this globally unique brand. David will talk more about the pipeline, including multiple shots on goal in our mid- to late-stage pipeline in each of our key areas of focus.

Where our teams have been very focused on day-to-day business and pipeline execution, we have also deployed capital to pay down debt and further delever the balance sheet while accelerating our share buyback program. We are now at a gross debt-to-EBITDA ratio of 3.2x, which is in line with our target for the year. In the first quarter of 2018 alone, we paid down $3.6 billion in net debt and completed our $2 billion share repurchase program, and we returned $320 million to preferred and ordinary shareholders in cash dividends. With the strong results we are delivering across all four of our focus areas, we are increasing our full-year 2018 revenue and non-GAAP performance net income per share.

Turning to our performance drivers on Slide 6 illustrates that we are successfully strengthening our core business while ensuring that we deliver on new sources of value. We now have nearly 90% of our total revenues coming from promoted brands with ongoing exclusivity and other established products. If you exclude the impact of M&A and foreign exchange, our underlying business grew approximately 6% this quarter versus prior year. This helped offset the impact of several anticipated LOEs this quarter, and the outlook remains very bright.

We have a robust product line with breadth and depth in our key therapeutic areas and a promising pipeline within our focus areas. We will remain disciplined in our capital allocation activities with a focus on investing in our business to support the long-term growth, reducing leverage, and returning capital to shareholders while making prudent investments to strengthen our position across our key therapeutic areas. This update is indicative of how we're delivering on the objectives that we set in place earlier this year and our strong confidence in the business going forward. We have a lot to be excited about. Now, let me turn the call over to Bill.

William Meury -- Executive Vice President and Chief Commercial Officer

Thanks, Brent. Good morning. Turning to Slide 8, the first quarter was highlighted by strong sales growth versus prior year for many of our flagship products. In Medical Aesthetics, growth was led by Botox Cosmetic up 10%. Botox Therapeutics was also very strong in the quarter, up 15%, and there was demand across all indications. Also, in CNS, Vraylar continues to exceed expectations, reaching $84 million in the quarter, up 58%. In GI, Linzess sales were up 8%, Zenpep sales were up 14%, and Viberzi sales were up 14%, too. In Eye Care, growth was led by sales for Ozurdex, which continued to grow at double-digit rates, up 13%. Finally, in Women's Health, strong growth for Lo Loestrin continues up 15%. As expected, this quarter, we faced generic competition for Estrace cream, Namenda XR, Minastrin, and Aczone, which -- as you can see in the slide -- impacted revenue growth by approximately $200 million.

Turning to Slide 9, our Medical Aesthetics business was strong across the board in the first quarter, and the outlook for the year and the long term is excellent. Now, frequently, I get asked questions about overhangs from alternative toxins. Here's how I think about it. Alternative toxins may enter the space, and we've dealt with this before. It's the reality of a growing and lucrative market. History has proven to us that the best strategy is to focus on what we can control, which is expanding the market, which has added inflection point and driving demand for our products, and if we do that, this business will continue to thrive. Every aspect of Allergan Medical Aesthetics is bigger and stronger today than it was three years ago when we began to run the business, including sales, product offerings -- which total over a dozen -- commercial capabilities, and pipeline, and we will continue to invest heavily to create an unprecedented level of awareness and interest in our products in the years ahead.

This year, we launched nationwide DTC campaigns for Botox and CoolSculpting. We're launching the U.S. Allergan Medical Institute, which is a branded proprietary program that will train tens of thousands of injectors and brings our entire portfolio under one training umbrella, and we're expanding our consumer loyalty program with over 3.6 million active consumers. These things -- among others -- have taken years to build, are difficult to replicate, and give us a major competitive advantage.

Now, in Facial Aesthetics, sales for Botox Cosmetic and Juvéderm are expected to increase at double-digit rates in 2018. As projected during last quarter call, our first-quarter sales were partially impacted by the timing of promotional offers and our year-end physician rebate program in 2017. Sales trends will normalize over the remainder of the year. Our Body Contouring business had an exceptionally strong quarter in the United States, with sales up 31% versus prior year on a pro forma basis, and we exited the quarter with 3,400 accounts.

With our expanded sales force, we drove an 85% increase in systems revenues. Total system placements came in just shy of record-setting levels in the fourth quarter of 2017, and for the 12-month period ending March -- and since our combination with Zeltiq -- system growth is up 30% compared to a flat period prior to the merger. International CoolSculpting sales were impacted by the ongoing restructuring of our distribution model, and we expect performance to improve in many markets in the second half of the year. Overall, we remain optimistic about the prospects for this business.

In Plastics and Regenerative Medicine, first-quarter sales were up 15% on a pro forma basis versus last year. Alloderm, our tissue matrix for breast reconstruction, continues to exceed expectations, with sales up 29% on a pro forma basis. Breast sales were also strong this quarter, up 11%. We expect growth for the balance of the year, but at a low to mid-single-digit level.

In Eye Care, excluding Restasis, we have a formidable $2 billion global business with sustainable low to mid-single-digit growth outlook. In the quarter, our glaucoma business remained stable with solid international growth offset by a moderate decline in the U.S., driven primarily by trade buying patterns. Ozurdex posted 13% growth in the first quarter, and in dry eye, the overall business declined 12% versus prior year, with 4% demand growth for Restasis in the U.S. being more than offset by trade buying patterns and lower net pricing. Demand for MDPF -- or, multidose preservative-free -- Restasis has now reached approximately 25% of the total brand and is still growing with targeted fuel force support.

Turning to Slide 10, the prospects for our CNS franchise remain bright. While driven by Botox Therapeutics and Vraylar today, we have multiple shots on goal in the pipeline, including new indications for Vraylar and Botox Therapeutic, CGRPs, and rapastinel. Let's look at Vraylar. It continues to exceed expectations and be the fastest-growing branded antipsychotic on the market. Vraylar volume grew 11% quarter over quarter despite first-quarter seasonality in payer dynamics. We initiated direct-to-consumer advertising in February. Since the launch of DTC, we've seen a 43% increase in new patient starts, which is above expectations and one of the most successful DTC campaigns we've ever launched at Allergan. The outlook for this business is excellent.

With Botox Therapeutic, one common misperception is that migraine and migraine alone is the growing part of Botox, but there's much more than that. Growth is coming from all three indications: Migraine, spasticity, and OAB. It's a strong, diversified revenue stream. In the quarter, Botox Therapeutic sales grew 15% versus prior year, driven mainly by volume. As it relates to migraine, we expect to be the only company that can offer physicians a two-pronged solution, which consists of ubrogepant for acute migraine and Botox for prevention. The products are complementary and there is an opportunity for sales synergies here.

In GI, Linzess is the flagship product, of course, and it's on its way to $1 billion in sales. The first-quarter revenues grew 8% versus prior year, with volume demand growing at 16%. The key source of Linzess growth continues to be dissatisfied OTC patients. We initiated a new DTC campaign, which has increased our new patient acquisition rates to an all-time high. Our partnership with Ironwood remains very strong and productive. Lastly, on Viberzi, demand is stable. We've right-sized our investment behind the brand for profitability, and our promotional attention is on a core group of approximately 15,000 users.

Finally, turning to Slide 11, in international, the strong momentum continued in the first quarter with sales up 9% excluding foreign exchange, with growth coming from every region. In Medical Aesthetics, Botox Cosmetic and Juvéderm grew 15% and 11% respectively and are now approximately the same size. We will be launching consumer campaigns around the world to support our Juvéderm collection business, which is the fastest-growing part of our international Aesthetics business. The international opportunity here is significant, especially in Asia/Pacific and Middle East/Africa. The outlook for the international business continues to be very positive. Now, let me turn the call over to David.

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Thanks, Bill. Good morning. The first quarter has been a very productive one for R&D, highlighted by positive Phase III studies for cariprazine and ubrogepant. We continue to progress our pipeline and we look forward to more data readouts during the remainder of the year. Turning to Slide 13, we recently announced positive results from the third and final cariprazine Phase III study in bipolar depression.

In this latest study, MD-56 -- as shown on the right-hand side of the slide -- the 1.5mg dose again showed a statistically significant reduction in MDRS total score compared to placebo. The 3mg dose in this study did not show statistical significance compared to placebo, but as you can see from the slide, it did in fact show a numerical benefit, similar to study MD-53, shown on the left. In all studies, cariprazine was well-tolerated and the side effect profile was very similar to that observed in all other cariprazine trials. We now have a complete data set that we will be submitting to the FDA in the second half of the year.

Turning to Slide 14, we are very pleased with the positive results from our single-attack Phase III studies with ubrogepant for the acute treatment of migraine. We presented the data from ACHIEVE I at the AAN meeting in Los Angeles last week, and the results from ACHIEVE II last Friday in a webcast, which is available on our website. I will just make a couple of comments on the highlights from ACHIEVE II.

ACHIEVE II is a U.S. multicenter randomized trial evaluating the efficacy and safety of two doses of ubrogepant -- 25mg and 50mg -- compared to placebo for the acute treatment of migraine. Coprimary endpoints were pain freedom and absence of the most bothersome migraine-associated symptom at two hours post-dose.

As shown on the slide, both doses result in a significantly greater percentage of ubrogepant patients achieving pain freedom compared to placebo. The 50mg dose also demonstrated a significant benefit on the most bothersome symptoms. Note that in the real world, data supports that upwards of 40% and 60% of patients will experience pain freedom after dosing at three hours and six hours respectively. Across both trials, ubrogepant was very well tolerated, demonstrating a similar safety profile to placebo. No cases of liver enzyme elevations were adjudicated to have a probable relationship to the drug and no cases of high zluose were observed.

We now have two well control studies which meet the registrational coprimary endpoints. Multiple doses showed statistically significant and clinically meaningful outcome measures. Migraine is underdiagnosed and undertreated. There is significant need for new treatments. The data we presented are an important milestone toward progressing in new treatment options for this disease. We look forward to the results of two long-term safety studies, which are expected in the second half of this year.

Turning to Slide 15, we continue to advance the rest of our mid- to late-state pipeline according to our timeline targets and expectations. The exception is our lead oral ROR gamma T project for psoriasis. Due to safety signals observed in the Phase II study, this project has been terminated. We continue to see ROR gamma T as a valid target in drug discovery and are now exploring alternative formulations and indications.

In Women's Health, the NDA for Esmya for the treatment of abnormal bleeding associated with uterine fibroids was accepted last year, and we now expect an FDA decision in late August. We continue to support Gedeon Richter regarding the ongoing EMA Pharmacovigilance Risk Assessment Committee's review of the post-marketing data and note that no additional cases of severe liver injury of interest to PRAC have been recorded since our last earnings call. We expect the EMA's final recommendation on Esmya to be completed in the first half of this year.

All of our other programs are on track. We are looking forward to additional data readouts from several of these programs later this year. As always, I thank my colleagues in R&D for their work as well as the patients participating in our clinical trials. Now, I'll turn the call over to Matt.

Matt Walsh -- Executive Vice President and Chief Financial Officer

Thank you, David. Let me open by saying that I'm pleased to be on my first earnings call as CFO of Allergan. It's already been two months since I started, and I can tell you that I'm impressed with the Allergan organization and culture as well as the strong talent pool within the finance, IT, and business development functions, which I lead. Prior to joining the company, when I was on the outside looking in, I was impressed with Allergan's unique business model that pairs medical aesthetics and biopharma together under one umbrella. Now that I'm here, the first-quarter results bear out the strength of this combination.

Turning to the key highlights of the first quarter on Slide 17, as Brent mentioned at the beginning of the call, Q1 demonstrated solid year-over-year financial performance across all of our commitments and a strong step toward our 2018 goals. Starting with the upper-left quadrant, you can see net revenues in the quarter with $3.67 billion, a 2.8% increase versus prior year and 1.1% excluding the benefit of foreign exchange translation.

The highlight of our first-quarter revenue profile was the strong performance of the promoted brands with ongoing exclusivity, which -- together with other revenues -- drove 6% core business growth versus the prior year. Note that this figure represents true organic growth conservatively presented, and that it excludes the impact of currency translation, and also excludes the impact of acquisitions. The strength of first-quarter revenue performance reaffirms prior statements about our top-line expectations for 2018.

As expected, the quarter was impacted by revenue declines in LOE products, which as a group declined 38% versus prior year. In aggregate, this outcome was aligned with our expectations and we will continue to see these declines during the year, all of which has already incorporated into the guidance that we provide.

Moving to the upper-right quadrant, non-GAAP gross margin for the quarter was 86.2%, a decline of 110 basis points versus prior year, due primarily to product mix as lower-margin products -- for example, our 2017 acquisitions in regenerative medicine and CoolSculpting -- displaced sales of LOE products, which carried somewhat higher margins.

More than offsetting the modest decline in gross margin, adjusted operating margin improved 260 basis points to 47.9% versus 45.3% last year. This had two primary drivers. First, we're seeing the benefits of lower operating expenses from the successful execution of the restructuring program we previously announced, which targeted $400 million on an annualized basis. This is driving most of the operating margin improvement realized. Second, this was smaller in magnitude. We saw some timing-related favorability and operating expenses in both R&D and sales and marketing that are likely to reverse over the remaining quarters of the year.

Looking at the lower-left quadrant, non-GAAP performance net income per share of $3.74 grew 12% versus the prior year. We've already discussed two of the key drivers: 1). Revenue growth in promoted brands, which included contribution from 2017 medical aesthetics acquisitions, and 2). Lower operating expenses. The third driver was share count, where we realized about 2.7 percentage points of growth, or about $0.09 per share.

In the lower-right quadrant, we look at operating cash flow generation, which has been steadily improving. Because cash flow can oscillate over narrow time windows, which makes comparisons difficult, it makes sense to look at cash flow on a last-12-months basis, which is what we're showing here. So, the bars represent LTM operating cash flow for each ending period with no adjustments of any kind. These numbers are taken directly from our GAAP cash flow statement.

The $1.46 billion in Q1 operating cash flow drives our LTM operating cash flow to $6.6 billion as of March 31st. While this is a strong result, we do believe there's an element of timing-related favorability here as well. That said, our first-quarter performance has increased our confidence level in our prior guidance of $4.7 billion to $5 billion in operating cash flow for 2018, and we'll revisit this when we discuss our full-year guidance update in just a few moments. As a footnote to this slide, we've provided more detail on the movements in cash and marketable securities in the appendix.

Having addressed the key financial highlights of the quarter, on Slide 18, you can see a more complete look at our key P&L line items for the first quarter as compared to the prior year. I won't cover this page in detail, other than to note that important line items such as net interest expense and our effective tax rate has come in at or favorable to our previous guidance. Not otherwise mentioned on this slide, each quarter, the company examines intangible assets for trigger events in order to identify impairments, and in the first quarter, we recorded an impairment charge of $522 million for the termination of the ROR gamma T Phase II program for psoriasis indication that David discussed earlier.

Turning now to our first-quarter performance by reporting segment on Slide 19, U.S. Specialized Therapeutics revenue growth was strong at 6.5% and continues to be our highest contribution margin segment. Despite some downward pressure from product mix shift as discussed earlier related to 2017 acquisitions, contribution margins were generally stable versus prior year at 68.5%. U.S. General Medicine was the segment most impacted by LOEs, as reflected in its revenue decline of 9% versus prior year. However, contribution margin improved by 350 basis points due to lower sales and marketing spend resulting from restructuring initiatives. International revenues continue to show robust growth, up 9% excluding foreign exchange translation, or 17.2% on a reported basis, with contribution margin remaining stable at 53.9% as we continue to invest behind profitable growth that we're seeing in our international markets.

Turning to Slide 20, our debt and leverage position continues to improve and we're well on our way to executing on our 2018 capital allocation commitments. We ended the quarter with total gross debt of $26.6 billion after retiring $3.75 billion in debt as it matured in the first quarter. We also paid down $372 million of our margin loan. This was all planned for the quarter and executed.

Given the price of our stock during the first quarter, we accelerated into Q1 and completed the $2 billion share buyback that was originally planned to execute later in the year. This opportunistic action required a small draw on the revolver of $500 million, which we plan to repay prior to the end of this fiscal year, and potentially as soon as the second quarter.

In total, our activities in reducing debt brought our gross leverage ratio down to 3.2x as of March 31st, in line with our target for the year and the lowest since the Allergan transaction in 2015. We will continue to manage our overall level of debt and key debt ratios in accordance with our commitment to maintaining an investment-grade credit rating.

Moving now to Slide 21 on our updated guidance, given the favorable developments in our business which we've just reviewed -- first-quarter results ahead of plan, the performance net income per share benefit of accelerating share buyback, and no Restasis generic entry in the month of April -- we are raising our full-year guidance for both revenues and non-GAAP performance net income per share, as well as focusing our guidance to cash flow from operations.

Starting with net revenues, we're raising our full-year outlook and now expect 2018 net revenues to be between $15.15 billion to $15.35 billion, a $150 million increase at the bottom and a $50 million at the increase at the top of the range compared to our prior guidance. This increase reflects our assumption of Restasis' generic entry between May and July of 2018 versus the previously assumed April to July of 2018. Our updated revenue guidance also reflects the better-than-expected revenues we realized in the first quarter broadly across the business. Other than a month benefit of Restasis to our full-year guidance, the remaining LOE assumptions are unchanged.

We continue to expect non-GAAP gross margins for the full year to be between 85.5% and 86% based on our product mix and LOE assumptions. As noted in the first-quarter financial highlights, stronger-than-expected first-quarter non-GAAP performance net income per share was driven in part by timing of operating expenses, which should reverse over the remainder of 2018, so therefore, our full-year guidance for non-GAAP SG&A and R&D expenses remains unchanged.

We expect our adjusted operating margins in 2018 to be in line with 2017 adjusted operating margins as our operating expense right-sizing initiatives are mostly implemented, which gives us almost a full year of impact. Full year non-GAAP net interest expense other of approximately $900 million and our full-year non-GAAP effective tax rate of approximately 14% also remain unchanged versus prior guidance.

We now expect average full-year share count to be approximately 345 million shares versus the prior guidance of 350 million shares to reflect completion of the buyback. Because of the updated revenue and share count guidance, we now expect full-year 2018 non-GAAP performance net income per share to be in the range of $15.65 to $16.25 as compared to the prior guidance of $15.25 to $16.00.

As we think about scenarios where generic Restasis entrants are delayed, we estimate incremental Restasis revenues on the order of approximately $80 million per month. Should we see that delay being sustained over several months or perhaps even quarters into the future, we will be looking at opportunities to reinvest a portion of these proceeds back into the business and our R&D pipeline. That said, we continue to expect non-GAAP performance net income per share growth in FY '19 over FY '17, which will reinforce the statements that we've made previously.

We also expect our reported cash flow from operations for 2018 to be approximately $5 billion, which is now focused on the high side of our prior guidance of $4.7 billion to $5 billion, reflecting 1). Generic Restasis entrance between May and July of 2018, 2). Success-based milestones from existing pipeline projects of approximately $600 million in 2018, and 3). Restructuring in other M&A integration payments in the range of approximately $225 million.

As mentioned last quarter, since this is an unusual year given the timing of generic entry for Restasis, we will continue to provide preliminary quarterly guidance on a temporary basis. At some point, we will be returning to our standard practice of providing annual guidance which we update quarterly. That said, for the second quarter, we expect total reported net revenue to be between $3.85 billion and $4 billion and non-GAAP performance net income per share between $4.00 and $4.20 per share. With that, I'll turn the call back to Brent.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Great. Thanks, Matt. So, against this backdrop of strong business momentum, consistent execution, and capital allocation, it is clear that there is a disconnect between our business performance and stock performance. We announced last month a review of strategic actions focused on unlocking shareholder value, and frankly, there is no better time to do a strategic review than when the underlying business is solid. As such, we are evaluating a range of strategic options in comparison to the business outlook and the inherent value of the company. We are now well into that process and have multiple financial advisors helping us evaluate the different options. Everything is on the table, but we have not reached the end of the assessment.

The options we're looking at can be put into five broad categories: 1). Deploying capital to aggressively buy back shares, 2). Divestitures, 3). Splitting the company, 4). Acquisitions or mergers, and 5). Continuing to operate the company more or less as currently configured. The first option, deploying capital aggressively to buy back shares: Since the divestiture of the generics business, Allergan has been an aggressive share repurchase. We have bought back $17 billon of Allergan stock. At the same time, we've paid down our debt by approximately $13 billion and have maintained our investment-grade credit rating. Despite the robust buyback, the stock disconnect remains, so we do not think that this will be a primary lever for us following the strategic review, but it may be worth pursuing incrementally.

The second option is to pursue divestitures. While we like our business as it exists today, we do believe there are strategic and financial merits to a more focused Allergan and are currently evaluating options that would enable us to concentrate more on key therapeutic areas where we have the strongest competitive advantage. Therefore, if economically prudent, we would look to divest certain assets. The third option, splitting the company, is also part of our strategic review. If we pursue this option, it will take the longest time to complete and be the most disruptive, but it is on the table for consideration. If our analysis does in fact indicate that such a long-term action would likely result in significant increase in shareholder value, then we would certainly consider this option.

The fourth option is doing acquisitions, combinations, or mergers. The key here is the right strategic fit and financial rationale. Given the current environment, a large combination or merger is an unlikely outcome at this time. However, small bolt-on transactions, including product and pipeline acquisitions that could strengthen our key areas of therapeutic focus, are on the table, but once again, the mandate is right strategy, right asset, right price. While the board continues to evaluate the options, my preliminary view is that a fundamental shift in the overall business strategy is not necessary. Running the company in large part as it exists today is not only an option, but also the baseline against which all options need to be considered.

So, in closing, we are continuing to explore the merits of all potential strategic actions, and I want to reassure you that we are not going to execute any activity that doesn't recognize the full inherent value of our assets at Allergan. Our No. 1 priority continues to be to deliver value by focusing on executing on our business. We have very strong drivers, organic top-line and bottom-line growth, and there is a lot of unrealized value creation potential within our existing business. With that, let's open it up for questions. Teneva?

Questions and Answers:

Operator

Our first question comes from the line of Ken Cacciatore with Cowen and Company.

Ken Cacciatore -- Cowen and Company -- Managing Director

Hi. Thanks, Brent, for the review of the options. Can you give us some sense -- I'm sure you've been talking to some of your shareholders -- just a sense of the feedback that you're getting as you discuss those options with them, and then, secondly, I'd love to hear from Bill talk about Botox migraine performance in the face of some of the CGRP competition that's coming up and expectations in the face of that. Thank you.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Thanks, Ken. We have -- as always -- continued to listen to our shareholders, and I would say there's a lot of different opinions from a variety of different shareholders. I think in the five options that I just outlined, there are some shareholders, at least, that support each one of those. I think that in fairness, what most shareholders -- the commenting that I hear from most shareholders is just frustration with the stock performance in light of particularly the business performance, and what we hear often is, "Just do something." I think that that's a fair point to be vocalized. I think the flip side of it is we need to do it very carefully and considerately.

We have a great business. I think we've proved again this quarter -- as we did in the fourth quarter -- there's a lot of momentum in this business. We saw some very strong pipeline data readouts. So far, we have a lot more to come, and so, I think we need to carefully and thoughtfully consider all options as we move forward. Again, everything's on the table. I gave you my preliminary view, but the board is highly engaged, there is a sense of urgency, and everybody's looking at everything.

William Meury -- Executive Vice President and Chief Commercial Officer

Ken, on the CGRPs, I don't underestimate the impact that a new class of medications can have on the migraine space. In this situation, I don't see people switching from Botox to CGRPs. To be fair, they're not more effective, they're not necessarily more convenient, and they're not more economical. I've said before I think the diagnosis and treatment rate is going to climb, and there are roughly an estimated 2 to 3 million people with chronic migraine. There's only a couple hundred thousand on Botox. The launch of the CGRPs is going to increase the pool of patients being treated, and remember, only 50% of people are going to respond to a CGRP.

And so, I believe that Botox and the CGRPs can and will coexist, and I think the fact that we also have ubrogepant, which is not for chronic migraine, but is for acute migraine, is going to give us an advantage in talking to both neurologists and primary care physicians about migraine and our two products. So, I think the outlook for the growth rate of Botox is positive. Even if there is a moderation in growth in the first several quarters on the migraine piece, there are two other parts to Botox that are large and also growing, and that's the spasticity disorders and overactive bladder. And so, I think the picture for the next several years looks very good.

Ken Cacciatore -- Cowen and Company -- Managing Director

Great, thanks.

Operator

Our next question comes from the line of David Maris with Wells Fargo.

David Maris -- Wells Fargo -- Managing Director

Good morning. Two questions. First, on the filler business, can you talk a little bit about what's driving the growth, but also, what the next-generation products are? Is that just to maintain growth, or does that expand the market? Separately, David, on the ROR gamma product that was killed this quarter, that was the main purpose of the Vitae acquisition, so what do you think went wrong in the initial assessment, and do you think that's reflective of the challenge of the open science approach, and what will you do differently going forward because of that? Thank you.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Thanks, David. I would just say a couple quick things, then I'll turn it over to Bill and David. On filler, we have the world's leading family of portfolio fillers under the Juvéderm family branding. It's something that I think gets overlooked often. I think Bill said in his prepared remarks in Europe, the filler -- the Juvéderm family now rivals Botox in size, and frankly, a faster growth rate.

As we bring more product flow into the U.S. -- Bill and I were both at a plastic surgery aesthetic meeting this weekend. What they're doing with our fillers -- the Juvéderm family -- is nothing short of spectacular. In fact, many of the plastic surgeons are telling me that it's really their first option versus a facelift, and they said it's something they never thought they would say -- when a surgeon tells you that you don't need a facelift and can fix it with filler, then you really don't need a facelift because surgeons -- generally, the first instinct is to cut. So, I think that's something, and of course, we are going to continue to invest. In fact, we're looking at a significant investment in our manufacturing footprint over time to meet the growing demand of volume.

Quickly on ROR gamma T -- and, David will provide more detail -- I think the challenge broadly is not unique to open science. I think it's just a science challenge, that sometimes, whether it's an internally derived program or an externally derived program, frankly, I think, is irrelevant to whether or not it is going to be successful. I think our success record is better than those that rely solely on internal, but David will provide some more color in a second. So, on fillers, Bill, do you want to add some commentary?

William Meury -- Executive Vice President and Chief Commercial Officer

David, listen: We often talk about Botox being the gateway to our aesthetics business. I can tell you in the future, at some point, Juvéderm will become a gateway. The business is growing at a double-digit rate in the U.S. and is near 20% internationally. I think it's at an inflection point with the rest of the market. Growth is coming from three different areas. First, softening lines is being replaced with volumizing, and shaping, and skin quality. Second, there's more volume per procedure as injectors get more experienced with fillers. And then, as it relates to new fillers, I think the next frontier for fillers will be the lower face -- the jawline, the chin -- among other areas.

And so, this is a great business, and we have at least three new fillers in development, next-generation fillers. Two of them are part of our Vycross collection, and then, of course, we announced the deal with Elastagen, where we're going to combine hyaluronic acid with elastin. The way plastics and derms think about it is it's equivalent to a paintbrush for an artist. Some of these fillers are larger, some last longer, some are smoother, and so, our job is just to continue to innovate and introduce new products, which is why this business has continued to grow at such a high rate over the past several years. I think some people forget that in 2017, we introduced three novel fillers in the United States and internationally, so the outlook is very good.

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Just a quick comment on fillers from an R&D perspective before I move on to ROR gamma T. We're really excited about the Elastagen acquisition. Over the last few years, of course, we've been replacing hyaluronic acid in the subdermal compartment, and now we have the possibility to add back not only hyaluronic acid, but also elastin as a whole new filler line to increase not only elasticity of the skin, but skin quality, and there's a lot of very exciting science that we'll be doing internally, but also with our external collaborators over the next few years.

Talking about ROR gamma T and in relation, perhaps, to the open science model, we moved the lead compound into Phase IIB trials. What we saw were safety concerns at different doses of the compound, so we did the right thing: We killed early and we killed fast, and we didn't try to flee forward with that compound. Now, ROR gamma T remains a very exciting target for drug discovery. Several companies are also pursuing ROR gamma T. It sits at the confluence of the IL-17 IL-23 pathways, which are so important in autoimmune disorders, so I remain confident in ROR gamma T as a target for drug discovery and development, and we are pursuing alternative formulations.

In addition, I remain confident in the quality of the R&D team here at Allergan and our ability to assess the quality of external opportunities. So, as you know, I remain a big fan of open science. I know that many companies are filling that pipeline through acquisitions. We all know that the majority of blockbuster drugs are sold by companies that didn't do the original discovery, and I see open science as the way forward for the future, and we need to build our business development deals accordingly.

David Maris -- Wells Fargo -- Managing Director

Thank you very much.

Operator

Our next question comes from the line of Liav Abraham with Citi.

Liav Abraham -- Citigroup Investment Research -- Analyst

Good morning. A couple of questions. Firstly, Brent, what is the timeline for the strategic review to be completed, and when can we expect to receive your final thoughts on this? And then, secondly, regarding your Botox franchise, I'd be interested in any color you can provide on additional toxin assets you have in your pipeline and when we can get additional details on these, either additional details for Botox that you alluded to you in your prepared remarks or novel botulinum toxin formulations. Thank you.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Sure. Thanks, Liav. So, with regard to the strategic process, as I mentioned in the prepared remarks, we're deep into the process. We obviously provided an update in this call in terms of the range of options that we're considering, and my initial preliminary view on each of those. What I would say -- this is an ongoing process. Our board is deeply engaged. We have multiple strategic advisors working with us and I am very committed to giving up an update as we continue to proceed.

But, I would point out that since the beginning for me when I started at Forest, we have always stayed focus with our board working on strategic initiatives. We have continuously looked for ways to not only simplify our business -- whether that be selling our respiratory business, whether that be selling our contract manufacturing, and frankly, selling our generics business -- to stay more focused on innovation and the core therapeutic areas. And remember, our strategy has always been to be leaders in the therapeutic areas we are committed to, and that means leaders commercially as well as in innovation, and if we believe we can do that, then we believe we're the right owners of that business. But, I'll update you as time goes if there are any changes. David, you want to talk about Botox and the pipeline?

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Sure, happy to do that. Thanks for the question. As I hope everyone understands, we have probably what is the largest R&D effort in toxins. We have five later-stage projects, three in therapeutics -- our depression effort, our efforts in allergic rhinitis and with atrial fibrillation -- and two in aesthetics -- that's in masseter and platysma. We've got several toxins to choose from as we enter Phase III with these indications. We have different formulations in development. Obviously, we've got a large R&D effort evaluating -- among other things -- duration of action, and we've already demonstrated different durations with the effect of Botox in different indications. We'll continue to update you as we identify our findings and the data in this area.

Operator

Our next question comes from the line of Vamil Divan with Credit Suisse.

Vamil Divan -- Credit Suisse -- Analyst

Great. Thanks so much for taking my questions. So, two for Bill. One around Esmya, given some of the safety concerns. I know we got the update on when we'll hear from the regulators, but how do you think about the commercial outlook of that product in both Europe and the U.S. given some of the concerns that have been raised? And then, second, I think I heard you say that Allergan will be the only company able to offer physicians and patients both an acute and preventive therapy for migraines. I was just curious because Lilly will also have agents on both sides. I'm just curious how you think about those assets, or was there some reason you didn't include those in your comments? Unless I misheard what you said.

William Meury -- Executive Vice President and Chief Commercial Officer

Thanks, Vamil. Obviously, David provided an update on Esmya, but we do remain focused on trying to work with both PRAC and Gedeon Richter as well as the U.S. FDA to bring this therapy to the women who, frankly, really do deserve innovation around this condition. The only thing I'd add to Esmya is we have to wait and see what the label looks like, of course. It's impossible right now to speculate about how that may impact how we position the product and how it's used. I will tell you that if it's got an acceptable benefit/risk ratio, even if there's some guidance as it relates to safety, this is one of the most common conditions OB/GYNs diagnose and treat.

There are no approved therapies. You saw the efficacy rates in both our U.S. and international studies with amenorrhea between 60% and 80%. It's an incredibly -- for some women -- debilitating condition, so it's got significant potential, assuming we have a reasonable benefit/risk profile, to share with physicians. I think we have to wait and see how the FDA views it, and we'll know in several months.

And then, as it relates to CGRPs, I guess I should have said we're one of two companies that have both an acute and a prevention treatment. I am aware of lasmiditan from Lilly and their CGRP, which is fine. I don't think about this in terms of a battle -to be fair -- between Allergan and Biohaven on the acute side or between Allergan and any other company on the chronic side. We've been in this space for six or seven years now. Because of our buy-and-bill product, we have incredible relationships with neurologists. We're an incumbent. I do think we have a competitive advantage. That's not to say that the other companies and the other products are not going to be important treatments too, but we have a great opportunity as it relates to migraine, so I'll change my wording to "one of."

Vamil Divan -- Credit Suisse -- Analyst

All right, thanks.

Operator

Our next question comes from the line of Douglas Tsao with Barclays.

Douglas Tsao -- Barclays -- Analyst

Good morning. Thanks for taking the questions. David, I think you referenced a number of different formulations for Botox. I was just curious when you feel like the company will be in a better position to provide a little bit more color in terms of what those are and the full pipeline of opportunities in the toxin space.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

I'll answer the question. As David said, we are the largest R&D shop when it comes to neurotoxins. We are absolutely committed to this space. We will lead the innovation in this category, and we're planning both an R&D Day and a Medical Aesthetics Day in the fall. I suspect between the two, you'll get a very robust update.

Douglas Tsao -- Barclays -- Analyst

And then, maybe a follow-up -- if you could give a little bit of your perspective, Brent, on the state of the Eye Care business, especially given the LOE of Restasis. Lumigan is a little bit more of a mature asset. I know you've got the SR product in development, but how core do you see that right now in the business and do you see a need for additional assets in the pipeline?

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

The Eye Care business remains a very important and strategic business for us. Take Restasis completely out, and we still have essentially a $2 billion global eyecare business. I think what you saw is the growth drivers are coming from products like Ozurdex, which continues to do very well -- up about 13% in the quarter and very strong globally. When we look at what's coming, clearly, we have abicipar, which could be a game-changer if successful, but we have Bimatoprost SR, we have Bimatoprost Ring, so I know we think about glaucoma as a relatively stable franchise, but the reality is that paradigm should shift to dropless therapy, and we will have not just an implant, we'll have drops, we'll have an implant, and we'll have a ring.

I think we're going to be able to offer the ophthalmologists and glaucoma specialists and maybe even the optometrists in the U.S. the best choices to treat this disease for patients. So, we're strongly committed to it, and I think you'll see our R&D move more toward retina. We have the Editas collaboration in gene therapy. We have our own gene therapy programs in early stage development. So, this is one of the strongest parts of Allergan, so, absolutely committed.

Douglas Tsao -- Barclays -- Analyst

Okay, great. Thank you very much.

Operator

Our next question comes from the line of Marc Goodman with UBS.

Marc Goodman -- UBS Investment Bank -- Managing Director

Good morning, Brent. Two questions here. First, big-picture strategy -- just to confirm, you mentioned no big deals are on the table, and I was just wondering... Help us explain the noise with the Shire about a week ago and whether that falls into the "no big deals," or the "no big deal" comment is after that. "We took a look, we're not interested, and in fact, we've decided we're not going to do a big deal." I'm just curious how that all plays in.

And then, when you talked about the small bolt-ons, are you referring to bolt-ons to verticals that you're in already? Can you talk about some of the verticals that you're 100% committed to? Would you consider swapping out some of these verticals for other verticals? I was curious how you thought about that. The second question is just about outside of the United States. Can you give us a flavor of some of the regions' growth profiles? What's going on? What are the new projects that will be launching in some new regions so we can expect -- instead of just modeling it by project, maybe also by region a little bit to know where a lot of the growth is coming from. Thanks.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Thanks, Marc. Excellent questions. With respect to large, transformational M&A, I said in my prepared remarks that it's not a priority for me, but I don't think you can absolutely ever rule out any option because we work in a very dynamic healthcare environment, and I think we always need to maintain flexibility if we perceive that there is a strong strategic and financial rationale to do something.

So, in the context of evaluating our full range of options here -- and, as I mentioned, engaging in a transformational or large acquisition was never a top priority, but because Takeda put Shire in play, we felt we had an obligation to at least do a cursory review and look to see if there was a probability that we could create value for shareholders. We did that, it was leaked -- as you saw -- in the press, and we were forced within minutes to make a preset disclosure as required by the U.K. takeover panel. But, to be clear, we worked very quickly with the takeover panel in the U.K. to clarify that, and we are not going to make an offer for Shire. So, that was something that unfortunately got played out in the press. We don't like to have things play out in the press, but it happens from time to time.

But, to be clear, it was a cursory review. We didn't take a lot of time. Our business development teams are always active. I would just end with it is SOP for us at Allergan to look at every company that's in play whether or not we even think there's a remote possibility to do it. It's much like your customers looking at stocks they don't buy. We have to look at other things to make us smarter about the things we want to buy, and that's what happened here.

With respect to verticals, we are absolutely committed to the big four: Medical Aesthetics, Eye Car, CNS, and GI. We have a strong view of both our Women's Health and Anti-infectives business, but they are less strategically important given the innovation cycle and the predominant U.S. focus of those, and of course, our pipeline in those businesses. But, they're good businesses, they're profitable businesses, they will have growth in those businesses, so, whatever we do with them, we have to make sure that we are serving the long-term shareholders in an economically strong and viable manner. And so, we are there.

I think in terms of bolt-ons, I think you'll see us generally focusing -- like we have in the past -- on the areas where we follow our strategy, which is to create market leadership positions in each of our therapeutic areas. So, we haven't done any bolt-ons in a while, but where you have seen them recently is Medical Aesthetics. We are the clear global leader. LifeCell and Zeltiq were both -- again, too early to bring to a conclusion this statement, but clearly, in the first year, we're feeling very good about those both strategically and financially exceeding expectations. I think if we could find things in Eye Care that made both strategic and financial sense, that would be a hot area for us, and GI and CNS equally so. So, those are the four we tend to focus on. Outside the U.S., I'll turn it over to Bill.

William Meury -- Executive Vice President and Chief Commercial Officer

Marc, listen, as you know, it's about a $3.5 billion business growing at 10%-plus. When you think about it regionally, in the following order: Asia/Pacific, plus 20% in the first quarter, Latin America/Canada, plus 14% in the first quarter, and then, Europe was just under 10%. Flagship products that are especially strong: Juvéderm -- as I mentioned -- especially in Asia/Pacific, Middle East/Africa, which are both investment regions for Allergan.

This whole story is an investment story. We've been adding commercial personnel virtually all over the world, but especially in emerging markets. Ozurdex in Eye Care is extremely strong, and as Brent mentioned, our glaucoma business -- unlike in the United States, which is off versus prior year -- is up versus prior year internationally. I think Latin America/Canada and Asia/Pacific -- when we think about the next three to five years -- have pretty significant growth prospects.

Operator

Our next question comes from the line of Gregg Gilbert with Deutsche Bank.

Gregg Gilbert -- Deutsche Bank -- Managing Director

Thanks. Good morning. Brent, first, on the decision to conduct a strategic review -- is that tied solely to the stock performance disconnect, or are there some things operationally that contribute that you've learned in the past couple of years? So, in other words, are you doing this only because of the stock underperformance? And then, David, two quick ones on rapastinel. Can you share your thoughts on how your product is similar and different to J&J's approach since we'll see their news first? And, on abicipar, can you clarify what formulation you plan to file and when? Thanks.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Gregg, just to be clear on the strategic review, it was instigated almost completely because of the disconnect between our performance and our stock price, and I understand why the wall of worry has been built around our company, but I think we continue to show quarter after quarter that we have a strong, robust, and durable core business, and I think that's ultimately what will prove it out -- actual performance. There's no better way to do it.

That being said, we are always doing strategic review. It is something that is part of my mandate and clearly part of the board's mandate, to always think strategically about our business and how to create value for shareholders. What's different here is the intensity of the review and the fact that we have multiple outside advisors actively engaged across a wide range of the options. That's what makes this review different in a sense than the normal course or continuous strategic review that we do.

Ultimately, as I said, I think our strategy is sound. I think focusing on leading in our therapeutic areas with both commercial capabilities and innovation is a winning strategy for Allergan, but given the stock performance, I had to say am I right or am I wrong? You can't keep drinking your own Kool-Aid and expecting a different result. And so, I think it's fair to have outsiders and a wider group of board members engaged in seeing what I see every day, and making their own assessment, and having that back-and-forth with them. And so, I'm anxious to learn. I'm always open to learning new ideas.

The good news here is our shareholders have been very open with their thoughts, so we've gotten a very broad and almost complete perspective from a lot of different shareholders, and that's being incorporated into the review as well. At the end, hopefully, we'll come out of this a much stronger and better Allergan with a great strategy. So, I think we're there today, but look, we can always improve, and we can always learn something new. I'll turn it over to David to talk about rapastinel and abicipar, and if there's anything else I can add, I will. David?

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Thanks. So, first of all, rapastinel -- comparison to J&J. Clearly, J&J are developing one of the enantiomers of ketamine. We now have convincing data that ketamine is a fast-acting antidepressant, albeit with many psychotomimetic-like side effects. Rapastinel shares some of the pharmacology of ketamine in that it modulates the glutamate NMDA receptor, but it does it in a different manner. Ketamine is a channel blocker; rapastinel is a weak partial agonist.

I'll spare you the details of why we see some of the same pharmacology with a partial agonist as with a channel blocker, but we do have unifying pharmacological hypotheses why rapastinel has rapid-acting antidepressant activity like ketamine, which we saw with rapastinel in Phase II studies, but lacks many of the side effects. For instance, at least in animal models, rapastinel will actually attenuate the negative effects of ketamine on cognition. So, rapastinel -- do we get read-throughs from ketamine and S-ketamine data? Partly, because we anticipate they both have rapid-acting antidepressing activity, but rapastinel clearly has a different side effect profile -- a much more benign side effect profile -- than ketamine.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

If I could, I would just add -- Gregg, I think it's important here given the focus on controlled substances and the like that if we prove it in the Phase III study, that side effect profile could be a considerable way to distinguish our program from ketamine's.

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

We do have a large program. We're looking at rapastinel in treatment-resistant depression as well as in monotherapy, and we've got a suicidality study which started recruiting in December last year. Regarding abicipar, clearly, as we mentioned, we'll get the data from our Phase III studies in the second half of this year, and our expectation is to file with those data and with the existing formulation.

As I believe many people are aware, we are working on new formulations of abicipar. We will initiate a clinical study in AMD with a new formulation where we have removed all hocer proteins that we can see based on the present purification and analytical techniques. We will start that additional clinical study in the first half of this year, and when appropriate, we will file a subsequent licensing variation for that formulation.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

If I could, I would just add some context on abicipar, Gregg. As you remember, when we acquired Allergan, there was some controversy of whether or not we should move abicipar into Phase III. Even though we liked the duration and efficacy from the Phase II data, there was concern about inflammation rates seen in those Phase II studies.

And so, we undertook -- I think I called it a free option at the time, but we undertook in David's team to really understand how to develop large proteins for the back of the eye. We looked at the competitive programs as well as our own capabilities, and what David essentially said to me was -- I'll oversimplify it -- "Look, what the others have done here is continue to refine their formulation to ultimately cleanse it of extraneous proteins and protein aggregation. We would need to develop analytic methods and ultimately apply those to a new formulation, but I think our team -- particularly our guys in Liverpool -- can do this work."

So, we made the decision to proceed with the Phase III, I'm glad we did it, and we will get the data soon. What I'm looking for there is efficacy and duration of effect because ultimately, we won't understand the inflammation rates until David finishes [inaudible] that he will initiate within the next month or so within the super-clean formulation. I think that this is not too different from how both Eylea and, I think, Lucentis certainly were developed this way.

If I could do it all over again, I'd like to go back before I owned Allergan and began the purification of the formulation a year before we acquired it, but that was the hand we had, and to be fair, I'm just incredibly proud of our R&D colleagues for playing catch-up and getting us to a point where I think we can see a convergence of these data to potentially get a win for patients and extend the duration of effect of these medicines. Frankly, this is a very aggravating procedure for both the retina specialists and especially for the patients, so if we can ease that burden here by having an extra-long duration with a nice risk/benefit profile, that would be a home run for Allergan, for patients, and for retina specialists. Sorry for the long-winded answer, Greg.

Operator

Our next question comes from the line of David Risinger with Morgan Stanley.

David Risinger -- Morgan Stanley -- Managing Director

Thanks very much. I have two questions, please. First, could you talk a little bit about Esmya in Canada, and specifically, where a Canadian review stands on the drug's safety, if they are conducting one? I haven't seen a label update, but I don't know where things stand in Canada. And then, second, David, could you speak to atogepant, specifically what your expectations are and the timing for the Phase IIB results? Thank you.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

David, do you want to talk about Esmya in Canada?

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Sure, happy to do that. We're working closely with all regulatory authorities about ulipristal Esmya, and that obviously includes Health Canada. The situation at the moment with Health Canada is that before starting patients on Fibristal, which is Esmya in Canada, there should be a discussion and evaluation of the benefits and risks associated with the medication, and that patients shouldn't be treated with Fibristal if there is any concomitant hepatic disease, and that the advice is to monitor liver function at least once a month during treatment, and in addition, a couple of weeks after completion of treatment.

So, I think that the post-marketing language in the Canadian label reads, "During post-marketing experience, rare cases of liver injury, including isolated cases of severe liver impairment requiring liver transplantation, were reported." So, that's basically the situation at the moment in Canada. The agent remains on the market with what we consider to be very appropriate information about liver safety.

William Meury -- Executive Vice President and Chief Commercial Officer

And, David, I've had a number of different conversations with physicians in the United States, but also mainly in Canada, where Esmya -- as you know -- is available, and their viewpoint is the level or the frequency with which testing may be required is important here, and as you know, there are a number of different classes of medications where there is guidance to monitor liver function. I think statins are a good example.

As long as the level of frequency of monitoring is manageable -- and, it's important. I don't want to minimize the importance of doing it, but as long as it's manageable, my sense from most OB/GYNs who I've spoken with is it's not going to dramatically change how they use the drug. We're just going to have to wait and see what the results from the FDA are, and David and his team are working on that. It's hard to speculate it at this point, but there's certainly a path forward here if, ultimately, after review of the data, the regulators are reassured by the benefit/risk profile of Esmya.

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

David, could you just remind me of your precise atogepant question?

David Risinger -- Morgan Stanley -- Managing Director

Yes. Actually, I just wanted to follow up on those comments. So, I should have asked as well on Esmya -- so, when did that label change occur that required monthly liver monitoring, and is it correct that Europe or EMEA will make a decision in May? Then, separately, that question on atogepant -- just wanted to get your updated commentary on that candidate and the timing for Phase II data.

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Okay. So, for atogepant, the Phase II data will be on schedule for the second half of this year. Regarding the Fibristal updates on the label, that happened -- we've been interacting with the Canadian authorities like we've been interacting with all health authorities over the last few months. The label change was in the early part of this year or late last year, when we were talking to them. Regarding news in Europe, we expect the PRAC to come with reports in May, as we've mentioned previously. Things remain on track.

David Risinger -- Morgan Stanley -- Managing Director

Okay. I'm sorry, one more, and thank you for your time. On atogepant, I thought that the Phase IIB completed -- I believe it was the end of March, March 28th. So, why won't we see a top-line sooner than the second half?

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Maybe I was giving myself a little bit more time that I needed. We are absolutely on track, and the top-line has always been forecast right in the middle of the year, and we did say the first half previously. It's right in the middle of the year, absolutely.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

It'll be right on the border.

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

There is absolutely no delaying the top-line. Sorry for the confusion.

David Risinger -- Morgan Stanley -- Managing Director

Okay, thank you.

Operator

Our next question comes from the line of Ronny Gal with Bernstein.

Ronny Gal -- Sanford C. Bernstein -- Managing Director

Hello, good morning. Congratulations on a nice start to the year. I have two questions. The first one is around business buying patterns by the pharmacies. I think you mentioned that Restasis had a bit of buying in the fourth quarter that was restocked in the fourth. Is this a broad phenomenon? We've seen it with some other companies -- the pharmacies anticipating companies' raising prices and buying into the quarter -- and if so, where does it happen? Second, to Matt, obviously, welcome on board. Sinalsing noted on their quarterly call that they expect a 1% hit on revenue from the Medicare gap rule that passed raising the pharma industry responsibility to 70%. You also have a large primary care business in the United States. Do you anticipate a similar hit in 2019 from the Medicare gap closing, or is this not something that will hit the company? Thank you.

William Meury -- Executive Vice President and Chief Commercial Officer

On buying patterns, I don't think I see anything significantly different this year than in previous years. We have a policy as it relates to our buying with wholesalers, and we try to maintain inventory levels at three to four weeks. First-quarter prescription fill rates, of course, can be impacted by health plan coverage dynamics, but no dramatic change in terms of buying patterns. We have a pretty consistent stream from quarter to quarter. I will say with Restasis, as you know, we're managing inventory levels in anticipation of an LOE and keeping prescription demand and factory sales as tight as possible, which is what we want to do to minimize any returns if and when a generic Restasis is introduced. That's largely the disconnect you saw this quarter given the demand versus factory sales gap.

Matt Walsh -- Executive Vice President and Chief Financial Officer

Ronny, thank you for your welcome to the company. No, we don't see a significant increase in our operating expenses because of the Medicare Part D. Our operating expenses -- both for the first quarter and for the full year -- will really be characterized by the success of the restructuring efforts, and to the extent that pharma fees come in, we're seeing lower pharma fees related to CHRUPS from last year as well as what our estimate is for this year.

Operator

Our next question comes from the line of Chris Schott with JPMorgan.

Chris Schott -- JPMorgan Chase -- Managing Director

Great. Thanks very much for the questions. The first one for Brent on strategic options: If you were to more narrowly focus the company, can you just elaborate a little bit more on the pros and cons of divestitures versus a split? Is there a bias of one versus the other as you go through this process, if in fact that's the direction you go? The second question, maybe for Bill or for Brent, can you talk a little bit more about the incremental opportunity for Vraylar in bipolar and how you see that product positioning in that segment of the market? Thanks very much.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Sure. Thanks, Chris. On the first one, as I said earlier, everything is on the table. I gave you my preliminary and current view of our options, but we have more work to be done, and we'll see how it plays out over the next few months, and I'll provide an update on our next call or if something happens earlier. I think the key with divestitures is it has to make strategic sense and it has to make financial sense. The one thing we won't do is a garage sale of important assets. Look, in our industry, there are many companies out there paying big premiums for sales growth and earnings growth, and right now, selling any assets in the categories that are being discussed for sale are dilutive, so we should just be clear about that.

I've heard the argument about focus. I think our management team is focused. I think we've proven that again this quarter when you look at our key therapeutic areas, and the growth rates in those areas, and the growth around a lot of the new product launches, and I don't view anything we have in our current portfolio as a distraction. But, that being said, if there's a way to create economic value for our shareholders and that value can be deployed in something that creates even more value, then you do it, and we've never been shy to do it in the past if we believe and have conviction around it and it makes strategic and financial sense, but you don't do it just because the stock isn't working for a couple quarters. And so, we just have to do what's right economically for the company, and that's something we're always committed to doing. It's not unique to this strategic review. Bill, do you want to talk about...?

William Meury -- Executive Vice President and Chief Commercial Officer

In terms of bipolar depression, I think the incremental sales from the indication could approach the current sales level of Vraylar today. There's only two agents on the market -- Seroquel and Latuda -- that have indications for bipolar depression. If you take a look at our studies, Vraylar produced a 50% reduction in the MADRS, the placebo-adjusted numbers are right in line with those two agents.

The sales for Seroquel -- which was the first product approved for bipolar -- at branded pricing for the indication are roughly $5 billion to $6 billion. If you look at sales for Latuda, which was the second product approved for bipolar depression, it's probably in the range of $1 billion. It's a great indication for us to get. If you talk to psychs, it's a tough condition to manage -- only two agents on the market -- so it's a sales multiplier for Vraylar if we get it approved and we successfully launch it.

Operator

Our next question comes from the line of Umer Raffat with Evercore.

Umer Raffat -- Evercore ISI -- Analyst

Thank you so much for taking my question. David, a couple for you and one for follow-up for Brent. David, the DARPin Phase III measures your primary endpoint four weeks after the last dose, so theoretically, both the every-eight and every-12-week arms should work because the primary endpoint is measured four weeks after the last dose. Am I thinking about it right, or is there something you want to expand on that?

The second one, David, what particularly triggered that 75 million milestone on the Chase Alzheimer's model? I know you were going to enter Phase III in 2017, it was delayed, so I'm just curious what triggered that. And then, finally, Brent, thank you for the color on the strategic review, and you mentioned you did a cursory review as SOP, but didn't make any offer on Shire, as you guys press-released as well, but since there was so much investor speculation on this topic, I'm curious -- did you guys ever approach Shire, or is that not something you're willing to discuss? Thank you.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Let me make a couple quick opening comments on the Shire point. I don't want to get bogged down in a lot of detail, but as I mentioned, it was a cursory review. We did not do any diligence. We only did public-company diligence, and we had just our business development team more or less doing it as a matter of protocol. So, I think it was perhaps overstated in the media in terms of the amount of effort that was involved on our end, and you should just know as a matter of SOP, we look at everything all the time. We have an active business development group. That's their job. That's what they do when they wake up and go to bed at night.

So, I wouldn't get too caught up on what everybody read. It wasn't a distracting initiative inside of the company. Frankly, the only thing distracting was the media and the shareholder speculation around it. With respect to Chase, as you know, almost every R&D deal we do, we try to use structure to mitigate risk and we try to have success-based payments instead of big up-fronts, and that certainly is the case with Chase. There was data that was required to be generated in order to make the next payment. That data was completed successfully, and that's what triggered the payment. Perhaps David could talk about both the abicipar question as well as anything else he wants to add on Chase.

C David Nicholson -- Executive Vice President and Chief Research and Development Officer

Sure. Thanks, Brent. Umer, look, the DARPin Phase II studies looked at the efficacy four weeks after last dose -- you're absolutely correct -- regardless of what intervals the abicipar -- the DARPin -- was actually administered. The Phase III design was different, and we're looking at efficacy every eight weeks and every 12 weeks, as well as secondary endpoints such as things like what proportion of patients receive benefit when the drug is administered every 12 weeks. Regarding Chase, as Brent mentioned, huge assets in the industry to look at these modifying agents -- beta-amyloids and more recent tau data. Unfortunately, so far, none of those approaches have been successful, although hopefully, they will be in the future.

Regardless of whether they're successful or not, we're still going to need symptomatic drugs because the disease modifying agent, unfortunately, will probably only slow disease progression, so we need symptomatic treatment now; we will need symptomatic treatment in the future. As a leader in the field of symptomatic improvement, we want to continue to work in the area. We have a deal with OSI/Heptares looking at the M1 agonist specifically to improve cognition as well as M4 agonist to look at other symptoms associated with Alzheimer's, because obviously, Alzheimer's is not only a problem of learning and memory.

In addition, we've got the donepezil/solifenacin deal with Chase, where as long as there is some presynaptic cholinergic innovation, we want to enhance that deteriorating input by slowing the breakdown of cholinesterase in the synaptic cleft. What we want to do is to take out the peripheral side effects with solifenacin to allow us to reduce peripheral side effects on normal doses of donepezil while potentially also increasing the dose of donepezil to get even greater central effects. So, symptomatic improvement is one of our core areas of R&D within Allergan.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

We'll take one last question.

Operator

Our final question comes from the line of Jason Gerberry with Bank of America.

Jason Gerberry -- Bank of America Merrill Lynch -- Managing Director

Great. Thanks for squeezing me in. Brent, on the strategic review, I'm just curious -- I realize it's a fluid process, but when you came to your preliminary assessment that a more meaningful split wasn't the best option, I'm just kind of curious how much meaningful dissynergy with the split factored into that. As I look at it, Eye Care business seemingly has some synergy with the Botox business, and it seems like you guys like your CNS pipeline too much to part ways, and thus, it'd be kind of hard to exit primary care, so that would be a challenge to splitting some of the bigger units apart. And then, second question for Bill, can you elaborate on the ex-U.S. strategy for CoolSculpting? I know the prior owner used the distribution model more heavily, so assuming you're fully resourced in the second half, how should we think about ex-U.S. growth of CoolSculpting? Thanks.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Jason, thanks for the questions. With respect to splitting the company, that is not off the table. I just gave you my preliminary view. Our board and advisors are still working, and modeling, and debating that type of option. I do think it is an option that requires the most time to execute, as well as probably the most difficult in terms of doing it. That being said, no one should walk away from this, that Allergan management wouldn't undertake an exercise that is either difficult or time-consuming if it were the right thing to do for shareholders.

We've done it in the past. I think selling our generics business and breaking out the chassis of this business was, frankly, probably more difficult operationally to execute than, frankly, it would be to split the company. Splitting the company comes with its own unique set of difficulties, including the requirements for audited financial statements. Trying to understand how to position our bond holders would be a key criterion. We do have investment-grade ratings. I think separating the companies is quite complex. There are complex tax consequences as well.

And then, you mentioned the synergistic effect that we have from our current business model and the fact that simply, drugs like Botox cross over both from the therapeutic side and the cash-based side, and I think it would be a very big error to take a flagship brand like Botox and break it apart. History has shown that when that happens, brand strength deteriorates. There are a lot of other issues that go into it, but I'm not going to spend a lot more time listing through it. That being said, if we ultimately believe there's a path to significant value creation, we would do the work. It would never intimidate us to do the work. Bill, do you want to talk quickly about the second part of the question?

William Meury -- Executive Vice President and Chief Commercial Officer

Jason, in terms of our strategy for CoolSculpting internationally, we're in the process of restructuring the distribution model in most markets from third-party distributors to a direct model, which is, of course, how we manage it. In the United States, we want CoolSculpting to be a gateway to the rest of the aesthetics business, so we'll manage it differently than Zeltiq has. That process will take a couple more quarters, and you should start to see fairly solid sales growth performance in the second half of the year.

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

Bill and I have traveled extensively around the world over the last couple quarters, and the markets are excited to get CoolSculpting from the distributors, but exiting from distributors and then starting up your own direct activity has to be done very carefully. If you break a lot of customer relationships or flood the market with inventory, that's a poor way to separate or divorce from your distributors, so we're doing it in a thoughtful way. Mark Princeton, who works for Bill, is doing a great job with his leadership team in getting ready to take those markets over, and we're excited for the future.

So, let me just close by saying again, obviously, we'll continue to update you on any strategic outcome that we come from this review, but really, our priority is on continuing to drive sales and earnings growth and advancing our pipeline. I think we had a strong end to last year. We started this year off in a good place, and we have a lot of work left to do, but our team is up for the challenge, we're energized, and we're focused. So, we look forward to keeping you updated, and thank you for the time.

Operator

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

Duration: 94 minutes

Call participants:

Daphne Karydas -- Senior Vice President of Global Investor Relations and Strategy

Brenton L. Saunders -- Chairman, President, and Chief Executive Officer

William Meury -- Chief Commercial Officer

C David Nicholson, PhD -- Chief Research and Development Officer

Matt Walsh -- Chief Financial Officer

A Robert D. Bailey -- Chief Legal Officer

Ken Cacciatore -- Cowen and Company -- Managing Director

David Maris -- Wells Fargo -- Managing Director

Liav Abraham -- Citigroup Investment Research -- Analyst

Vamil Divan -- Credit Suisse -- Analyst

Douglas Tsao -- Barclays -- Analyst

Marc Goodman -- UBS Investment Bank -- Managing Director

Gregg Gilbert -- Deutsche Bank -- Managing Director

David Risinger -- Morgan Stanley -- Managing Director

Ronny Gal -- Sanford C. Bernstein -- Managing Director

Chris Schott -- JPMorgan Chase -- Managing Director

Umer Raffat -- Evercore ISI -- Analyst

Jason Gerberry -- Bank of America Merrill Lynch -- Managing Director

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