Warner Chilcott plc (WCRX)

2012 Guidance Call

January 27, 2012 8:00 AM ET

Executives

Paul Herendeen – EVP & CFO

Roger Boissonneault – CEO, President & Director

Analysts

Chris Schott – JP Morgan

Gregg Gilbert – Bank of America/Merrill Lynch

Randall Stanicky – Canaccord Genuity

Gary Nachman – Susquehanna Financial

Shibani Malhotra – RBC Capital Markets

David Risinger – Morgan Stanley

Marc Goodman – UBS

Michael Tong – Wells Fargo Securities

Tim Chiang – CRT Capital

Greg Waterman – Goldman Sachs

Elliot Wilbur – Needham & Company

Douglas Tsao – Barclays Capital

Presentation

Operator

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Good day ladies and gentlemen, and welcome to the Warner Chilcott 2012 financial guidance call. at this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will be given at that time. (Operator instructions)

I would now like to turn the conference over to your host, Mr. Paul Herendeen, CFO. Please go ahead.

Paul Herendeen

Thank you Halli. Good morning everyone. Thanks for joining the call. I am joined this morning by Roger Boissonneault, our President and CEO. This morning we issued a press release the outlines our financial guidance for the full year 2012, which I hope you got a chance to review. Copies of the press release are available on the company’s website.

I will take a few moments to provide some additional comments with regard to 2012 guidance, after which Roger and I will host a brief Q&A period. Please note that in the Q&A we will only address questions relating to our guidance for 2012. before I start, let me note that we are affirming our full-year 2011 financial guidance at this time. We expect to report our Q4 and full year 2011 results in late February.

During the Q&A period we cannot and will not provide any additional details with respect to the fourth quarter or full year 2011 results. I also want to point out that this call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause the company’s actual results to differ materially from such statements.

These risks and uncertainties are discussed in this morning’s press release, our 2010 annual report on Form 10-K and subsequent filings with the SEC, all of which are available on the SEC's website. Forward-looking statements made during this call are made only as of the date of this call and the company undertakes no obligation to update such statements to reflect subsequent events or circumstances.

In addition, we'll make reference to certain non-GAAP financial measures as defined by SEC regulations. In accordance with these regulations, we have provided reconciliations of these measures in our press release issued this morning to what we believe are the most directly comparable GAAP measures.

I want to spend a few minutes to talk about how you might think about our expectations for 2012 and beyond. I suspect that many of you either listen to or have read the transcript from our presentation at JP Morgan a few weeks back. in my prepared remarks, I encouraged people to think about Warner Chilcott as being comprised of two distinct pieces of value, a core business of branded products that is growing both in terms of revenue and profits, and the revenue and profit stream associated with the Actonel brand.

You simply look at Warner Chilcott in the aggregate, or rely on headlines with respect to our guidance. You will likely miss the underlying strength and value of our company. First let us talk about our core business, which is everything other than Actonel. The products that make up our core fall into one of three categories. The growers for 2012 that includes the Loestrin franchise, Asacol, Estrace Cream, and Atelvia; the steady group, that includes Doryx and Enablex, and like every other branded company we have our tail revenues that are declining.

Let us start with the Loestrin franchise. 2011 saw us gain good traction with Lo Loestrin following its launch at the beginning of the year. Our challenge in 2012 and beyond is to drive the growth of Lo Lo to agree that the Loestrin franchise in the aggregate grows. And we expect we can do that in 2012.

Looking out beyond 2012, we continue to work to develop new contraceptives to give us the prospect of maintaining a growth position in this attractive segment, just as we have in prior years when we faced the loss of exclusivity of our then key brands. We think of our overseas business as one that can be a source of revenue and profit growth for years to come.

Next let me comment on Asacol. Asacol is like a battleship. It is hard to change the trajectory of this brand all that much as the market turns over so slowly. The good news is that this battleship is moving in the right direction, up. Asacol units are relatively steady, and we are able to enjoy growth driven by improved net pricing. So we expect Asacol to fall into the grower category in 2012, and thereafter.

It is worth mentioning here that when we acquired Proctor and Gamble’s Pharma business, the asset we covered it was Asacol, and that was in large part because we believe the uncertain and potentially difficult regulatory pathway for generics could mean that Asacol may enjoy market exclusivity beyond the expiry of the patents around the brand. Based on events that have transpired since we acquired Asacol, we continue to be confident in the prospects for sustaining the Asacol franchise. Of course, one of the other elements of the Asacol franchise that appeals to us, was that the product lend themselves to the development of product improvements that are right in our sweet spot. So I would not expect that we would sit still with Asacol and hope to sustain it over the long haul. You should expect us to actively manage the life cycle of this important franchise.

Estrace Cream, Estrace Cream has been, I think an underappreciated asset. While we have supported the product with promotional resources, it has responded nicely with solid unit and net sales growth. we expect to continue to grow Estrace Cream into 2012 and we are encouraged by the long-term prospects for the brand. Looking out beyond 2012, we believe that we have the opportunity to maintain exclusivity in this space due to a combination of the challenging regulatory pathway for potential generics, and our efforts to develop and introduce improved products in this segment.

One year in with Atelvia, we have set the stage for the brand to continue to grow. During 2011, we made strong progress addressing the potential barriers to Atelvia gaining share, mainly ensuring that the brand has credible coverage of managed care so that the good work of our sales reps can be evidenced by field RXs at the pharmacy counter. As we think about 2012, we think of Atelvia as being an important contributor to sales growth.

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