10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2009

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 0-53772

WARNER CHILCOTT PUBLIC LIMITED COMPANY

(Exact name of Registrant as specified in its charter)

Ireland	98-0626948
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. — Employer Identification Nos.)

Unit 19 Ardee Business Park

Hale Street

Ardee, Co. Louth,

Ireland

(Address of principal executive offices)

Registrant’s telephone number, including area code: +353.41.685.6983

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Ordinary Shares, $0.01 par value	The NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  þ    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ	Accelerated filer  ¨	Non-accelerated filer  ¨	Smaller reporting company  ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)    Yes  ¨    No  þ

The aggregate market value of ordinary shares held by non-affiliates as of June 30, 2009 was approximately $1,450.4 million, using the closing price per share of $13.15, as reported on The NASDAQ Global Market as of such date. Ordinary Shares held by the executive officers and directors and our controlling shareholders have been excluded from this calculation because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of February 12, 2010, the number of the Registrant’s ordinary shares, par value $0.01 per share, outstanding was 252,030,578.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required by Part III of this Annual Report on Form 10-K (“Annual Report”) is incorporated by reference from the Registrant’s proxy statement to be filed pursuant to Regulation 14A with respect to the Registrant’s Annual Meeting of Shareholders to be held on May 13, 2010.

WARNER CHILCOTT PLC

INDEX
PART I.
Item 1.	Business	1
Item 1A.	Risk Factors	27
Item 1B.	Unresolved Staff Comments	44
Item 2.	Properties	44
Item 3.	Legal Proceedings	45
Item 4.	Submission of Matters to a Vote of Security Holders	45
	PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	46
Item 6.	Selected Financial Data	48
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	84
Item 8.	Financial Statements and Supplementary Data	84
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	84
Item 9A.	Controls and Procedures	85
Item 9B.	Other Information	85
	PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	86
Item 11.	Executive Compensation	86
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	86
Item 13.	Certain Relationships and Related Transactions, and Director Independence	86
Item 14.	Principal Accounting Fees and Services	86
	PART IV.
Item 15.	Exhibits, Financial Statement Schedules	87
Signatures		88

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PART I.

Item 1. Business.

Business Overview

We are a leading global specialty pharmaceutical company currently focused on the gastroenterology, women’s healthcare, dermatology and urology segments of the North American and Western European pharmaceuticals markets. We are a fully integrated company with internal resources dedicated to the development, manufacture and promotion of our products. Our franchises are comprised of complementary portfolios of established branded and development-stage products that we actively manage throughout their life cycle. Our success is not tied to any single product, as multiple products make up our existing sales base and several of these provide opportunities for future growth.

2009 was a transformative year for our Company. On October 30, 2009, we acquired the global branded pharmaceuticals business (“PGP”) of The Procter & Gamble Company (“P&G”) for approximately $2,919.3 million in cash and the assumption of certain liabilities (the “PGP Acquisition”). The purchase price remains subject to certain post-closing adjustments. Under the terms of the purchase agreement, we acquired PGP’s portfolio of branded pharmaceutical products (including its two primary products ASACOL and ACTONEL), PGP’s prescription drug pipeline and its manufacturing facilities in Puerto Rico and Germany. ASACOL is the leading treatment for ulcerative colitis in the U.S. market for orally administered 5-aminosalicylic acid (“5-ASA”) products, with approximately 41% of the market share based on filled prescriptions and approximately 47% of the market share based on revenues, each according to IMS Health, Inc. (“IMS”). ACTONEL is the leading branded product in the U.S. non-injectable osteoporosis market for the prevention and treatment of osteoporosis in women, according to IMS. ACTONEL is marketed under our global collaboration agreement with Sanofi-Aventis US LLC (“Sanofi”).

The PGP Acquisition has transformed us into a global pharmaceutical company with significant scale and geographic reach. Prior to the PGP Acquisition, our women’s healthcare franchise was anchored by our strong presence in the U.S. oral contraceptive market (where we market LOESTRIN 24 FE and FEMCOM FE), U.S. hormone therapy (“HT”) market (where our commercialized products include ESTRACE Cream, FEMHRT and other products) and the U.S. dermatology market (where we promote and sell DORYX, an oral anti-infective for acne). The PGP Acquisition added a highly attractive specialty segment in gastroenterology (ASACOL), expanded our presence in women’s healthcare (ACTONEL) and established us in the urology market (ENABLEX) as our development work continues on two new erectile dysfunction (“ED”) products. The combined company has an expanded sales force and infrastructure to better promote products in the United States, Canada, most of the major Western European markets and Australia, increased diversity of revenue sources, enhanced product development capabilities and a deeper pipeline. Moreover, the PGP Acquisition provides an opportunity for us to apply our demonstrated expertise in the management of pharmaceutical product life cycles to PGP’s market-leading products.

In addition to the PGP Acquisition, we completed two other significant transactions during 2009. First, on August 20, 2009 we completed the redomestication of our principal holding company from Bermuda to Ireland, following the approval of a scheme of arrangement by our shareholders and the Supreme Court of Bermuda. As a result of the transaction, Warner Chilcott plc, a public limited company organized in, and a tax resident of, Ireland, became the principal holding company of the Warner Chilcott group and each holder of Warner Chilcott Limited’s outstanding Class A common shares, par value $0.01 per share, received ordinary shares of Warner Chilcott plc, par value $0.01 per share, on a one-for-one basis. Finally, on September 23, 2009, we agreed to terminate our exclusive product licensing rights from LEO Pharma A/S (“LEO”) in the United States to TACLONEX, TACLONEX SCALP, DOVONEX and all other dermatology products in LEO’s development pipeline, and sold the related assets to LEO, for $1,000.0 million in cash (the “LEO Transaction”).

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For the year ended December 31, 2009, we recorded net income of $514.1 million on revenues of $1,435.8 million. For the year ended December 31, 2008, we recorded a net (loss) of $(8.4) million on revenues of $938.1 million. For the year ended December 31, 2007, we recorded net income of $28.9 million on revenues of $899.6 million. As of December 31, 2009, 2008 and 2007, we had total assets of $6,031.2 million, $2,582.9 million and $2,885.0 million, respectively.

Strategy

Our primary strategy is to continue to develop our specialty pharmaceutical products business by focusing on therapeutic areas dominated by specialist and other high-prescribing physicians. We remain committed to driving long-term revenue and profit growth by continuing to improve upon our portfolio of products and market those products through our precision marketing techniques. Furthermore, we intend to supplement this growth and broaden our market position in our existing franchises through ongoing product development and selectively reviewing potential product in-licensing, acquisition and partnership opportunities.

Focus on selected therapeutic markets. While large pharmaceutical companies have focused on developing “blockbuster” drugs, we concentrate our efforts on branded products that are prescribed by high-prescribing physicians, as well as developing products that complement those products and therapeutic segments.

Drive long-term growth. We seek to drive organic growth in product franchises by employing precision marketing techniques. More specifically, we seek to identify the high-prescribing physicians in our therapeutic categories and then target the activities of our sales representatives to reach those specific physicians. We believe this strategy results in an efficient and effective return on our marketing efforts. The PGP Acquisition has expanded our therapeutic and geographic reach, primarily in North America and Western Europe, and provides a platform from which our sales force will seek to drive market share by promoting complementary products.

Execute focused, efficient R&D effort. Our product development efforts are focused primarily on new products with established regulatory guidance and extending proprietary protection of our existing products through product improvements that may include new and enhanced dosage forms. These development efforts tend to be lower-cost endeavors with a higher probability of success than typical development programs run by other pharmaceutical and biotechnology companies. Our R&D efforts benefit from an experienced team of scientists, clinicians and regulatory professionals with proven product development expertise. Since March 2003, our internal development efforts have yielded a number of approvals from the U.S. Food and Drug Administration (“FDA”), including those for the following products:

• DORYX delayed-release tablets

• FEMRING

• FEMCON FE

• FEMTRACE

• LOESTRIN 24 FE

• Low Dose FEMHRT

• SARAFEM tablets

We expect to continue to pursue this strategy following the PGP Acquisition by leveraging the experience of our and PGP’s R&D teams to bring new products to market.

Selectively acquire products that enhance our existing product portfolio. To supplement our organic growth, we continually evaluate opportunities to expand our pharmaceutical product portfolio by reviewing potential product in-licensing, acquisition and partnership opportunities, such as our transactions with PGP, Paratek Pharmaceuticals, Inc. (“Paratek”), Dong-A PharmTech Co. Ltd (“Dong-A”) and NexMed, Inc. (“NexMed”). We focus on acquisitions and partnerships in therapeutic categories that we believe will complement our strategic

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focus. The PGP Acquisition has continued this strategy by broadening our product breadth in women’s healthcare, and by expanding our reach into gastroenterology and urology. Gastroenterology is a specialty segment that we believe is well suited to our marketing strategies as it is characterized by a small concentrated base of physicians. The expansion into the urology market complements our existing product development efforts in the ED category. We have acquired a number of products through license, co-promotion arrangements or purchase, including the following:

• ASACOL

• ACTONEL

• ENABLEX

• ESTRACE Cream

• FEMHRT

• LOESTRIN Franchise

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Our Principal Products

We market and sell the following principal products:

Our Principal Products

	Product (Active Ingredient)	Indication	U.S. Patent Expiry(1)	Year Ended December 31, 2009 Revenue ($mm)(2)
Gastroenterology	Ulcerative Colitis ASACOL 400 mg (Mesalamine)	Treatment of mild to moderate ulcerative colitis and maintenance of remission	July 2013(3)	$114.9(4)
	ASACOL 800 mg (Mesalamine)	Treatment of moderately active ulcerative colitis	November 2021(5)
Women’s Healthcare	Osteoporosis ACTONEL (Risedronate sodium)	Prevention and treatment of postmenopausal osteoporosis	June 2014(6) and November 2023(7). In addition, two new formulation patents expiring in January 2026 have been issued that cover potential next generation ACTONEL products.	$222.0
	Oral Contraceptives LOESTRIN 24 FE (Norethindrone acetate and ethinyl estradiol)	Prevention of pregnancy	July 2014(8)	$247.6
	FEMCON FE (Norethindrone and ethinyl estradiol)	Prevention of pregnancy	April 2019(9)	$49.5
	Hormone Therapy ESTRACE Cream (17-beta estradiol)	Vaginal cream for treatment of vaginal and vulvar atrophy	Patent expired March 2001	$115.9
Dermatology	Acne DORYX (Doxycycline hyclate)	Oral adjunctive therapy for severe acne in 75, 100 and 150 mg strength delayed-release tablets	December 2022(10)	$210.0
Urology	Overactive bladder ENABLEX (darifenacin)	Treatment of overactive bladder	March 2015 and August 2016(11)	$14.9

(1) See Item 1A. “Risk Factors—Risks Relating to Our Business—If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products may be adversely affected” and “Business—Competition” and “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report. In addition, our products may lose exclusivity in other countries at earlier dates. For example, ASACOL has no exclusivity in the United Kingdom and ACTONEL will lose exclusivity in Canada in early 2010 and many Western European markets beginning in late 2010.

(2) Represents product revenue for the year ended December 31, 2009. As we acquired PGP on October 30, 2009, the above table includes revenues for the PGP products, including ASACOL, ACTONEL and ENABLEX, for the period from October 30, 2009 through December 31, 2009.

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(3) In September 2007, PGP and Medeva Pharma Suisse AG (“Medeva”) received a Paragraph IV certification notice letter from Roxane Laboratories, Inc. (“Roxane”), a subsidiary of Boehringher Ingelheim Corporation, indicating that Roxane had submitted to the FDA an Abbreviated New Drug Application (“ANDA”) seeking approval to manufacture and sell a generic version of the ASACOL 400 mg product. PGP and Medeva, the patent owner, filed a patent infringement suit against Roxane in October 2007 alleging infringement of the formulation and method patent covering PGP’s ASACOL 400 mg product (the “ASACOL Patent”), which triggered a 30-month stay of FDA approval with respect to the above mentioned ANDA. The stay will expire on the earlier of March 2010 or the resolution of the suit. The trial has not yet been scheduled. However, unless the court decides earlier in its favor, Roxane has agreed not to launch a generic version of the ASACOL 400 mg product before November 1, 2010. In addition, Roxane has agreed that if the case is fully submitted to the court by November 1, 2010, it will not launch until the court decides the case. While we and Medeva intend to vigorously defend the ASACOL Patent and pursue our legal rights, we can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent of the ASACOL 400 mg product will not be approved and enter the market prior to the expiration of the ASACOL Patent in 2013. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(4) Represents total ASACOL revenues (400 mg and 800 mg). ASACOL 800 mg (known as ASACOL HD in the United States) was launched in the United States in June 2009.

(5) ASACOL 800 mg, was launched in June 2009 and has protection under a formulation patent until 2021, which is not currently subject to litigation. This patent does not protect the ASACOL 400 mg product.

(6) New chemical entity (“NCE”) patent (including a 6-month pediatric extension of regulatory exclusivity). In July 2004, PGP received a Paragraph IV certification notice letter from a subsidiary of Teva Pharmaceutical Industries, Ltd. (together with its subsidiaries “Teva”) regarding PGP’s NCE patent covering ACTONEL and indicating that Teva had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of ACTONEL. PGP filed a patent infringement suit against Teva in August 2004. In that case, Teva admitted patent infringement but alleged that the NCE patent was invalid and, in February 2008, the U.S. District Court for the District of Delaware decided in favor of PGP, upholding the ACTONEL NCE patent as valid and enforceable. Teva appealed, and the U.S. Court of Appeals for the Federal Circuit unanimously upheld the decision of the District Court in May 2009. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(7) Method patent with respect to once-a-month product (the “ACTONEL Method Patent”) (including a 6-month pediatric extension of regulatory exclusivity). This patent does not protect the once-a-week ACTONEL product. PGP and Hoffman-La Roche Inc. (“Roche”) received Paragraph IV certification notice letters from Teva, Sun Pharma Global, Inc. (“Sun”) and Apotex Inc. and Apotex Corp. (together “Apotex”) regarding the ACTONEL Method Patent (not the NCE patent) covering ACTONEL’s once-a-month product and indicating that each such company had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of the once-a-month ACTONEL product. PGP and Roche, which licenses the ACTONEL Method Patent to PGP, filed a patent infringement suit against Teva in September 2008, against Sun in January 2009 and against Apotex in March 2009 related to the Paragraph IV certification notice letters. The suit against Teva (which delivered the first Paragraph IV certification notice letter to PGP) triggered a 30-month stay of FDA approval with respect to Teva’s above-mentioned ANDA. The stay of approval of Teva’s ANDA will expire on the earlier of February 2011 or the resolution of the suit. Additionally, once-a-month ACTONEL has FDA exclusivity through April 2011, and the underlying ACTONEL NCE patent expires in June 2014 (including a 6-month pediatric extension of regulatory exclusivity). The suits against Teva and Apotex have been consolidated for pretrial purposes. While a pretrial schedule has been set, and a pretrial conference scheduled, no trial date has been set. While we and Roche intend to vigorously defend the ACTONEL Method Patent and pursue our legal rights, we can offer no assurance as to when the lawsuits will be decided, whether the lawsuits will be successful or that a generic equivalent of the ACTONEL once-a-month product will not be approved and enter the market prior to the expiration of the ACTONEL Method Patent in 2023. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(8) In January 2009, we entered into a settlement and license agreement with Watson Pharmaceuticals, Inc. (together with its subsidiaries, “Watson”) to resolve patent litigation related to LOESTRIN 24 FE. Under the agreement, Watson was permitted to commence marketing its generic equivalent product on the earlier of January 22, 2014 or the date on which another generic version of LOESTRIN 24 FE enters the U.S. market. In July 2009, we received a Paragraph IV certification notice letter from Lupin Ltd. and its wholly owned subsidiary Lupin Pharmaceuticals, Inc. (together, “Lupin”) advising us that Lupin had filed an ANDA to manufacture and sell a generic version of LOESTRIN 24 FE. In September 2009, we filed an infringement lawsuit against Lupin in response to its submission. Our lawsuit results in a stay of FDA approval of Lupin’s ANDA for 30 months from the date of our receipt of Lupin’s notice in order to allow the court to resolve the suit. Under current law, unless Watson forfeits its “first filer” status, the FDA may not approve Lupin’s ANDA until 180 days following the date on which Watson enters the market. We believe Watson may have

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forfeited its “first filer” status as a result of its failure to receive approval of its ANDA from the FDA within the requisite period. As a result, while we have filed an infringement suit against Lupin and intend to vigorously defend the LOESTRIN 24 FE patent and pursue our legal rights, we can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent of LOESTRIN 24 FE will not be approved and enter the market prior to the expiration of the LOESTRIN 24 FE patent in 2014. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(9) In December 2008, we entered into a settlement and license agreement with a subsidiary of Barr Pharmaceuticals, Inc. (together, with its subsidiaries, “Barr”), which was subsequently acquired on December 23, 2008 by Teva, to resolve our patent litigation related to FEMCON FE. Under the terms of the agreement, Teva was not permitted to launch a generic version of FEMCON FE until the earlier of July 1, 2012 or, among other circumstances, the date that is two years following the date of the filing of a new ANDA with a Paragraph IV certification by a third-party. In January 2009, we entered into a settlement and license agreement with Watson to resolve patent litigation related to FEMCON FE. Under the agreement, Watson was permitted to commence marketing its generic equivalent product on the earlier of 180 days after Teva enters the market with a generic equivalent product, or January 1, 2013. In July 2009, we received a Paragraph IV certification notice letter from Lupin advising us that Lupin had filed an ANDA to manufacture and sell a generic version of FEMCON FE. In September 2009, we filed an infringement lawsuit against Lupin in response to its submission. Our lawsuit results in a stay of FDA approval of Lupin’s ANDA for 30 months from the date of our receipt of Lupin’s notice in order to allow the court to resolve the suit. If Lupin filed its ANDA with respect to FEMCON FE during 2009 and Teva’s ANDA with respect to a generic version of FEMCON FE is approved, Teva may be able to enter the market with a generic version of FEMCON FE as early as 2011. While we have filed an infringement suit against Lupin and intend to vigorously defend the FEMCON FE patent and pursue our legal rights, we can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent of FEMCON FE will not be approved and enter the market prior to the expiration of the FEMCON FE patent in 2019. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(10) As a result of the enactment of the QI Program Supplemental Funding Act of 2008 (the “QI Act”) on October 8, 2008, Mayne Pharma International Pty. Ltd. (“Mayne”) submitted to the FDA for listing in the FDA’s Orange Book the U.S. patent covering DORYX, and potential generic competitors that had filed an ANDA prior to the listing of the DORYX patent were permitted to certify to the listed patent within 120 days of the enactment of the QI Act. In November and December 2008 and January 2009, we and Mayne received Paragraph IV certification notice letters from Actavis Elizabeth LLC (“Actavis”), Mutual Pharmaceutical Company, Inc. (“Mutual”), Mylan Pharmaceuticals Inc. (“Mylan”), Impax Laboratories, Inc. (“Impax”) and Sandoz Inc. (“Sandoz”) indicating that each had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of our DORYX 75 mg and 100 mg delayed-release tablets. In December 2008 and January 2009, we and Mayne filed infringement lawsuits against each of the potential generic competitors. In March 2009 the FDA issued guidance that indicated that a 30-month stay would not apply to the potential approvals of generic versions of our DORYX 75 mg and 100 mg products for which ANDAs were filed prior to the listing of the DORYX patent. On November 9, 2009, pursuant to an agreement among the Company, Mayne and Mutual, the court dismissed the lawsuit against Mutual concerning generic versions of the DORYX 75 mg and 100 mg products following Mutual’s agreement to withdraw its ANDA with respect to such products. In March 2009, we and Mayne received Paragraph IV certification notice letters from Impax and Mylan indicating that each had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of our DORYX 150 mg delayed-release tablets. In March and May 2009 we and Mayne filed infringement lawsuits against each of Impax and Mylan. In February 2010, we and Mayne received a Paragraph IV certification notice letter from Heritage Pharmaceuticals Inc. (“Heritage”) indicating that it had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of our DORYX 75 mg, 100 mg and 150 mg products. We are reviewing the Heritage notice letter and expect to file an infringement lawsuit against Heritage within 45 days of our receipt of the Paragraph IV certification notice letter. Based on the FDA’s interpretive guidance, and assuming that the Company and Mayne bring suit against Heritage within the requisite period, we believe that because each of Impax’s and Mylan’s ANDAs with respect to generic versions of our DORYX 150 mg product, and Heritage’s ANDA with respect to generic versions of our DORYX 75 mg, 100 mg, and 150 mg products, were submitted after the listing of the DORYX patent in the FDA’s Orange Book, that the FDA will stay approval of these generic versions of our products for up to 30 months, subject to the prior resolution of the matter before the court. In January 2010 we and Mayne received a Paragraph IV certification notice letter from Sandoz indicating that it had amended its ANDA previously submitted to the FDA requesting approval to manufacture and sell generic versions of our DORYX 75 mg and 100 mg products to include a generic version of our DORYX 150 mg product. In January 2010 we and Mayne filed an infringement lawsuit against Sandoz with respect to its amended ANDA. While we can give no assurance, we believe that under current law, the FDA may not approve Sandoz’s amended ANDA with respect to the DORYX 150 mg strength product until 180 days following the date on

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which the “first filer” of an ANDA with respect to the DORYX 150 mg strength product enters the market, unless the first filer transfers or forfeits its first filer rights, for example by failing to begin marketing its product in a timely manner. Our lawsuits against Actavis, Mylan, Impax and Sandoz relating to our DORYX 75 mg and 100 mg products, as well as our lawsuits against Impax, Mylan and Sandoz relating to our DORYX 150 mg product, remain pending. While we and Mayne intend to vigorously defend the DORYX patent and pursue our legal rights, we can offer no assurance as to when the lawsuits will be decided, whether the lawsuits will be successful or that a generic equivalent of our DORYX 75 mg, 100 mg and 150 mg products will not be approved and enter the market prior to the expiration of the DORYX patent in 2022. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(11) The NCE patent expires in March 2015 and the formulation patent expires in August 2016. We market this product pursuant to a co-promotion agreement with Novartis Pharmaceuticals Corporation (“Novartis”) which expires in August 2016. We have been informed that Novartis has received Paragraph IV filings in connection with these patents.

Revenues by Product Class/Percentage of Total Revenues

The following product classes accounted for a significant percentage of consolidated revenues:

(dollars in millions)	Year Ended December 31, 2009 (1)				Year Ended December 31, 2008				Year Ended December 31, 2007
Gastroenterology	$	114.9	8	%	$	—	—	%	$	—	—	%
Osteoporosis		222.0	15	%		—	—			—	—
Dermatology		479.9	33	%		435.5	46	%		388.3	43	%
Oral Contraceptives		320.7	22	%		276.7	29	%		267.0	30	%
Hormone Therapy		203.1	14	%		171.2	18	%		165.8	18	%
Urology		14.9	1	%		—	—	%		—	—	%

(1) Includes revenues from PGP products from October 30, 2009 through December 31, 2009.

For a discussion of product revenues and other results of our operations, see Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For a discussion of our revenues and property, plant and equipment by country of origin, see “Note 17” to the Notes to the Consolidated Financial Statements for the year ended December 31, 2009 included elsewhere in this Annual Report.

History and Development of the Company

Our company was formed principally through a series of acquisitions and divestitures. We began commercial operations on January 5, 2005 when we acquired Warner Chilcott PLC (our “Predecessor”). Our Predecessor was incorporated in 1968 as a sales and marketing organization focused on branded pharmaceutical products in Northern Ireland, but in September 2000 expanded into the U.S. pharmaceuticals market through the acquisition of a U.S. pharmaceutical business that marketed a portfolio of products including OVCON and ESTRACE Cream. Between 2001 and 2004, our Predecessor disposed of its pharmaceutical services businesses and its U.K. pharmaceutical products businesses and focused its strategy on strengthening its pharmaceutical products business in the United States, specifically in the areas of women’s healthcare and dermatology.

In November 2004, affiliates of Bain Capital Partners, DLJ Merchant Banking, J.P. Morgan Partners (currently advised by CCMP Capital) and Thomas H. Lee Partners, L.P. (collectively, the “Sponsors”) reached an agreement to acquire our Predecessor. The acquisition became effective on January 5, 2005, and thereafter, following a series of transactions, we acquired 100% of the share capital of the Predecessor. We refer to this transaction as our “leveraged buyout.” To complete our leveraged buyout, the Sponsors, certain of their limited partners and certain members of our management indirectly funded equity contributions to us and certain of our subsidiaries, the proceeds of which were used to purchase 100% of the Predecessor’s share capital. On January 18, 2005, certain of our subsidiaries borrowed an aggregate of $2,020.0 million, consisting of an initial drawdown of $1,420.0 million under our then existing $1,790.0 million senior secured credit facilities and the

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issuance of $600.0 million aggregate principal amount of 8.75% senior subordinated notes due 2015 (the “Notes”) by one of our U.S. subsidiaries, Warner Chilcott Corporation. The proceeds from the acquisition financings, together with cash on hand at our Predecessor, were used to pay the selling shareholders $3,014.4 million, to retire all of our Predecessor’s outstanding share options for $70.4 million, to retire all of our Predecessor’s previously outstanding funded indebtedness totaling $195.0 million and to pay related fees and expenses.

In September 2006, our parent company, at that time Warner Chilcott Limited, sold 70,600,000 of its Class A common shares (“Class A common shares”) in an initial public offering (the “IPO”) at a price to the public of $15.00 per share for an aggregate offering price of $1,059.0 million (before direct issuance fees). Immediately following the IPO, the Sponsors owned approximately 61% of the outstanding Class A common shares.

In August 2009, we completed a redomestication from Bermuda to Ireland (the “Redomestication”), whereby each Class A common share of Warner Chilcott Limited was exchanged on a one-for-one basis for an ordinary share of Warner Chilcott plc, a newly formed public limited company organized in, and tax resident of, Ireland, and Warner Chilcott Limited became a wholly owned subsidiary of Warner Chilcott plc.

On September 23, 2009, we entered into a definitive asset purchase agreement with LEO pursuant to which LEO paid us $1,000.0 million in cash in order to terminate our exclusive product licensing rights in the United States to distribute LEO’s TACLONEX, TACLONEX SCALP and DOVONEX products (including rights to all dermatology products in LEO’s development pipeline), and acquire certain assets related to our distribution of the products in the United States. We used approximately $481.8 million of the proceeds from the transaction to repay the entire remaining principal balance of the loans outstanding under our prior senior secured credit facilities (the “Prior Senior Secured Credit Facilities”), as well as accrued and unpaid interest and fees. The repayment resulted in the termination of our Prior Senior Secured Credit Facilities.

On October 30, 2009, we acquired PGP with proceeds from our new senior secured credit facilities (the “New Senior Secured Credit Facilities”) and cash on hand for approximately $2,919.3 million in cash and the assumption of certain liabilities. The purchase price remains subject to certain post-closing adjustments. Under the terms of the purchase agreement, we acquired PGP’s portfolio of branded pharmaceutical products (including its two primary products ASACOL and ACTONEL), PGP’s prescription drug pipeline and its manufacturing facilities in Puerto Rico and Germany. In order to finance the majority of the consideration for the PGP Acquisition, certain of our subsidiaries entered into New Senior Secured Credit Facilities, comprised of $2,950.0 million in aggregate term loan facilities and a $250.0 million revolving credit facility. The term loan facilities were initially comprised of a term A facility in the amount of $1,000.0 million, a term B facility in the amount of $1,600.0 million and a delayed-draw term loan facility in the amount of $350.0 million, which we were permitted to borrow in the event that Sanofi chose to exercise its put rights under the global collaboration agreement following the closing of the PGP Acquisition. On the closing date, our subsidiaries borrowed a total of $2,600.0 million under the term loan facilities and made no borrowings under delayed-draw term loan facility or the revolving credit facility.

On November 23, 2009, certain of our shareholders sold 23,000,000 ordinary shares in registered public offering pursuant to an effective shelf registration statement (the “Secondary Offering”) at a price to the public of $22.25 per share for an aggregate offering price of $511.8 million. The selling shareholders included the Sponsors, certain other institutional shareholders and members of our senior management team. The Company did not receive any proceeds from the sale of the shares but did pay the expenses of the Secondary Offering. Following the Secondary Offering, the Sponsors collectively owned approximately 54.3% of our ordinary shares.

On December 15, 2009, Sanofi elected not to exercise its right to put to us its interest in the global collaboration agreement. As a result, on December 16, 2009, certain of our subsidiaries entered into an amendment to our senior secured credit agreement, pursuant to which the credit agreement was amended to create a new tranche of term loans to be borrowed by one of our U.S. subsidiaries, Warner Chilcott Corporation. On December 30, 2009 Warner Chilcott Corporation borrowed $350.0 million under the new tranche of term

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loans in order to finance, together with cash on hand, the repurchase or redemption of any and all of its issued and outstanding $380.0 million in aggregate principal amount of Notes. On January 15, 2010, we announced that Warner Chilcott Corporation had received and accepted for purchase approximately $292.5 million aggregate principal amount of the Notes pursuant to its tender offer (all but $2.0 million of which were purchased on December 30, 2009). The remaining $87.5 million aggregate principal amount of Notes were redeemed by Warner Chilcott Corporation on February 1, 2010.

PGP Alliance with Sanofi

As a result of the PGP Acquisition, we and Sanofi are parties to a global collaboration agreement (the “Collaboration Agreement”) pursuant to which the parties co-develop and market ACTONEL (risedronate sodium) on a global basis, excluding Japan. Sanofi has rights to ACTONEL under the Collaboration Agreement from us.

Under the Collaboration Agreement, the ongoing global R&D costs for ACTONEL are shared equally between the parties, while the promotion and marketing arrangements vary by geographic market. Under the Collaboration Agreement, there are five principal territories with different promotion and marketing obligations:

• Co-Promotion Territory. In the co-promotion territory, the product is jointly promoted through the alliance arrangements of the Collaboration Agreement under the brand name ACTONEL. This territory includes the United States (including Puerto Rico), Canada and France. We and Sanofi share development, promotion and marketing costs as well as product profits in the co-promotion territory based on contractual percentages. We are deemed to be the principal in transactions with customers and invoice all sales in the co-promotion territory.

• Secondary Co-Promotion Territory. In the secondary co-promotion territory, the product is jointly promoted through the alliance arrangements of the Collaboration Agreement under the brand name ACTONEL. This territory includes Ireland, Sweden, Finland, Greece, Switzerland, Austria, Portugal and Australia. We and Sanofi share development, promotion and marketing costs as well as product profits in the secondary co-promotion territory based on contractual percentages. Sanofi is deemed to be the principal in transactions with customers and invoices all sales in the secondary co-promotion territory.

• Co-Marketing Territory. In the co-marketing territory, each company markets the product independently under its own brand name. Italy is the only country in the co-marketing territory. In Italy, the product is sold under the brand name ACTONEL by us and under the brand name Optinate by Sanofi. In the co-marketing territory, we and Sanofi share net product profits, as defined, for each company’s separately branded product based on contractual percentages. Each company is deemed to be the principal in transactions with customers and invoices all sales with respect to its separately branded product. Each company also markets the product independently under its own brand name in Spain, although Spain is not included in the co-marketing territory; the product is marketed in Spain under the brand name ACREL^® by us and under the brand name ACTONEL by Sanofi.

• Warner Chilcott Only Territory. In the Warner Chilcott only territory, the product is marketed independently by us. This territory includes Germany, Belgium, Luxembourg, the Netherlands and the United Kingdom. We and Sanofi share development, promotion and marketing costs as well as product profits based on contractual percentages in the Warner Chilcott only territory (except that Sanofi’s responsibility for sharing costs in this territory is capped at certain annual dollar amounts). We are deemed to be the principal in transactions with customers and invoice all sales in the Warner Chilcott only territory.

• Sanofi Only Territory. In all other countries where the product is marketed, the product is marketed by Sanofi independently under the brand name ACTONEL or another agreed trademark. In this territory,

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Sanofi is responsible for all development, promotion and marketing costs, and pays us a percentage of Sanofi’s net sales in the territory. Sanofi is deemed to be the principal in transactions with customers and invoices all sales in the Sanofi only territory.

For PGP’s fiscal year ended June 30, 2009, net sales of ACTONEL made pursuant to the Collaboration Agreement amounted to approximately $1.4 billion of PGP’s $2.3 billion in net sales. In addition, during the fiscal year ended June 30, 2009, PGP made payments to Sanofi under the Collaboration Agreement in the amount of $472.5 million relating to ACTONEL product sales in the territories where it was deemed to be the principal in the transactions and invoiced sales. In geographic markets where we are deemed to be the principal in transactions with customers and invoice sales (i.e., the co-promotion territory, the Warner Chilcott only territory and, solely with respect to the ACTONEL branded product, the co-marketing territory), we recognize all revenues from sales of the product along with the related product costs. In these markets, all selling, advertising and promotion expenses incurred by us and all contractual profit sharing payments to Sanofi are recognized in selling, general and administrative expenses. Our share of selling, advertising and promotion expenses in geographic markets where Sanofi is deemed to be the principal in transactions with customers and invoices sales (i.e., the secondary co-promotion territory, the Sanofi only territory and, solely with respect to the Optinate^® branded product, the co-marketing territory) is recognized in selling, general and administrative expenses and we recognize our share of income attributable to the contractual payments made by Sanofi to us in these territories as a component of “other revenue”.

The Collaboration Agreement, which was originally entered into in 1997, was amended and restated in 2004 and expires on January 1, 2015. Under the Collaboration Agreement, a joint oversight committee comprised of equal representation from us and Sanofi is responsible for overseeing the development and promotion of ACTONEL. Under the Collaboration Agreement, Sanofi generally has the right to elect to participate in the development of ACTONEL-related product improvements, and the parties are currently jointly developing a once-a-week 35 mg dose of ACTONEL. Subject to certain limited exceptions, the Collaboration Agreement provides that in the event either we or Sanofi experiences a change-in-control, the other party has the option either to continue with the Collaboration Agreement with the acquiring entity, or require the acquiring entity to purchase such other party’s rights and obligations under the Collaboration Agreement for an amount determined pursuant to the terms thereof. The PGP Acquisition constituted a change of control under the Collaboration Agreement, giving Sanofi the right to exercise an option to require us to acquire Sanofi’s interest in the Collaboration Agreement. Sanofi did not elect to exercise this right. We are also a party to a related supply agreement with an affiliate of Sanofi in which we provide finished ACTONEL product to Sanofi for sale by Sanofi under the Collaboration Agreement. The supply agreement will terminate at the same time as the Collaboration Agreement.

Transition Services Agreement with P&G

In connection with the closing of the PGP Acquisition and in order to facilitate the transition of the PGP business to us, we and P&G entered into a Transition Services Agreement, effective as of October 30, 2009 (the “Transition Services Agreement”). Pursuant to the terms of the Transition Services Agreement, P&G will provide us with specified services for a limited time following the closing of the PGP Acquisition, including with respect to the following: order acquisition and management, distribution, customer service, purchasing and procurement systems, integrated supply network systems, manufacturing execution systems, IT support, sales and marketing, research and development and regulatory and certain accounting and finance related services. We will pay P&G a fee for these services.

The initial term of the Transition Services Agreement is for a period of 12 months after the closing of the PGP Acquisition, unless earlier terminated. We may extend services (or a portion thereof) for additional one month periods (up to a maximum of six additional months) by providing 60 days prior notice to P&G. We are able to terminate the Transition Services Agreement by giving 60 days prior notice to P&G and may terminate individual services by giving 60 days prior notice to P&G provided that the terminated services can be segregated from the services that will continue to be provided under the Transition Services Agreement.

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The Transition Services Agreement also addresses certain matters relating to the manner in which the services are provided, including the management of the relationship between the parties, the use of each other’s facilities, technology and software and contains customary indemnification provisions.

Product Acquisitions

In addition to transformative transactions such as the PGP Acquisition and our recent in-licensing arrangements with companies such as Paratek and Dong-A described under “—Research and Development” below, we have built our pharmaceutical products business through a number of product acquisitions. These transactions include our acquisition of the OVCON oral contraceptive franchise and ESTRACE Cream from Bristol-Myers Squibb Company (“Bristol-Myers”) in 2000, our acquisition of ESTRACE Tablets from Bristol-Myers in 2001, our acquisition of the U.S. sales and marketing rights for SARAFEM from Eli Lilly and Company in 2003, our acquisition of LOESTRIN, ESTROSTEP FE and FEMHRT from Pfizer Inc. (“Pfizer”) in 2003 and our acquisition of the U.S. rights to NexMed’s topically applied alprostadil cream under development for the treatment of ED in February 2009.

Product Dispositions

We became the exclusive licensee of TACLONEX in the United States in 2005 and acquired the exclusive U.S. sales and marketing rights to DOVONEX from Bristol Myers in 2006. On September 23, 2009, we announced that, in exchange for a one-time cash payment of $1,000.0 million to us, LEO reacquired our exclusive product licensing rights in the United States to our topical psoriasis treatment products TACLONEX, TACLONEX Scalp and DOVONEX, as well as rights to all dermatology products in LEO’s development pipeline, and acquired certain assets related to our distribution of DOVONEX and TACLONEX in the United States. Our agreement with LEO contains customary representations, warranties and covenants in the transaction agreement. These include, among other things, customary indemnification obligations. We also entered into related transaction agreements at the closing, including an interim distribution agreement and a transition services agreement.

Research and Development (“R&D”)

Our R&D team has significant experience and proven capabilities in pharmaceutical development and clinical development. We focus our R&D efforts primarily on developing new products that target therapeutic areas with established regulatory guidance, making proprietary improvements to our existing products and developing new and enhanced dosage forms. When compared to the development of new products in therapeutic areas lacking established regulatory guidance, this approach to R&D has historically involved less development and regulatory risk and shorter timelines from concept to market. In addition, as our product development strategy has continued to expand, we have added a few projects that involve higher risks but also offer higher potential returns, such as our in-licensing arrangements with Paratek and Dong-A as described below. Our investment in R&D, funded primarily by our Puerto Rican subsidiary, consists of our internal development costs, fees paid to contracted development groups and license fees paid to third parties. License fees and milestone payments are recognized as R&D expense unless or until they relate to products approved by the FDA, at which time they are capitalized as intangible assets.

In July 2005, PGP entered into a co-development and co-promotion agreement with Novartis under which we agreed with Novartis to co-develop and co-promote ENABLEX. Under the agreement which expires in August 2016, we may be required to make payments to Novartis upon the achievement of various sales milestones that could aggregate up to $15.0 million.

In June 2006, PGP entered into an agreement with Watson under which we acquired the rights to certain products under development relating to transdermal delivery systems for testosterone for use in females. Under the product development agreement, we may be required to make additional payments to Watson upon the

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achievement of various developmental milestones that could aggregate up to $25.0 million. Further, the Company agreed to pay a supply fee and royalties to Watson on the net sales of those products.

In July 2007, we entered into an agreement with Paratek under which we acquired certain rights to novel tetracyclines under development for the treatment of acne and rosacea. We paid an up-front fee of $4.0 million which was included in R&D expense in the year ended December 31, 2007 and agreed to reimburse Paratek for R&D expenses incurred during the term of the agreement. We may make additional payments to Paratek upon the achievement of certain developmental milestones that could aggregate up to $24.5 million. In addition, we agreed to pay royalties to Paratek based on the net sales of the products covered under the agreement.

In November 2007, we entered into an agreement with NexMed under which we acquired an exclusive license of the U.S. rights to NexMed’s topically applied alprostadil cream for the treatment of ED. We paid a license fee of $0.5 million which was recognized in R&D expense in the year ended December 31, 2007. On February 3, 2009, we acquired the U.S. rights to NexMed’s product and the previous license agreement between us and NexMed relating to the product was terminated. Under the terms of the asset purchase agreement, we agreed to pay NexMed an up-front payment of $2.5 million and a milestone payment of $2.5 million upon the FDA’s approval of the product’s New Drug Application (“NDA”). We are currently working to prepare our response to the non-approvable letter that the FDA delivered to NexMed in July 2008 with respect to the product.

In December 2008, we signed an agreement with Dong-A, to develop and market its orally-administered udenafil product, a PDE-5 inhibitor for the treatment of ED in the United States. We paid $2.0 million in connection with signing the agreement, which was included in R&D expense for the year ended December 31, 2008. In March 2009, we paid $9.0 million to Dong-A, which was included in R&D expense for the year ended December 31, 2009, upon the achievement of a developmental milestone under the agreement. We agreed to pay for all development costs incurred during the term of the agreement and we may make additional payments to Dong-A of $13.0 million upon the achievement of a contractually-defined milestone. In addition, we agreed to pay a profit-split to Dong-A based on operating profit (as defined in the agreement), if any, from the product.

In January 2010, we entered into an agreement with Blue Ash Therapeutics, LLC (“BAT”), pursuant to which BAT acquired an exclusive worldwide license to the rights to AZIMILIDE (for the treatment of ventricular arrhythmias), a compound developed by PGP’s R&D team and currently in Phase III development. Under the terms of the license agreement, BAT agreed to pay us a royalty of 8% of annual net sales, if any, from up to $100 million and 15% of annual net sales, if any, in excess of $100 million.

As of December 31, 2009, our R&D team consists of approximately 300 professionals including those that joined us from PGP at the closing of the PGP Acquisition. PGP’s R&D team has successfully developed and brought to market products such as ACTONEL and ASACOL and is currently developing new products, including a new once-a-week ACTONEL product for which we submitted an NDA in the United States in September 2009 and in Canada in October 2009 and other next-generation ACTONEL products (for the treatment of postmenopausal osteoporosis); next-generation ASACOL products (for the treatment of ulcerative colitis); INTRINSA (for the treatment of hypoactive sexual desire disorder in postmenopausal women and congestive heart failure); and NEMONAXACIN (non-fluorinated quinolone for the treatment of pathogens such as methicillin-resistant staphylococcus aureus).

Product Pipeline

The following shows certain new products in our R&D pipeline and their respective stages of development. We note that the information below should be viewed with caution since there are a number of risks and uncertainties associated with the development and marketing of new products, including changes in market conditions, uncertainty as to whether any of our current product candidates will prove effective and safe in humans and whether we will be successful in obtaining required regulatory approvals. Specifically, the approval processes in the U.S., Europe, Canada and other countries can be time-consuming and expensive and there is no assurance that approval will be forthcoming. Generally, without the approval of the relevant regulatory authority,

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products cannot be commercialized. Furthermore, even if we obtain regulatory approvals, the terms of any product approval, including labeling, may be more restrictive than desired and could affect the marketability of our products, and the approvals may be contingent upon burdensome post-approval study commitments.

Women’s Healthcare

WC3016. In March 2009, we submitted an NDA for a low-dose oral contraceptive. In January 2010 we received a complete response letter from the FDA indicating that during FDA inspections of the third-party drug substance manufacturing facility and control testing laboratory used to support the application, deficiencies were noted that remain unresolved. Satisfactory resolution of these issues is required before the application can be approved. No efficacy or safety issues were raised by the FDA in the letter. We intend to work closely with the FDA and our third-party partners whose facilities were cited in the complete response letter to resolve these issues as rapidly as possible.

WC3026. In January 2010, we submitted an NDA for another low-dose oral contraceptive. In January 2009, we entered into a license and supply agreement with Watson pursuant to which we granted Watson an exclusive license to market and sell the product. Under the agreement, we are responsible for completing development and obtaining approval of this product. We also agreed to exclusively supply Watson with the product on a cost plus margin basis in return for royalties based on product net sales.

WC3048. PGP has completed and submitted an application to the European Medicines Agency for a treatment of hypoactive sexual desire disorder in naturally menopausal women (INTRINSA HSDD).

WC3049. PGP is currently in Phase II in the United States with respect to the development of a product for the treatment of congestive heart failure (INTRINSA CHF).

WC3051. We have completed a Phase III study for a once-a-week osteoporosis treatment for postmenopausal women and submitted an NDA for this product in the United States in September 2009 and in Canada in October 2009.

Other Osteoporosis Products. In addition, we have other next generation ACTONEL products in development for the treatment of postmenopausal women and novel small molecules in preclinical development.

Gastroenterology

Ulcerative Colitis Products. We are currently considering the development of 5-ASA-like compounds for the treatment of ulcerative colitis.

Dermatology

WC2055. We commenced clinical development of an oral antibiotic for the treatment of acne in the second half of 2007 and completed a Phase II study in November 2008.

WC3035. In July 2007, we entered into an agreement with Paratek under which we acquired certain rights to novel tetracyclines under development for the treatment of acne and rosacea. A lead compound is currently in preclinical development.

Urology

WC3036. In November 2007, we entered into an agreement with NexMed under which we acquired an exclusive license of the U.S. rights to NexMed’s topically applied alprostadil cream for the treatment of ED. NexMed’s NDA for the product was accepted for review by the FDA in November 2007. In July 2008, NexMed

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announced that it had received a non-approvable letter from the FDA with respect to the product. On February 3, 2009, we acquired the U.S. rights to NexMed’s product and the previous license agreement between us and NexMed relating to the product was terminated. We are currently working to prepare our response to the non-approvable letter.

WC3043. In December 2008, we entered into an agreement with Dong-A to develop and market their orally-administered udenafil product, a PDE5 inhibitor for the treatment of ED in the United States. Dong-A has successfully completed Phase II studies of the product in the United States. Phase III development of the product began in the third quarter of 2009.

Other

NEMONAXACIN. Phase II studies have been completed of non-fluorinated quinolone for the treatment of pathogens such as methicillin-resistant staphylococcus aureus.

AZIMILIDE. We are currently in Phase III for a treatment of ventricular arrhythmias. In January 2010, we entered into an agreement with BAT, pursuant to which BAT acquired an exclusive worldwide license to the rights to this product.

Sales and Marketing

We employ marketing techniques to identify and target physicians with the highest potential to prescribe our products. In connection with our marketing initiatives, we seek to efficiently size, deploy, direct and compensate our sales forces in order to grow our market share, sustain product sales growth, revitalize acquired products and successfully launch new products. We regularly review the size and effectiveness of our sales force as they execute our sales strategies and may further adjust the size of our sales force depending on general economic conditions, the sales of our promoted products and other factors. We also regularly review our promotional priorities. For example, as we announced in January 2010, we have recently reconfigured our U.S. sales force to more closely align it with our strategic initiatives. We created a new “Uro/Gyn team” which has promotional responsibilities for our women’s healthcare and urology products, a “Gastro/Derm team” focused on the promotion of our ASACOL and DORYX products and a primary care physician or “PCP team.”

We also may, from time to time, enter into collaboration agreements, such as our collaboration agreement with Watson under which Watson agreed to co-promote our FEMRING product to OB/GYNs commencing in the first quarter of 2009. In return, we agreed to pay Watson an annual fee, plus a portion of the net sales of FEMRING above an agreed upon threshold during the term of the agreement. In addition, as a result of the PGP Acquisition, we are now party to the Collaboration Agreement with Sanofi and a co-development and co-promotion agreement with Novartis under which we co-promote ENABLEX. See “—PGP Alliance with Sanofi.”

Our sales force as of December 31, 2009 was comprised of approximately 1,100 representatives (including the PGP sales force), primarily in the North America and Western Europe, that promote products to physicians with frequent face-to-face product presentations and a consistent supply of product samples. The PGP Acquisition has expanded our therapeutic and geographic reach and provided a platform from which we believe our sales force can drive market share by promoting complementary products.

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Customers

While the ultimate end-users of our products are the individual patients to whom our products are prescribed by physicians, our direct customers include certain of the nation’s leading wholesale pharmaceutical distributors, such as McKesson Corporation (“McKesson”), AmerisourceBergen Corporation (“AmerisourceBergen”) and Cardinal Health, Inc. (“Cardinal”), and major retail drug and grocery store chains. During the periods presented, the following customers accounted for 10% or more of our revenues:

	Year Ended December 31, 2009 (1)		Year Ended December 31, 2008		Year Ended December 31, 2007
Cardinal	31	%	40	%	36	%
McKesson	26	%	36	%	35	%
AmerisourceBergen	9	%	10	%	10	%

(1) Includes the impact of PGP from October 30, 2009 through December 31, 2009.

Financial information regarding revenue from customers attributed to significant geographic areas is incorporated herein by reference to Note 17 “Segment Information” of the Notes to the Consolidated Financial Statements found elsewhere in this Annual Report.

Competition

The pharmaceutical industry is highly competitive. Our branded products compete with brands marketed by other pharmaceutical companies including large, fully integrated concerns with financial, marketing, legal and product development resources substantially greater than ours.

Our principal branded competitors include:

• Gastroenterology—Shire (Lialda^®, Pentasa^®) and Salix Pharmaceuticals, Inc. (Colazal^®);

• Osteoporosis—Merck (Fosamax^®), Roche (Boniva^®) and Novartis (Reclast^®);

• Hormonal Contraceptives—Bayer AG (Yasmin^®, Yaz^®), Johnson & Johnson (Ortho Tri-Cyclen Lo^®, Ortho Evra^®), Schering-Plough Corporation (Nuvaring^®) and Teva (Seasonique^®);

• Hormone Therapy—Pfizer (Premarin^®, Premarin^® Vaginal Cream, Prempro™), Bayer AG (Climara^®) and Novo Nordisk A/S (Vagifem^®, Activella^®);

• Acne—Medicis Pharmaceutical Corporation (Solodyn^®), Nycomed S.C.A. SICAR (Adoxa^®) and Galderma (Oracea™); and

• Urology—Pfizer (Detrol^®), Ortho-McNeil Pharmaceutical, Inc. (Ditroban XL^®), Esprit Pharmaceuticals, Inc. and Indevus Pharmaceuticals, Inc. (Sanctira^®).

Our branded pharmaceutical products are or may become subject to competition from generic equivalents, and potential generic entrants may also challenge our patents. For example, as of November 2009 a generic equivalent of FEMHRT was approved for entry onto the market, which may negatively impact future net sales of FEMHRT. ESTRACE Cream, ESTRACE Tablets, ESTROSTEP FE, SARAFEM, OVCON 50 and OVCON 35 are currently not protected by patents. This is also true for certain of PGP’s products. For example, ASACOL is not currently protected by a patent in the United Kingdom and ACTONEL will lose exclusivity in Canada in early 2010 and in many Western European markets in late 2010. See “Risk factors—Risks Relating to Our Business—If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products may be adversely affected.” Generic equivalents for some of our branded pharmaceutical products are sold by other pharmaceutical companies at lower prices. As a result, drug retailers have economic incentives to fill prescriptions for branded products with generic equivalents when available. After the introduction of a generic competitor, a significant percentage of the prescriptions written for the branded product may be filled with the generic version at the pharmacy, resulting in a commensurate loss in sales of the branded product. In addition, legislation enacted in the United States allows or, in a few instances, in the

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absence of specific instructions from the prescribing physician, mandates the use of generic products rather than brand name products where a generic equivalent is available. The availability of generic equivalent products may cause a material decrease in revenue from our branded pharmaceutical products.

Manufacturing, Supply and Raw Materials

Our pharmaceutical manufacturing facility in Fajardo, Puerto Rico houses approximately 194,000 sq. ft. of manufacturing space. Adjacent to the facility is an approximately 24,000 sq. ft. warehouse that we lease from a third party. The Fajardo facility currently manufactures many of our women’s oral contraceptive and hormone therapy (“HT”) healthcare products, including LOESTRIN 24 FE and FEMCON FE, and packages products, including delayed-release DORYX tablets and FEMHRT. We also utilize our facility in Larne, Northern Ireland to manufacture our FEMRING vaginal rings.

In the PGP Acquisition, we acquired manufacturing facilities in Weiterstadt, Germany and Manati, Puerto Rico. The facility in Weiterstadt, Germany houses approximately 50,000 sq. ft. of manufacturing space and 54,000 sq. ft. of warehouse space. The Weiterstadt facility currently manufactures ASACOL tablets and packages ACTONEL. The manufacturing facility in Manati, Puerto Rico houses approximately 85,000 sq. ft. of manufacturing space and approximately 27,000 sq. ft. of warehouse space. The Manati facility currently manufactures ACTONEL tablets.

We currently contract with third parties to manufacture and supply certain of our other products. We will continue to rely on our third-party partners, Mayne for DORYX, Contract Pharmaceuticals Limited Niagara (“CPL”) for ESTRACE Cream and Teva for FEMHRT. In addition, Norwich Pharmaceuticals Inc. (“NPI”) currently manufactures a small percentage of our ACTONEL products and, beginning in 2010, Sanofi will manufacture certain ACTONEL products for us. GlaxoSmithKline plc (“GSK”) currently manufactures our ASACOL 400 mg product sold in the U.K.

We conduct quality assurance audits of our manufacturing and other property sites, our contract manufacturers’ sites and our raw material suppliers’ sites and related records to confirm compliance with the relevant regulatory requirements.

Product	Third-Party Manufacturer	Expiration
ACTONEL	NPI (Secondary Supplier)	June 2011
ASACOL 400 mg	GSK (for U.K.)	December 2011
DORYX	Mayne	December 2011
ESTRACE Cream	CPL	January 2015
FEMHRT	Teva	September 2011

The products above accounted for a significant percentage of our product sales during the twelve-month period ended December 31, 2009. If a supplier suffers an event that causes it to be unable to manufacture our product requirements for an extended period, the resulting shortages of inventory could have a material adverse effect on our business. See “Note 20” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report. See “Risk factors—Risks Relating to Our Business—Delays in production could have a material adverse impact on our business.”

Patents, Proprietary Rights and Trademarks

Protecting our intellectual property, such as trademarks and patents, is a key part of our strategy.

Patents, Trade Secrets and Proprietary Knowledge

We rely on patents, trade secrets and proprietary knowledge to protect our products. We take steps to enforce our legal rights against third parties when we believe that our intellectual property or other proprietary

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rights have been infringed. The following is a description of recent actions we and PGP have taken to enforce our intellectual property rights against various third parties:

Warner Chilcott Actions.

In June 2006, we received from Watson a Paragraph IV certification notice letter indicating that Watson had submitted an ANDA to the FDA seeking approval to market a generic version of LOESTRIN 24 FE prior to the expiration of our patent. We filed a complaint against Watson alleging that Watson’s submission of an ANDA for a generic version of LOESTRIN 24 FE infringed the patent covering our LOESTRIN 24 FE oral contraceptive. In January 2009, we settled the patent litigation related to LOESTRIN 24 FE with Watson. In July 2009, we received a Paragraph IV certification notice letter from Lupin advising us that Lupin had filed an ANDA to manufacture and sell a generic version of LOESTRIN 24 FE. In September 2009, we filed an infringement lawsuit against Lupin in response to its submission. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

In August 2007, we received from each of Barr and Watson a Paragraph IV certification notice letter indicating that each of Barr and Watson had separately submitted an ANDA to the FDA seeking approval to market a generic version of FEMCON FE prior to the expiration of our patent. We filed infringement lawsuits against each of Watson and Barr in response to these submissions. In December 2008, we settled our patent litigation related to FEMCON FE with Barr (now Teva). In January 2009, we announced that we settled our patent litigation related to FEMCON FE with Watson. In July 2009, we received a Paragraph IV certification notice letter from Lupin notifying us that Lupin had filed an ANDA to manufacture and sell a generic version of FEMCON FE. In September 2009, we filed suit against Lupin for patent infringement. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

In November 2008, December 2008, January 2009, March 2009, January 2010 and February 2010, we and Mayne received Paragraph IV certification notice letters from Actavis, Mutual, Mylan, Impax, Sandoz and Heritage indicating that each had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of one or more versions of our DORYX products. We filed infringement lawsuits against each of Actavis, Mutual, Mylan, Impax and Sandoz in response to these submissions, and intend to file an infringement lawsuit against Heritage within 45 days of our receipt of the Paragraph IV certification notice letter. In November 2009, pursuant to an agreement among us, Mayne and Mutual, the court dismissed the lawsuit against Mutual concerning generic versions of our DORYX 75 mg and 100 mg products following Mutual’s agreement to withdraw its ANDA with respect to such products. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

PGP Actions.

In July 2004, PGP received a Paragraph IV certification notice letter from Teva regarding PGP’s NCE patent covering ACTONEL and indicating that Teva had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of ACTONEL. PGP filed a patent infringement suit against Teva in August 2004 charging Teva with infringement of the NCE patent covering ACTONEL. In that case, Teva admitted patent infringement but alleged that the NCE patent was invalid and, in February 2008, the U.S. District Court for the District of Delaware decided in favor of PGP, upholding the ACTONEL NCE patent, which expires in June 2014 (including a 6-month pediatric extension of regulatory exclusivity), as valid and enforceable. Teva appealed, and the U.S. Court of Appeals for the Federal Circuit unanimously upheld the decision of the district court in May 2009. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

In August 2008, December 2008 and January 2009, PGP and Roche (which licenses the ACTONEL Method Patent to PGP with respect to the once-a-month product), received Paragraph IV certification notice letters from Teva, Sun and Apotex regarding the ACTONEL Method Patent covering once-a-month ACTONEL. PGP and Roche filed patent infringement suits against each of Teva in September 2008, Sun in January 2009 and Apotex

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in March 2009 charging each with infringement of the ACTONEL Method Patent. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

In September 2007, PGP received a Paragraph IV certification notice letter from Roxane, a subsidiary of Boehringher Ingelheim Corporation, indicating that Roxane had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of the ASACOL 400 mg product. PGP and Medeva, the owner of the ASACOL Patent, filed a patent infringement suit against Roxane in October 2007 in response to the Paragraph IV certification notice letter alleging infringement of the ASACOL Patent. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

We also seek to protect our proprietary rights by filing applications for patents on certain inventions and entering into confidentiality, non-disclosure and assignment of invention agreements with our employees, consultants, licensees and other companies. However, we do not ultimately control whether we will be successful in enforcing our legal rights against third-party infringers, whether our patent applications will result in issued patents, whether our patents will be subjected to inter parte reexaminations by the USPTO or similar proceedings in jurisdictions outside the U.S., whether our confidentiality, non-disclosure and assignment of invention agreements will be breached and whether we will have adequate remedies in the event of any such breach, or whether our trade secrets will become known by competitors. In addition, some of our key products are not protected by patents and proprietary rights and therefore are or may become subject to competition from generic equivalents. For a further discussion of our competition, see “—Competition” and “Risk Factors—Risks Relating to Our Business—If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products may be adversely affected.”

Trademarks

Due to our branded product focus, we consider our trademarks to be valuable assets. Therefore, we actively manage our trademark portfolio, maintain long-standing trademarks and obtain trademark registrations for new brands in key jurisdictions in which we operate. The names indicated below are certain of our key registered trademarks, some of which may not be registered in all relevant jurisdictions:

ACTONEL	FEMRING
DORYX	LOESTRIN
ESTRACE	OVCON
ESTROSTEP	SARAFEM
FEMCON	Warner Chilcott
FEMHRT

We also police our trademark portfolio against infringement and violation by third parties. However, our efforts to protect our trademarks may be unsuccessful and we may not have adequate remedies in the event of such infringement or violation.

As a result of the PGP Acquisition, we are the exclusive licensee of the trademark ASACOL and ENABLEX in the United States.

Government Regulation

The U.S. pharmaceutical industry is subject to regulation by national, regional, state and local agencies, including the FDA, the Drug Enforcement Administration, the Department of Justice, the Federal Trade Commission, the Office of Inspector General of the U.S. Department of Health and Human Services, the Consumer Product Safety Commission, the Occupational Safety and Health Administration and the U.S. Environmental Protection Agency (“EPA”). The Federal Food, Drug and Cosmetic Act, the Public Health Service Act and other federal and state statutes and regulations govern to varying degrees the research,

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development and manufacturing of, and commercial activities relating to, prescription pharmaceutical products, including pre-clinical and clinical testing, approval, production, labeling, sale, distribution, import, export, post-market surveillance, advertising, dissemination of information and promotion. The manufacture and disposal of pharmaceutical products in the United States is also regulated by the EPA. Similar regulatory authorities and regulations exist in the member states of the European Union and in other foreign countries in which we manufacture, test, distribute and sell our products.

The process of testing, data analysis, manufacturing development and regulatory review necessary to obtain and maintain required governmental approvals is costly. Non-compliance with applicable legal and regulatory requirements can result in civil fines, criminal fines and prosecution, recall of products, the total or partial suspension of manufacture and/or distribution, seizure of products, injunctions, whistleblower lawsuits, failure to obtain approval of pending product applications, withdrawal of existing product approvals, exclusion from participation in government healthcare programs and other sanctions. Any threatened or actual government enforcement action can also generate adverse publicity and require that we devote substantial resources that could otherwise be used productively in other areas of our business.

U.S. Approval Requirements

FDA approval is required before a prescription drug can be marketed in the United States, except for narrow exceptions. For innovative, or non-generic, new drugs, an FDA-approved NDA is required before the drugs may be marketed in the U.S. The NDA must contain data to demonstrate that the drug is safe and effective for its intended uses and that it will be manufactured to appropriate quality standards. In order to demonstrate safety and effectiveness, an NDA generally must include or reference pre-clinical studies and clinical data from controlled trials in humans. For a new chemical entity, this generally means that lengthy, uncertain and rigorous pre-clinical and clinical testing must be conducted. For compounds that have a record of prior or current use, it may be possible to utilize existing data or medical literature and limited new testing to support an NDA. Any pre-clinical testing must comply with the FDA’s good laboratory practice and other requirements. Clinical testing in human subjects must be conducted in accordance with the FDA’s good clinical practice and other requirements.

In order to initiate a clinical trial, the sponsor must submit an investigational new drug application, or IND, to the FDA or meet one of the narrow exemptions that exist from the IND requirement. Clinical research must also be reviewed and approved by independent institutional review boards, or IRBs, at the sites where the research will take place, and the study subjects must provide informed consent. The FDA or an IRB can prevent a clinical trial from being started or require that a clinical trial be terminated or suspended. Some clinical trials are also monitored by data safety monitoring boards, which review available data from the studies and determine whether the studies may continue or should be terminated or modified based on ethical considerations and the best interest of the study subjects. There are also legal requirements to register clinical trials on public databases when they are initiated, and to disclose the results of the trials on public databases upon completion.

The FDA can, and does, reject NDAs, require additional clinical trials, or grant approvals on a restricted basis only, even when product candidates performed well in clinical trials. In addition, the FDA may approve an NDA subject to burdensome post-approval study or monitoring requirements, or require that other risk management measures be utilized. There are also requirements to conduct pediatric trials for all new NDAs and supplements to NDAs, unless a waiver or deferral applies.

The FDA regulates and often inspects manufacturing facilities, equipment and processes used in the manufacturing of pharmaceutical products before granting approval to market any drug. Each NDA submission requires a substantial user fee payment unless a waiver or exemption applies. The FDA has committed generally to review and make a decision concerning approval on an NDA within 10 months, and on a new priority drug within six months. However, final FDA action on the NDA can take substantially longer, and where novel issues are presented there may be review and recommendation by an independent FDA advisory committee. The FDA can also refuse to file and to review an NDA it deems incomplete or not properly reviewable.

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The FDA continues to review marketed products even after approval. If previously unknown problems are discovered or if there is a failure to comply with applicable regulatory requirements, the FDA may restrict the marketing of an approved product, impose new risk management requirements, cause the withdrawal of the product from the market, or under certain circumstances seek recalls, seizures, injunctions or criminal sanctions. For example, the FDA may require withdrawal of an approved marketing application, labeling changes, additional studies, or other risk management measures for any marketed drug product if new information reveals questions about a drug’s safety or effectiveness. In addition, changes to the product, the manufacturing methods or locations, or labeling are subject to additional FDA approval, which may or may not be received, and which may be subject to a lengthy FDA review process.

Additional U.S. Regulatory Requirements

All drugs must be manufactured, packaged and labeled in conformity with current Good Manufacturing Practices (“cGMP”) requirements, and drug products subject to an approved application must be manufactured, packaged, labeled and promoted in accordance with the approved application. Certain of our products must also be packaged with child-resistant and senior-friendly packaging under the Poison Prevention Packaging Act and Consumer Product Safety Commission regulations. Our third-party manufacturers must also comply with cGMP requirements. In complying with cGMP requirements, manufacturers must continually expend time, money and effort in production, record keeping and quality assurance and control to ensure that their products meet applicable specifications and other requirements for product safety, efficacy and quality. The FDA and other regulatory agencies periodically inspect drug manufacturing facilities to ensure compliance with applicable cGMP requirements. Mutual recognition agreements for government inspections exist between the United States, the European Union, Canada, Australia and New Zealand. Failure to comply with the statutory and regulatory requirements, including, in the case of our own manufacturing facilities in Fajardo, Puerto Rico, certain obligations that we assumed in our purchase of the facility arising out of a consent decree entered into by the previous owner before a U.S. District Court, subjects the manufacturer to possible legal or regulatory action.

The distribution of pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation of drug distributors at the state level. Under the PDMA and state law, states require the registration of manufacturers and distributors who provide pharmaceuticals in that state, including, in certain states, manufacturers and distributors who ship pharmaceuticals into the state even if such manufacturers or distributors have no place of business within the state. States also impose requirements on manufacturers and distributors to establish the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new technology capable of tracking and tracing product as it moves through the distribution chain. Both the PDMA and state laws impose requirements and limitations upon drug sampling to ensure accountability in the distribution of samples. The PDMA sets forth civil and criminal penalties for violations of these and other provisions.

Other reporting and recordkeeping requirements also apply for marketed drugs, including, for prescription products, requirements to review and report cases of adverse events. Product advertising and promotion are subject to FDA and state regulation, including requirements that promotional claims conform to any applicable FDA approval, be appropriately balanced with important safety information and otherwise be adequately substantiated. Adverse experiences with the use of products can result in the imposition of marketing restrictions through labeling changes, risk management requirements or product removal.

Other U.S. Regulation

Our sales, marketing and scientific/educational programs must comply with applicable requirements of the anti-kickback provisions of the Social Security Act, the False Claims Act, the Veterans Healthcare Act, and the implementing regulations and policies of the U.S. Health and Human Services Office of Inspector General and U.S. Department of Justice, as well as similar state laws. Although there are a number of statutory exemptions

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and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and regulatory safe harbors are often limited, and promotional practices may be subject to scrutiny if they do not qualify for an exemption or safe harbor. In addition, several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices. Similar legislation is being considered in other states and at the federal level in the United States. All of our activities are potentially subject to federal and state consumer protection and unfair competition laws. We are subject to possible administrative and legal proceedings and actions under these laws. Such actions may result in the imposition of civil and criminal sanctions, which may include fines, penalties and injunctive or administrative remedies.

In recent years, Congress and some state legislatures have considered a number of proposals and have enacted laws that could effect major changes in the healthcare system, either nationally or at the state level. The Medicare Part D outpatient prescription drug benefit went into effect in January 2006. Coverage under Medicare Part D is provided primarily through private entities, which act as plan sponsors and negotiate price concessions from pharmaceutical manufacturers. In addition, Congress is considering various other legislative proposals to reform the U.S. healthcare system. These legislative proposals generally are intended to expand healthcare coverage to currently uninsured Americans and to limit the rate of increase in healthcare spending. Such legislation, if enacted, could decrease the price we receive or our sales volume or could impose taxes or other costs of doing business on pharmaceutical manufacturers.

We also participate in the Federal Medicaid rebate program established by the U.S. Omnibus Budget Reconciliation Act of 1990, as well as several state supplemental rebate programs. Under the Medicaid rebate program, we pay a rebate to each state Medicaid program for our products that are reimbursed by those programs. The Medicaid rebate amount is computed each quarter based on our submission to the Centers for Medicare and Medicaid Services at the U.S. Department of Health and Human Services of our current average manufacturing price and best price for each of our products. The terms of our participation in the program impose an obligation to correct the prices reported in previous quarters, as may be necessary. Any such corrections could result in an overage or underage in our rebate liability for past quarters, depending on the direction of the correction. In addition to retroactive rebates (and interest, if any), if we are found to have knowingly submitted false information to the government, the statute provides for civil monetary penalties in the amount of ten thousand dollars per item of false information. Governmental agencies may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid.

U.S. Manufacturing for Export

Products marketed outside of the United States that are manufactured in the United States are subject to certain FDA regulations, including rules governing export, as well as regulation by the country in which the products are sold. We currently supply LOESTRIN to Teva in Canada. Now that we have acquired PGP, we market in Canada, Western Europe and Australia certain products, including ACTONEL, which are manufactured in the United States.

Regulation in Europe

Whether or not FDA approval has been obtained, authorization of a pharmaceutical product by regulatory authorities must be obtained in any other country prior to the commencement of clinical trials or the marketing of the product in that country. The authorization process varies from country to country and the time may be longer or shorter than that required for FDA approval.

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Under European regulatory systems, we must submit an application for and obtain a clinical trial authorization (“CTA”) in each member state in which we intend to conduct a clinical trial. The application for the CTA must include an Investigational Medicinal Product Dossier, or IMPD, which must contain pharmaceutical, pre-clinical and, if existing, previous clinical information on the drug substance and product. An overall risk-benefit assessment critically analyzing the non-clinical and clinical data in relation to the potential risks and benefits of the proposed trial must also be included. The application for the CTA must be submitted to the regulatory authorities of each member state where the trial is intended to be conducted prior to its commencement. The trial must be conducted on the basis of the proposal as approved by an ethics committee in each member state (the EU equivalent to an IRB) before the trial commences.

After we complete our clinical trials, we must obtain marketing authorization before we can market our product. In Europe, there are three procedures under the prevailing European pharmaceutical legislation that, if successfully completed, allow us to obtain marketing authorizations. For certain designated drugs, an applicant may obtain a marketing authorization from the European Commission pursuant to a centralized procedure following the issuance of a positive opinion from the European Medicines Agency. Such marketing authorizations are valid in each of the European Union member states and also in Norway, Ireland and Liechtenstein under the European Economic Agreement. With the exception of products that are authorized centrally, the competent authorities of the member states are responsible for granting marketing authorizations for products that are sold in their markets. Applicants not relying on the centralized procedure who intend to market their product in more than one member state may seek marketing authorizations under the mutual recognition procedure or decentralized procedure. The mutual recognition procedure may be used if the product has already been authorized in one member state under that member state’s national authorization procedure to facilitate mutual recognition of the existing authorization in another member state. The decentralized procedure, on the other hand, may be used in cases where the product has not received a marketing authorization in any member state. Under this procedure, the applicant may facilitate the grant of a marketing authorization in one or more member states on the basis of an identical dossier presented to such member states. The marketing authorization of a product may be made conditional on conducting post-marketing studies.

Irrespective of whether a marketing authorization for a product is obtained centrally, under the mutual recognition procedure or under the decentralized procedure, the product must be manufactured in accordance with the principles of good manufacturing practices set forth in the relevant European Union directives and other rules governing the manufacture of medicinal products in the European community. More specifically, our manufacturing facility in Weiterstadt, Germany is subject to regulation by the German Bundesinstitut für Arzneimittel und Medizinprodukte and the FDA. Our facility in Larne, Northern Ireland is approved and regularly inspected by the U.K. Medicines and Healthcare products Regulatory Agency and the FDA. Our manufacturing activities in Germany are governed by the German Arzneimittelgesetz and its ordinances, while our manufacturing activities in the United Kingdom are governed by the United Kingdom Medicines Act of 1968 and the regulations promulgated thereunder.

In addition to applicable regulations relating to the manufacture of medicinal products in the European Union, each marketing authorization carries with it the obligation to comply with many post-authorization regulations relating to the marketing and other activities of the authorized holder. These include requirements relating to adverse event reporting and other pharmacovigilance requirements, advertising, packaging and labeling, patient package leaflets, distribution and wholesale dealing. Violations of these regulations may result in civil and criminal liability, loss of marketing authorization and other sanctions.

Regulatory approval of prices for certain products is required in many countries outside the United States. In particular, many European countries make the reimbursement of a product within the national health insurance scheme conditional on the agreement by the seller not to sell the product above a fixed price in that country. Also common is the unilateral establishment of a reimbursement price by the national authorities, often accompanied by the inclusion of the product on a list of reimbursable products. Related pricing discussions and ultimate governmental approvals can take several months to years.

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Seasonality

Our results of operations are minimally affected by seasonality.

Employees

Prior to the PGP Acquisition, we had approximately 1,000 employees and no unionized employees. As of December 31, 2009, giving effect to the PGP Acquisition, we had approximately 2,700 employees, approximately 1,850 in North America and approximately 850 in Europe and the rest of the world. None of our employees in the United States are unionized. Certain of our employees in Europe are represented by works councils and certain employees are members of industry, trade and professional associations. We believe that our employee relations are satisfactory.

Environmental Matters

Our operations and facilities are subject to various U.S., foreign and local environmental laws and regulations, including those governing air emissions, water discharges, the management and disposal of hazardous substances and wastes and the cleanup of contaminated sites. We could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, or third-party property damage or personal injury claims, in the event of violations or liabilities under these laws and regulations, or noncompliance with the environmental permits required at our facilities. Potentially significant expenditures could be required in order to comply with environmental laws that may be adopted or imposed in the future.

We acquired our Fajardo, Puerto Rico facility from Pfizer in 2004. Under the purchase agreement, Pfizer retained certain liabilities relating to pre-existing contamination and indemnified us, subject to certain limitations, for other potential environmental liabilities. In addition, in 2008 and 2009, we acquired an aggregate of approximately 8.8 vacant acres adjacent to our Fajardo manufacturing facility in separate transactions not involving Pfizer, in respect of which we have no indemnification rights for potential environmental liabilities. As part of the PGP Acquisition we acquired manufacturing facilities in Manati, Puerto Rico and Weiterstadt, Germany. While we are not aware of any material claims or obligations relating to these sites, our current or former sites, or any off-site location where we sent hazardous wastes for disposal, the discovery of new or additional contaminants or the imposition of new or additional cleanup obligations at our Fajardo, Manati, Weiterstadt or other sites, or the failure of any other party to meet its financial obligations to us, could result in significant liability.

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Executive Officers

The executive officers of Warner Chilcott plc, their positions and their ages as of December 31, 2009, are as listed.

Name	Age	Position
Roger M. Boissonneault	61	Chief Executive Officer, President and Director
Anthony D. Bruno	53	Executive Vice President, Corporate Development
Mahdi B. Fawzi, Ph.D	62	President, Research and Development
Paul Herendeen	54	Executive Vice President, Chief Financial Officer
W. Carl Reichel	51	President, Pharmaceuticals
Marinus Johannes van Zoonen	52	President, Europe/International and Global Marketing
Leland H. Cross	53	Senior Vice President, Technical Operations
Herman Ellman, M.D.	62	Senior Vice President, Clinical Development
Izumi Hara	50	Senior Vice President, General Counsel and Corporate Secretary
Alvin D. Howard	55	Senior Vice President, Regulatory Affairs

Roger M. Boissonneault was appointed Chief Executive Officer, President and Director of Warner Chilcott as of January 5, 2005. Mr. Boissonneault was appointed Chief Executive Officer and Director for the Predecessor in September 2000. From 1996 to 2000, he served as President and Chief Operating Officer of the company acquired by the Predecessor, which was also known as Warner Chilcott PLC, serving as a director from 1998 through 2000. From 1976 to 1996, Mr. Boissonneault served in various capacities with Warner-Lambert (now part of Pfizer), including Vice President, Female Healthcare, Director of Corporate Strategic Planning and Director of Obstetrics/Gynecology Marketing.

Anthony D. Bruno joined Warner Chilcott in March 2001 as Senior Vice President, Corporate Development and General Counsel. Mr. Bruno was promoted to Executive Vice President in April 2003 and continued to serve as General Counsel of the company until August 1, 2005. Prior to joining the company, Mr. Bruno spent 17 years with Warner-Lambert (now part of Pfizer), most recently serving as Vice President and Associate General Counsel, Pharmaceuticals, where he was responsible for all legal matters relating to Warner-Lambert’s pharmaceutical business worldwide.

Mahdi B. Fawzi, Ph.D., joined Warner Chilcott as President, Research and Development on October 20, 2009 after nearly 15 years at Wyeth (now part of Pfizer), most recently as Executive Vice President, Preclinical Development. From 1984 to 1995, he served in various capacities at Warner-Lambert Company, including Vice President, Product Development. Prior to joining Warner-Lambert, Dr. Fawzi spent several years at The Procter & Gamble Company as well as a few years at Pfizer Inc. in the United Kingdom.

Paul Herendeen joined Warner Chilcott as Chief Financial Officer and Executive Vice President on April 1, 2005 and is responsible for finance, accounting, treasury and management information system functions. Prior to joining the company, Mr. Herendeen was, from April 2001 to March 2005, Executive Vice President and Chief Financial Officer of MedPointe Inc. From 1998 through March 2001, Mr. Herendeen served as our Executive Vice President and Chief Financial Officer. Mr. Herendeen also served as a director of us and our predecessor companies from 1996 through March 2001.

W. Carlton Reichel joined Warner Chilcott as President, Pharmaceuticals in October 2000 after nearly 20 years of experience at Parke-Davis, a division of Warner-Lambert (now part of Pfizer), where he, together with Mr. Boissonneault, was a pioneer in the pharmaceutical marketing methods currently employed by the company. Most recently, he held the position of President, U.K./British Isles at Warner-Lambert.

Marinus Johannes van Zoonen joined Warner Chilcott as President, Europe/International & Global Marketing in November 2009 after 20 years at The Procter & Gamble Company, most recently as Vice President, Pharmaceuticals Europe, Australia & Japan and International Health Affairs. From 1989 to 2008, he served in

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various capacities at Procter & Gamble in their prescription and OTC divisions and from 2005 to 2009 represented the Industry as President of the European OTC Association. Prior to joining Procter & Gamble, Mr. van Zoonen spent a few years at Duphar Pharmaceuticals International.

Leland H. Cross joined Warner Chilcott as Senior Vice President, Technical Operations on September 1, 2001 and is responsible for technical operations worldwide. From 1994 to 2001, Mr. Cross was part of the Global Manufacturing group at Warner-Lambert (now part of Pfizer), where most recently he was General Manager of Pfizer Ireland Pharmaceuticals, responsible for Pfizer’s dosage manufacturing operations in Ireland. Prior to joining Warner-Lambert, Mr. Cross managed a manufacturing operation for Merck & Co. Inc.

Herman Ellman, M.D., joined Warner Chilcott as Senior Vice President, Clinical Development in June 2000. Dr. Ellman is responsible for clinical development and medical affairs activities. Prior to joining the company, Dr. Ellman held the position of Medical Director for Women’s Healthcare of Berlex Laboratories.

Izumi Hara joined Warner Chilcott as Senior Vice President and Deputy General Counsel in June 2001 and is responsible for the legal matters of the company. She was promoted to General Counsel as of August 1, 2005. Prior to joining the company, Ms. Hara held positions of increasing responsibility at Warner-Lambert (now part of Pfizer), where her most recent position was Vice President and Associate General Counsel, Corporate Affairs, and where she was responsible for all corporate legal matters, including acquisitions, divestitures, alliances and other transactions in all of Warner-Lambert’s lines of business worldwide.

Alvin D. Howard joined Warner Chilcott as Vice President, Regulatory Affairs in February 2001. He was promoted to Senior Vice President as of August 1, 2005 and is responsible for the registration of all products and for managing relationships with the FDA, Health Canada and other agencies regulating the sale of pharmaceutical products. Prior to joining the company, Mr. Howard was Vice President, Worldwide Regulatory Affairs at Roberts Pharmaceuticals.

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WHERE YOU CAN FIND MORE INFORMATION

We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. Unless specifically noted otherwise, these filings are not deemed to be incorporated by reference in this Annual Report. Statements contained in this Annual Report as to the contents of any contract or other document referred to are not necessarily complete and in each instance, if such contract or document is filed or incorporated by reference as an exhibit, reference is made to the copy of such contract or other document filed or incorporated by reference as an exhibit to this Annual Report, each statement being qualified in all respects by such reference. A copy of this Annual Report, including the exhibits and schedules thereto, may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that site is http://www.sec.gov. We also maintain an Internet site at www.wcrx.com. We make available on our internet website free of charge our Annual Reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K as soon as practicable after we electronically file such reports with the SEC. Our website and the information contained therein or connected thereto shall not be deemed to be incorporated into this Annual Report.

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Item 1A. Risk Factors.

Special Note Regarding Forward-Looking Statements

This Annual Report contains certain forward-looking statements, including, without limitation, statements concerning the conditions in our industry, expected cost savings, our operations, our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy and product development efforts. The words “may,” “might,” “will,” “should,” “estimate,” “project,” “plan,” “anticipate,” “expect,” “intend,” “outlook,” “believe” and other similar expressions are intended to identify forward-looking statements and information. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. These risks and uncertainties include, without limitation, those identified under the captions “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” below and elsewhere in this Annual Report.

You should carefully consider the risk factors set forth below as well as the other information contained in this Annual Report before making an investment decision. Additional risks and uncertainties not currently known to us or those we currently deem to be immaterial may also materially and adversely affect our business operations. Any of the following risks could materially adversely affect our business, financial condition, results of operations or cash flows. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Risks Relating to Our Business

If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products will be adversely affected.

Generic equivalents for branded pharmaceutical products are typically sold by competing companies at a lower cost than the branded product. After the introduction of a competing generic product, a significant percentage of the prescriptions written for the branded product are often written for the generic version. In addition, legislation enacted in most states in the United States allows or, in some instances mandates, that a pharmacist dispense an available generic equivalent when filling a prescription for a branded product, in the absence of specific instructions from the prescribing physician. As a result, branded products typically experience a significant loss in revenues following the introduction of a competing generic product. Our branded pharmaceutical products are or may become subject to competition from generic equivalents because there is no proprietary protection for some of the branded pharmaceutical products we sell, because our patent protection expires or because our patent protection is not sufficiently broad. In addition, we may not be successful in our efforts to extend the proprietary protection afforded our branded products through the development and commercialization of proprietary product improvements and new and enhanced dosage forms. Competition from generic equivalents could have a material adverse impact on our revenues, financial condition, results of operations and cash flows.

ESTRACE Cream, ESTRACE Tablets, ESTROSTEP FE, SARAFEM, OVCON 50 and OVCON 35 are currently not protected by patents. Generic equivalents are currently available for ESTROSTEP FE, SARAFEM capsules, ESTRACE Tablets and OVCON 35. ASACOL is not currently protected by a patent in the United Kingdom. Although our U.S. patent covering FEMHRT expires in May 2010, under a 2004 settlement of certain patent litigation, we granted Barr (which is now a division of Teva ) a non-exclusive license to launch a generic version of the product six months prior to the expiration of our patent. Although Teva’s generic equivalent of FEMHRT was approved for entry into the market in November 2009 and may be launched at any time, we do not believe that Teva has commenced sales of its generic version of FEMHRT.

During the next five years, additional products of ours will lose patent protection or likely become subject to generic competition. For example, our current ACTONEL products will lose their patent protection and exclusivity in Canada in early 2010 and many Western European markets beginning in late 2010. In addition,

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while we enforce our legal rights against third parties when we believe that our intellectual property or other proprietary rights are infringed, we have in the past, and may in the future, enter into settlements with generic competitors that result in sale of generic products prior to the expiration of our patents. For example, as a result of our settlements of our outstanding patent litigation relating to LOESTRIN 24 FE and FEMCON FE, we granted non-exclusive licenses to third-parties to launch generic versions of these products during the next five years. More specifically, in January 2009, we settled patent litigation related to LOESTRIN 24 FE with Watson. Under the agreement, Watson was permitted to commence marketing its generic equivalent product on the earlier of January 22, 2014 or the date on which another generic version of LOESTRIN 24 FE enters the U.S. market. In July 2009, we received a Paragraph IV certification notice letter from Lupin advising us that Lupin had filed an ANDA to manufacture and sell a generic version of LOESTRIN 24 FE. In September 2009, we filed an infringement lawsuit against Lupin in response to its submission. Our lawsuit results in a stay of FDA approval of Lupin’s ANDA for 30 months from the date of our receipt of Lupin’s notice, subject to the prior resolution of the matter before the court. Under current law, unless Watson forfeits its “first filer” status, the FDA may not approve Lupin’s ANDA until 180 days following the date on which Watson enters the market. We believe Watson may have forfeited its “first filer” status as a result of its failure to receive approval of its ANDA from the FDA within the requisite period. As a result, while we have filed an infringement suit against Lupin and intend to vigorously defend the LOESTRIN 24 LE patent and pursue our legal rights, we can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent product will not be approved and enter the market prior to the expiration of the LOESTRIN 24 FE patent in 2014. In December 2008, we settled our patent litigation related to FEMCON FE with Barr (now Teva). Under the terms of the agreement, Teva was not permitted to enter the market until the earlier of July 1, 2012 or, among other circumstances, the date that is two years following the date of the filing of a new ANDA with a Paragraph IV certification by a third-party. In January 2009, we announced that we settled our patent litigation related to FEMCON FE with Watson. Under the agreement, Watson was permitted to commence marketing its generic equivalent product on the earlier of 180 days after Teva enters the market with a generic equivalent product, or January 1, 2013. On July 31, 2009, we received a Paragraph IV certification notice letter from Lupin indicating that it had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of FEMCON FE. In September 2009, we filed an infringement lawsuit against Lupin in response to its submission. Our lawsuit results in a stay of FDA approval of Lupin’s ANDA for 30 months from the date of our receipt of Lupin’s notice, subject to the prior resolution of the matter before the court. If Lupin filed its ANDA with respect to FEMCON FE during 2009 and Teva’s ANDA with respect to a generic version of FEMCON FE is approved, Teva may be able to enter the market with a generic version of FEMCON FE as early as 2011. While we have filed an infringement lawsuit against Lupin and intend to vigorously defend the FEMCON FE patent and pursue our legal rights, we can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent will not be approved and enter the market prior to the expiration of the FEMCON FE patent in 2019.

As noted above, potential generic competitors may challenge the patents protecting our branded pharmaceutical products. For example, we and Mayne have received several challenges relating to our DORYX products. As a result of the enactment of the QI Act, on October 8, 2008, Mayne submitted to the FDA for listing in the FDA’s Orange Book the U.S. patent covering DORYX, and potential generic competitors that had filed an ANDA prior to the listing of the DORYX patent were permitted to certify to the listed patent within 120 days of the enactment of the QI Act. In November and December 2008 and January 2009, we and Mayne received Paragraph IV certification notice letters from Actavis, Mutual, Mylan, Impax and Sandoz indicating that each had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of our DORYX 75 mg and 100 mg delayed-release tablets. In December 2008 and January 2009, we and Mayne filed infringement lawsuits against each of the potential generic competitors. In March 2009 the FDA issued guidance that indicated that a 30-month stay would not apply to the potential approvals of generic versions of our DORYX 75 mg and 100 mg products for which ANDAs were filed prior to the listing of the DORYX patent. On November 9, 2009, pursuant to an agreement among the Company, Mayne and Mutual, the court dismissed the lawsuit against Mutual concerning generic versions of the DORYX 75 mg and 100 mg products following Mutual’s agreement to withdraw its ANDA with respect to such products. In March 2009, we and Mayne

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received Paragraph IV certification notice letters from Impax and Mylan indicating that each had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of our DORYX 150 mg delayed-release tablets. In March and May 2009 we and Mayne filed infringement lawsuits against each Impax and Mylan. In February 2010, we and Mayne received a Paragraph IV certification notice letter from Heritage indicating that it had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of our DORYX 75 mg, 100 mg and 150 mg products. We and Mayne are reviewing the Heritage notice letter and expect to file an infringement lawsuit against Heritage within 45 days of our receipt of the Paragraph IV certification notice. Based on the FDA’s interpretive guidance, and assuming that we and Mayne bring suit against Heritage within the requisite period, we believe that because each of Impax’s and Mylan’s ANDAs with respect to generic versions of our DORYX 150 mg product, and Heritage’s ANDA with respect to generic versions of our DORYX 75 mg, 100 mg, and 150 mg products, were submitted after the listing of the DORYX patent in the FDA’s Orange Book, the FDA will stay approval of these generic versions of our products for up to 30 months, subject to the prior resolution of the matters before the court. In January 2010 we and Mayne received a Paragraph IV certification notice letter from Sandoz indicating that it had amended its ANDA previously submitted to the FDA requesting approval to manufacture and sell generic versions of our DORYX 75 mg and 100 mg products to include a generic version of our DORYX 150 mg product. In January 2010 we and Mayne filed an infringement lawsuit against Sandoz with respect to its amended ANDA. While we can give no assurance, we believe that under current law, the FDA may not approve Sandoz’s amended ANDA with respect to the DORYX 150 mg strength product until 180 days following the date on which the “first filer” of an ANDA with respect to the DORYX 150 mg strength product enters the market, unless the first filer transfers or forfeits its first filer rights, for example by failing to begin marketing its product in a timely manner. Our lawsuits against Actavis, Mylan, Impax and Sandoz relating to our DORYX 75 mg and 100 mg products, as well as our lawsuits against Impax, Mylan and Sandoz relating to our DORYX 150 mg product, remain pending. While we and Mayne intend to vigorously defend the DORYX patent and pursue our legal rights, we can offer no assurance as to when the lawsuits will be decided, whether the lawsuits will be successful or that a generic equivalent of our DORYX 75 mg, 100 mg and 150 mg products will not be approved and enter the market prior to the expiration of the DORYX patent in 2022.

Certain of the products we acquired in the PGP Acquisition have also been challenged by generic competitors. For example, in July 2004, PGP received a Paragraph IV certification notice letter from Teva regarding PGP’s NCE patent covering ACTONEL and indicating that Teva had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of ACTONEL. PGP filed a patent infringement suit against Teva in August 2004. In that case, Teva admitted patent infringement but alleged that the NCE patent was invalid and, in February 2008, the U.S. District Court for the District of Delaware decided in favor of PGP, upholding the ACTONEL NCE patent as valid and enforceable. Teva appealed, and the U.S. Court of Appeals for the Federal Circuit unanimously upheld the decision of the District Court in May 2009. PGP and Roche received Paragraph IV certification notice letters from Teva, Sun and Apotex regarding the ACTONEL Method Patent (not the NCE patent) covering ACTONEL’s once-a-month product and indicating that each such company had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of the once-a-month ACTONEL product. PGP and Roche, which licenses the ACTONEL Method Patent to PGP, filed a patent infringement suit against Teva in September 2008, against Sun in January 2009 and against Apotex in March 2009 charging each with infringement of the ACTONEL Method Patent. The suit against Teva (which delivered the first Paragraph IV certification notice letter to PGP) triggered a 30-month stay of FDA approval with respect to Teva’s above mentioned ANDA. The stay of approval of Teva’s ANDA will expire on the earlier of February 2011 or the resolution of the suit. Additionally, once-a-month ACTONEL 150 mg has FDA exclusivity through April 2011, and the underlying ACTONEL NCE patent expires in June 2014 (including a 6-month pediatric extension of regulatory exclusivity). While we and Roche intend to vigorously defend the ACTONEL Method Patent and pursue our legal rights, we can offer no assurance as to when the lawsuits will be decided, whether the lawsuits will be successful or that a generic equivalent of the ACTONEL once-a-month product will not be approved and enter the market prior to the expiration of the ACTONEL Method Patent in 2023.

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In addition in September 2007, PGP and Medeva received a Paragraph IV certification notice letter from Roxane, a subsidiary of Boehringher Ingelheim Corporation, regarding the ASACOL Patent indicating that Roxane had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of the ASACOL 400 mg product. PGP and Medeva, the owner of the ASACOL Patent, filed a patent infringement suit against Roxane in October 2007. The lawsuit results in a stay of FDA approval of Roxane’s ANDA for up to 30 months from the date of PGP’s and Medeva’s receipt of the notice (i.e. until March 2010), subject to the prior resolution of the matter before the court. The trial has not been scheduled. However, unless the court decides earlier in its favor, Roxane has agreed not to launch a generic version of the ASACOL 400 mg product before November 1, 2010. In addition, Roxane has agreed that if the case is fully submitted to the court by November 1, 2010, it will not launch until the court decides the case. While we and Medeva intend to vigorously defend the ASACOL Patent and pursue our legal rights, we can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent of the ASACOL 400 mg product will not be approved and enter the market prior to the expiration of the ASACOL Patent in 2013.

We cannot predict what effect, if any, such matters will have on our financial condition, results of operations and cash flows.

Our trademarks, patents and other intellectual property are valuable assets, and if we are unable to protect them from infringement or challenges, our business prospects may be harmed.

Due to our focus on branded products, we consider our trademarks to be valuable assets. Therefore, we actively manage our trademark portfolio, maintain long-standing trademarks and obtain trademark registrations for new brands. We also police our trademark portfolio against infringement. Our efforts to defend our trademarks may be unsuccessful and we may not have adequate remedies in the event of a finding of infringement due, for example, to the fact that a violating company may be insolvent.

We also rely on patents, trade secrets and proprietary knowledge to protect our products. We take steps to protect our proprietary rights by filing applications for patents on certain inventions, by entering into confidentiality, non-disclosure and assignment of invention agreements with our employees, consultants, licensees and other companies and enforcing our legal rights against third parties that we believe may infringe our intellectual property rights. We do not ultimately control whether we will be successful in enforcing our legal rights against third-party infringers, whether our patent applications will result in issued patents, whether our patents will be subjected to inter parte reexamination by the USPTO, whether our confidentiality, non-disclosure and assignment of invention agreements will be breached and whether we will have adequate remedies in the event of any such breach, or whether our trade secrets will become known by competitors.

We are today, and have in the past been, involved in litigation with respect to the validity and infringement of our patents. In addition, we may be involved in such litigation in the future. The outcome of this type of litigation is unpredictable, and if unfavorable, may deprive us of market exclusivity or from marketing and selling a product altogether. In addition, bringing and defending these lawsuits is costly, and consequently we may decide to not bring or defend such suits and to abandon the products to which they relate. If we lose market exclusivity for or stop marketing a product, our business, financial condition, results of operations and cash flows could be adversely affected.

Delays in production could have a material adverse impact on our business.

Our pharmaceutical manufacturing facility located in Fajardo, Puerto Rico currently manufactures many of our products, including LOESTRIN 24 FE and FEMCON FE, and packages our delayed-release DORYX tablets and FEMHRT. The PGP facilities we acquired in Manati, Puerto Rico and Weiterstadt, Germany currently manufacture many of the PGP products we acquired in the PGP Acquisition, including ACTONEL and ASACOL. Because the manufacture of pharmaceutical products requires precise and reliable controls, and due to significant compliance obligations imposed by laws and regulations, we may face delays in qualifying the Fajardo, Manati and Weiterstadt facilities for the manufacture of new products or for our other products that are currently manufactured for us by third parties. In addition, natural disasters such as hurricanes, floods, fires and

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earthquakes could adversely affect the ability of our manufacturing facilities to supply products to us. Hurricanes are relatively common in Puerto Rico and the severity of such natural disasters is unpredictable.

In addition, certain of our pharmaceutical products are currently manufactured for us under contracts with third parties. Our contract manufacturers may not be able to manufacture our products without interruption and may not comply with their obligations under our various supply arrangements, and we may not have adequate remedies for any breach. Our contract manufacturers have occasionally been unable to meet all of our orders, which has led to the depletion of our safety stock and temporary shortages of trade supply and promotional samples.

Failure by our own manufacturing facilities or any third-party manufacturer (each a “product supplier”) to comply with regulatory requirements could adversely affect their ability to supply products to us. All facilities and manufacturing techniques used for the manufacture of pharmaceutical products must be operated in conformity with current Good Manufacturing Practices, or cGMPs. In complying with cGMP requirements, product suppliers must continually expend time, money and effort in production, record-keeping and quality assurance and control to ensure that their products meet applicable specifications and other requirements for product safety, efficacy and quality. Manufacturing facilities are subject to periodic unannounced inspections by the FDA and other regulatory authorities. Failure to comply with applicable legal requirements (including, in the case of our manufacturing facility located in Fajardo, certain obligations that we assumed in our purchase of the facility arising out of a consent decree entered into by the previous owner) subjects the product suppliers to possible legal or regulatory action, including shutdown, which may adversely affect their ability to supply us with product.

The FDA and other regulatory authorities must approve suppliers of certain active and inactive pharmaceutical ingredients and certain packaging materials used in our products as well as suppliers of finished products. The development and regulatory approval of our products are dependent upon our ability to procure these ingredients, packaging materials and finished products from suppliers approved by the FDA and other regulatory authorities. Such approval of a new supplier would be required if, for example, active ingredients, packaging materials or finished products were no longer available from the initially approved supplier or if that supplier had its approval from the FDA or other regulatory authority withdrawn. The qualification of a new product supplier or a new supplier of product components could potentially delay the manufacture of the drug involved. Furthermore, we may not be able to obtain active ingredients, packaging materials or finished products from a new supplier on terms that are as favorable to us as those agreed to with the initially approved supplier or at reasonable prices.

A delay in supplying, or failure to supply, products by any product supplier could result in our inability to meet the demand for our products, the loss of all or a portion of our market share with respect to such products, and adversely affect our revenues, financial condition, results of operations and cash flows.

Pricing pressures from third-party payors, including managed care organizations, government sponsored health systems and regulations relating to Medicare and Medicaid, healthcare reform, pharmaceutical reimbursement and pricing in general could decrease our U.S. revenues.

Our commercial success in producing, marketing and selling products in the United States depends, in part, on the availability of adequate reimbursement from third-party healthcare payors, such as managed care organizations and government bodies and agencies for the cost of the products and related treatments. The market for our products may be limited by actions of third-party payors.

Managed care organizations and other third-party payors try to negotiate the pricing of medical services and products to control their costs, including by developing formularies to encourage plan beneficiaries to utilize preferred products for which the plans have negotiated favorable terms. Exclusion of a product from a formulary, or placement of a product on a disfavored formulary tier, can lead to sharply reduced usage in the managed care

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organization patient population. If our products are not included within an adequate number of formularies or if adequate reimbursements are not provided, or if reimbursement policies increasingly favor generic products, our market share and business could be negatively affected.

Reforms in Medicare added an out-patient prescription drug reimbursement beginning in 2006 for all Medicare beneficiaries. Private plans contracting with the government to deliver the benefit, through their purchasing power under these programs, are demanding discounts from pharmaceutical companies that may implicitly create price controls on prescription drugs. These reforms may decrease our future revenues from products such as ACTONEL, which are covered by the Medicare drug benefit.

We also face pricing pressures and potential pricing pressures for our drug products reimbursed under the Medicaid program. Most states have established preferred drug lists (“PDLs”) and require that manufacturers pay supplemental rebates, in addition to the federal rebate, to the state in order to be included in the PDL or to avoid being placed in a disfavored position on the state formulary.

Further, a number of other legislative and regulatory measures aimed at changing the healthcare system have been proposed, including federal proposals to permit the U.S. government to use its purchasing power to negotiate further discounts from pharmaceutical companies under Medicare, and proposals to increase the federal rebates we must pay to the states based on the utilization of our products under Medicaid. In addition, Congress is considering various other legislative proposals that generally are intended to expand healthcare coverage to currently uninsured Americans and to limit the rate of increase in healthcare spending. While we cannot predict whether any such proposals will be adopted or the effect such proposals may have on our business, the existence of such proposals, as well as the adoption of any proposal, may increase industry-wide pricing pressures or increase the cost of doing business (for example by imposing taxes on pharmaceutical manufacturers), thereby adversely affecting our results of operations and cash flows.

Government regulation in the European Union of the price and reimbursement status of medicinal products could limit market acceptance of our products or reduce the prices we receive for our products.

Most European Union member states impose controls on the prices at which medicines are reimbursed under state-run healthcare schemes. In many countries reimbursement of a product is conditional on the agreement by the seller not to sell the product above a fixed price in that country. Often the reimbursement price is established unilaterally by the national authorities and is accompanied by the inclusion of the product on a list of reimbursable products. Some member states operate reference pricing systems in which they set national reimbursement prices by reference to those in other member states. Increased pressures to reduce government healthcare spending and increased transparency of prices following the adoption of the euro have meant that an increasing number of governments have adopted this approach. Furthermore, in the event of increased price transparency or the loss of exclusivity, such as our expected loss of exclusivity for ACTONEL in many Western European markets in late 2010, parallel importation of pharmaceuticals from lower price level countries to higher priced markets may increase and lower our effective average selling price.

Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our consolidated tax liability, and changes in tax laws and regulations could materially adversely affect our results of operations, financial position and cash flows.

We conduct operations world-wide through subsidiaries in various tax jurisdictions. Certain aspects of the transactions between our subsidiaries, including our transfer pricing (which is the pricing we use in the transfer of products and services among our subsidiaries) and our intercompany financing arrangements, could be challenged by applicable taxing authorities. While we believe both our transfer pricing and our intercompany financing arrangements are reasonable, either or both could be challenged by the applicable taxing authorities. Following any such challenge, our taxable income could be reallocated among our subsidiaries. Such reallocation could both increase our consolidated tax liability and adversely affect our financial condition, results of operations and cash flows.

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Our U.S. operating subsidiaries previously entered into an Advance Pricing Agreement (the “APA”) with the Internal Revenue Service (the “IRS”) covering the calendar years 2006 through 2010. This APA is applicable to the U.S. subsidiaries and operations as they existed prior to the PGP Acquisition. We cannot ensure that we will be able to enter into a new APA covering calendar years after 2010 or that any new APA will contain terms comparable to those in our existing APA. If we do not enter into a new APA, while we believe that our transfer pricing arrangements comply with applicable U.S. tax rules, the IRS could challenge our transfer pricing arrangements.

In addition, our future operating results, financial position and cash flows could be materially adversely affected by changes in the application of tax principles, including tax rates, new tax laws, or revised interpretations of existing tax laws and precedents, which result in a shift of taxable earnings between tax jurisdictions.

Changes in market conditions, including lower than expected cash flows or revenues for our branded pharmaceutical products as a result of competition from other branded products, may result in our inability to realize the value of our products, in which case we may have to record an impairment charge.

The pharmaceutical industry is characterized by rapid product development and technological change, and as a result, our pharmaceutical products could be rendered obsolete or their value may be significantly decreased by the development of new technology or new branded pharmaceutical products indicated for the treatment of conditions currently addressed by our products, technological advances that reduce the cost of production or marketing or pricing actions by one or more of our competitors. Some of the companies we compete against have significantly greater resources than we do, and therefore, may be able to adapt more quickly to new or emerging technologies and changes in customer requirements, or devote greater resources to the promotion and sale of their products than we can. Our inability to compete successfully with respect to these or other factors may materially and adversely affect our cash flows or revenues, or may result in our inability to realize the value of our branded pharmaceutical products, including products acquired from third parties, and may require us to record an impairment charge.

Recent legal and regulatory requirements could make it more difficult for us to obtain new or expanded approvals for our products, and could limit or make more burdensome our ability to commercialize our approved products.

The Food and Drug Administration Amendments Act of 2007 contains significant additional regulatory requirements affecting pharmaceutical manufacturers. The legislation grants the FDA extensive additional authority to impose post-approval clinical study and clinical trial requirements, require safety-related changes to product labeling, review advertising aimed at consumers, and require the adoption of risk management plans, referred to in the legislation as risk evaluation and mitigation strategies (“REMS”). The REMS may include requirements for special labeling or medication guides for patients, special communication plans for healthcare professionals, and restrictions on distribution and use. For example, if the FDA were to make the requisite findings, it might require that a new product be prescribed only by physicians with certain specialized training, only in certain designated healthcare settings, or only in conjunction with special patient testing and monitoring.

The legislation also includes, among other new requirements, provisions requiring the disclosure to the public of certain information regarding ongoing clinical trials for drugs through a clinical trial registry and for disclosing clinical trial results to the public through a clinical trial database; renewed requirements for conducting trials to generate information on the use of products in pediatric patients; and new penalties, for such acts as false or misleading consumer drug advertising. Other proposals have been made to impose additional requirements on drug approvals, further expand post-approval requirements, and restrict sales and promotional activities.

New requirements have also been imposed in some states, and proposed in other states, requiring us to provide paper or electronic pedigree information for the drugs that we distribute to help establish their authenticity and to track their movement from the manufacturer through the chain of distribution. These new

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federal and state requirements, and additional requirements that have been proposed and might be adopted, may make it more difficult or burdensome for us to obtain new or expanded approvals for our products, may be more restrictive or come with onerous post-approval or other requirements, may hinder our ability to commercialize approved products successfully, and may harm our business.

Delays and uncertainties in clinical trials or the government approval process for new products could result in lost market opportunities and hamper our ability to recoup costs associated with product development.

FDA approval is generally required before a prescription drug can be marketed in the United States. For innovative, or non-generic, new drugs, an FDA-approved New Drug Application, or NDA, is required before the drugs may be marketed in the United States. The NDA must contain data to demonstrate that the drug is safe and effective for its intended uses, and that it will be manufactured to appropriate quality standards. Products marketed outside the United States are also subject to government regulation, which may be equally or more demanding. The clinical trials required to obtain regulatory approvals can be complex and expensive, and their outcomes are uncertain. Positive results from pre-clinical studies and early clinical trials do not ensure positive results in later clinical trials that form the basis of an application for regulatory approval. Even where clinical trials are completed successfully, the FDA or other regulatory authorities may determine that a product does not present an acceptable risk-benefit profile, and may not approve an NDA or its foreign equivalent or may only approve an NDA or its foreign equivalent with significant restrictions or conditions. The drug development and approval process can be time-consuming and expensive without assurance that the data will be adequate to justify approval of proposed new products. If we are unable to obtain regulatory approval for our products, we will not be able to commercialize our products and recoup our R&D costs. Furthermore, even if we were to obtain regulatory approvals, the terms of any product approval, including labeling, may be more restrictive than desired and could affect the marketability of our products, and the approvals may be contingent upon burdensome post-approval study commitments. If we are unable to obtain timely product approvals on commercially viable terms, our profitability and business could suffer. In January 2010 we received a complete response letter from the FDA indicating that during FDA inspections of the third-party drug substance manufacturing facility and control testing laboratory used to support the NDA for our low-dose oral contraceptive, which we refer to as WC3016, deficiencies were noted that remain unresolved. While no efficacy or safety issues were raised by the FDA in the letter, satisfactory resolution of these issues is required before the NDA can be approved. In addition, we are currently conducting Phase II and Phase III clinical trials and have pending NDAs for certain important products, including our next generation ACTONEL product. If these NDAs are not approved, we may not be able to commercialize these products in the United States and, in the case of our next generation ACTONEL product, may not be able to realize the full anticipated value of the PGP Acquisition.

Changes in laws and regulations could adversely affect our results of operations, financial position or cash flows.

Our future operating results, financial position or cash flows could be adversely affected by changes in laws and regulations such as (i) changes in the FDA or equivalent foreign approval processes that may cause delays in, or limit or prevent the approval of, new products, (ii) new laws, regulations and judicial decisions affecting product marketing, promotion or the healthcare field generally and (iii) new laws or judicial decisions affecting intellectual property rights.

The perceived health effects of estrogen and combined estrogen-progestogen hormone therapy, or HT, products may affect the acceptability and commercial success of our HT products.

ESTRACE Tablets, ESTRACE Cream, FEMRING and FEMTRACE are estrogen therapy products, and FEMHRT is a combined estrogen-progestogen therapy product. These HT products are used by women to alleviate symptoms associated with menopause. Studies during the last decade have analyzed the health effects of estrogen therapy and estrogen-progestogen therapy products and the American College of Obstetricians and Gynecologists has recommended that consumers use these products in the lowest possible dose for the shortest

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possible duration. We believe the publicity surrounding some of these studies resulted in a significant industry-wide decrease in the number of prescriptions being written for estrogen therapy and estrogen-progestogen therapy products, including FEMHRT. The ultimate effect of these studies, and any further changes in labeling for our products, may further affect the acceptability of our products by patients, the willingness of physicians to prescribe our products for their patients or the duration of their therapy. In any such event, our overall rate of growth may be lower.

The loss of the services of members of our senior management team or scientific staff or the inability to attract and retain other highly qualified employees could impede our ability to meet our strategic objectives and adversely affect our business.

Our success is dependent on attracting and retaining highly qualified scientific, sales and management staff, including our Chief Executive Officer, Roger Boissonneault. We face intense competition for personnel from other companies, academic institutions, government entities and other organizations. The loss of key personnel, or our failure to attract and retain other highly qualified employees, may impede our ability to meet our strategic objectives.

Pursuant to our business strategy, we intend to develop proprietary product improvements as well as new products. This strategy may require us to hire additional employees with expertise in areas that relate to product development. We cannot fully anticipate or predict the time and extent to which we will need to hire this type of specialized personnel. We may not be successful in attracting and retaining the personnel necessary to pursue our business strategy fully. In addition, if competition continues to intensify, then our cost of attracting and retaining employees may escalate.

Product liability claims and product recalls could harm our business.

The development, manufacture, testing, marketing and sale of pharmaceutical products entail significant risk of product liability claims or recalls. Our products are, in the substantial majority of cases, designed to affect important bodily functions and processes. Unforeseen side-effects caused by, or manufacturing defects inherent in, the products sold by us could result in exacerbation of a patient’s condition, further deterioration of the patient’s condition or even death. The occurrence of such an event could result in product liability claims and/or the recall of one or more of our products. Claims may be brought by individuals seeking relief for themselves or, in certain jurisdictions, by groups seeking to represent a class. For example, approximately 709 product liability suits, including some with multiple plaintiffs, have been filed against, or tendered pursuant to acquisition agreements to, us in connection with the HT products FEMHRT, ESTRACE Tablets, ESTRACE Cream and medroxyprogesterone acetate. The lawsuits were likely triggered by the July 2002 and March 2004 announcements by the National Institutes of Health (“NIH”) of the terminations of two large-scale randomized controlled clinical trials, which were part of the Women’s Health Initiative (“WHI”), examining the long-term effect of HT on the prevention of coronary heart disease and osteoporotic fractures, and any associated risk for breast cancer in postmenopausal women. In the case of the trial terminated in 2002, which examined combined estrogen and progestogen therapy (the “E&P Arm of the WHI Study”), the safety monitoring board determined that the risks of long-term estrogen and progestogen therapy exceeded the benefits, when compared to a placebo. WHI investigators found that combined estrogen and progestogen therapy did not prevent heart disease in the study subjects and despite a decrease in the incidence of hip fracture and colorectal cancer, there was an increased risk of invasive breast cancer, coronary heart disease, stroke, blood clots and dementia. In the trial terminated in 2004, which examined estrogen therapy, the trial was ended one year early because the NIH did not believe that the results were likely to change in the time remaining in the trial and that the increased risk of stroke could not be justified by the additional data that could be collected in the remaining time. As in the E&P Arm of the WHI Study, WHI investigators again found that estrogen only therapy did not prevent heart disease and although study subjects experienced fewer hip fractures and no increase in the incidence of breast cancer compared to subjects randomized to placebo, there was an increased incidence of stroke and blood clots in the legs. The estrogen used in the WHI Study was conjugated equine estrogen and the progestin was

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medroxyprogesterone acetate, the compounds found in Premarin^® and Prempro™, products marketed by Wyeth (now Pfizer). See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Further, we may be liable for product liability, warranty or similar claims in relation to products that we acquired in the PGP Acquisition. Our agreement with P&G provides that P&G will indemnify us for 50% of the losses from any such claims pending as of October 30, 2009, subject to certain limits. One such set of claims may relate to litigation in connection with ACTONEL. Beginning in 2003, case reports in scientific literature reported a series of adverse events involving post-menopausal women who developed osteonecrosis of the jaw (“ONJ”) subsequent to alleged use of medications for osteoporosis. The majority of these reports involved multiple myeloma patients who used high doses of intravenous bisphosphonates as part of their cancer therapy. Beginning in 2006, several complaints were filed against PGP and Sanofi regarding ONJ. We are aware of 89 claimants, in 81 cases, in which we were named as a defendant. Generally, the plaintiffs allege that ACTONEL increases the risk of ONJ and that this risk was not included in the product’s warnings. Under the Collaboration Agreement, Sanofi has agreed to indemnify us, subject to certain limitations, for 50% of any losses from product liability claims related to ACTONEL, which would include losses regarding ONJ-related claims. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Product liability insurance coverage is expensive, can be difficult to obtain and may not be available in the future on acceptable terms, if at all. Our product liability insurance may not cover all the future liabilities we might incur in connection with the development, manufacture or sale of our products. In addition, we may not continue to be able to obtain insurance on satisfactory terms or in adequate amounts.

We currently maintain product liability insurance coverage for claims between $25.0 million and $170.0 million, above which we are self-insured. Our insurance may not apply to damages or defense costs related to the above mentioned HT claims or the above mentioned ONJ claims, including any claim arising out of HT or ACTONEL products with labeling that does not conform completely to FDA approved labeling. A successful claim or claims brought against us in connection with our HT product liability litigation, the ONJ litigation or other matters that is in excess of available insurance coverage could subject us to significant liabilities and have a material adverse effect on our business, financial condition, results of operations and cash flows. Such claims could also harm our reputation and the reputation of our products, thereby adversely affecting our ability to market our products successfully. In addition, irrespective of the outcome of product liability claims, defending a lawsuit with respect to such claims could be costly and significantly divert management’s attention from operating our business. Furthermore, we could be rendered insolvent if we do not have sufficient financial resources to satisfy any liability resulting from such a claim or to fund the legal defense of such a claim.

Product recalls may be issued at our discretion or at the discretion of certain of our suppliers, the FDA, other government agencies and other entities that have regulatory authority for pharmaceutical sales. From time to time, we have recalled some of our products; however, to date none of these recalls have been significant. Any recall of a significant product could materially adversely affect our business and profitability by rendering us unable to sell that product for some time.

Sales of our products may be adversely affected by the consolidation among wholesale drug distributors and the growth of large retail drug store chains.

The network through which we sell our products has undergone significant consolidation marked by mergers and acquisitions among wholesale distributors and the growth of large retail drugstore chains. As a result, a small number of large wholesale distributors control a significant share of the market, and the number of independent drug stores and small drugstore chains has decreased. Three large wholesale distributors accounted for an aggregate of 66% of our net revenues during the year ended December 31, 2009. In addition, excess inventory levels held by large distributors may lead to periodic and unanticipated future reductions in revenues and cash flows. Consolidation of drug wholesalers and retailers, as well as any increased pricing pressure that those entities face from their customers, including the U.S. government, may increase pricing pressure and place other competitive pressures on drug manufacturers, including us.

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If we fail to comply with government regulations we could be subject to fines, sanctions and penalties that could adversely affect our ability to operate our business.

We are subject to regulation by national, regional, state and local agencies, including, in the United States, the FDA, the Drug Enforcement Administration, the Department of Justice, the Federal Trade Commission, the Office of the Inspector General of the U.S. Department of Health and Human Services, the U.S. Environmental Protection Agency and other regulatory bodies. The Federal Food, Drug and Cosmetic Act, the Public Health Service Act and other federal and state statutes and regulations in the United States, and equivalent laws and regulations in the European Union, govern to varying degrees, the research, development, manufacturing and commercial activities relating to prescription pharmaceutical products, including pre-clinical and clinical testing, approval, production, labeling, sale, distribution, import, export, post-market surveillance, advertising, dissemination of information and promotion.

Our sales, marketing, research and other scientific/educational programs must also comply with the anti-kickback and fraud and abuse provisions of the Social Security Act, the False Claims Act, the privacy provisions of the Health Insurance Portability and Accountability Act, and similar state laws. Pricing and rebate programs must comply with the Medicaid drug rebate requirements of the Omnibus Budget Reconciliation Act of 1990 and the Veterans Health Care Act of 1992. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.

All of these activities are also potentially subject to federal and state consumer protection and unfair competition laws. In addition, in recent years, several states in the United States, including California, Massachusetts, Maine, Minnesota, Nevada, New Hampshire, New Mexico, Texas, Vermont and West Virginia, as well as the District of Columbia, have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing and prohibit certain other sales and marketing practices. Similar legislation is being considered in other states and at the federal level in the United States. Many of these requirements are new and their breadth and application are uncertain.

Noncompliance with these and other government regulations and other legal requirements may result in civil fines, criminal fines and prosecution, the recall of products, the total or partial suspension of manufacture and/or distribution, seizure of products, injunctions, whistleblower lawsuits, failure to obtain approval of pending product applications, withdrawal of existing product approvals, exclusion from participation in government healthcare programs and other sanctions. Any threatened or actual government enforcement action can also generate adverse publicity and require that we devote substantial resources that could be used productively on other aspects of our business. Any of these enforcement actions could affect our ability to commercially distribute our products and could materially and adversely affect our business, financial condition, results of operations and cash flows.

We may not be able to successfully identify, develop, acquire, license or market new products as part of growing our business.

In order to grow and achieve success in our business, we must continually identify, develop, acquire and license new products that we can ultimately market. Any future growth through new product acquisitions will be dependent upon the continued availability of suitable acquisition candidates at favorable prices and upon advantageous terms and conditions. Even if such opportunities are present, we may not be able to successfully identify products as candidates for potential acquisition, licensing, development or collaborative arrangements. Moreover, other companies, many of which may have substantially greater financial, marketing and sales resources, are competing with us for the right to acquire such products.

If an acquisition candidate is identified, the third parties with whom we seek to cooperate may not select us as a potential partner or we may not be able to enter into arrangements on commercially reasonable terms or at

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all. Furthermore, we do not know if we will be able to finance the acquisition or integrate an acquired product into our existing operations. The negotiation and completion of potential acquisitions could result in a significant diversion of management’s time and resources and potentially disrupt our ongoing business. Future product acquisitions may result in the incurrence of debt and contingent liabilities and an increase in interest expense and amortization expenses, as well as significant charges relating to integration costs.

At each stage between developing or sourcing new products and marketing these products, there are a number of risks and uncertainties, and failure at any stage could have a material adverse effect on our ability to achieve commercial success with a product or to maintain or increase revenues, profits and cash flow. In addition, if we are unable to manage the challenges surrounding product development, acquisitions or the successful integration of acquisitions, it could have materially adverse effects on our business, financial condition, results of operations and cash flows.

Prescription drug importation from Canada and other countries could increase pricing pressure on certain of our products and could decrease our revenues and profit margins.

Under current U.S. law, U.S. individuals may import prescription drugs that are unavailable in the United States from Canada and other countries for their personal use under specified circumstances. Other imports, although illegal under U.S. law, also enter the country as a result of the resource constraints and enforcement priorities of the FDA and the U.S. Customs Service. The volume of prescription drug imports from Canada and elsewhere could increase due to a variety of factors, including the further spread of Internet pharmacies and actions by certain state and local governments to facilitate Canadian and other imports. These imports may harm our business.

We currently sell a number of products, including ACTONEL, ASACOL, FEMHRT and MACROBID in Canada. In addition, ESTRACE Tablets are sold in Canada by third parties. Due to government price regulation in Canada and other countries, these products are generally sold in Canada and other countries for lower prices than in the United States. As a result, if these drugs are imported into the United States from Canada or elsewhere, we may experience reduced revenue or profit margins.

We have a significant amount of intangible assets, which may never generate the returns we expect.

Our identifiable intangible assets, which include trademarks and trade names, license agreements and patents acquired in acquisitions (including the PGP Acquisition), were $3,302.4 million at December 31, 2009, representing approximately 54.8% of our total assets of $6,031.2 million. Goodwill, which relates to the excess of cost over the fair value of the net assets of the businesses acquired, was $1,060.6 million at December 31, 2009, representing approximately 17.6% of our total assets. The majority of our intangible assets are owned by one of our Puerto Rican subsidiaries.

Goodwill and identifiable intangible assets are recorded at fair value on the date of acquisition. Under Accounting Standards Codification (“ASC”) No. 350 “Intangibles—Goodwill and other”, goodwill is reviewed at least annually for impairment and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Future impairment may result from, among other things, deterioration in the performance of the acquired business or product line, adverse market conditions and changes in the competitive landscape, adverse changes in applicable laws or regulations, including changes that restrict the activities of the acquired business or product line, changes in accounting rules and regulations, and a variety of other circumstances. The amount of any impairment is recorded as a charge to the statement of operations. We may never realize the full value of our intangible assets. Any determination requiring the write-off of a significant portion of intangible assets may have an adverse effect on our financial condition and results of operations. For example, in connection with our annual review of intangible assets during the fourth quarter of 2008, we recorded a non-cash impairment charge of $163.3 million relating to our OVCON / FEMCON FE product family. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for details.

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If we fail to comply with our reporting and payment obligations under the Medicaid rebate program or other governmental pricing programs, we could be subject to additional reimbursements, penalties, sanctions and fines which could have a material adverse effect on our business.

We participate in the federal Medicaid rebate program established by the Omnibus Budget Reconciliation Act of 1990, as well as several state supplemental rebate programs. Under the Medicaid rebate program, we pay a rebate to each state Medicaid program for our products that are reimbursed by those programs. The minimum amount of the rebate for each unit of product is set by law as 15.1% of the average manufacturer price (“AMP”) of that product, or if it is greater, the difference between AMP and the best price available from us to any customer. The rebate amount also includes an inflation adjustment, if necessary.

As a manufacturer of different types of drug products, including products that the Centers for Medicare and Medicaid Services treats as innovators (usually branded products) and noninnovators (usually generic products), rebate calculations vary among products and programs. The calculations are complex and, in certain respects, subject to interpretation by us, governmental or regulatory agencies and the courts. For example, the Medicaid rebate amount is computed each quarter based on our submission to the Centers for Medicare and Medicaid Services at the U.S. Department of Health and Human Services of our current AMP and best price for each of our products. The terms of our participation in the program impose an obligation to correct the prices reported in previous quarters, if necessary. Any such corrections could result in an overage or underage in our rebate liability for past quarters, depending on the direction of the correction. In addition to retroactive rebates (and interest, if any), if we are found to have knowingly submitted false information to the government, the statute provides for civil monetary penalties in the amount of $0.1 million per item of false information. Governmental agencies may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid.

Federal law requires that any company that participates in the Medicaid rebate program extend comparable discounts to qualified purchasers under the Public Health Services (“PHS”) pharmaceutical pricing program. The PHS pricing program extends discounts comparable to the Medicaid rebates to a variety of community health clinics and other entities that receive health services grants from the PHS, as well as hospitals that serve a disproportionate share of economically disadvantaged patients.

Under the Veterans Health Care Act (“VHCA”), manufacturers are required to offer certain drug and biologics at a discount to a number of federal agencies including the Veterans’ Administration (“VA”), the Department of Defense, and the Public Health Service in order to participate in other federal funding programs including Medicare and Medicaid. Through contractual agreements with the VA implementing the requirements of the VHCA, we must offer certain products on the VA Federal Supply Schedule and through other contract vehicles at prices that are equal to or lower than the Federal Ceiling Price, which is a price determined through the use of a statutory formula that provides for a discount off the average price to wholesalers. In addition, recent legislative changes purport to require that similarly discounted prices be offered for certain Department of Defense purchases for its TRICARE program via a rebate system.

Rebate and pricing calculations vary among products and programs. The calculations are complex and, in certain respects, subject to interpretation by us, governmental or regulatory agencies and the courts. For example, the Medicaid rebate amount is computed each quarter based on our submission to the Centers for Medicare and Medicaid Services at the U.S. Department of Health and Human Services of our current AMP and best price for each of our products, while the Federal Ceiling Price is calculated annually by the VA based on quarterly and annual sales submissions. The terms of our participation in the Medicaid program impose an obligation to correct the prices reported in previous quarters, as may be necessary. Any such corrections could result in an overage or underage in our rebate liability for past quarters, depending on the direction of the correction. In addition to retroactive rebates (and interest, if any), if we are found to have knowingly submitted false information to the government, the statute provides for civil monetary penalties in the amount of ten thousand dollars per item of false information. Similar risks and obligations apply to the VHCA program. Finally, governmental agencies

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may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid.

Adverse outcomes in our outstanding litigation matters, or in new litigation matters that arise in the future, could negatively affect our business, results of operations, financial condition and cash flows.

Our financial condition could be negatively affected by unfavorable results in our outstanding litigation matters, including those described in “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report, or in lawsuits that may be initiated in the future. Our outstanding litigation matters include intellectual property litigation and product liability litigation, any of which, if adversely decided, could negatively affect our business, results of operations, financial condition and cash flows.

Risks Related to the PGP Acquisition

We may not realize the anticipated opportunities from the PGP Acquisition.

The success of the PGP Acquisition will depend, in part, on our ability to realize the anticipated growth opportunities from integrating the business of PGP with our business, including utilization of its sales force to expand our reach outside the United States. Our success depends on the successful integration of our and PGP’s businesses and operations including information systems, manufacturing and R&D operations, and financial systems. We cannot assure you that we will be able to realize such opportunities or that our management will not be distracted.

The PGP business faces business, regulatory and other risks, some of which may be different from the risks we currently face.

We entered into the PGP Acquisition based on a number of assumptions and determinations regarding future revenues and cash flow from PGP’s products and risks relating to the PGP business that may prove to be incorrect. Although we believe the PGP business is complementary to our current business and is consistent with our strategy, operating our combined company will require managing operations and risks that are different, in some respects, from those we currently face, including the following:

• PGP’s business is more geographically dispersed than our business. While prior to the PGP Acquisition we sold our products primarily in North America, 31% of PGP’s revenues for its year ended June 30, 2009, were outside North America, primarily in Western Europe.

• Both ASACOL and ACTONEL, PGP’s principal products, are expected to contribute significantly more to our future revenue than any of our products prior to the PGP Acquisition, and our business could be significantly affected by any decrease in net sales from those products that is more than we have estimated or any liability relating to them.

• We expect net sales of PGP’s products in the aggregate to decline over the next several years for a variety of reasons. Although we have strategies in place to mitigate this decline and in certain instances, increase revenues, those strategies may prove unsuccessful:

• Net sales of ACTONEL declined 11% in PGP’s year ended June 30, 2009 compared to its prior year period, mainly due to decreased demand in the United States driven by aggressive managed care initiatives implemented to favor generic versions of once-a-week FOSAMAX and market share gains by once-a-month BONIVA. Our efforts to address market share pressures through, among other things, the marketing of our once-a-month ACTONEL 150 mg product and the development of a next generation once-a-week ACTONEL product, may not succeed in limiting the loss of market share in non-injectable osteoporosis treatment products.

• ACTONEL will lose exclusivity in Canada in early 2010 and in many Western European markets beginning in late 2010.

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• PGP began to experience some erosion of its market share for ASACOL in the United States in 2007 due to the introduction of competition, and the increase in net sales of ASACOL in PGP’s fiscal year ended June 30, 2009 compared to its prior year period was primarily due to higher net selling prices in the United States, which more than offset decreased demand in the United States. Our ability to increase selling prices to offset decreases in demand will be limited by the effect of higher selling prices on our market share. Our efforts to address market share pressures through, among other things, the marketing of our ASACOL 800 mg product may prove ineffective.

• If Roxane’s ANDA is approved by the FDA and Roxane decided to launch its generic version of our ASACOL 400 mg product, we could lose exclusivity in the United States as early as November 2010. See “Risks Related to Our Business—If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products will be adversely affected” and “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

These and other operational factors and risks could prove more difficult to manage than we have estimated, which could cause the benefits of the PGP Acquisition to be less than we had anticipated and could materially adversely affect our revenues and results of operations.

We have a substantial amount of indebtedness following the PGP Acquisition, which may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants and make payments on our indebtedness.

We have a significant amount of indebtedness. As of December 31, 2009, we had total indebtedness of $3,039.5 million.

Our substantial level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respect of our indebtedness. Our substantial indebtedness, combined with our leases and other financial obligations and contractual commitments, could have other important consequences. For example, it could:

• make it more difficult for us and certain of our direct and indirect subsidiaries to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictive covenants, could result in an event of default under the agreements governing our indebtedness;

• make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

• require us or our subsidiaries to dedicate a substantial portion of our or their cash flow from operations to payments on our indebtedness, thereby reducing the availability of cash flows to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• place us at a competitive disadvantage compared to our competitors that have less debt; and

• limit our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other purposes.

Any of the above listed factors could materially adversely affect our business, financial condition and results of operations. Furthermore, our interest expense could increase if interest rates increase because debt under our New Senior Secured Credit Facilities bear interest at our option at adjusted LIBOR (subject to a floor rate) plus an applicable margin or ABR plus an applicable margin. If we do not have sufficient earnings to service our debt, we may be required to refinance all or part of our existing debt, sell assets, borrow more money or sell securities, none of which we can guarantee we will be able to do.

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In addition, the agreements governing our indebtedness contain financial and other restrictive covenants that limit our subsidiaries’ ability to engage in activities that may be in our long-term best interests and require us to maintain specified financial ratios. A failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt.

Risks Relating to Our Ordinary Shares

Future sales of our shares could depress the market price of our ordinary shares.

Sales of a substantial number of our ordinary shares, in the public market or otherwise, or the perception that such sales could occur, could adversely affect the market price of our ordinary shares. We currently have a total of approximately 252.0 million of our ordinary shares outstanding.

In November 2009, certain of our shareholders sold 23.0 million ordinary shares in the Secondary Offering. The selling shareholders included the Sponsors, certain other institutional shareholders and members of the Company’s senior management. Upon completion of the Secondary Offering, approximately 40% of our outstanding ordinary shares were freely tradable, without restriction, in the public market. All of our remaining outstanding ordinary shares were issued and sold by us in private transactions and are eligible for public sale if registered under the Securities Act or sold in accordance with Rule 144 thereunder, subject to volume and manner of sale limits in certain cases and contractual restrictions in some cases. The Sponsors have the right, subject to certain conditions, to cause us to register the ordinary shares which they currently own, and substantially all of the remaining outstanding ordinary shares that are not freely tradable were issued in prior transactions and have “piggyback” registration rights in respect of any such Sponsor-requested registration. In addition, approximately 50.5 million shares in aggregate held by one of our Sponsors and certain of our institutional shareholders may be sold under Rule 144 without compliance with any volume or manner of sale limitations. In addition, our articles of association permit the issuance of up to approximately 248.0 million additional ordinary shares. Thus, we have the ability to issue substantial amounts of ordinary shares in the future, which would dilute the percentage ownership held by current shareholders.

In connection with the redomestication, in August 2009 we adopted the Warner Chilcott Equity Incentive Plan (the “Plan”), assumed Warner Chilcott Limited’s existing obligations in connection with awards granted under the Plan and amended the Plan and awards as necessary to provide for the issuance of our ordinary shares, rather than the Class A common shares of Warner Chilcott Limited, upon the exercise of awards consisting of options under the Plan. We also filed a registration statement on Form S-8 under the Securities Act to register up to approximately 17.3 million shares of our ordinary shares under the Plan. As awards under the Plan are granted, vest and are exercised, subject to certain limitations under the management shareholders agreement, the shares issued on exercise generally will be available for sale in the open market by holders who are not our affiliates and, subject to the volume and other applicable limitations of Rule 144, by holders who are our affiliates. As of December 31, 2009, options to purchase approximately 6.3 million of our ordinary shares were outstanding (of which options to acquire approximately 2.6 million ordinary shares were vested). In addition, as of December 31, 2009, approximately 6.9 million restricted shares were granted under the Equity Incentive Plan (of which approximately 6.1 million restricted shares were vested).

The market price of our ordinary shares may be volatile, which could cause the value of your investment to decline significantly.

Securities markets worldwide experience significant price and volume fluctuations in response to general economic and market conditions and their effect on various industries. This market volatility could cause the price of our ordinary shares to decline significantly and without regard to our operating performance. In addition, the market price of our ordinary shares could decline significantly if our future operating results fail to meet or exceed the expectations of public market analysts and investors.

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Some specific factors that may have a significant effect on our ordinary shares’ market price include:

• actual or expected fluctuations in our operating results;

• actual or expected changes in our growth rates or our competitors’ growth rates;

• conditions in our industry generally;

• conditions in the financial markets in general or changes in general economic conditions;

• our inability to raise additional capital;

• changes in market prices for our products; and

• changes in stock market analyst recommendations regarding our ordinary shares, other comparable companies or our industry generally.

Provisions of our articles of association could delay or prevent a takeover of us by a third party.

Our articles of association could delay, defer or prevent a third party from acquiring us, despite the possible benefit to our shareholders, or otherwise adversely affect the price of our ordinary shares. For example, our articles of association:

• permit our board of directors to issue one or more series of preferred shares with rights and preferences designated by our board;

• impose advance notice requirements for shareholder proposals and nominations of directors to be considered at shareholder meetings;

• stagger the terms of our board of directors into three classes; and

• require the approval of a supermajority of the voting power of the shares of our share capital entitled to vote generally in the election of directors for shareholders to amend or repeal our articles of association.

These provisions may discourage potential takeover attempts, discourage bids for our ordinary shares at a premium over the market price or adversely affect the market price of, and the voting and other rights of the holders of, our ordinary shares. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors other than the candidates nominated by our board.

Because our Sponsors own a substantial portion of our outstanding ordinary shares, if they act collectively, the influence of our public shareholders over significant corporate actions may be limited, and conflicts of interest between our Sponsors and us or you could arise in the future.

Our Sponsors collectively beneficially own approximately half of our outstanding ordinary shares. As a result, if our Sponsors act collectively, they could exercise control over the composition of our board of directors and could control the vote of our ordinary shares. If this were to occur, our Sponsors could have effective control over our decisions to enter into any corporate transaction and could have the ability to prevent any transaction that requires the approval of our stockholders regardless of whether or not other equity holders believe that any such transactions are in their own best interests. For example, if our Sponsors act collectively, they effectively could cause us to make acquisitions that increase our indebtedness or sell revenue-generating assets. Additionally, our Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. Our Sponsors may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as our Sponsors continue to own a significant amount of our equity, if they exercise their shareholder rights collectively, they would be able to significantly influence or effectively control our decisions.

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We are incorporated in Ireland, and Irish law differs from the laws in effect in the United States and may afford less protection to shareholders.

Our shareholders may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction of the United States. As an Irish company, we are governed by the Irish Companies Acts (the “Companies Act”). The Companies Act differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including the provisions relating to interested directors, mergers, amalgamations and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.

We are an Irish company and it may be difficult for you to enforce judgments against us.

We are incorporated in Ireland and a substantial portion of our assets are located in jurisdictions outside the United States. It may therefore be difficult for investors to effect service of process against us or to enforce against us judgments of U.S. courts predicated upon civil liability provisions of the U.S. federal securities laws.

There is no treaty between Ireland and the United States providing for the reciprocal enforcement of foreign judgments. The following requirements must be met before the foreign judgment will be deemed to be enforceable in Ireland:

• The judgment must be for a definite sum;

• The judgment must be final and conclusive; and

• The judgment must be provided by a court of competent jurisdiction.

An Irish court will also exercise its right to refuse judgment if the foreign judgment was obtained by fraud, if the judgment violated Irish public policy, if the judgment is in breach of natural justice or if it is irreconcilable with an earlier judgment.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our pharmaceutical manufacturing facility in Fajardo, Puerto Rico houses approximately 194,000 sq. ft. of manufacturing space. Adjacent to the facility is an approximately 24,000 sq. ft. warehouse that we lease from a third party. The Fajardo facility currently manufactures many of our women’s healthcare products, including our LOESTRIN 24 FE and FEMCON FE, and packages delayed-release DORYX tablets and FEMHRT.

In the PGP Acquisition, we acquired manufacturing facilities in Weiterstadt, Germany and in Manati, Puerto Rico. The facility in Weiterstadt, Germany houses approximately 50,000 sq. ft. of manufacturing space and 54,000 sq. ft. of warehouse space. The Weiterstadt facility currently manufactures ASACOL tablets and packages ACTONEL. The manufacturing facility in Manati, Puerto Rico houses approximately 85,000 sq. ft. of manufacturing space and 27,000 sq. ft. of warehouse space. The Manati facility currently manufactures ACTONEL tablets.

We also own a 154,000 sq. ft. facility in Larne, Northern Ireland, 54,000 sq. ft. of which is leased to a third party. The remainder is dedicated to the manufacture of our vaginal rings, research and product development as well as development of analytical methods.

As of December 31, 2009, we leased approximately 74,000 sq. ft. of office space in Rockaway, New Jersey, where our U.S. operations are headquartered.

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Item 3. Legal Proceedings.

See “Note 19” to the Notes to the Consolidated Financial Statements for the year ended December 31, 2009 included elsewhere in this Annual Report.

Item 4. Submission of Matters to a Vote of Security Holders.

No matter was submitted to a vote of security holders of the Company during the fourth quarter of 2009.

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Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Warner Chilcott plc’s ordinary shares began trading on The NASDAQ Global Market under the symbol “WCRX” on August 21, 2009. From September 21, 2006 until the effective time of the Redomestication following the close of business on August 20, 2009, the Class A common stock of Warner Chilcott Limited was listed on The NASDAQ Global Market under the symbol “WCRX”. In connection with the Redomestication, Warner Chilcott Limited became a wholly owned subsidiary of Warner Chilcott plc.

The following table presents the high and low prices for our ordinary shares (and for periods prior to August 21, 2009, Warner Chilcott Limited’s Class A common stock) on The NASDAQ Global Market during the periods indicated:

	High		Low
2009:
First Quarter (ended March 31, 2009)	$	14.85	$	9.24
Second Quarter (ended June 30, 2009)	$	13.64	$	9.64
Third Quarter (ended September 30, 2009)	$	22.94	$	12.60
Fourth Quarter (ended December 31, 2009)	$	28.56	$	20.66
2008:
First Quarter (ended March 31, 2008)	$	18.07	$	15.30
Second Quarter (ended June 30, 2008)	$	18.46	$	16.26
Third Quarter (ended September 30, 2008)	$	18.37	$	14.45
Fourth Quarter (ended December 31, 2008)	$	15.72	$	10.81

As of February 12, 2010, there were 4 registered holders of record for our ordinary shares and 252,030,578 shares outstanding. Because many of our ordinary shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. The closing price of our ordinary shares on The NASDAQ Global Market on February 12, 2010, was $25.89.

During the years ended December 31, 2009 and 2008, respectively, we did not pay any cash dividends to our stockholders. We currently intend to retain future earnings to fund the development and growth of our business and, therefore, do not anticipate paying cash dividends within the foreseeable future. Any future payment of dividends will be determined by our Board and will depend on our consolidated financial position and results of operations and other factors deemed relevant by our Board.

In September 2006, Warner Chilcott Limited sold 70,600,000 of its Class A common shares in connection with the IPO.

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Performance Graph

The following graph shows the value as of December 31, 2009 of a $100 investment in our ordinary shares as if made on September 21, 2006, as compared with similar investments based on the value of (i) the NASDAQ Composite Index and (ii) the NASDAQ Pharmaceuticals Index in each case on a “total return” basis assuming reinvestment of dividends. The index values were calculated assuming an initial investment of $100 in such indexes on September 21, 2006. The stock performance shown below is not necessarily indicative of future performance.

Comparative values:

	Warner Chilcott Stock		NASDAQ Composite Index		NASDAQ Pharmaceuticals Index
On September 21, 2006	$	100.00	$	100.00	$	100.00
On September 30, 2006	$	88.96	$	103.52	$	102.57
On December 31, 2006	$	92.44	$	111.71	$	106.09
On March 31, 2007	$	99.06	$	112.09	$	100.47
On June 30, 2007	$	121.00	$	120.88	$	102.76
On September 30, 2007	$	118.86	$	123.55	$	108.80
On December 31, 2007	$	118.60	$	121.40	$	100.43
On March 31, 2008	$	120.40	$	103.84	$	96.74
On June 30, 2008	$	113.38	$	104.88	$	99.87
On September 30, 2008	$	101.14	$	93.77	$	102.54
On December 31, 2008	$	96.99	$	71.92	$	92.80
On March 31, 2009	$	70.37	$	69.63	$	85.43
On June 30, 2009	$	87.96	$	83.58	$	92.20
On September 30, 2009	$	144.62	$	96.80	$	100.70
On December 31, 2009	$	190.43	$	103.72	$	99.08

Unregistered Sales of Securities

None.

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Repurchases of Equity Securities During the Quarter Ended December 31, 2009

None.

Item 6. Selected Financial Data.

The following table sets forth our selected historical consolidated financial data. The financial statements relating to the year ended December 31, 2005 reflect the leveraged buyout as if the closing took place on January 1, 2005 and the operating results for the period January 1 through January 4, 2005 were ours. The four day period included only two business days and the impact on the results of operations for the year ended December 31, 2005 was not material.

The selected consolidated financial data as of December 31, 2009 and 2008 and for the years ended December 31, 2009, 2008, and 2007 presented in this table have been derived from our audited consolidated financial statements and related notes included elsewhere in this Annual Report. The selected consolidated financial data as of December 31, 2007, 2006 and 2005, and for the years ended December 31, 2006 and 2005 presented in this table are derived from our audited consolidated financial statements and related notes which are not included in this Annual Report.

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The selected consolidated financial data set forth below should be read in conjunction with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

	Year Ended December 31,
(dollars and share amounts in thousands, except per share amounts)	2005			2006			2007		2008			2009(1)
Statement of Operations Data:
Total revenue(2)	$	515,253		$	754,457		$	899,561	$	938,125		$	1,435,816
Costs and expenses:
Cost of sales (excluding amortization and impairments)(3)		95,224			151,750			185,990		198,785			320,278
Selling, general and administrative (including transaction related costs)(3)(4)		198,645			253,937			265,822		192,650			436,384
Research and development		58,636			26,818			54,510		49,956			76,737
Amortization of intangible assets(3)		233,473			253,425			228,330		223,913			312,172
Impairment of intangible assets(5)		38,876			—			—		163,316			—
(Gain) on sale of assets(6)		—			—			—		—			(393,095	)
Acquired in-process research and development(3)		280,700			—			—		—			—
Net interest expense(3)(4)		147,934			206,994			117,618		93,116			124,617
Accretion on preferred stock of subsidiary(4)(7)		31,533			26,190			—		—			—
(Loss) / income before taxes		(569,768	)		(164,657	)		47,291		16,389			558,723
(Benefit) / provision for income taxes		(13,122	)		(11,147	)		18,416		24,746			44,605
Net (loss) / income	$	(556,646	)	$	(153,510	)	$	28,875	$	(8,357	)	$	514,118
Per Share Data(8)(9):
Earnings (loss) per share—basic
Ordinary shares	$	(7.19	)	$	(1.63	)	$	0.12	$	(0.03	)	$	2.05
Class L	$	7.35		$	6.33			—		—			—
Earnings (loss) per share—diluted
Ordinary shares	$	(7.19	)	$	(1.63	)	$	0.12	$	(0.03	)	$	2.05
Class L	$	7.34		$	6.33			—		—			—
Weighted average shares outstanding—basic
Ordinary shares		88,311			133,897			248,916		249,807			250,565
Class L		10,642			10,280			—		—			—
Weighted average shares outstanding—diluted
Ordinary shares		88,311			133,897			250,454		249,807			251,219
Class L		10,668			10,282			—		—			—
Balance Sheet Data (at period end):
Cash and cash equivalents	$	11,502		$	84,464		$	30,776	$	35,906		$	539,006
Total assets(3)(5)(6)(10)		3,041,877			3,162,545			2,884,974		2,582,891			6,031,241
Total debt(3)(4)(6)(10)		1,989,500			1,550,750			1,200,239		962,557			3,039,460
Preferred stock in subsidiary(4)(7)		435,925			—			—		—			—
Shareholders’ equity(4)(7)		332,510			1,328,232			1,354,420		1,349,920			1,889,093

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(1) On October 30, 2009, pursuant to the purchase agreement dated August 24, 2009 (as amended, the “Purchase Agreement”), between us and P&G, we acquired PGP from P&G for $2,919.3 million in cash and the assumption of certain liabilities in the PGP Acquisition. The purchase price remains subject to certain post-closing adjustments. Under the terms of the Purchase Agreement, we acquired P&G’s portfolio of branded pharmaceutical products, prescription drug pipeline, manufacturing facilities in Puerto Rico and Germany and a net receivable owed from P&G of approximately $60.0 million. We recorded adjustments to the fair value of our assets and liabilities as of the date of the PGP Acquisition including a significant increase to intangible assets, including in-process research & development (“IPR&D”). During 2009, the following items were included in our operating results:

• total revenues and the related cost of sales for PGP products beginning October 30, 2009;

• a charge of $73.5 million in cost of sales attributable to a purchase accounting adjustment increasing the opening value of the inventories acquired in the PGP Acquisition that was recorded as that inventory was sold during the year ended December 31, 2009;

• SG&A and R&D expenses from the PGP business, including transaction costs and transition services expenses paid to P&G;

• amortization expense for intangible assets acquired; and

• increased interest expense from the $2,600.0 million in aggregate term loan indebtedness we incurred under our New Senior Secured Credit Facilities to complete the PGP Acquisition.

(2) The increase in product revenues is, in part, attributable to product acquisitions and internally developed products.

(3) The closing of the leveraged buyout in 2005 affected our financial condition, results of operations and cash flows. During the year ended December 31, 2005, we completed the leveraged buyout for total consideration of $3,152.1 million, which was funded by approximately $1,282.8 million of equity contributions, $1,420.0 million of senior secured debt under our Prior Senior Secured Credit Facilities (including $20.0 million under our revolving credit facility at the time of the leveraged buyout), $600.0 million aggregate principal amount of the Notes and cash on hand. We recorded adjustments to the fair value of our assets and liabilities as of the date of the leveraged buyout including a significant increase to intangible assets and goodwill. During 2005, the following items were included in our operating results:

• a charge of $22.4 million in cost of sales representing the write-off of the purchase price allocated to the fair value of our opening inventory;

• $7.8 million of incremental SG&A expenses directly related to the closing of the leveraged buyout;

• $4.9 million in SG&A expenses for the management fee to our Sponsors;

• a $280.7 million write-off of acquired IPR&D;

• $36.0 million of transaction costs; and

• increased interest expense from the indebtedness we incurred to complete the leveraged buyout.

(4) Our initial public offering in September 2006 (“IPO”) affected our results of operations, financial condition and cash flows as follows:

• for the year ended December 31, 2006, SG&A expenses included $42.1 million of costs directly related to the IPO;

• interest expense decreased due to the reduction of our outstanding debt using a portion of the proceeds from the IPO;

• all of the Preferred Shares (as defined below) were either converted to Class A common shares of Warner Chilcott Limited or redeemed for cash at the time of the IPO;

• all Class L common shares (as defined below) were converted into Class A common shares of Warner Chilcott Limited at the time of the IPO; and

• shareholders’ equity increased $1,070.0 million.

(5) During the year ended December 31, 2008 we recorded a noncash impairment charge related to the OVCON/FEMCON product family intangible asset as our forecast of future cash flows declined compared to prior forecasts.

(6) On September 23, 2009, we agreed to terminate our exclusive product licensing rights from LEO in the United States to TACLONEX, TACLONEX SCALP, DOVONEX and all other dermatology products in LEO’s development pipeline, and sold the related assets to LEO, for $1,000.0 million in cash. The LEO Transaction resulted in a gain of $380.1 million, net of tax. The impact of this transaction on our financial position included the following:

• Goodwill was reduced by $251.6 million;

• Intangible assets were reduced by $220.1 million.

A portion of the cash proceeds were used to terminate our Prior Senior Secured Credit Facilities. As a result of the LEO Transaction, we entered into a distribution agreement with LEO pursuant to which the Company agreed to, among other things, continue to distribute DOVONEX and TACLONEX for LEO, for a distribution fee, through September 23, 2010.

(7) Our indirect wholly-owned subsidiary, Warner Chilcott Holdings Company II, Limited, issued 404,439 Preferred Shares in connection with the leveraged buyout. The Preferred Shares were entitled to cumulative preferential dividends at an accretion rate of 8% per annum, compounded quarterly.

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(8) As part of the redomestication on August 20, 2009, each holder of Warner Chilcott Limited’s outstanding Class A common shares, par value $0.01 per share, received ordinary shares, par value $0.01 per share, of Warner Chilcott plc on a one-for-one basis. References throughout to “ordinary shares” refer to Warner Chilcott Limited’s Class A common shares, par value $0.01 per share, prior to the effective time of the scheme of arrangement and to Warner Chilcott plc’s ordinary shares, par value $0.01 per share, since the effective time of the scheme of arrangement.

(9) We were in a net loss position for the years ended December 31, 2008, 2006 and 2005. The effect from the exercise of outstanding stock options and the vesting of restricted shares during the periods would have been anti-dilutive. Accordingly, the effect of the shares issuable upon exercise of such stock options and the restricted shares have not been included in the calculation of diluted earnings per share for the years ended December 31, 2008, 2006 and 2005. The December 31, 2006 earnings per share of the Class L common shares is calculated through September 30, 2006, as there were no Class L common shares outstanding during the fourth quarter of 2006. There were no outstanding Class L common shares outstanding during the years ended December 31, 2009, 2008 and 2007.

(10) During the year ended December 31, 2006 we completed the acquisition of the U.S. sales and marketing rights to DOVONEX for $205.2 million and paid the final milestone payment for TACLONEX ointment of $40.0 million. We borrowed $240.0 million in connection with these transactions and recorded $238.5 million in intangible assets.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion together with Part II, Item 6. “Selected Financial Data” and our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ materially from those we currently anticipate as a result of many factors, including the factors we describe under Item 1A. “Risk Factors” and elsewhere in this Annual Report.

Unless otherwise noted or the context otherwise requires, references in this Form 10-K to “Warner Chilcott,” “the Company,” “our company,” “we,” “us” or “our” refer to Warner Chilcott plc and its direct and indirect subsidiaries.

Overview

We are a leading global specialty pharmaceutical company currently focused on the gastroenterology, women’s healthcare, dermatology and urology segments of the North American and Western European pharmaceuticals markets. We are a fully integrated company with internal resources dedicated to the development, manufacture and promotion of our products. Our franchises are comprised of complementary portfolios of established branded and development-stage products that we actively manage throughout their life cycle. Our success is not tied to any single product, as multiple products make up our existing sales base and several of these provide opportunities for future growth.

The PGP Acquisition and Related Financing

2009 was a transformative year for our Company. On October 30, 2009, we acquired the global branded pharmaceuticals business (“PGP”) of The Procter & Gamble Company (“P&G”) for $2,919.3 million in cash and the assumption of certain liabilities (the “PGP Acquisition”). The purchase price remains subject to certain post-closing purchase price adjustments. Under the terms of the purchase agreement, we acquired PGP’s portfolio of branded pharmaceutical products (including its two primary products ASACOL and ACTONEL), prescription drug pipeline, manufacturing facilities in Puerto Rico and Germany and a net receivable owed from P&G of approximately $60.0 million. ASACOL is the leading treatment for ulcerative colitis in the U.S. market for orally administered 5-aminosalicylic acid (“5-ASA”) products, with approximately 41% of the market share based on filled prescriptions and approximately 47% of the market share based on revenues, each according to IMS. ACTONEL is the leading branded product in the U.S. non-injectable osteoporosis market for the prevention and treatment of osteoporosis in women, according to IMS. ACTONEL is marketed under our global collaboration agreement (the “Collaboration Agreement”) with Sanofi-Aventis US LLC (“Sanofi”).

The PGP Acquisition has transformed us into a global pharmaceuticals company with significant scale and geographic reach. Prior to the PGP Acquisition, our women’s healthcare franchise was anchored by our strong presence in the U.S. oral contraceptive market (where we market LOESTRIN 24 FE and FEMCOM FE), U.S. hormone therapy (“HT”) market (where our commercialized products include ESTRACE Cream, FEMHRT and other products) and the U.S. dermatology market (where we promote and sell DORYX, an oral anti-infective for acne). The PGP Acquisition added a highly attractive specialty segment in gastroenterology (ASACOL), expanded our presence in women’s healthcare (ACTONEL) and established us in the urology market (ENABLEX) as our development work continues on two new erectile dysfunction (“ED”) products. The combined company has an expanded sales force and infrastructure to better promote products in North America, most of the major Western European markets and Australia, increased diversity of revenue sources, enhanced product development capabilities and a deeper pipeline. Moreover, the PGP Acquisition provides an opportunity for us to apply our demonstrated expertise in the management of pharmaceutical product life cycles to PGP’s market-leading products.

In order to finance the majority of the consideration for the PGP Acquisition, certain of our subsidiaries entered into new senior secured credit facilities (the “New Senior Secured Credit Facilities”), comprised of $2,950.0 million in aggregate term loan facilities and a $250.0 million revolving credit facility. The term loan facilities are comprised of a term A facility in the amount of $1,000.0 million, a term B facility in the amount of

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$1,600.0 million and a $350.0 million tranche of additional term loans, the proceeds of which were used, together with cash on hand, to repurchase and redeem our previously outstanding 8.75% senior subordinated notes due 2015 (the “Notes”). On the closing date, our subsidiaries borrowed a total of $2,600.0 million under the term loan facilities and made no borrowings under delayed-draw term loan facility or the revolving credit facility. We refer to the PGP Acquisition and the entry into the New Senior Secured Credit Facilities as the “Transactions”.

LEO Transaction

On September 23, 2009, we agreed to terminate our exclusive product licensing rights from LEO Pharma A/S (“LEO”) in the United States to TACLONEX, TACLONEX SCALP, DOVONEX and all other dermatology products in LEO’s development pipeline, and sold the related assets to LEO, for $1,000.0 million in cash (the “LEO Transaction”). We used approximately $481.8 million of the proceeds from the LEO Transaction to repay the entire remaining principal balance of the loans outstanding under our prior senior secured credit facilities (the “Prior Senior Secured Credit Facilities”), as well as accrued and unpaid interest and fees. In connection with the LEO Transaction, we entered into a distribution agreement with LEO under which we agreed to continue to distribute DOVONEX and TACLONEX for LEO, in exchange for a distribution fee, through September 23, 2010. The LEO Transaction resulted in a gain in the quarter ended September 30, 2009 of $393.1 million (or $380.1 million, net of tax). In addition, we recorded a deferred gain relating to the sale of certain inventories in connection with the LEO Transaction. In the fourth quarter of 2009, we recognized $34.2 million of the deferred gain as a reduction of cost of sales ($33.5 million net of tax). However, the remaining $34.7 million of the deferred gain is expected to be recognized as part of pre-tax income during the distribution agreement period in 2010. The aggregate gain from the LEO Transaction is expected to be $462.0 million (or $447.6 million, net of tax).

Redomestication

On August 20, 2009, we completed the redomestication of our principal holding company from Bermuda to Ireland, following the approval of a scheme of arrangement by our shareholders and the Supreme Court of Bermuda. As a result of the transaction, Warner Chilcott plc, a public limited company organized in, and a tax resident of, Ireland, became the principal holding company of the Warner Chilcott group and each holder of Warner Chilcott Limited’s outstanding Class A common shares, par value $0.01 per share, received ordinary shares of Warner Chilcott plc, par value $0.01 per share, on a one-for-one basis. The redomestication did not have an impact on our financial position, results of operations or cash flows in any periods presented.

Factors Affecting Our Results of Operations

Revenue

We generate two types of revenue: revenue from product sales (including contract manufacturing) and other revenue which currently includes royalty revenue and revenue earned under co-promotion and distribution agreements. As a result of the PGP Acquisition, we generated additional revenues in 2009 mainly from the sale of ACTONEL and ASACOL during the period from October 30, 2009 through December 31, 2009.

Net Sales

We promote a portfolio of branded prescription pharmaceutical products currently focused on the gastroenterology, women’s healthcare, dermatology and urology segments of the North American and Western European pharmaceuticals markets. To generate demand for our products, our sales representatives make face-to-face promotional and educational presentations to physicians who are potential prescribers of our products. By informing these physicians of the attributes of our products, we generate demand for our products with physicians, who then write prescriptions for their patients, who in turn go to the pharmacy where the prescription is filled. Pharmacies buy our products either through wholesale pharmaceutical distributors or directly from us (for example, retail drug store chains). We recognize revenue when title and risk of loss pass to our customers, net of sales-related deductions.

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When our unit sales to customers in any period exceeds consumer demand (as measured by filled prescriptions or its equivalent in units), our sales in excess of demand must be absorbed before our customers begin to order again. We refer to the estimated amount of inventory held by our customers and pharmacies that purchase our product from our direct customers, generally measured in the number of days of demand on hand, as “pipeline inventory”. Pipeline inventories expand and contract in the normal course of business. When comparing reported product sales between periods, it is important to consider whether estimated pipeline inventories increased or decreased during each period.

Historically, we generated our revenue primarily from the sale of branded pharmaceutical products in the United States, including our oral contraceptives (LOESTRIN 24 FE, FEMCON FE, and others), our HT products (ESTRACE Cream, FEMHRT, and others), our oral antibiotic for the adjunctive treatment of severe acne (DORYX), our treatment (SARAFEM) for pre-menstrual dysphoric disorder (“PMDD”) and, prior to the LEO Transaction, our psoriasis products (TACLONEX and DOVONEX). Our revenue from sales of these products consists primarily of sales invoiced less returns and other sales-related deductions. In addition to the products listed above, we earn a small portion of revenues from the sale of generic products, including TILIA™ FE (a generic version of ESTROSTEP FE) and ZENCHENT (a generic version of OVCON 35) under profit-sharing supply and distribution agreements with Watson. Prior to the LEO Transaction, we also recognized revenue on a generic version of DOVONEX Solution under a profit-sharing supply and distribution agreement with Hi-Tech. The revenue we earn under these agreements is included with our related branded product revenue for financial reporting purposes.

Included in net sales are amounts earned under contract manufacturing agreements. These activities are generally by-products of our May 2004 acquisition of the Fajardo, Puerto Rico manufacturing facility from a subsidiary of Pfizer Inc. (“Pfizer”) and the March 2004 sale of rights to two LOESTRIN products to a unit of Teva Pharmaceutical Industries Ltd. (“Teva”) (then Barr Pharmaceuticals, Inc. (“Barr”)). In connection with these transactions, we agreed to manufacture certain products for Pfizer and Teva for specified periods. Contract manufacturing is not an area of strategic focus for us as these contracts produce profit margins significantly below the margins realized on sales of our branded products. We have phased out the manufacturing of all but one of the Pfizer products.

Changes in revenue from sales of our products from period to period are affected by factors that include the following:

• changes in the level of competition faced by our products, including the launch of new products by competitors and the introduction of generic equivalent products;

• changes in the level of promotional or marketing support for our products and the size of our sales force;

• expansion or contraction of the levels of pipeline inventories of our products held by our customers;

• changes in the regulatory environment;

• our ability to successfully develop or acquire and launch new proprietary products;

• changes in the level of demand for our products, including changes based on general economic conditions in the U.S. and other major Western European economies;

• long-term growth of our core therapeutic markets, currently gastroenterology, women’s healthcare, dermatology and urology;

• price changes, which are common in the branded pharmaceutical industry and for the purposes of our period-over-period comparisons, reflect the average gross selling price billed to our customers before any sales-related deductions; and

• changes in the levels of sales related deductions.

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Following the PGP Acquisition, changes in our revenue will also be affected by these factors as they relate to PGP, its principal products and its additional therapeutic markets of gastroenterology and urology. Changes in revenues may differ between PGP’s North American and Western European markets, including as a result of the following factors:

• the loss of exclusivity for ACTONEL in Canada in early 2010 and in many Western European markets beginning in late 2010;

• market share pressures on ACTONEL in the United States, mainly due to aggressive managed care initiatives implemented to favor generic versions of once-a-week FOSAMAX and market share gains by once-a-month Boniva, and our success in mitigating the loss of market share through the promotion of once-a-month ACTONEL 150 mg and the development of next generation ACTONEL products;

• the lack of patent protection for ASACOL in the United Kingdom and the effect of market share pressures from generic competitors in the Western European market; and

• the erosion of market share for ASACOL in the United States since 2007 due to competition, and our success in mitigating market share pressures through, among other things, the promotion of ASACOL HD (800 mg).

We and Sanofi are parties to the Collaboration Agreement pursuant to which we co-develop and co-market ACTONEL on a global basis, excluding Japan. Pursuant to the agreement, a joint oversight committee comprised of equal representation from us and Sanofi is responsible for overseeing the development and promotion of ACTONEL. Our rights and obligations are specified by geographic market. In certain geographic markets, we share selling and A&P costs as well as product profits based on contractual percentages. In geographic markets where we are deemed to be the principal in transactions with customers, revenues and related product costs are recognized on a gross basis. Our share of selling, A&P and contractual profit sharing expenses are recognized in SG&A expenses. For a discussion of the Collaboration Agreement, see “Part I., Item 1. Business-PGP Alliance with Sanofi.” In addition, we and Novartis Pharmaceuticals Corporation (“Novartis”) are parties to an agreement to co-promote ENABLEX, developed by Novartis, in the U.S. We share expenses with Novartis pursuant to the agreement which expires in August 2016, and these costs are included within SG&A.

Other Revenue

We recognize revenue as a result of our licensing of our patents and intellectual property rights, based on third-party sales, as earned in accordance with contract terms when the third-party sales can be reasonably estimated and collection is reasonably assured. These amounts are included as a component of “other revenue”. In addition, following the PGP Acquisition, we recognize revenue earned based on a percentage of our co-promotion partners’ net sales on a net basis in “other revenue” when the co-promotion partners ship the products and title passes to their customers.

Cost of Sales (excluding amortization and impairment of intangible assets)

We currently manufacture products in our facilities in Fajardo, Puerto Rico, Manati, Puerto Rico, Weiterstadt, Germany and Larne, Northern Ireland. We also have supply contracts with our third-party development partners, such as Contract Pharmaceuticals Limited Niagara (“CPL”) (ESTRACE Cream), Mayne Pharma International Pty. Ltd. (“Mayne”) (DORYX) and Norwich Pharmaceuticals Inc. (“NPI”) (ACTONEL). Our supply agreements with these third-party manufacturers and development partners may include minimum purchase requirements and may provide that the price we pay for the products we sell can be increased based on factors outside of our control such as inflation, increases in costs or other factors.

For products that we manufacture and package in our Fajardo, Puerto Rico and Larne, Northern Ireland facilities, (as of December 31, 2009, LOESTRIN 24 FE, FEMCON FE, ESTROSTEP FE, OVCON 50 and FEMRING), our direct material costs include the costs of purchasing raw materials and packaging materials. For products that we only package (as of December 31, 2009, DORYX, FEMHRT, OVCON 35), our direct material

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costs include the costs of purchasing packaging materials. Direct labor costs for these products consist of payroll costs (including benefits) of employees engaged in production, packaging and quality control in our manufacturing plants in Fajardo, Puerto Rico and Larne, Northern Ireland. The largely fixed indirect costs of our manufacturing plants consist of production, overhead and certain laboratory costs. We do not include amortization or impairments of intangible assets as components of cost of sales.

A significant factor that influences the cost of sales, as a percentage of product net sales, is the terms of our supply agreements with our third-party manufacturers. On September 2005 and January 2006, we became the exclusive licensee of the U.S. sales and marketing rights to TACLONEX and DOVONEX, respectively, under agreements with LEO. We were obligated to pay LEO specified supply fees and royalties based on a percentage of our net sales. We terminated these arrangements with LEO as part of the LEO Transaction in September 2009. In addition, with respect to DOVONEX, we were obligated to pay Bristol-Myers Squibb Company (“Bristol-Myers”) a royalty of 5% of net sales through December 31, 2007.

As part of the PGP Acquisition, we acquired pharmaceutical manufacturing facilities in Manati, Puerto Rico and Weiterstadt, Germany. As a result of the PGP Acquisition, we acquired two primary products: ACTONEL and ASACOL. The Manati facility currently manufactures the majority of our ACTONEL products. The Weiterstadt facility manufactures ASACOL products for sale in the United States and Canada and packages ACTONEL products for sale in markets outside the United States. We pay a royalty fee based on our net sales of ASACOL in the U.S. and Canada which is included as a component of our cost of sales. The application of purchase accounting increased the opening value of the inventories acquired in the PGP Acquisition resulting in a non-recurring charge which will be recorded in our cost of sales as that inventory is sold to our customers. The write-up of the opening value of the PGP inventory reduces our gross margin on product sales. This expense was reflected in our income statement during the year ended December 31, 2009, and a further expense is expected to be incurred in the first quarter of 2010. Once the inventory write-up is expensed through cost of sales, we expect that our gross margin on total revenue will be positively affected by the PGP Acquisition.

SG&A Expenses

SG&A expenses are comprised of selling and distribution expenses, advertising and promotion expenses (“A&P”) and general and administrative expenses (“G&A”). Selling and distribution and A&P expenses consist of all expenditures incurred in connection with the sales and marketing of our products, including warehousing costs. The major items included in selling and distribution and A&P expenses are:

• costs associated with employees in the field sales forces, sales force management and marketing departments, including salaries, benefits and incentive bonuses;

• promotional and advertising costs, including samples, medical education programs and direct-to-consumer campaigns; and

• distribution and warehousing costs reflecting the transportation and storage associated with transferring products from our manufacturing facilities to our distribution contractors and on to our customers.

Changes in selling and distribution and A&P expenses, as a percentage of our revenue, may be affected by a number of factors, including:

• changes in sales volumes, as higher sales volumes enable us to spread the fixed portions of our selling and A&P expenses over higher sales;

• changes in the mix of products we promote, as some products (such as those in launch phase, for example) may require more intensive promotion than others; and

• changes in the size and configuration of our sales forces, such as when we establish a sales force to market a new product or expand or reduce our sales forces.

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Following the PGP Acquisition, our share of selling, A&P, and contractual expenses related to our co-promotion partnerships are also recognized in SG&A expenses.

G&A expenses consist of management salaries, benefits, incentive compensation, rent, legal and professional fees and miscellaneous administration and overhead costs (including transaction-related expenses and transition service fees paid to P&G).

R&D

Our R&D expenses are comprised mainly of development costs. These development costs are typically associated with:

• developing improvements to our existing products, including new dosage forms;

• developing new products, often based on compounds which have been previously shown to be safe and effective; and

• supporting and conducting clinical trials and subsequent registration of products we develop internally or license from third parties.

In addition, as our product development strategy has continued to expand we have added a few projects that focus on earlier stage exploratory research. R&D costs also include payments to third-party licensors when products that we have licensed reach contractually-defined milestones. Milestone payments are recognized as expenses, unless they meet the criteria of an intangible asset, in which case they are capitalized and amortized over their useful lives.

The aggregate level of our R&D expense in any period is related to the number of products in development and the stage of their development process. Development costs for any particular product may increase progressively during the development process, with Phase III clinical trials generally accounting for a significant portion of the total development costs of a product.

Depreciation and Amortization

Depreciation costs relate to the depreciation of property, plant and equipment and are included in our statement of operations, primarily in cost of sales and G&A expenses. Depreciation is calculated on a straight-line basis over the expected useful life of each class of asset. No depreciation is charged on land.

Amortization costs relate to the amortization of identified definite-lived intangible assets, which for us consists primarily of intellectual property rights. Amortization is calculated on either an accelerated or a straight-line basis over the expected useful life of the asset, with identifiable assets assessed individually or by product family. Patents and other intellectual property rights are amortized over periods not exceeding 15 years. We periodically review the amortization schedules for intangible assets to ensure that the methods employed and the amortization rates being used are consistent with our then current forecasts of future product cash flows. Where appropriate, we make adjustments to the remaining amortization to better match the expected benefit of the asset.

Interest Income and Interest Expense (“Net interest expense”)

Interest income consists primarily of interest income earned on our cash balances. Interest (expense) consists primarily of interest on outstanding indebtedness, amortization of deferred financing costs and the write-off of deferred financing costs associated with the early prepayment of debt. Upon the closing of the PGP Acquisition, we incurred substantial incremental indebtedness under our New Senior Secured Credit Facilities. As a result, our interest expense, including interest on outstanding indebtedness and the amortization of deferred financing costs increased. In addition, as a result of cash flow generated from operations and cash proceeds from the LEO Transaction, our interest expense in 2009 includes significant write-offs of deferred financing costs related to the early prepayment of certain indebtedness.

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Provision / (Benefit) for Income Taxes

Provision / (benefit) for income taxes consist of a current corporate tax expense, deferred tax expense and any other accrued tax expense. In addition, interest and penalties accrued on our reserves recorded under ASC Topic 740, “Income Taxes,” (“ASC 740”), are included as a component of our provision / (benefit) for income taxes. We are an Irish holding company with operating subsidiaries in the Republic of Ireland, United States, United Kingdom, Puerto Rico, Germany, Switzerland, Canada and other Western European countries. We have a tax agreement with the Puerto Rican tax authorities whereby our earnings in Puerto Rico, which are a large component of our overall earnings, are subject to a 2% income tax for a period of 15 years expiring in 2024 pursuant to a grant from the Puerto Rico tax authorities.

Following the PGP Acquisition, we operate in a number of tax jurisdictions including the Republic of Ireland, the United States, the United Kingdom, Puerto Rico, Germany, Switzerland, Canada and other Western European countries. The PGP Acquisition resulted in one of our Puerto Rican subsidiaries acquiring most of the PGP intangible assets. As a result, a substantial portion of the pre-tax income associated with the acquisition of PGP is expected to be earned in Puerto Rico where our earnings are taxed at a 2% tax rate (pursuant to a ruling received in 2009 from the Puerto Rican tax authorities). See “Note 16” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further discussion of Income Taxes.

2009 Significant Events

The following are certain significant events that occurred during the year ended December 31, 2009:

• In January 2009, we entered into settlement and license agreements with Watson Pharmaceuticals, Inc. to resolve certain pending patent litigation relating to FEMCON FE and LOESTRIN 24 FE;

• In February 2009, we acquired the U.S. rights to NexMed, Inc.’s (“NexMed”) topically applied alprostadil cream for the treatment of erectile dysfunction (“ED”) and the previous license agreement between the Company and NexMed relating to the product was terminated. We paid an upfront fee of $2.5 million (which was included in R&D expense) and agreed to make an additional payment of $2.5 million upon the U.S. Food and Drug Administration’s (“FDA”) approval, if any, of the New Drug Application (“NDA”);

• In March 2009, we paid $9.0 million to Dong-A PharmTech Co. Ltd. (“Dong-A”), which was included in R&D, upon the achievement of a developmental milestone under our existing agreement for the development of an orally-administered udenafil product for the treatment of ED;

• In March 2009, we submitted an NDA for a low-dose oral contraceptive to the FDA;

• In March 2009, we made optional repayments aggregating $100.0 million of our term loan indebtedness under our Prior Senior Secured Credit Facilities;

• In May 2009, the Board of Directors of Warner Chilcott Limited announced that it had unanimously approved the redomestication of the company from Bermuda to Ireland, subject to the approval of a scheme of arrangement by the company’s stockholders and the approval of the Supreme Court of Bermuda. On August 5, 2009 and August 14, 2009, respectively, the scheme of arrangement was approved by the shareholders of Warner Chilcott Limited and the Supreme Court of Bermuda. At 7:30 pm on August 20, 2009, the effective time of the scheme of arrangement, each holder of Warner Chilcott Limited’s outstanding Class A common shares, par value $0.01 per share, received ordinary shares, par value $0.01 per share, of Warner Chilcott plc on a one-for-one basis. As a result of the transaction, Warner Chilcott plc, a public limited company organized in, and a tax resident of, Ireland, became the ultimate public holding company of the Warner Chilcott group;

• On September 23, 2009, we entered into a definitive asset purchase agreement with LEO pursuant to which LEO paid us $1,000.0 million in cash in order to terminate our exclusive product licensing rights

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in the United States to distribute LEO’s TACLONEX and DOVONEX products (including rights to all dermatology products in LEO’s development pipeline), and acquire certain assets related to our distribution of DOVONEX and TACLONEX in the United States. This transaction resulted in an after-tax gain of $380.1 million in the quarter ended September 30, 2009. We used approximately $481.8 million of the proceeds from the transaction to repay the entire remaining principal balance of the loans outstanding under the Prior Senior Secured Credit Facilities of $479.8 million, as well as $2.0 million to pay accrued and unpaid interest and fees. The repayment resulted in the termination of our Prior Senior Secured Credit Facilities;

• On October 30, 2009, we acquired PGP for approximately $2,919.3 million in cash and the assumption of certain liabilities. In the PGP Acquisition, we acquired P&G’s portfolio of branded pharmaceutical products, prescription drug pipeline and manufacturing facilities in Puerto Rico and Germany. To finance the PGP Acquisition, we used a combination of cash on hand and borrowings under our New Senior Secured Credit Facilities;

• On December 15, 2009, our subsidiary, Warner Chilcott Corporation (“WCC”), commenced a cash tender offer, on the terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation Statement dated December 15, 2009, for any and all of its outstanding Notes. On December 30, 2009, WCC received and accepted for purchase approximately $290.5 million aggregate principal amount of the Notes. WCC funded the purchase with proceeds of the $350.0 million tranche of additional term loans under our New Senior Secured Credit Facilities; and

• Our revenue for the year ended December 31, 2009 was $1,435.8 million and our net income was $514.1 million.

Strategic Transactions

As discussed briefly above, we completed two strategic transactions during 2009 that will have a significant impact on our future operations.

PGP Acquisition

On October 30, 2009, pursuant to the purchase agreement dated August 24, 2009 (as amended, the “Purchase Agreement”), between the Company and P&G, we acquired PGP for $2,919.3 million in cash and the assumption of certain liabilities. The purchase price is subject to certain post-closing adjustments. Under the terms of the Purchase Agreement, we acquired P&G’s portfolio of branded pharmaceutical products, prescription drug pipeline, manufacturing facilities in Puerto Rico and Germany and a net receivable owed from P&G of approximately $60.0 million. The total purchase price of $2,919.3 million was allocated to the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date. In order to fund the consideration for the PGP Acquisition, certain of our subsidiaries entered into the New Senior Secured Credit Facilities, comprised of $2,950.0 million in aggregate term loan facilities and a $250.0 million revolving credit facility. On October 30, 2009, the Company borrowed $2,600.0 million of the aggregate $2,950.0 million of term loan facilities to finance the PGP Acquisition.

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The PGP Acquisition was accounted for as a business combination using the acquisition method of accounting. The results of operations of PGP since October 30, 2009 are included in our consolidated statement of operations. The purchase price allocation presented below is considered preliminary pending completion of the final valuation. Final determination of the fair values may result in further adjustments to the values presented below.

Purchase Price:
Total cash consideration	$	2,919.3
Identifiable net assets:
Trade accounts receivable (approximates contractual value)	$	298.2
Inventories		256.2
Other current and long term assets		79.2
Property, plant and equipment		85.1
Intangible Assets—Intellectual property		2,587.2
In-process research and development		247.6
Other current and long term liabilities		(645.4	)
Deferred income taxes, net		(50.7	)
Total identifiable net assets		2,857.4
Goodwill		61.9
Total	$	2,919.3

In connection with the closing of the PGP Acquisition and in order to facilitate the transition of the PGP business, we and P&G entered into a Transition Services Agreement, effective as of October 30, 2009 (the “Transition Services Agreement”). Pursuant to the terms of the Transition Services Agreement, P&G will provide us with specified services for a limited time following the closing of the PGP Acquisition, including with respect to the following: order acquisition and management, distribution, customer service, purchasing and procurement systems, integrated supply network systems, manufacturing execution systems, IT support, sales and marketing, research and development and regulatory and certain accounting and finance related services. We will pay P&G a fee for these services.

LEO Transaction

On September 23, 2009, we entered into a definitive asset purchase agreement (the “LEO Transaction Agreement”) with LEO pursuant to which LEO paid us $1,000.0 million in cash in order to terminate our exclusive license to distribute its DOVONEX, TACLONEX and TACLONEX SCALP products (and all other dermatology products in LEO’s development pipeline) in the United States and to acquire certain assets related to the distribution of such products in the United States. The LEO Transaction closed simultaneously with the execution of the LEO Transaction Agreement. In connection with the LEO Transaction, we entered into a distribution agreement with LEO pursuant to which we agreed to, among other things, (1) continue to distribute DOVONEX and TACLONEX for LEO, for a distribution fee, through September 23, 2010 and (2) purchase inventories of DOVONEX and TACLONEX from LEO. As a result of the distribution agreement with LEO, our gross margin percentage was negatively impacted during the fourth quarter of 2009. The impact of the distribution agreement is expected to negatively impact gross margin percentage in 2010 as we continue to record net sales and costs of sales at nominal distributor margins. In addition, we agreed to provide certain transition services for LEO for a period of up to one year after the closing.

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The LEO Transaction resulted in a gain of $380.1 million, net of tax, which was calculated as follows:

(dollars in millions)
Cash purchase price	$	1,000.0
Write-off of goodwill associated with the group of assets sold		(251.6	)
Write-off of DOVONEX/TACLONEX product family intangible assets		(220.1	)
Product supply advance		(104.1	)
Closing costs and other		(31.1	)
Pre-tax gain on the LEO Transaction		393.1
Provision for income taxes		(13.0	)
After-tax gain on the LEO Transaction	$	380.1

In addition, during the quarter ended September 30, 2009, we recorded a deferred gain of $68.9 million relating to the sale of certain inventories to LEO in connection with the LEO Transaction. In the fourth quarter of 2009, we recognized $34.2 million of the deferred gain as a reduction to cost of sales ($33.5 million net of tax). However, the remaining $34.7 million of the deferred gain is expected to be recognized during 2010 as we continue to distribute products for LEO under the distribution agreement. The aggregate gain from the LEO Transaction is expected to be $462.0 million (or $447.6 million, net of tax).

We used approximately $481.8 million of the proceeds from the LEO Transaction to repay the entire remaining principal balance of the loans outstanding under the Prior Senior Secured Credit Facilities of $479.8 million, as well as accrued and unpaid interest and fees of $2.0 million. This repayment resulted in the termination of the Prior Senior Secured Credit Facilities.

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Operating Results for the years ended December 31, 2009 and 2008

Revenue

The following table sets forth our revenue for the years ended December 31, 2009 and 2008, with the corresponding dollar and percentage change:

	Year Ended December 31,				Increase (decrease)
(dollars in millions)	2009		2008		Dollars			Percent
Women’s Healthcare:
Oral Contraceptives
LOESTRIN 24 FE	$	247.6	$	197.2	$	50.4		25.6	%
FEMCON FE		49.5		45.8		3.7		8.1	%
Other Oral Contraceptives(1)		23.6		33.7		(10.1	)	(29.9	)%
Total oral contraceptives	$	320.7	$	276.7	$	44.0		15.9	%
Hormone Therapy
ESTRACE Cream	$	115.9	$	83.8	$	32.1		38.3	%
FEMHRT		60.3		61.5		(1.2	)	(2.0	)%
Other Hormone Therapy		26.9		25.9		1.0		4.0	%
Total hormone therapy	$	203.1	$	171.2	$	31.9		18.7	%
ACTONEL(2)	$	222.0	$	—	$	222.0		100.0	%
Other women’s healthcare products		20.7		16.9		3.8		22.1	%
Total Women’s Healthcare	$	766.5	$	464.8	$	301.7		64.9	%
Dermatology:
DORYX	$	210.0	$	158.9	$	51.1		32.1	%
TACLONEX(3)		137.3		153.3		(16.0	)	(10.4	)%
DOVONEX(3)		132.6		123.3		9.3		7.5	%
Total Dermatology	$	479.9	$	435.5	$	44.4		10.2	%
Gastroenterology:
ASACOL	$	114.9	$	—	$	114.9		100.0	%
Urology:
ENABLEX(2)	$	14.9	$	—	$	14.9		100.0	%
Other:
Other products net sales	$	18.7	$	—	$	18.7		100.0	%
Contract manufacturing product sales		12.9		18.7		(5.8	)	(30.7	)%
Other revenue		28.0		19.1		8.9		46.0	%
Total Revenues	$	1,435.8	$	938.1	$	497.7		53.1	%

(1) Includes revenue from related authorized generic product sales from the date of their respective launch.

(2) Includes “other revenue” as classified in our consolidated statement of operations.

(3) Includes sales for LEO following the closing of the LEO Transaction through December 31, 2009.

Revenue in the year ended December 31, 2009 totaled $1,435.8 million, an increase of $497.7 million, or 53.1%, over the year ended December 31, 2008. The primary drivers of the increase in revenue were the acquired products from the PGP Acquisition, primarily ACTONEL, ASACOL and ENABLEX, which together contributed $351.8 million of revenue growth. Total revenue for the year ended December 31, 2009 from all PGP products was $374.0 million, which represented revenue after the closing of the PGP Acquisition on October 30, 2009. Also contributing to the increase were growth in the net sales of our promoted products DORYX, LOESTRIN 24 FE, and ESTRACE CREAM, which together contributed $133.6 million of revenue growth for the year ended December 31, 2009 compared to the prior year. The growth delivered by these products was offset, in part, by net sales declines in

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other products, primarily TACLONEX. Changes in the net sales of our products are a function of a number of factors including changes in: market demand, gross selling prices, sales-related deductions from gross sales to arrive at net sales and the levels of pipeline inventories of our products. We use IMS estimates of filled prescriptions for our products as a proxy for market demand in the U.S.

Net sales of our oral contraceptive products increased $44.0 million, or 15.9%, in the year ended December 31, 2009, compared with the prior year. LOESTRIN 24 FE generated revenues of $247.6 million in the year ended December 31, 2009, an increase of 25.6%, compared with $197.2 million in the prior year. The increase in LOESTRIN 24 FE net sales was primarily due to an increase in filled prescriptions of 24.3% in the year ended December 31, 2009, and to a lesser extent, higher average selling prices compared to the prior year, offset in part by an increase in sales related deductions primarily due to increased utilization of the customer loyalty cards. FEMCON FE generated revenues of $49.5 million in the year ended December 31, 2009, compared to $45.8 million in the prior year. The increase in FEMCON FE net sales in the year ended December 31, 2009 versus the prior year was primarily due to higher average selling prices, offset partially by a contraction of pipeline inventory levels relative to the prior year period, the impact of higher sales-related deductions and a decrease in filled prescriptions of 1.0%.

Net sales of our hormone therapy products increased $31.9 million, or 18.7%, in the year ended December 31, 2009 as compared to the prior year. Net sales of ESTRACE Cream increased $32.1 million, or 38.3%, in the year ended December 31, 2009, compared to the prior year, primarily due to an increase in filled prescriptions of 20.4% and higher average selling prices, offset in part by a contraction of pipeline inventories relative to the prior year. Net sales of FEMHRT decreased $1.2 million, or 2.0%, in the year ended December 31, 2009, compared to the prior year. The decline in FEMHRT net sales was due primarily to a decrease in filled prescriptions of 15.7%, which was partially offset by higher average selling prices and the expansion of pipeline inventories compared with the prior year. Generic competition may negatively impact net sales of FEMHRT in 2010.

Revenues of ACTONEL were $222.0 million in the year ended December 31, 2009 and reflect only two months of results following the closing of the PGP Acquisition on October 30, 2009. Revenues of ACTONEL in North America were $138.3 million, including $116.0 million in the U.S. We expect generic competition to negatively impact our net sales of ACTONEL beginning in early 2010 in Canada and in late 2010 for many countries in Western Europe. In addition, in the United States, ACTONEL continues to face market share declines due to the impact of managed care initiatives encouraging the use of generic versions of other products.

Net sales of our dermatology products increased $44.4 million, or 10.2%, in the year ended December 31, 2009, as compared to the prior year. Net sales of DORYX increased $51.1 million, or 32.1%, in the year ended December 31, 2009, compared to the prior year, primarily due to a 38.0% increase in filled prescriptions and higher average selling prices, which were offset in part by higher sales-related deductions and a contraction of pipeline inventories relative to the prior year period. The increase in filled prescriptions primarily relates to DORYX 150 mg, which we launched in the third quarter of 2008 and to which we have dedicated significant promotional efforts, including our customer loyalty card program. Increased utilization of the customer loyalty card for DORYX 150 mg drove an increase in sales-related deductions in 2009. Net sales of TACLONEX decreased $16.0 million, or 10.4%, to $137.3 million in the year ended December 31, 2009, compared to $153.3 million in the prior year. The decrease in net sales in the year ended December 31, 2009 is primarily due to higher sales-related deductions as well as a decline in filled prescriptions of 10.0%, offset in part by the impact of higher average selling prices. Net sales of DOVONEX increased $9.3 million, or 7.5%, in the year ended December 31, 2009 as compared to the prior year period. The increase in DOVONEX net sales in the year ended December 31, 2009 was due primarily to a decrease in sales related deductions, an expansion of pipeline inventory levels relative to the prior year period and higher average selling prices, which were partially offset by decreases in filled prescriptions of 22.0%. The decline in filled prescriptions was due primarily to customers switching to other therapies, as well as the introduction of generic versions of DOVONEX Solution into the market in the second quarter of 2008, including our authorized generic product. As a result of the LEO Transaction and related distribution agreement with LEO, we recorded revenue and cost of sales at distributor margins for all TACLONEX and DOVONEX products subsequent to the close of the LEO Transaction on September 23, 2009. Total product net sales recorded during the period September 23, 2009 through

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December 31, 2009 were approximately $82.1 million. We will continue to record revenue and cost of sales from the distribution of the products for LEO during 2010 until the termination of the distribution agreement. This will continue to negatively impact our gross margin percentage during the distribution period.

Net sales of ASACOL in the year ended December 31, 2009 were $114.9 million and reflect only two months of results following the closing of the PGP Acquisition on October 30, 2009. Net sales of ASACOL in North America were $105.9 million, including $102.1 million in the U.S. In October 2007, PGP and Medeva Pharma Suisse AG (“Medeva”), the owner of the formulation and method patent for PGP’s ASACOL 400 mg product, filed a patent infringement suit against Roxane Laboratories, Inc. (“Roxane”), a subsidiary of Boehringher Ingelheim Corporation, which triggered a 30-month stay of FDA approval with respect to Roxane’s ANDA for a generic version of the ASACOL 400 mg product. See “Note 19” to the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report. Our ASACOL 800 mg product (known as ASACOL HD in the U.S.) was launched in the United States in June 2009 and has protection under a separate formulation patent until 2021, which is not currently subject to litigation. This patent does not protect the ASACOL 400 mg product. In 2009, the ASACOL 400 mg product accounted for the substantial majority of our total ASACOL net sales.

In the year ended December 31, 2009, we generated $28.0 million of revenue which consisted primarily of royalties earned on the net sales of an oral contraceptive product sold by a third party under a license relating to one of our patents as well as income received from LEO for the transition services provided, as compared to $19.1 million of royalty revenues in the prior year.

Cost of Sales (excluding Amortization and Impairment of Intangible Assets)

The table below shows the calculation of cost of sales and cost of sales percentage for the years ended December 31, 2009 and 2008:

(dollars in millions)	Year Ended December 31, 2009			Year Ended December 31, 2008			$ Change		Percent Change
Product net sales	$	1,384.6		$	919.0		$	465.6	50.7	%
Cost of sales (excluding amortization)		320.3			198.8			121.5	61.1	%
Cost of sales percentage		23.1	%		21.6	%

Cost of sales increased $121.5 million in the year ended December 31, 2009 compared with the prior year, due primarily to the 50.7% increase in product net sales, the impact of the purchase accounting inventory step-up that was recognized of $73.5 million as a result of the PGP Acquisition, as well as the nominal distributor margins recognized under the LEO distribution agreement in the fourth quarter of 2009. The increase was offset in part by a $34.2 million gain relating to the sale of certain inventories resulting from the LEO Transaction and the change in product mix as a result of the PGP Acquisition. Our cost of sales, as a percentage of product net sales, increased from 21.6% in the year ended December 31, 2008 to 23.1% in the year ended December 31, 2009. During the first quarter of 2010, we expect to record an expense of approximately $105.5 million in respect of the purchase accounting inventory step-up resulting from the PGP Acquisition as the remainder of the effected inventory is sold. Excluding the purchase accounting inventory step-up described above, the PGP Acquisition is expected to have a positive impact on our cost of sales percentage.

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SG&A Expenses

The Company’s SG&A expenses were comprised of the following for the years ended December 31, 2009 and 2008:

(dollars in millions)	Year Ended December 31, 2009		Year Ended December 31, 2008		$ Change		Percent Change
A&P	$	61.1	$	47.3	$	13.8	29.3	%
Selling and Distribution		188.6		90.0		98.6	109.6	%
G&A		186.7		55.4		131.3	236.8	%
Total	$	436.4	$	192.7	$	243.7	126.5	%

SG&A expenses for the year ended December 31, 2009 were $436.4 million, an increase of $243.7 million, or 126.5%, compared to the prior year. A&P expenses for the year ended December 31, 2009 increased $13.8 million, or 29.3%, versus the prior year, primarily due to advertising and other promotional spending attributable to the PGP products. Selling and distribution expenses for the year ended December 31, 2009 increased $98.6 million, or 109.6%, over the prior year. The increase is primarily due to the Sanofi co-promotion expense of $98.9 million under the Collaboration Agreement, increased headcount resulting from the acquisition of the PGP sales force as well as new expenses related to the acquired PGP products, offset in part by a reduction of the size of our legacy field sales forces. G&A expenses in the year ended December 31, 2009 increased $131.3 million, or 236.8%, as compared to the prior year. The increase is due in large part to increases in infrastructure costs, compensation expenses and professional and legal fees primarily relating to the PGP Acquisition. Included in G&A expenses were $60.5 million of legal, consulting and other professional fees relating to the PGP Acquisition, expenses payable to P&G under the Transition Services Agreement of $17.2 million and severance costs of $33.1 million.

R&D

Our investment in R&D for the year ended December 31, 2009 was $76.7 million, an increase of $26.7 million, or 53.6%, compared with the prior year. Included in the year ended December 31, 2009 was a $9.0 million payment to Dong-A upon the achievement of a developmental milestone under our existing agreement for an orally-administered udenafil product for the treatment of ED. Also included in the year ended December 31, 2009, was a $2.5 million payment to NexMed in connection with our acquisition of the rights to its topically applied alprostadil cream for the treatment of ED. R&D expense for the year ended December 31, 2008 included a $2.0 million upfront payment to Dong-A to acquire certain rights to its ED product. Excluding these one time payments in both periods, R&D expense increased $17.2 million, or 36.0%, in the year ended December 31, 2009 compared to the prior year due primarily to costs incurred relating to ongoing legacy clinical studies, PGP R&D studies and PGP overhead costs.

Amortization of Intangible Assets (including Impairment of Intangible Assets)

Amortization of intangible assets in the years ended December 31, 2009 and 2008 was $312.2 million and $387.2 million (including a non-cash impairment of intangible assets of $163.3 million), respectively. Our amortization methodology is calculated on either an accelerated or a straight-line basis to match the expected useful life of the asset, with identifiable assets assessed individually or by product family. We regularly review the remaining useful lives of our identified intangible assets based on each product family’s estimated future cash flows. The year ended December 31, 2009 included amortization expense of $85.0 million relating primarily to intellectual property assets acquired in the PGP Acquisition. We expect amortization expense to significantly increase in 2010 as a result of the PGP Acquisition.

In connection with our annual review of intangible assets, in the fourth quarter of 2008 we recorded a non-cash impairment charge of $163.3 million relating to our OVCON / FEMCON FE product family. Based on

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changes in a number of assumptions, including those relating to the allocation of our expected future promotional emphasis between LOESTRIN 24 FE, FEMCON FE and other oral contraceptives currently in development and our product viability estimates in light of the future expected entrance of generic competition for FEMCON FE, the projected future revenue and related cash flows for the OVCON / FEMCON FE product family declined compared to previous forecasts. The undiscounted cash flows relating to this product family no longer exceeded the book value of the intangible asset. We estimated the fair value of the product family using a discounted cash flow analysis. The fair value was compared to the then current carrying value of the intangible asset for this product family and the difference was recorded as an impairment expense in the quarter ended December 31, 2008.

Net interest expense

Net interest expense for the year ended December 31, 2009 was $124.6 million, an increase of $31.5 million, or 33.8%, from $93.1 million in the prior year. Included in net interest expense in the years ended December 31, 2009 and 2008 were $20.6 million and $3.5 million, respectively, relating to the write-off of deferred loan costs associated with the optional prepayments and repayments of debt in both periods, as well as the write-off of deferred loan costs in connection with the termination of the delayed-draw term loan commitment and subsequent borrowing of $350.0 million in additional term loans under our New Senior Secured Credit Facilities in the year ended December 31, 2009. During 2009, we made optional prepayments totaling $100.0 million before repaying the remaining $479.8 million of outstanding indebtedness and terminating the Prior Senior Secured Credit Facilities with proceeds received in the LEO Transaction. We also purchased and retired $290.5 million aggregate principal amount of our Notes in the year ended December 31, 2009, which resulted in an interest premium of $13.8 million. In the year ended December 31, 2008, we made optional prepayments totaling $220.0 million of outstanding indebtedness under our Prior Senior Secured Credit Facilities and purchased and retired $10.0 million aggregate principal amount of our Notes. Excluding the write-off of deferred loan costs in 2009 and 2008, net interest expense increased by $14.4 million or 16.0%. The increase in net interest expense in the year ended December 31, 2009 was primarily due to increased term debt due to initial borrowings under our New Senior Secured Credit Facilities of $2,600.0 million used to fund the PGP Acquisition.

Provision / (Benefit) for Income Taxes

Our effective tax rates, as a percentage of pre-tax income, for the years ended December 31, 2009 and 2008 were 8.0% and 151.0%, respectively. Our corporate effective tax rate with respect to any period may be volatile based on the mix of income in the tax jurisdictions in which we operate and the amount of our consolidated income / (loss) before taxes. One of our Puerto Rican subsidiaries owns the majority of our intangible assets and records the majority of income and amortization expense related to these intangible assets. As a result, the proportion of our consolidated book income / (loss) before taxes generated in Puerto Rico, where our tax rate is 2.0%, has a significant impact on the effective tax rate. For the year ended December 31, 2009, this Puerto Rican subsidiary generated the substantial majority of our overall profits, in large part due to the gain on the LEO Transaction, which was subject to a 2% tax rate. This was offset, in part, by non-deductible transaction costs related to the PGP Acquisition. As a result, the effective tax rate for the year ended December 31, 2009 was less than the U.S. statutory rate. For the year ended December 31, 2008, our U.S. entities generated income before taxes while our operations in the tax jurisdictions where we are subject to a lower tax rate, mainly Puerto Rico, generated significant losses.

The valuation allowance for deferred tax assets of $22.2 million and $9.9 million as of December 31, 2009 and 2008, respectively, relates principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss carryforwards in various jurisdictions. We expect to generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets on our Consolidated Balance Sheet. The valuation allowance was calculated in accordance with the provisions of ASC 740, “Income Taxes”, which requires a valuation allowance be established or maintained when it is “more likely than not” that all or a portion of deferred tax assets will not be realized.

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Our calculation of tax liabilities involves uncertainties in the application of complex tax regulations in various tax jurisdictions. For example, in 2009 we applied for tax rulings with certain taxing authorities. If certain of our ruling applications are approved, we may record benefits of approximately $42.0 million in our income tax provision to revalue certain deferred tax liabilities. Amounts related to tax contingencies that management has assessed as unrecognized tax benefits have been appropriately recorded under the provisions of ASC 740 “Income Taxes”. For any tax position, a tax benefit may be reflected in the financial statements only if it is “more likely than not” that we will be able to sustain the tax return position, based on its technical merits. Potential liabilities arising from tax positions taken are recorded based on our estimate of the largest amount of benefit that is cumulatively greater than 50 percent. These liabilities may be adjusted to take into consideration changing facts and circumstances. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from the current estimate of the tax liabilities. These potential tax liabilities are recorded in accrued expenses in the Consolidated Balance Sheet. We intend to continue to reinvest accumulated earnings of our subsidiaries for the foreseeable future; as such, no additional provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for differences related to investments in subsidiaries.

On February 25, 2008, our U.S. operating entities entered into an APA with the IRS covering the calendar years 2006 through 2010. The APA is an agreement with the IRS that specifies the agreed upon terms under which our U.S. entities are compensated for distribution and other services provided for our non-U.S. entities. The APA provides us with greater certainty with respect to the mix of our pretax income in the various tax jurisdictions in which we operate. This APA is applicable to our U.S. subsidiaries and operations as they existed prior to the PGP Acquisition.

Net Income

Due to the factors described above, we reported net income / (loss) of $514.1 million and $(8.4) million in the years ended December 31, 2009 and 2008, respectively.

Operating Results by Segment

After the PGP Acquisition, we organized our business into two reportable segments, North America (which includes the U.S., Canada and Puerto Rico) and the Rest of the World (“ROW”) consistent with how we manage our business and view the markets we serve. We manage our business separately in North American and ROW as components of an enterprise for which separate information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assess performance. Prior to the PGP Acquisition on October 30, 2009, all of our revenues were derived domestically through one reportable segment. With the PGP Acquisition, we have now expanded into Western Europe, Canada, the United Kingdom and Australia. In addition to managing our results of operations in the two reportable segments, we manage revenues at a brand level. The discussion set forth above presents revenues discussion at the brand level.

We measure an operating segment’s performance primarily based on segment operating income, which excludes interest, and is used by the chief operating decision maker to evaluate the success of a specific region.

In the year ended December 31, 2009, revenues in North America were $2,075.7 million, compared to $938.1 million in 2008. Revenues in ROW in 2009 were $142.7 million, compared to zero in 2008 prior to the PGP Acquisition. Revenues in North America increased as a result of the PGP Acquisition and growth in net sales of promoted products as described above. Revenues in ROW increased due to the PGP Acquisition, as we did not generate revenues in ROW prior to the PGP Acquisition.

Segment operating profit in North America was $708.1 million in 2009, compared to $109.5 million in 2008. ROW segment operating (losses) in 2009 was $(8.4) million in 2009, compared to zero in 2008. Segment operating profit in North America grew as a result of the factors describe above.

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Operating Results for the years ended December 31, 2008 and 2007

Revenue

The following table sets forth our revenue for the years ended December 31, 2008 and 2007, with the corresponding dollar and percentage change:

	Year Ended December 31,				Increase (decrease)
(dollars in millions)	2008		2007		Dollars			Percent
Oral Contraceptives
LOESTRIN 24 FE	$	197.2	$	148.9	$	48.3		32.4	%
FEMCON FE		45.8		32.4		13.4		41.5	%
ESTROSTEP FE*		20.8		70.2		(49.4	)	(70.3	)%
OVCON 35/50 (“OVCON”)*		12.9		15.5		(2.6	)	(16.7	)%
Total	$	276.7	$	267.0	$	9.7		3.7	%
Hormone Therapy (“HT”)
ESTRACE Cream	$	83.8	$	73.1	$	10.7		14.7	%
FEMHRT		61.5		63.7		(2.2	)	(3.4	)%
FEMRING		14.2		15.5		(1.3	)	(8.2	)%
Other HT products		11.7		13.5		(1.8	)	(13.3	)%
Total	$	171.2	$	165.8	$	5.4		3.3	%
Dermatology
DORYX	$	158.9	$	115.8	$	43.1		37.3	%
TACLONEX		153.3		127.2		26.1		20.6	%
DOVONEX*		123.3		145.3		(22.0	)	(15.1	)%
Total	$	435.5	$	388.3	$	47.2		12.2	%
PMDD
SARAFEM	$	16.9	$	37.7	$	(20.8	)	(55.1	)%
Other Product Net Sales
Other		—		3.7		(3.7	)	(100.0	)%
Contract manufacturing		18.7		25.7		(7.0	)	(27.3	)%
Total Product Net Sales	$	919.0	$	888.2	$	30.8		3.5	%
Other Revenue
Royalty revenue		19.1		11.4		7.7		68.3	%
Total Revenue	$	938.1	$	899.6	$	38.5		4.3	%

* Includes revenue from related authorized generic product sales from the date of their respective launch.

Revenue in the year ended December 31, 2008 totaled $938.1 million, an increase of $38.5 million, or 4.3%, over the year ended December 31, 2007. The primary drivers of the increase in revenue were the net sales of our promoted products LOESTRIN 24 FE, DORYX, TACLONEX and FEMCON FE, which together contributed $130.9 million of revenue growth for the year ended December 31, 2008 compared to the prior year. The growth delivered by these products was offset primarily by significant declines in ESTROSTEP FE and SARAFEM net sales due to generic competition and declines in DOVONEX net sales. Changes in the net sales of our products are a function of a number of factors including changes in: market demand, gross selling prices, sales-related deductions from gross sales to arrive at net sales and the levels of pipeline inventories of our products. We use IMS estimates of filled prescriptions for our products as a proxy for market demand in the U.S.

Net sales of our oral contraceptive products increased $9.7 million, or 3.7%, in the year ended December 31, 2008, compared with the prior year. LOESTRIN 24 FE generated revenues of $197.2 million in the year ended

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December 31, 2008, an increase of 32.4%, compared with $148.9 million in the prior year. The increase in LOESTRIN 24 FE net sales was primarily due to an increase in filled prescriptions of 28.8% in the year ended December 31, 2008, and to a lesser extent, higher average selling prices compared to the prior year. FEMCON FE generated revenues of $45.8 million in the year ended December 31, 2008, compared to $32.4 million in the prior year. The increase in FEMCON FE net sales in the year ended December 31, 2008 was primarily due to an increase in filled prescriptions of 58.2% versus the prior year, offset partially by the impact of higher sales-related deductions in the year ending December 31, 2008. ESTROSTEP FE net sales decreased $49.4 million, or 70.3%, in the year ended December 31, 2008, as compared to the prior year. The decrease in ESTROSTEP FE net sales was primarily due to an 80.2% decline in filled prescriptions in the year ended December 31, 2008, compared to the prior year, as a result of generic versions of ESTROSTEP FE being introduced in the fourth quarter of 2007, including our authorized generic Tilia™ FE. Our revenue from net sales of Tilia™ FE, is reported in our net sales for ESTROSTEP FE.

Net sales of our dermatology products increased $47.2 million, or 12.2%, in the year ended December 31, 2008, as compared to the prior year. Net sales of DORYX increased $43.1 million, or 37.3%, in the year ended December 31, 2008, compared to the prior year, primarily due to the launch of DORYX 150 mg in the third quarter of 2008, as well as higher average selling prices and a 10.7% increase in total DORYX filled prescriptions. In addition, we believe the average economic value of a DORYX 150 mg prescription is roughly one-third higher than that of a DORYX 100 mg prescription. Net sales of TACLONEX increased $26.1 million, or 20.6%, to $153.3 million in the year ended December 31, 2008, compared to $127.2 million in the prior year. The increase in net sales was primarily due to increases in filled prescriptions, measured on a per-gram basis, and higher average selling prices in the year ended December 31, 2008, compared to the prior year. The introduction of our TACLONEX scalp product in June 2008 also contributed to the increase compared to the prior year. We believe the increases in filled prescriptions for TACLONEX are not fully reflective of the increases in demand for the product during these periods. In August 2007, we began offering TACLONEX in 100 gram tubes, in addition to our original 60 gram tubes, resulting in an increase in the average grams per filled TACLONEX prescription during the year ended December 31, 2008 compared with the prior year. Net sales of DOVONEX decreased $22.0 million, or 15.1%, in the year ended December 31, 2008 as compared to the prior year. The decline in DOVONEX net sales in the year ended December 31, 2008 was due primarily to a decrease in filled prescriptions of 23.3%, and, to a lesser extent, increases in sales-related deductions during the 2008 period, which were partially offset by higher average selling prices. The decline in filled prescriptions was due primarily to the introduction of generic versions of DOVONEX Solution into the market in the second quarter of 2008, including our authorized generic product, and also due to customers switching to other therapies.

Net sales of our hormone therapy products increased $5.4 million, or 3.3%, in the year ended December 31, 2008 as compared to the prior year. Net sales of ESTRACE Cream increased $10.7 million, or 14.7%, in the year ended December 31, 2008, compared to the prior year, primarily due to higher average selling prices, and an increase in filled prescriptions of 2.0%, offset in part by a contraction of pipeline inventories relative to the prior year. Net sales of FEMHRT decreased $2.2 million, or 3.4%, in the year ended December 31, 2008, compared to the prior year. The decline in FEMHRT net sales was due primarily to a decrease in filled prescriptions of 14.1% as well as higher sales-related deductions for the year ended December 31, 2008, offset partially by higher average selling prices as compared with the prior year.

Net sales of SARAFEM, our product used to treat symptoms of pre-menstrual dysphoric disorder (“PMDD”), decreased $20.8 million, or 55.1%, in the year ended December 31, 2008, compared with the prior year. The decrease in net sales was due primarily to a decline in filled prescriptions of 51.7% in the year ended December 31, 2008 compared to the prior year. During the first half of 2008 we discontinued sales of SARAFEM Capsules and commenced sales of SARAFEM Tablets. Generic versions of SARAFEM Capsules were introduced in May 2008 and negatively impacted our SARAFEM net sales. We expect generic competition to continue to have an adverse impact on our SARAFEM net sales in the future.

Our other product net sales declined in the year ended December 31, 2008 due to a recall of certain non-core products manufactured by a third party. As a result of the recall, our other product net sales during the year ended

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December 31, 2008 were negatively impacted due to contra-sales related accruals for the product recalls. We do not expect this product recall to materially affect our operating results in future periods. Our contract manufacturing revenues relate to certain products which we manufacture for third parties. Additionally, in the year ended December 31, 2008, we generated $19.1 million of revenue which consisted of royalties earned on the net sales of an oral contraceptive product sold by a third party under a license relating to one of our patents, as compared to $11.4 million in the prior year.

Cost of Sales (excluding Amortization and Impairment of Intangible Assets)

The table below shows the calculation of cost of sales and cost of sales percentage for the years ended December 31, 2008 and 2007:

(dollars in millions)	Year Ended December 31, 2008			Year Ended December 31, 2007			$ Change		Percent Change
Product net sales	$	919.0		$	888.2		$	30.8	3.5	%
Cost of sales (excluding amortization)		198.8			186.0			12.8	6.9	%
Cost of sales percentage		21.6	%		20.9	%

Cost of sales increased $12.8 million in the year ended December 31, 2008 compared with the prior year, due in part to the 3.5% increase in product net sales. Our cost of sales, as a percentage of product net sales, increased from 20.9% in the year ended December 31, 2007 to 21.6% in the year ended December 31, 2008. Our cost of sales increased due to higher expenses relating to inventory reserves totaling $14.7 million in the year ended December 31, 2008 as compared to $10.9 million in the year ended December 31, 2007. Also contributing to the increase in the current year were higher costs relative to the prior year, partially offset by the absence of a 5% royalty on our net sales of DOVONEX which we were required to pay in the prior year under a contract with Bristol-Myers that terminated on December 31, 2007.

SG&A Expenses

The Company’s SG&A expenses were comprised of the following for the years ended December 31, 2008 and 2007:

(dollars in millions)	Year Ended December 31, 2008		Year Ended December 31, 2007		$ Change			Percent Change
A&P	$	47.3	$	81.0	$	(33.7	)	(41.7	)%
Selling and Distribution		90.0		89.5		0.5		0.5	%
G&A		55.4		95.3		(39.9	)	(41.8	)%
Total	$	192.7	$	265.8	$	(73.1	)	(27.5	)%

SG&A expenses for the year ended December 31, 2008 were $192.7 million, a decrease of $73.1 million, or 27.5%, compared to the prior year. A&P expenses for the year ended December 31, 2008 decreased $33.7 million, or 41.7%, versus the prior year, primarily due to a $25.4 million decrease in direct-to-consumer advertising in the year ended December 31, 2008, as well as a decrease in other promotional spending. Selling and distribution expenses for the year ended December 31, 2008 increased $0.5 million, or 0.5%, over the prior year. The increase in selling and distribution expenses was primarily due to normal inflationary increases in compensation costs offset by the impact of a lower average headcount within our sales forces during the year ended December 31, 2008 as compared to the prior year. G&A expenses in the year ended December 31, 2008 decreased $39.9 million, or 41.8%, as compared to the prior year. The year ended December 31, 2007 included a $26.5 million expense, related to the settlement of a class action lawsuit in connection with the Company’s OVCON 35 litigation. Outside legal fees (excluding litigation settlements) in the year ended December 31, 2008 decreased by $11.8 million compared with the prior year, primarily as a result of the timing of our litigation settlements.

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R&D

Our investment in R&D for the year ended December 31, 2008 was $50.0 million, a decrease of $4.5 million, or 8.4%, compared with the prior year. Included in the year ended December 31, 2008 was a $2.0 million upfront payment to Dong-A to acquire certain rights to its orally-administered udenafil product, a PDE5 inhibitor for the treatment of ED. R&D expense for the year ended December 31, 2007 included a $4.0 million upfront payment to Paratek to acquire certain rights to novel tetracyclines for the treatment of acne and rosacea. Also included in the year ended December 31, 2007 was a $10.0 million milestone payment to LEO, which was triggered by the FDA’s acceptance of LEO’s NDA submission for a TACLONEX scalp product. Excluding these one time payments in both periods, R&D expense increased $7.5 million, or 18.4%, in the year ended December 31, 2008 compared to the prior year due to costs incurred for clinical studies relating to two oral contraceptives, as well as new projects which were initiated towards the end of 2007 and early 2008. We completed the treatment phase of the Phase III clinical study for a new low-dose oral contraceptive in the third quarter of 2008.

Amortization of Intangible Assets (including Impairment of Intangible Assets)

Amortization of intangible assets in the years ended December 31, 2008 and 2007 was $387.2 million (including a non-cash impairment of intangible assets of $163.3 million) and $228.3 million, respectively. Our amortization methodology is calculated on either an accelerated or a straight-line basis to match the expected useful life of the asset, with identifiable assets assessed individually or by product family. We regularly review the remaining useful lives of our identified intangible assets based on each product family’s estimated future cash flows. During the third quarter of 2008, we accelerated the amortization on certain unimpaired non-core products based on our review. As a result, the year ended December 31, 2008 included additional amortization expense of $16.0 million.

In connection with our annual review of intangible assets, in the fourth quarter of 2008 we recorded a non-cash impairment charge of $163.3 million relating to our OVCON / FEMCON FE product family. Based on changes in a number of assumptions, including those relating to the allocation of our expected future promotional emphasis between LOESTRIN 24 FE, FEMCON FE and other oral contraceptives currently in development and our product viability estimates in light of the future expected entrance of generic competition for FEMCON FE, the projected future revenue and related cash flows for the OVCON / FEMCON FE product family declined compared to previous forecasts. The undiscounted cash flows relating to this product family no longer exceeded the book value of the intangible asset. We estimated the fair value of the product family using a discounted cash flow analysis. The fair value was compared to the then current carrying value of the intangible asset for this product family and the difference was recorded as an impairment expense in the quarter ended December 31, 2008.

Net interest expense

Net interest expense for the year ended December 31, 2008 was $93.1 million, a decrease of $24.5 million, or 20.8%, from $117.6 million in the prior year. Included in net interest expense in the years ended December 31, 2008 and 2007 were $3.5 million and $6.6 million, respectively, relating to the write-off of deferred loan costs associated with the optional prepayments of debt. We made optional prepayments totaling $220.0 million of outstanding indebtedness under our Prior Senior Secured Credit Facilities and purchased and retired $10.0 million aggregate principal amount of our Notes, at a discount, in the year ended December 31, 2008. In the year ended December 31, 2007, we made optional prepayments totaling $340.0 of outstanding indebtedness under our Prior Senior Secured Credit Facilities. The decrease in net interest expense in the year ended December 31, 2008 was primarily the result of the above mentioned prepayments of our outstanding debt which reduced the weighted average debt outstanding in the year ended December 31, 2008 by $281.5 million as compared to the prior year. The cumulative reductions in debt were accomplished through the use of our free cash flow.

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Provision / (Benefit) for Income Taxes

Our effective tax rates, as a percentage of pre-tax income/(loss), for the years ended December 31, 2008 and 2007 were 151.0% and 38.9%, respectively. Our corporate effective tax rate with respect to any period may be volatile based on the mix of income in the tax jurisdictions in which we operate and the amount of our consolidated income / (loss) before taxes. Our Puerto Rican subsidiary owns the majority of our intangible assets and records the majority of the income and amortization expense related to these intangible assets. As a result, the proportion of our consolidated book income / (loss) before taxes generated in Puerto Rico, where our tax rate is 2.0%, has a significant impact on the effective tax rate. For the year ended December 31, 2008, our U.S. subsidiaries generated income before taxes while our operations in the tax jurisdictions where we are subject to a lower tax rate, mainly Puerto Rico, generated significant losses. For the year ended December 31, 2007, our U.S. subsidiaries generated over half of our consolidated book income before taxes. As a result, the effective tax rate for the years ended December 31, 2008 and 2007 was greater than the U.S. statutory rate in both periods.

The valuation allowance for deferred tax assets of $9.9 million and $11.8 million as of December 31, 2008 and 2007, respectively, relates principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss carryforwards in various jurisdictions. We expect to generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets on our consolidated balance sheet. The valuation allowance was calculated in accordance with the provisions of ASC No. 740, “Income Taxes”, which requires a valuation allowance be established or maintained when it is “more likely than not” that all or a portion of deferred tax assets will not be realized.

Our calculation of tax liabilities involves uncertainties in the application of complex tax regulations in various tax jurisdictions. Amounts related to tax contingencies that management has assessed as unrecognized tax benefits have been appropriately recorded under the provisions of ASC 740, “Income Taxes.” For any tax position, a tax benefit may be reflected in the financial statements only if it is “more likely than not” that we will be able to sustain the tax return position, based on its technical merits. Potential liabilities arising from tax positions taken are recorded based on our estimate of the largest amount of benefit that is cumulatively greater than 50 percent. These liabilities may be adjusted to take into consideration changing facts and circumstances. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from the current estimate of the tax liabilities. These potential tax liabilities are recorded in accrued expenses in our consolidated balance sheet. We intend to continue to reinvest accumulated earnings of our subsidiaries for the foreseeable future; as such, no additional provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for differences related to investments in subsidiaries.

On February 25, 2008, our U.S. operating entities entered into an APA with the IRS covering the calendar years 2006 through 2010. The APA is an agreement with the IRS that specifies the agreed upon terms under which our U.S. entities are compensated for distribution and other services provided for our non-U.S. entities. The APA provides us with greater certainty with respect to the mix of our pretax income in the various tax jurisdictions in which we operate.

Net Income

Due to the factors described above, we reported net (loss) / income of $(8.4) million and $28.9 million in the years ended December 31, 2008 and 2007, respectively.

Financial Condition, Liquidity and Capital Resources

Cash

At December 31, 2009, our cash on hand was $539.0 million, as compared to $35.9 million at December 31, 2008. As of December 31, 2009 our debt, net of cash, was $2,500.5 million and consisted of $2,950.0 million of borrowings under our New Senior Secured Credit Facilities plus $89.5 million aggregate principal amount of our outstanding Notes, less $539.0 million of cash on hand.

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The following table summarizes our net increase in cash and cash equivalents for the periods presented:

(dollars in millions)	Year Ended December 31, 2009			Year Ended December 31, 2008
Net cash provided by operating activities	$	501.9		$	313.3
Net cash (used in) investing activities		(1,925.0	)		(71.9	)
Net cash provided by / (used in) financing activities		1,926.2			(236.3	)
Net increase in cash and cash equivalents	$	503.1		$	5.1

Our net cash provided by operating activities for the year ended December 31, 2009 increased $188.6 million compared with the prior year. We reported net income of $514.1 million for the year ended December 31, 2009 as compared to net (loss) of $(8.4) million for the prior year. The year ended December 31, 2009 included a gain on sale of assets of $380.1 million related to the LEO Transaction ($393.1 million before tax). Also impacting net income in the year ended December 31, 2009 was $73.5 million of non-cash inventory charges attributable to a purchase accounting adjustment that increased the opening value of the inventories acquired in the PGP Acquisition that was recorded as that inventory was sold during the period. During the year ended December 31, 2009, we paid amounts in respect of income taxes totaling $71.6 million as compared to $99.5 million in the prior year. During the year ended December 31, 2008, the income tax payments were made primarily based upon (1) estimates of the amounts payable in connection with the settlement of U.S. federal tax audits related to the tax periods ended September 30, 2003, September 30, 2004, January 17, 2005 and December 31, 2005, (2) estimates of U.S. income taxes for the December 31, 2007 and 2008 tax years, and (3) amended income tax returns filed for the tax year ended December 31, 2006 resulting from the APA signed with the IRS. Our liability for unrecognized tax benefits (including interest) under ASC 740 “Income Taxes” which is expected to settle within the next twelve months is $1.9 million. Our liability for unrecognized tax benefits (including interest) is expected to settle after twelve months is $9.7 million. Also impacting our cash flows from operating activities was a $9.0 million cash payment made in the quarter ended March 31, 2008 relating to the final settlement of the Company’s OVCON 35 litigation which was included in net income in the year ended December 31, 2007.

Our net cash used in investing activities during the year ended December 31, 2009 totaled $1,925.0 million, consisting primarily of $2,869.4 million (net of cash acquired) paid to P&G in connection with the PGP Acquisition, which was partially offset by the $1,000.0 million of proceeds received as a result of the LEO Transaction. Capital expenditures in the year ended December 31, 2009 totaled $44.0 million. We also recorded $11.6 million of contingent purchase consideration paid to Pfizer in connection with the 2003 acquisition of FEMHRT. The cash flows used in investing activities in the year ended December 31, 2008 consisted of $11.6 million of contingent purchase consideration paid to Pfizer in connection with the 2003 acquisition of FEMHRT, $40.0 million paid to LEO to acquire the rights to sell the TACLONEX Scalp product, and $20.3 million of capital expenditures. We expect our capital expenditures in 2010 to significantly increase over the 2009 levels due primarily to infrastructure investments.

Our net cash provided by financing activities in the year ended December 31, 2009 was $1,926.2 million, principally consisting of $2,950.0 million in proceeds from borrowings under our New Senior Secured Credit Facilities, offset by repayments of $582.6 million of debt under our Prior Senior Secured Credit Facilities, the payment of debt financing costs associated with the New Senior Secured Credit Facilities of $155.1 million, and the repurchase and redemption of $290.5 million aggregate principal amount of Notes pursuant to a tender offer. We currently intend to use future cash flows provided by operating activities, net of cash used in investing activities, to make optional prepayments of our long-term debt or purchases of such debt in privately negotiated or open market transactions, by tender offer or otherwise. Our net cash used in financing activities in the year ended December 31, 2008 was primarily the result of our repayment of $227.7 million of term debt under the Prior Senior Secured Credit Facilities and the purchase and retirement of $10.0 million of aggregate principal amount of Notes, at a discount, in privately negotiated open market transactions.

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New Senior Secured Credit Facilities

On October 30, 2009, our subsidiaries Warner Chilcott Holdings Company III, Limited (“Holdings III”), WC Luxco S.à r.l. (the “Luxco Borrower”), Warner Chilcott Corporation (“WCC”) (the “US Borrower”), Warner Chilcott Company, LLC (“WCCL”) (the “PR Borrower”, and together with the Luxco Borrower and the US Borrower, the “Borrowers”) entered into a credit agreement (as amended, the “Credit Agreement”) with a syndicate of lenders (the “Lenders”), Credit Suisse, Cayman Islands Branch as administrative agent, Bank of America Securities LLC as syndication agent and JPMorgan Chase Bank, N.A. as documentation agent for our New Senior Secured Credit Facilities. Under the Credit Agreement the Lenders have provided senior secured credit facilities in an aggregate amount of $3,200.0 million comprised of (i) $2,950.0 million in aggregate term loan facilities and (ii) a $250.0 million revolving credit facility with a five-year maturity that is available to all Borrowers. The term loan facilities are comprised of (i) a Term A facility in the amount of $1,000.0 million with a five-year maturity that was borrowed by the PR Borrower, (ii) a Term B facility in the amount of $1,600.0 million with a five-and-a-half year maturity ($500.0 million of which was borrowed by the US Borrower and $1,100.0 million of which was borrowed by the PR Borrower) and (iii) an additional $350.0 million tranche of term loans, borrowed in connection with Amendment No. 1 to the Credit Agreement described as below. The Borrowers borrowed a total of $2,600.0 million under the term loan facilities and made no borrowings under the revolving credit facility on October 30, 2009 to fund the PGP Acquisition. The interest rates on the borrowings under the New Senior Secured Credit Facilities, other than swing line loans, are (1) for the Term A facility, LIBOR (with a floor of 2.25%) plus 3.25% or ABR, as defined, plus 2.25% and (2) for the Term B facility (including the additional tranche) and the revolving credit facility, LIBOR (with a floor of 2.25%) plus 3.50% or ABR, as defined, plus 2.50%.

The proceeds of the term loan facilities (other than the additional $350.0 million tranche, as described below), together with cash on hand, were used to fund the PGP Acquisition, to consummate the other transactions contemplated thereby and to pay fees and expenses in connection therewith. The Borrowers may use the proceeds of the revolving credit facility for working capital and general corporate purposes. The revolving credit facility provides for a $20.0 million sublimit for swing line loans and a $50.0 million sublimit for the issuance of standby letters of credit. Any swing line loans and letters of credit would reduce the available commitment under the revolving credit facility on a dollar-for-dollar basis.

On December 16, 2009, the Borrowers entered into an amendment (“Amendment No. 1”) to the Credit Agreement to create a new tranche of term loans which were borrowed by the US Borrower in an aggregate principal amount of $350.0 million in order to finance, together with cash on hand, the repurchase and redemption (as described below) of any and all of the issued and outstanding Notes. The interest rates on the borrowings under Amendment No. 1 are LIBOR (with a floor of 2.25%) plus 3.50% or ABR, as defined, plus 2.50%. In addition to the creation of the new $350.0 million tranche of term loans, Amendment No. 1 terminated the Lenders’ commitment to fund a $350.0 million delayed-draw term loan facility that was established under the initial Credit Agreement to fund our obligations under the Collaboration Agreement in the event that Sanofi chose to exercise its put rights following the closing of the PGP Acquisition.

The loans and other obligations under the New Senior Secured Credit Facilities (including in respect of hedging agreements and cash management obligations) are (i) guaranteed by Holdings III and substantially all of its subsidiaries (subject to certain exceptions and limitations) and (ii) secured by substantially all of the assets of the Borrowers and each guarantor (subject to certain exceptions and limitations).

The New Senior Secured Credit Facilities contain a financial covenant that requires Holdings III to maintain a ratio of total indebtedness to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) (both as defined in the New Senior Secured Credit Facilities) not to exceed certain levels. The New Senior Secured Credit Facilities also contains a financial covenant that requires Holdings III to maintain a minimum ratio of EBITDA to interest expense (as defined in the New Senior Secured Credit Facilities) and other covenants that, among other things, limit the ability of Holdings III and certain of its subsidiaries to incur additional

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indebtedness, incur liens, prepay subordinated debt, make loans and investments, merge or consolidate, sell assets, change business or amend the terms of subordinated debt and restrict the payment of dividends. As of December 31, 2009, Holdings III was in compliance with all covenants under the New Senior Secured Credit Facilities.

The New Senior Secured Credit Facilities specify certain customary events of default including, without limitation, non-payment of principal or interest, violation of covenants, breaches of representations and warranties in any material respect, cross defaults and cross acceleration of certain other material indebtedness, material judgments and liabilities, certain ERISA events, and invalidity of guarantees and security documents under the New Senior Secured Credit Facilities.

Prior Senior Secured Credit Facilities

On January 18, 2005, Holdings III and its subsidiaries, WCC and WCCL, entered into the $1.790.0 million Prior Senior Secured Credit Facilities with Credit Suisse as administrative agent and lender, and the other lenders and parties thereto. The Prior Senior Secured Credit Facilities consisted of $1,640.0 million of term loans (including $240.0 million of delayed-draw term loans) and a $150.0 million revolving credit facility, of which $30.0 million and $15.0 million were available for letters of credit and swing line loans, respectively, to WCC and WCCL. All of the remaining outstanding debt under the Prior Senior Secured Credit Facilities was repaid with a portion of the proceeds of the LEO Transaction in September 2009.

8.75% Notes

On January 18, 2005, WCC, a wholly-owned U.S. subsidiary, issued $600.0 million aggregate principal amount of Notes. The Notes were guaranteed on a senior subordinated basis by the Company, Holdings III, WC Lucxo S.à.r.l., Warner Chilcott Intermediate (Luxembourg) S.à.r.l., WC Pharmaceuticals I Limited, the U.S. operating subsidiary (Warner Chilcott (US), LLC) and WCCL (collectively, the “Guarantors”). Interest payments on the Notes were due semi-annually in arrears on each February 1 and August 1. The issuance costs related to the Notes were being amortized to interest expense over the ten-year term of the Notes using the effective interest method.

On December 15, 2009, WCC commenced a cash tender offer for any and all of its outstanding Notes. WCC also commenced a solicitation of consents to certain proposed amendments to the Indenture, dated as of January 18, 2005, governing the Notes by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as the Trustee (the “Indenture”). As set forth in the Offer to Purchase and Consent Solicitation Statement dated December 15, 2009 (the “Offer to Purchase”), the proposed amendments would, among other things, eliminate substantially all of the restrictive covenants and certain events of default and eliminate or modify related provisions contained in the Indenture. Pursuant to the Offer to Purchase, WCC purchased $290.5 million aggregate principal amount of the Notes on December 30, 2009 for a total price of $304.3 million (104.75% of the principal amount), plus accrued interest. On December 29, 2009, the early consent date, WCC had received consents from holders of approximately 76% of the Notes. The consents were sufficient to effect all of the proposed amendments to the Indenture. On December 30, 2009, WCC, the guarantors named therein and Wells Fargo Bank, National Association, as the Trustee, executed a supplemental indenture effecting the proposed amendments to the Indenture that was binding on the holders of Notes not purchased in the tender offer.

Following WCC’s acceptance for purchase of $290.5 million principal amount of the Notes on December 30, 2009, $89.5 million principal amount of the Notes remained outstanding. In January of 2010, WCC received and accepted for purchase, following the expiration date of the tender offer on January 14, 2010, approximately $2.0 million aggregate principal amount of additional Notes in the tender offer. Thus, in total, WCC received and accepted for purchase approximately $292.5 million aggregate principal amount of the Notes, representing approximately 77% of the aggregate principal amount of the Notes outstanding prior to the tender

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offer. On February 1, 2010, WCC redeemed all of the remaining Notes outstanding in accordance with the Indenture. The redemption price for the redeemed Notes was $1,043.75 per $1,000.00 principal amount, plus accrued and unpaid interest.

Components of Indebtedness

As of December 31, 2009, our outstanding indebtedness under the New Senior Secured Credit Facilities and Notes included the following (dollars in millions):

	Current Portion as of December 31, 2009		Long-Term Portion as of December 31, 2009		Total Outstanding as of December 31, 2009
Revolving loans	$	—	$	—	$	—
Term loans		119.5		2,830.5		2,950.0
Notes		89.5		—		89.5
Total	$	209.0	$	2,830.5	$	3,039.5

As of December 31, 2009, mandatory principal repayments of long-term debt in each of the five years ending December 31, 2010 through 2014 and thereafter were as follows:

Year Ending December 31,	Aggregate Maturities (in millions)
2010	$	209.0
2011		219.5
2012		219.5
2013		219.5
2014		319.5
Thereafter		1,852.5
Total long-term debt	$	3,039.5

Our ability to make scheduled payments of principal, or to pay the interest or additional interest, on, or to refinance our indebtedness, or to fund planned capital expenditures will depend on our future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on the current level of operations, we believe that cash flow from operations for each of our significant subsidiaries, available cash and short-term investments, together with borrowings available under the New Senior Secured Credit Facilities, will be adequate to meet our future liquidity needs throughout 2010. We note that future cash flows from operating activities may be adversely impacted by the settlement of contingent liabilities and could fluctuate significantly from quarter-to-quarter based on the timing of certain working capital components. To the extent we generate excess cash flow from operations, net of cash flows from investing activities, we intend to make optional prepayments of our long-term debt or purchases of such debt in privately negotiated open market transactions. As a result of the above mentioned prepayments of long-term debt, we may recognize non-cash expenses for the write-off of applicable deferred loan costs which is a component of interest expense. Our assumptions with respect to future costs may not be correct, and funds available to us from the sources discussed above may not be sufficient to enable us to service our indebtedness under the New Senior Secured Credit Facilities or to cover any shortfall in funding for any unanticipated expenses. In addition, to the extent we make future acquisitions, we may require new sources of funding including additional debt, or equity financing or some combination thereof. We may not be able to secure additional sources of funding on favorable terms or at all.

The carrying amount reported for long-term debt, other than the Notes, is at variable rates and reprices frequently. Our Notes were publicly traded securities. The fair value of the Notes, based on available market quotes, was $93.7 million and $349.6 million as of December 31, 2009 and 2008, respectively.

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Contractual Commitments

The following table summarizes our financial commitments as of December 31, 2009:

	Cash Payments due by Period
(dollars in millions)	Total		Less than 1 Year		From 1 to 3 Years		From 3 to 5 Years		More than 5 Years
Long-term debt:
New Senior Secured Credit Facilities	$	2,950.0	$	119.5	$	439.0	$	539.0	$	1,852.5
Notes(1)		89.5		89.5		—		—		—
Interest payments on long-term debt(2)		755.2		170.3		300.5		248.9		35.5
Supply agreement obligations(3)		59.2		46.4		12.8		—		—
Lease obligations		16.0		6.9		6.2		2.1		0.8
Other		38.9		27.0		5.6		2.7		3.6
Total Contractual Obligations	$	3,908.8	$	459.6	$	764.1	$	792.7	$	1,892.4

(1) We redeemed 100% of the remaining outstanding Notes in the first quarter of 2010.

(2) Interest rates reflect borrowing rates for our outstanding long-term debt as of December 31, 2009 and the mandatory future reductions of long-term debt. Based on our variable rate debt levels of $2,950.0 million as of December 31, 2009, a 1.0% change in interest rates would impact our annual interest payments by approximately $29.5 million.

(3) Supply agreement obligations consist of outstanding commitments for raw materials and commitments under non-cancelable minimum purchase requirements.

The table above does not include payments related to any of the items mentioned below.

We may owe additional future purchase consideration to Pfizer in connection with our 2003 acquisition of FEMHRT. This payment is contingent on FEMHRT maintaining market exclusivity through the first quarter of 2010. Assuming market exclusivity is maintained during this period, we would pay Pfizer $2.9 million for FEMHRT in the first quarter of 2010.

Our liability for unrecognized tax benefits under ASC 740, “Income Taxes” is not included in the table above. The amounts which are expected to settle within the next twelve months are $1.9 million, and the amounts expected to be settled after twelve months are $9.7 million, including interest.

Product Development Agreements

In July 2007, we entered into an agreement with Paratek under which we acquired certain rights to novel tetracyclines under development for the treatment of acne and rosacea. We paid an upfront fee of $4.0 million and agreed to reimburse Paratek for R&D expenses incurred during the term of the agreement. We may make additional payments to Paratek upon the achievement of various developmental milestones that could aggregate up to $24.5 million. In addition, we agreed to pay royalties to Paratek based on the net sales, if any, of the products covered under the agreement.

In December 2008, we signed an agreement with Dong-A, to develop and market its orally-administered udenafil product, a PDE5 inhibitor for the treatment of ED in the United States. We paid $2.0 million in connection with signing the agreement, which was included in R&D expense for the year ended December 31, 2008. In March 2009, we paid $9.0 million to Dong-A, which was included in R&D expense for the year ended December 31, 2009, upon the achievement of a developmental milestone under the agreement. We agreed to pay for all development costs incurred during the term of the agreement and may make an additional payment to Dong-A of $13.0 million upon the achievement of a contractually-defined milestone. In addition, we agreed to pay a profit-split to Dong-A based on operating profit (as defined in the agreement), if any, from the product.

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In February 2009, we acquired the U.S. rights to NexMed’s topically applied alprostadil cream for the treatment of ED and the previous license agreement between us and NexMed relating to the product was terminated. Under the terms of the acquisition agreement, we paid NexMed an up-front payment of $2.5 million, which was included in R&D expense in the year ended December 31, 2009, and agreed to pay a milestone payment of $2.5 million to NexMed upon the FDA approval of the product NDA. We are currently working to prepare our response to the non-approvable letter that the FDA delivered to NexMed in July 2008 with respect to the product.

Product Development Agreements—PGP

As part of the PGP Acquisition, we became party to certain agreements including.

In July 2005, PGP entered into a co-development and co-promotion agreement with Novartis under which Novartis agreed to co-develop and co-promote ENABLEX. Under the agreement which expires in August 2016, we may be required to make payments to Novartis upon the achievement of various sales milestones that could aggregate up to $15.0 million.

In June 2006, PGP entered into an agreement with Watson under which PGP acquired the rights to certain products under development relating to trans-dermal delivery systems for testosterone for use in females. Under the product development agreement, we may be required to made additional payments to Watson upon the achievement of various developmental milestones that could aggregate up to $25.0 million. Further, we agreed to pay a supply fee and royalties to Watson on the net sales of those products.

In June 2007, PGP entered into an agreement with Dong Wha Pharm. Ind. Co. Ltd. (“Dong-Wha”). Under the agreement PGP acquired an exclusive license to develop, manufacture and commercialize compounds world wide excluding Asia for the treatment of osteoporosis. We may make additional payments to Dong-Wha upon the achievement of various developmental milestones that could aggregate up to $181.0 million. In addition, we agreed to pay royalties to Dong-Wha based on the net sales, if any, of the products covered under the agreement.

Collaboration Agreements

We and Sanofi are parties to the Collaboration Agreement under which we co-promote ACTONEL on a global basis, excluding Japan. Pursuant to the agreement, a management committee comprised of equal representation from us and Sanofi is responsible for overseeing the development and promotion of ACTONEL. The rights and obligations of us and Sanofi are specified by geographic market. In certain geographic markets, we and Sanofi share development and promotion costs as well as product profits based on contractual percentages. Pursuant to the Collaboration Agreement, we are obligated to incur an agreed upon amount for A&P and selling each fiscal year. See “Part I., Item 1., Business—PGP Alliance with Sanofi”

As mentioned above, we and Novartis are parties to an agreement to co-promote ENABLEX, in the U.S. We and Novartis share development and promotion costs pursuant to the agreement. Such costs incurred by us are included within SG&A. We receive a contractual percentage of Novartis’ sales of ENABLEX, which is recorded on a net basis in “other revenue”. Pursuant to this agreement, we are obligated to incur an agreed upon amount for A&P and selling each fiscal year.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

New Accounting Pronouncements

See “Note 2” to the Notes to the Consolidated Financial Statements for the year ended December 31, 2009 included elsewhere in this Annual Report for a discussion of recent accounting pronouncements.

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Critical Accounting Policies and Estimates

We make a number of estimates and assumptions in the preparation of our financial statements in accordance with accounting principles generally accepted in the U.S. Actual results could differ significantly from those estimates and assumptions. The following discussion addresses our most critical accounting policies, which we believe are important to the portrayal of our financial condition and results of operations and require management’s judgment regarding the effect of uncertain matters.

On an ongoing basis, management evaluates its estimates and assumptions, including those related to revenue recognition, recoverability of long-lived assets and the continued value of goodwill and intangible assets. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable at the time the estimates and assumptions are made. Actual results may differ from these estimates and assumptions under different circumstances or conditions.

Revenue Recognition

We recognize revenue in accordance with ASC 605, Revenue Recognition in Financial Statements. Our accounting policy for revenue recognition has a substantial impact on our reported results and relies on certain estimates that require difficult, subjective and complex judgments on the part of management. Changes in the conditions used to make these judgments could have a material impact on our results of operations. Management does not believe that the assumptions which underlie its estimates are reasonably likely to change in the future. Revenue from product sales is recognized when title and risk of loss to the product transfers to our customers. Based on the above criteria, revenue is generally recognized when the product is received by the customer or, in some instances, as a result of the PGP Acquisition, when it is shipped to the customer depending on the specific terms of the arrangement. Recognition of revenue also requires reasonable assurance of collection of sales proceeds and completion of all performance obligations. We warrant products against defects and for specific quality standards, permitting the return of products under certain circumstances. Product sales are recorded net of trade discounts, sales returns, rebates, customer loyalty programs and fee for service arrangements with certain distributors. Revenues associated with royalty revenues are recognized based on a percentage of sales reported by third parties. Other revenues recognized include service revenues based on a contractual fee.

As part of our revenue recognition policies, we estimate the items that reduce our gross sales to net sales. We establish accruals for these contra revenues in the same period that we recognize the related sales. Our two most significant sales-related deductions are product returns by our customers and product rebates given to commercial and government customers.

We account for sales returns in accordance with ASC Topic 605, “Revenue Recognition,” (“ASC 605”), by establishing an accrual in an amount equal to our estimate of the portion of sales that are expected to be returned for credit in a future period. For established products, we estimate the sales return accrual primarily based on historical experience regarding actual sales returns but we also consider other factors that could cause future sales returns to deviate from historical levels. These factors include levels of inventory in the distribution channel, estimated remaining shelf life of products sold or in the distribution channel, product recalls, product discontinuances, price changes of competitive products, introductions of generic products and introductions of new competitive products. We consider all of these factors and adjust the accrual periodically throughout each quarter to reflect actual experience and changes in expectations. The accruals needed for future returns of new products are estimated based on the historical sales returns experience of similar products, such as those within the same line of product or those within the same or similar therapeutic category.

Other sales related deductions primarily represent rebates and discounts to government agencies, wholesalers, distributors and managed care organizations with respect to our pharmaceutical products. These deductions represent estimates of the related obligations which requires judgment and knowledge of market conditions and practice when estimating the impact of these sales deductions on gross sales for a reporting period. These estimates and types of sales related deductions vary depending on the region.

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In the U.S., we record provisions for pharmaceutical Medicaid, Medicare, customer loyalty programs, government and contract rebates based upon our historical experience of rebates paid and actual prescriptions written. We apply the historical experience to the respective period’s sales to determine the ending accrual and related contra revenue amount. This estimated provision is evaluated regularly to ensure that the historical trends are as current as practicable as well as to factor in changes relating to new products, contract terms, discount rates, pipeline movements, generic launches, and regulatory changes. As appropriate, we will adjust the estimated discounts to better match our current experience or our expected future experience.

Outside the U.S., the majority of our pharmaceutical rebates, discounts and price reductions are contractual or legislatively mandated, and our estimates are based on actual invoiced sales within each period; both of these elements help to reduce the risk of variations in the estimation process. Some European countries base their rebates on the government’s unbudgeted pharmaceutical spending and we use an estimated allocation factor (based on historical payments) and total revenues by country against our actual invoiced sales to project the expected level of reimbursement.

The movement in our sales-related reserve accounts for the periods presented is as follows:

	Returns			Government Rebates			Cash Discounts			Wholesaler Rebates			Coupons / Loyalty Programs			Managed Care			Medicare			Other			Total
December 31, 2006 Balance	$	35.5		$	6.1		$	1.6		$	4.4		$	1.2		$	—		$	—		$	1.8		$	50.6
Current provision related to sales(1)		56.4			16.8			19.8			19.8			10.5			—			—			15.4			138.7
Current processed returns/rebates		(42.7	)		(16.4	)		(20.0	)		(18.9	)		(9.9	)		—			—			(15.2	)		(123.1	)
December 31, 2007 Balance	$	49.2		$	6.5		$	1.4		$	5.3		$	1.8		$	—		$	—		$	2.0		$	66.2
Current provision related to sales(1)		62.7			20.1			21.1			22.0			16.8			0.9			—			28.4			172.0
Current processed returns/rebates		(50.6	)		(17.8	)		(20.6	)		(22.0	)		(12.9	)		—			—			(24.8	)		(148.7	)
December 31, 2008 Balance	$	61.3		$	8.8		$	1.9		$	5.3		$	5.7		$	0.9		$	—		$	5.6		$	89.5
Current provision related to sales(1)(2)		53.5			42.3			32.1			31.6			125.2			46.1			9.8			37.5			378.1
PGP acquired reserves		37.0			27.3			3.2			11.4			—			74.3			43.0			11.8			208.0
Current processed returns/rebates		(45.4	)		(28.8	)		(31.6	)		(31.8	)		(86.0	)		(31.0	)		(10.7	)		(35.2	)		(300.5	)
December 31, 2009 Balance	$	106.4		$	49.6		$	5.6		$	16.5		$	44.9		$	90.3		$	42.1		$	19.7		$	375.1

(1) Adjustments of estimates to actual results were less than 1.0% of net sales for each of the periods presented.

(2) Includes amounts recorded as part of gain on sale of assets as part of divestiture of LEO products.

We consider information from external sources in developing our estimates of gross to net sales adjustments. We purchase prescription data for our key products, which we use to estimate the market demand. We have access to the actual levels of inventory held by three of our major customers (which aggregate approximately 66% of our sales for the year ended December 31, 2009). We also informally gather information from other sources to attempt to monitor the movement of our products through the wholesale and retail channels. We combine this external data with our own internal reports to estimate the levels of inventories of our products held in the wholesale and retail channels as this is a significant factor in determining the adequacy of our sales-related reserves. Our estimates are subject to inherent limitations that rely on third-party information, as certain third-party information is provided in the form of estimates, and reflects other limitations including lags between the date which third-party information is generated and the date on which we receive third-party information.

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Inventories and Inventory Reserves

Inventories are stated at the lower of cost or market value and consist of finished goods purchased from third party manufacturers held for distribution, as well as raw materials, work-in-process and finished goods manufactured by us. We determine cost on a first-in, first-out basis. As of December 31, 2009, inventories included a fair market step-up adjustment in association with the PGP acquisition of $105.5 million. This one-time increase in the cost of inventory is expected to be recognized in the statement of operations in 2010.

We establish reserves for our inventory to reflect situations in which the cost of the inventory is not expected to be recovered. We review our inventory for products that are close to or have reached their expiration date and therefore are not expected to be sold, for products where market conditions have changed or are expected to change, and for products that are not expected to be saleable based on our quality assurance and control standards. The reserves we establish in these situations are equal to all or a portion of the cost of the inventory based on the specific facts and circumstances. In evaluating whether inventory is properly stated at the lower of cost or market, we consider such factors as the amount of product inventory on hand, estimated time required to sell such inventory, remaining shelf life and current and expected market conditions, including levels of competition. We record provisions for inventory obsolescence as part of cost of sales.

Valuation of Goodwill and Intangible Assets

Goodwill and intangible assets constitute a substantial portion of our total assets. As of December 31, 2009, goodwill represented approximately 17.6% of our total assets and intangible assets represented approximately 54.8% of our total assets. Goodwill is associated with one of our two reporting units, while intangible assets are split between the two reporting units.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of assets acquired net of liabilities assumed in a purchase business combination. We periodically evaluate goodwill for potential impairment indicators. Our judgments regarding the existence of impairment indicators are based on legal factors, market conditions and the operational performance of our business. We carry out an annual impairment review of goodwill unless an event occurs which triggers the need for an earlier review. Future events could cause us to conclude that impairment indicators exist and that goodwill associated with our business is impaired. Goodwill is tested for impairment at the reporting unit level in accordance with ASC 350, “Intangibles—Goodwill and other” (“ASC 350”), which, for us, is one reporting unit. In order to perform the impairment analysis, management makes key assumptions regarding future cash flows used to measure the fair value of the entity. These assumptions include discount rates, our future earnings and, if needed, the fair value of our assets and liabilities. In estimating the value of our intangible assets, as well as goodwill, management has applied a discount rate of approximately 12%, our estimated weighted average cost-of-capital, to the estimated cash flows. Our cash flow model used a 5-year forecast with a terminal value. The factors used in evaluating goodwill for impairment are subject to change and are tracked against historical results by management. Changes in the key assumptions by management can change the results of testing. Any resulting impairment could affect our financial condition and results of operations. We completed our annual test during the quarter ended December 31, 2009 and no impairment charge resulted.

Definite-Lived Intangible Assets

We assess definite-lived intangible assets for impairment, individually or on a product family basis, whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Our analysis includes, but is not limited to, the following key assumptions:

• review of period-to-period actual sales and profitability by product;

• preparation of sales forecasts by product;

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• analysis of industry and economic trends and projected product growth rates;

• internal factors, such as the current focus of our sales forces’ promotional efforts;

• projections of product viability over the estimated useful life of the intangible asset (including consideration of relevant patents); and

• consideration of regulatory and legal environments.

When we determine that there is an indicator that the carrying value of a definite-lived intangible asset may not be recoverable we test the asset for impairment based on undiscounted future cash flows. We measure impairment, if any, based on estimates of discounted future cash flow. These estimates include the assumptions described above about future conditions within the Company and the industry. The assumptions used in evaluating intangible assets for impairment are subject to change and are tracked against historical results by management. If actual cash flows differ from those projected by management, or if there is a change in any of these key assumptions, additional write-offs may be required. Management does not believe that its key assumptions are reasonably likely to change in the future.

In 2008 we recorded a non-cash impairment expense of $163.3 million relating to our OVCON / FEMCON FE product family as a result of our review of the intangible asset for recoverability. In addition to impairments, as a result of changing assumptions in evaluating intangible assets for impairment, certain unimpaired assets may be subject to a change in amortization recognized in future periods to approximate expected future cash flows.

Indefinite-Lived Intangible Assets

As a result of the PGP Acquisition, the Company acquired $247.6 million of in-process research and development (“IPR&D”) intangible assets. These costs will begin to be amortized if the associated regulatory approval is received. If regulatory approval is not received, and the R&D study is considered to be no longer viable, the IPR&D would be considered impaired. Until such time that either one of the two events occur, IPR&D is treated as an indefinite-lived intangible asset.

We also have a Warner Chilcott trademark with an indefinite life, which is not amortized. However, the carrying value would be adjusted if it were determined that the fair value has declined. The impairment test is performed on an annual basis, or more frequently if necessary, and utilizes the same key assumptions as those described above for our definite-lived assets. In addition, if future events occur that warrant a change to a definite life, the carrying value would then be amortized prospectively over the estimated remaining useful life. We completed our annual test during the quarter ended December 31, 2009 and no impairment charge resulted.

Income Taxes

We must make certain estimates and judgments in determining our net income for financial statement purposes. This process affects the calculation of certain of our tax liabilities and the determination of the recoverability of certain of our deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expense. Deferred tax assets and liabilities could also be affected by changes in tax laws and rates in the future.

A valuation allowance is established to reduce deferred tax assets if, based on available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. All available positive and negative evidence is considered in evaluating the ability to recover deferred tax assets, including past operating results, the existence of cumulative losses in recent years and the forecast of future taxable income. Assumptions used to estimate future taxable income include the amount of future state, federal and international pretax operating income and the reversal of temporary differences. These assumptions are consistent with our plans and estimates used to manage our business, however, such assumptions require significant judgment about the forecasts of future taxable income.

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Any recorded valuation allowances will be maintained until it is more likely than not that the deferred tax assets will be realized. Income tax expense recorded in the future will be reduced to the extent of decreases in these valuation allowances. The realization of remaining deferred tax assets is principally dependent on future taxable income. Any reduction in future taxable income may require an additional valuation allowance to be recorded against our deferred tax assets. An increase in the valuation allowance would result in additional income tax expense and could have a significant impact on future earnings.

In addition, the calculation of our tax liabilities involves uncertainties in the application of complex tax rules in various jurisdictions. For example, in 2009 we applied for tax rulings with certain taxing authorities. If certain of our ruling applications are approved, we may record benefits of approximately $42.0 million in our income tax provision to revalue certain deferred tax liabilities. Amounts related to tax contingencies that management has assessed as unrecognized tax benefits have been appropriately recorded under the provisions of ASC 740. For any tax position, a tax benefit may be reflected in the financial statements only if it is “more likely than not” that we will be able to sustain the tax return position, based on its technical merits. Potential liabilities arising from tax positions taken are recorded based on our estimate of the largest amount of benefit that is cumulatively greater than 50 percent. These liabilities may be adjusted to take into consideration changing facts and circumstances. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from the current estimate of the tax liabilities. If the estimate of tax liabilities was less than the ultimate assessment, then an additional charge to expense would result. If payment of these amounts is ultimately less than the recorded amounts, then the reversal of the liabilities would result in tax benefits being recognized in the period when it is determined the liabilities are no longer necessary.

Litigation

We are involved in various legal proceedings in the normal course of our business, including product liability and other litigation and contingencies. We record reserves related to these legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable. See “Note 19” to the Notes to the Consolidated Financial Statements for the year ended December 31, 2009 included elsewhere in this Annual Report for a description of our significant current legal proceedings.

Business Combinations

The acquisition method of accounting as defined in ASC Topic 805 “Business Combinations,” (“ASC 805”), uses the fair value concepts defined in ASC Topic 820 “Fair Value Measurements and Disclosures,” (“ASC 820”), which we have adopted in the required periods.

The Company values most assets acquired and liabilities assumed in a business purchase combination at their fair values as of the acquisition date. Fair value measurements can be highly subjective and the reasonable application may result in a range of alternative estimates using the same facts and circumstances.

The process for estimating the fair values of IPR&D, identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, timing and probability of success to complete in-process projects and projecting regulatory approvals. Under ASC 805, transaction costs are not included as a component of consideration transferred, and are expensed as incurred. The excess of the purchase price (consideration transferred) over the estimated amounts of identifiable assets and liabilities as of the effective date of the acquisition are allocated to goodwill in accordance with ASC 805. Relating to the PGP Acquisition, the final valuation is expected to be completed as soon as practicable but no later than one year after the consummation of the acquisition.

ASC 805 requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can reasonably be estimated. If the fair value of an asset or liability that arises from a contingency can be determined, the asset or liability would be recognized in accordance with ASC Topic 450, “Accounting for Contingencies” (“ASC 450”). If the fair value is not determinable and the ASC 450 criteria are not met, no asset or liability would be recognized.

83

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The principal market risks (i.e., the risk of loss arising from adverse changes in market rates and prices) to which we are exposed is interest rates on debt and movements in exchange rates among foreign currencies. We had neither foreign currency option contracts nor any interest rate hedges at December 31, 2009.

The following risk management discussion and the estimated amounts generated from analytical techniques are forward-looking statements of market risk assuming certain market conditions occur. Actual results in the future may differ materially from these projected results due to actual developments in the global financial markets.

Interest Rate Risk

We manage debt and overall financing strategies centrally using a combination of short- and long-term loans with either fixed or variable rates. Based on variable rate debt levels of $2,950.0 million as of December 31, 2009, a 1.0% change in interest rates would impact net interest expense by approximately $7.4 million per quarter.

Foreign Currency Risk

As a result of the PGP Acquisition, a significant portion of our earnings and assets are in foreign jurisdictions where transactions are denominated in currencies other then the U.S. dollar (primarily the Euro and British pound). Depending on the direction of change relative to the U.S. dollar, foreign currency values can increase or decrease the reported dollar value of our net assets and results of operations. Our international-based revenues, as well as our international net assets, expose our revenues and earnings to foreign currency exchange rate changes.

We may enter into hedging and other foreign exchange management arrangements to reduce the risk of foreign currency exchange rate fluctuations to the extent that cost-effective derivative financial instruments or other non-derivative financial instrument approaches are available. Derivative financial instruments are not expected to be used for speculative purposes. The intent of gains and losses on hedging transactions is to offset the respective gains and losses on the underlying exposures being hedged. Although we may decide to mitigate some of this risk with hedging and other activities, our business will remain subject to foreign exchange risk from foreign currency translation exposures that we will not be able to manage through effective hedging or the use of other financial instruments.

Inflation

Inflation did not have a material impact on our operations during the years ended December 31, 2009, 2008 and 2007.

Item 8. Financial Statements and Supplementary Data.

The information required by this Item is incorporated by reference to the Consolidated Financial Statements beginning on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

84

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act, as amended (the “Exchange Act”)) designed to provide reasonable assurance that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. These include controls and procedures designed to ensure that this information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management, with the participation of the Chief Executive and Chief Financial Officers, evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2009. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2009 at the reasonable assurance level.

Management’s Annual Report on Internal Control over Financial Reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). The Company’s internal control over financial reporting is a process designed by, or under the supervision of the CEO and CFO, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Management, with the participation of the Chief Executive and Chief Financial Officers, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. In making its assessment of internal controls over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on this evaluation, management, with the participation of the Chief Executive and Chief Financial Officers, concluded that, as of December 31, 2009, the Company’s internal control over financial reporting was effective.

Management’s evaluation of internal control over financial reporting excluded the PGP business, which the Company acquired on October 30, 2009. The total assets (excluding amounts resulting from the purchase price allocation) and total revenues of the acquired PGP business represent approximately 8% and 26%, respectively, of the related Consolidated Financial Statement amounts as of and for the year ended December 31, 2009. In accordance with guidance issued by the SEC, companies are permitted to exclude acquisitions from their assessment of internal controls over financial reporting during the first year subsequent to the acquisition while integrating the acquired operations.

PricewaterhouseCoopers LLP, the independent registered public accounting firm who audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K, has issued a report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009, which is included herein.

Changes in Internal Control over Financial Reporting.

There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended December 31, 2009, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information.

None.

85

Part III

Item 10. Directors, Executive Officers and Corporate Governance.

In addition to the information set forth under the caption “Executive Officers” in Part I of this Annual Report, the information required by this Item is incorporated by reference to our Proxy Statement with respect to our Annual Meeting of Shareholders to be held on May 13, 2010.

Item 11. Executive Compensation.

The information called for by this item is hereby incorporated by reference to our Proxy Statement with respect to our Annual Meeting of Shareholders to be held on May 13, 2010.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information called for by this item is hereby incorporated by reference to our Proxy Statement with respect to our Annual Meeting of Shareholders to be held on May 13, 2010.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information called for by this item is hereby incorporated by reference to our Proxy Statement with respect to our Annual Meeting of Shareholders to be held on May  13, 2010.

Item 14. Principal Accounting Fees and Services.

The information called for by this item is hereby incorporated by reference to our Proxy Statement with respect to our Annual Meeting of Shareholders to be held on May 13, 2010.

86

PART IV.

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements

The Financial Statements listed in the Index to the Consolidated Financial Statements, filed as part of this Annual Report.

(a)(2) Financial Statement Schedules

None.

(a)(3) Exhibits

The exhibits listed at the end of this Annual Report are filed as part of this Annual Report.

87

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 1, 2010.

WARNER CHILCOTT PLC
By:	/s/    ROGER M. BOISSONNEAULT
Name:	Roger M. Boissonneault
Title:	Chief Executive Officer, President and Director (Principal Executive Officer)
By:	/s/    PAUL HERENDEEN
Name:	Paul Herendeen
Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2010.

Signature	Title
/S/    ROGER M. BOISSONNEAULT         Roger M. Boissonneault	Chief Executive Officer, President and Director (Principal Executive Officer)
/S/    PAUL HERENDEEN         Paul Herendeen	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
/S/    TODD M. ABBRECHT         Todd M. Abbrecht	Director
/S/    JAMES H. BLOEM         James H. Bloem	Director
/S/    DAVID F. BURGSTAHLER         David F. Burgstahler	Director
/S/    JOHN P. CONNAUGHTON         John P. Connaughton	Director
/S/    JOHN A. KING         John A. King	Director
/S/    STEPHEN P. MURRAY         Stephen P. Murray	Director
/S/    PATRICK O’SULLIVAN           Patrick O’sullivan	Director

88

Exhibit No.	Description
2.1	Implementation Agreement, dated October 27, 2004, among the Consortium Members (as defined therein), Waren Acquisition Limited and Warner Chilcott PLC and Second Supplemental Agreement thereto, dated November 16, 2004 (incorporated herein by reference to Exhibit 2.1 to the Registration Statement on Form S-4 filed by Warner Chilcott Holdings Company III, Limited and Warner Chilcott Corporation on July 18, 2005, Registration Number 333-12666 (the “Warner Chilcott Holdings Company III S-4”))
2.2	Purchase Agreement, dated as of August 24, 2009, between The Procter & Gamble Company and Warner Chilcott plc (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Warner Chilcott plc on August 24, 2009 (the “Warner Chilcott August 24, 2009 8-K”))
2.3*	Transition Services Agreement effective as of October 30, 2010 between Warner Chilcott plc and The Procter & Gamble Company
2.4	Asset Purchase Agreement dated as of September 23, 2009 among LEO Pharma A/S, LEO Laboratories Ltd., Warner Chilcott plc, Warner Chilcott Company, LLC and Warner Chilcott (US), LLC (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Warner Chilcott plc on September 23, 2009)
3.1	Memorandum and Articles of Association of Warner Chilcott plc (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K12G3 filed by Warner Chilcott plc on August 21, 2009 (the “Warner Chilcott August 21, 2009 8-K12G3”))
4.1	Amended and Restated Shareholders Agreement, dated as of March 31, 2005, among Warner Chilcott Holdings Company, Limited, Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and the Shareholders party thereto (the “Amended and Restated Shareholders Agreement”) (incorporated herein by reference to Exhibit 4.3 to the Warner Chilcott Holdings Company III S-4)
4.2	First Amendment to the Amended and Restated Shareholders Agreement, dated April 19, 2005, among Warner Chilcott Holdings Company, Limited, Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and the Shareholders party thereto (incorporated herein by reference to Exhibit 4.4 to the Warner Chilcott Holdings Company III S-4)
4.3	Management Shareholders Agreement, dated as of March 28, 2005, among Warner Chilcott Holdings Company, Limited, Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited, the Management Shareholders party thereto and the Shareholders party thereto (incorporated herein by reference to Exhibit 4.5 to the Warner Chilcott Holdings Company III S-4)
4.4	Joinder Agreement, dated as of April 1, 2005, among Warner Chilcott Holdings Company, Limited, Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and Paul S. Herendeen (incorporated herein by reference to Exhibit 4.6 to the Warner Chilcott Holdings Company III S-4)
4.5	Second Amendment to the Amended and Restated Shareholders Agreement, dated as of August 20, 2009, by and among Warner Chilcott plc, Warner Chilcott Limited (f/k/a Warner Chilcott Holdings Company, Limited), Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and certain other persons named therein to the Amended and Restated Management Shareholders Agreement, dated as of March 31, 2005 (incorporated herein by reference to Exhibit 4.3 to the Warner Chilcott August 21, 2009 8-K12G3)
4.6	Waiver of the Amended and Restated Shareholders Agreement, dated November 24, 2009, among Warner Chilcott Holdings Company, Limited, Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and the Shareholders party thereto (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by Warner Chilcott plc on November 24, 2009)

89

Exhibit No.	Description
4.7	First Amendment to the Amended and Restated Management Shareholders Agreement, dated as of September 17, 2007, by and among Warner Chilcott plc, Warner Chilcott Limited (f/k/a Warner Chilcott Holdings Company, Limited), Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and certain other persons named therein to the Amended and Restated Management Shareholders Agreement, dated as of March 28, 2005 (incorporated herein by reference to Exhibit 4.12 to the Registration Statement on Form S-3 filed by Warner Chilcott plc on November 13, 2009 (the “Warner Chilcott November 13, 2009 S-3”))
4.8	Second Amendment to the Amended and Restated Management Shareholders Agreement, dated as of August 20, 2009, by and among Warner Chilcott plc, Warner Chilcott Limited (f/k/a Warner Chilcott Holdings Company, Limited), Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and certain other persons named therein to the Amended and Restated Management Shareholders Agreement, dated as of March 28, 2005 (incorporated herein by reference to Exhibit 4.4 to the Warner Chilcott August 21, 2009 8-K12G3)
4.9	Form of Share Certificate (incorporated herein by reference to Exhibit 4.5 to the Warner Chilcott August 21, 2009 8-K12G3)
10.1	Securities Purchase Agreement, dated January 18, 2005 by and among Warner Chilcott Holdings Company, Limited, Warner Chilcott Holdings Company II, Limited, Bain Capital Integral Investors II, L.P., BCIP Trust Associates III, and BCIP Trust Associates III-B, DLJMB Overseas Partners III, C.V., DLJ Offshore Partners III, C.V., DLJ Offshore Partners III-1, C.V., DLJ Offshore Partners III-2, C.V., DLJ MB Partners III GmbH & Co. KG, Millennium Partners II, L.P. and MBP III Plan Investors, L.P., J.P. Morgan Partners (BHCA), L.P., J.P. Morgan Partners Global Investors, L.P., J.P. Morgan Partners Global Investors (Cayman), L.P., J.P. Morgan Partners Global Investors (Cayman II), L.P., J.P. Morgan Partners Global Investors A, L.P., Thomas H. Lee (Alternative) Fund V, L.P., Thomas H. Lee Parallel (Alternative) Fund V, L.P., Thomas H. Lee (Alternative) Cayman Fund V, L.P., Putnam Investments Employees’ Securities Company I LLC, Putnam Investments Employees Securities Company II LLC, Putnam Investments Holdings, LLC, Thomas H. Lee Investors Limited Partnership, OMERS Administration Corporation (formerly known as Ontario Municipal Employees Retirement Board), AlpInvest Partners CS Investments 2003 C.V., AlpInvest Partners Later Stage Co-Investments Custodian II B.V., AlpInvest Partners Later Stage Co-Investments Custodian IIA B.V., Filbert Investment Pte Ltd and The Northwestern Mutual Life Insurance Company (incorporated herein by reference to Exhibit 10.2 to the Warner Chilcott Holdings Company III S-4)
10.2	Purchase and Sale Agreement, dated as of May 3, 2004, among Pfizer Inc., Pfizer Pharmaceuticals LLC, Galen Holdings Public Limited Company and Warner Chilcott Company, Inc. (incorporated herein by reference to Exhibit 10.3 to the Warner Chilcott Holdings Company III S-4)
10.3	Option and License Agreement, dated as of March 24, 2004, by and between Barr Laboratories, Inc. and Galen (Chemicals) Limited (incorporated herein by reference to Exhibit 10.4 to the Warner Chilcott Holdings Company III S-4)
10.4	Finished Product Supply Agreement, dated as of March 24, 2004, by and between Barr Laboratories, Inc. and Galen (Chemicals) Limited (incorporated herein by reference to Exhibit 10.5 to the Warner Chilcott Holdings Company III S-4)
10.5	Transaction Agreement by and between Galen Holdings PLC and Warner Chilcott PLC, dated May 4, 2000 (incorporated herein by reference to Exhibit 2.1 to Warner Chilcott PLC’s Current Report on Form 8-K filed on May 15, 2000, Commission File No. 000-29364)
10.6	Estrace Transitional Support and Supply Agreement between Westwood-Squibb Pharmaceuticals, Inc. and Warner Chilcott, Inc., dated as of January 26, 2000 (incorporated herein by reference to Exhibit 10.2 to Warner Chilcott PLC’s Current Report on Form 8-K filed on February 29, 2000, Commission File No. 000-29364 (the “Warner Chilcott PLC February 29, 2000 8-K”))

90

Exhibit No.	Description
10.7	Ovcon Transitional Support and Supply Agreement between Bristol-Myers Squibb Laboratories Company and Warner Chilcott, Inc., dated as of January 26, 2000 (incorporated herein by reference to Exhibit 10.3 to the Warner Chilcott PLC February 29, 2000 8-K)
10.8	Asset Purchase Agreement between Bristol-Myers Squibb Company and Galen (Chemicals) Limited, dated as of June 29, 2001 (incorporated herein by reference to Exhibit 10.8 to Galen Holdings PLC’s Form F-1 filed on July 2, 2001, Commission File No. 333-64324 (the “Galen Holdings July 2, 2001 F-1”))
10.9	Supply Agreement between Bristol-Myers Squibb Laboratories Company and Galen (Chemicals) Limited, dated as of June 29, 2001 (incorporated herein by reference to Exhibit 10.9 to the Galen Holdings July 2, 2001 F-1)
10.10	Assignment, Transfer and Assumption Agreement, dated as of December 7, 2002, by and between Galen (Chemicals) Limited and Eli Lilly and Company (incorporated herein by reference to Exhibit 4.28 to Galen Holdings PLC’s Annual Report on Form 20-F filed on January 2, 2003 for the year ended September 30, 2002, Commission File No. 333-12634)
10.11	Manufacturing Agreement, dated as of December 7, 2002, by and between Galen (Chemicals) Limited and Eli Lilly and Company (incorporated herein by reference to Exhibit 4.30 to Galen Holdings PLC’s Annual Report on Form 20-F filed on December 31, 2003 for the year ended September 30, 2003, Commission File No. 333-12634) (the “Galen Holdings’ 2002-2003 20-F”))
10.12	Purchase and Sale Agreement (OCS) among Pfizer Inc., Galen (Chemicals) Limited and Galen Holdings PLC, dated as of March 5, 2003 (incorporated herein by reference to Exhibit 4.31 to the Galen Holdings’ 2002-2003 20-F)
10.13	Purchase and Sale Agreement (Femhrt) among Pfizer Inc., Galen (Chemicals) Limited and Galen Holdings PLC, dated as of March 5, 2003 (incorporated herein by reference to Exhibit 4.32 to the Galen Holdings’ 2002-2003 20-F)
10.14	Transitional Supply Agreement, dated March 27, 2003, between Galen (Chemicals) Limited and Pfizer Inc. (incorporated herein by reference to Exhibit 4.33 to the Galen Holdings’ 2002-2003 20-F)
10.15	Co-promotion Agreement, effective May 1, 2003, by and between Bristol-Myers Squibb Company and Galen (Chemicals) Limited (incorporated herein by reference to Exhibit 4.34 to the Galen Holdings’ 2002-2003 20-F)
10.16	Option Agreement, dated as of April 1, 2003, by and between Bristol-Myers Squibb Company and Galen (Chemicals) Limited (incorporated herein by reference to Exhibit 4.35 to the Galen Holdings’ 2002-2003 20-F)
10.17	Development Agreement between LEO Pharma A/S and Galen (Chemicals) Limited, dated April 2, 2003 (incorporated herein by reference to Exhibit 4.36 to the Galen Holdings’ 2002-2003 20-F)
10.18	Manufacturing Agreement, dated as of September 24, 1997, by and between Duramed Pharmaceuticals, Inc. and Warner-Lambert Company (assigned to Galen (Chemicals) Limited pursuant to the Purchase and Sale Agreement (Femhrt), among Pfizer Inc., Galen (Chemicals) Limited and Galen Holdings PLC, dated as of March 5, 2003) (incorporated herein by reference to Exhibit 4.40 to the Galen Holdings’ 2002-2003 20-F)
10.19	Master Agreement between Galen (Chemicals) Limited and LEO Pharma A/S, dated April 1, 2003 (incorporated herein by reference to Exhibit 4.41 to Amendment No. 1 to the Annual Report on Form 20-F of Galen Holdings PLC, filed on January 5, 2004 for the year ended September 30, 2003 (File No. 333-12634))

91

Exhibit No.	Description
10.20	Business Purchase Agreement for the Sale and Purchase of the Business and Assets of Ivex Pharmaceuticals Limited, among Ivex Pharmaceuticals Limited, Galen Holdings, PLC, Gambro Northern Ireland Limited and Gambro BCT, Inc, dated April 28, 2004 (incorporated herein by reference to Exhibit 10.22 to the Warner Chilcott Holdings Company III S-4)
10.21	Purchase and Sale Agreement among Galen Holdings PLC, Nelag Limited, Galen Limited and Galen (Chemicals) Limited, dated April 28, 2004 (incorporated herein by reference to Exhibit 10.23 to the Warner Chilcott Holdings Company III S-4)
10.22	Purchase and Sale Agreement among Galen Limited, Galen Holdings PLC, Galen (Chemicals) Limited and Nelag Limited, dated April 27, 2004 (incorporated herein by reference to Exhibit 10.24 to the Warner Chilcott Holdings Company III S-4)
10.23	Third Amended and Restated Employment Agreement, dated as of November 7, 2008, between Warner Chilcott (US), LLC and Roger M. Boissonneault (incorporated herein by reference to Exhibit 10.1 to Warner Chilcott plc’s Quarterly Report on Form 10-Q filed on November 10, 2008 for the quarter ended September 30, 2008)
10.24	Second Amended and Restated Employment Agreement, dated as of November 7, 2008, between Warner Chilcott (US), LLC and W. Carl Reichel (incorporated herein by reference to Exhibit 10.2 to Warner Chilcott plc’s Quarterly Report on Form 10-Q filed on November 10, 2008 for the quarter ended September 30, 2008 (the “Warner Chilcott November 10, 2008 10-Q”))
10.25	Second Amended and Restated Employment Agreement, dated as of November 7, 2008, between Warner Chilcott (US), LLC and Anthony Bruno (incorporated herein by reference to Exhibit 10.3 to the Warner Chilcott November 10, 2008 10-Q)
10.26*	Employment Agreement, dated as of October 20, 2009, between Warner Chilcott plc and Mahdi Fawzi
10.27	Amended and Restated Employment Agreement, dated as of November 7, 2008, between Warner Chilcott (US), LLC and Paul Herendeen (incorporated herein by reference to Exhibit 10.4 to the Warner Chilcott November 10, 2008 10-Q)
10.28	License, Supply and Development Agreement, dated as of September 14, 2005, between Warner Chilcott Company, Inc. and LEO Pharma A/S (incorporated herein by reference to Exhibit 10.31 to Amendment No. 1 to the Registration Statement on Form S-4 filed by Warner Chilcott Holdings Company III, Limited and Warner Chilcott Corporation, Registration Number 333-12666 (the “Warner Chilcott Holdings Company III S-4/A”)
10.29	Addendum I, dated September 14, 2005, to Master Agreement between Galen (Chemicals) Limited and LEO Pharma A/S, dated April 1, 2003 (incorporated herein by reference to Exhibit 10.32 to the Warner Chilcott Holdings Company III S-4/A)
10.30	Amended and Restated License and Supply Agreement, dated as of September 14, 2005, between Warner Chilcott Company, Inc. and LEO Pharma A/S (incorporated herein by reference to Exhibit 10.33 to the Warner Chilcott Holdings Company III S-4/A)
10.31	Right of First Refusal Agreement, dated as of September 14, 2005, between Warner Chilcott Company, Inc. and LEO Pharma A/S (incorporated herein by reference to Exhibit 10.34 to the Warner Chilcott Holdings Company III S-4/A)
10.32	Asset Purchase Agreement, dated as of September 30, 2005, between Bristol-Myers Squibb Company and Warner Chilcott Company, Inc. (incorporated herein by reference to Exhibit 10.35 to the Warner Chilcott Holdings Company III S-4/A)
10.33	First Amendment to Asset Purchase Agreement, effective as of January 1, 2006, to the Asset Purchase Agreement between Bristol-Myers Squibb Company and Warner Chilcott Company, Inc., dated September 30, 2005 (incorporated herein by reference to Exhibit 10.36 to the Warner Chilcott Holdings Company III S-4/A)

92

Exhibit No.	Description
10.34	Trademark Assignment, dated as of January 1, 2006, by and among Westwood-Squibb Pharmaceuticals, Inc., Warner Chilcott Company, Inc. and LEO Pharma A/S (incorporated herein by reference to Exhibit 10.37 to the Warner Chilcott Holdings Company III S-4/A)
10.35	First Amendment to Transitional Supply Agreement, effective as of July 1, 2006, between Warner Chilcott Company Inc. and Pfizer Inc. (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by Warner Chilcott Holdings Company III, Limited on August 11, 2006, Commission File No. 333-126660)
10.36	Warner Chilcott Holdings Company, Limited 2005 Equity Incentive Plan, amended and restated as of August 31, 2006 (incorporated herein by reference to Exhibit 10.46 to the Registration Statement on Form S-1 filed by Warner Chilcott Holdings Company, Limited on September 5, 2006, Registration No. 333-134893 (the “Warner Chilcott Holdings S-1”)
10.37	Waiver, dated September 25, 2006, to Section 3.1, Section 3.3 and Section 3.5(b) of the Option and License Agreement between Barr and Galen (Chemicals) Limited dated March 24, 2004 and to Section 2.1 of the Finished Product Supply Agreement between Barr and Galen (Chemicals) Limited dated March 24, 2004 (incorporated herein by reference to Exhibit 10.41 to the Warner Chilcott Holdings S-1)
10.38	Form of Restricted Share Award Agreement (incorporated herein by reference to Exhibit 10.50 to the Annual Report on Form 10-K filed by Warner Chilcott Limited on March 26, 2007, Commission File No. 1-33039 (the “Warner Chilcott 2006 10-K”)
10.39	Form of Share Option Award Agreement (incorporated herein by reference to Exhibit 10.51 to the Warner Chilcott 2006 10-K)
10.40	Form of Bonus Share Award Agreement (incorporated herein by reference to Exhibit 10.52 to the Warner Chilcott 2006 10-K)
10.41	Form of Management Securities Purchase Agreement (incorporated herein by reference to Exhibit 10.53 to the Warner Chilcott 2006 10-K)
10.42	Form of Strip Grant Agreement (incorporated herein by reference to Exhibit 10.54 to the Warner Chilcott 2006 10-K)
10.43	Form of 2005 Restricted Share Award Agreement (incorporated herein by reference to Exhibit 10.55 to the Warner Chilcott 2006 10-K)
10.44	Settlement and License Agreement dated as of January 9, 2009, by and among Warner Chilcott Company, LLC (f/k/a/ Warner Chilcott Company, Inc.), Watson Pharmaceuticals, Inc. and Watson Laboratories, Inc. (incorporated herein by reference to Exhibit 10.2 to Warner Chilcott Limited’s Quarterly Report on Form 10-Q filed on August 7, 2009 for the quarter ended June 30, 2009 (the “Warner Chilcott Limited August 7, 2009 10-Q”))
10.45	Letter Agreement, dated as of May 7, 2009, between LEO Pharma A/S and Warner Chilcott Company, LLC with respect to the 80-185 product (incorporated herein by reference to Exhibit 10.1 to the Warner Chilcott Limited August 7, 2009 10-Q)
10.46	Warner Chilcott Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Warner Chilcott August 21, 2009 8-K12G3)
10.47	Deed Poll of Assumption relating to Equity Incentive Plan, dated as of August 20, 2009 (incorporated herein by reference to Exhibit 10.3 to the Warner Chilcott August 21, 2009 8-K12G3)
10.48*	Form of Warner Chilcott Equity Incentive Plan Restricted Share Unit Award Agreement
10.49*	Form of Warner Chilcott Equity Incentive Plan Share Award Agreement
10.50*	Form of Warner Chilcott Equity Incentive Plan Share Option Award Agreement

93

Exhibit No.	Description
10.51*	Warner Chilcott P&G Pharmaceuticals Business Transaction and Integration Incentive Program
10.52	Warner Chilcott Management Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Warner Chilcott August 21, 2009 8-K12G3)
10.53	Deed Poll of Assumption relating to Management Incentive Plan, dated as of August 20, 2009 (incorporated herein by reference to Exhibit 10.4 to the Warner Chilcott August 21, 2009 8-K12G3)
10.54	Commitment Letter among Warner Chilcott plc, Bank of America, N.A., Banc of America Bridge LLC, Credit Suisse, Barclays Bank PLC, Citibank, N.A., JPMorgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc. and certain of their respective affiliates dated August 24, 2009 (incorporated herein by reference to Exhibit 10.1 to the Warner Chilcott August 24, 2009 8-K)
10.55	Credit Agreement, dated as of October 30, 2009, among Warner Chilcott Holdings Company III, Limited, WC Luxco S.à r.l., Warner Chilcott Corporation, Warner Chilcott Company, LLC, Credit Suisse, Cayman Islands Branch, as administrative agent, Bank of America Securities LLC, as syndication agent and JPMorgan Chase Bank, N.A., as documentation agent, and the lenders thereunder (incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by Warner Chilcott plc on November 2, 2009)
10.56	Amendment No. 1 to Credit Agreement, dated as of December 16, 2009, among Warner Chilcott Holdings Company III, Limited, WC Luxco S.à r.l., Warner Chilcott Corporation, Warner Chilcott Company, LLC, Credit Suisse AG, Cayman Islands Branch, as administrative agent and the lenders party thereto (incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by Warner Chilcott plc on December 18, 2009)
10.57*+	Amended and Restated Collaboration Agreement, dated October 8, 2004, by and between The Procter & Gamble Company and Procter & Gamble Pharmaceuticals, Inc. and Aventis Pharmaceuticals Inc. (the “Sanofi Collaboration Agreement”)
10.58*+	Amendment Agreement to the Collaboration Agreement, dated December 19, 2007, by and between The Procter & Gamble Company and Procter & Pharmaceuticals and Sanofi-Aventis U.S. LLC, as successor in interest to Aventis Pharmaceuticals, Inc. (the “Sanofi Amendment Agreement”)
10.59*+	Amendment to the Sanofi Amendment Agreement, dated October 9, 2008, by and between The Procter & Gamble Company and Procter & Pharmaceuticals and Sanofi-Aventis U.S. LLC
10.60	Form of Indemnification Agreement for directors and Secretary of Warner Chilcott plc (incorporated herein by reference to Exhibit 10.5 to the Warner Chilcott August 21, 2009 8-K12G3)
21.1*	Subsidiaries of the Registrant
23.1*	Consent of PricewaterhouseCoopers LLP
31.1*	Certification of Chief Executive Officer under Rule 13a-14(a) of the Securities Exchange Act, as amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer under Rule 13a-14(a) of the Securities Exchange Act, as amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith.

+ Portions of this Exhibit have been omitted pursuant to a request for confidential treatment. These portions have been filed separately with the Securities and Exchange Commission.

94

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Audited Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2009 and 2008	F-3
Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007	F-4
Consolidated Statements of Shareholders’ Equity for the years ended December  31, 2009, 2008 and 2007	F-5
Consolidated Statements of Comprehensive Income for the years ended December  31, 2009, 2008 and 2007	F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007	F-7
Notes to Consolidated Financial Statements
Note 1: The Company	F-8
Note 2: Summary of Significant Accounting Policies	F-8
Note 3: Redomestication	F-16
Note 4: Acquisitions	F-16
Note 5: LEO Transaction	F-19
Note 6: Earnings Per Share	F-21
Note 7: Collaboration Agreements	F-21
Note 8: Derivatives and Fair Value of Financial Instruments	F-22
Note 9: Inventories	F-23
Note 10: Property, Plant and Equipment, net	F-24
Note 11: Goodwill and Intangible Assets	F-24
Note 12: Accrued Expenses	F-26
Note 13: Indebtedness	F-26
Note 14: Stock-Based Compensation Plans	F-29
Note 15: Commitments and Contingencies	F-31
Note 16: Income Taxes	F-34
Note 17: Segment Information	F-37
Note 18: Leases	F-41
Note 19: Legal Proceedings	F-41
Note 20:  Concentration of Credit Risk, Reliance on Significant Suppliers and Reliance on Major Products	F-48
Note 21: Retirement Plans	F-49
Note 22: Related Parties	F-53
Note 23: Valuation and Qualifying Accounts	F-53
Note 24: Quarterly Data (unaudited)	F-54
Note 25: Subsequent Event	F-54

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Warner Chilcott Public Limited Company:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of shareholders’ equity, of comprehensive income and of cash flows present fairly, in all material respects, the financial position of Warner Chilcott Public Limited Company and its subsidiaries (the “Company”) at December 31, 2009 and December 31, 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded the PGP business from its assessment of internal control over financial reporting as of December 31, 2009 because it was acquired by the Company in a purchase business combination during 2009. We have also excluded the acquired PGP business from our audit of internal control over financial reporting. The total assets (excluding amounts resulting from purchase price allocation) and total revenues of the acquired PGP business represent approximately 8% and 26%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2009.

/s/    PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Florham Park, NJ

March 1, 2010

F-2

WARNER CHILCOTT PUBLIC LIMITED COMPANY

CONSOLIDATED BALANCE SHEETS

(All amounts in thousands except share amounts)

	As of December 31, 2009			As of December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	539,006		$	35,906
Accounts receivable, net		339,753			93,015
Inventories, net		236,203			57,776
Deferred income taxes		98,084			54,285
Prepaid income taxes		—			109
Prepaid expenses and other current assets		131,225			15,419
Total current assets		1,344,271			256,510
Other assets:
Property, plant and equipment, net		177,825			60,908
Intangible assets, net		3,302,386			993,798
Goodwill		1,060,644			1,250,324
Other non-current assets		146,115			21,351
Total assets	$	6,031,241		$	2,582,891
LIABILITIES
Current liabilities:
Accounts payable	$	174,838		$	15,014
Accrued expenses and other current liabilities		662,442			151,753
Income taxes payable		50,377			—
Current portion of long-term debt		208,960			5,977
Total current liabilities		1,096,617			172,744
Other liabilities:
Long-term debt, excluding current portion		2,830,500			956,580
Deferred income taxes		113,387			86,867
Other non-current liabilities		101,644			16,780
Total liabilities		4,142,148			1,232,971
Commitments and contingencies (see Note 15)
SHAREHOLDERS’ EQUITY
Ordinary shares, par value $0.01 per share; 500,000,000 shares authorized; 251,594,687 and 251,294,256 shares issued and 251,594,687 and 250,781,978 shares outstanding		2,516			2,508
Additional paid-in capital		2,066,202			2,055,521
Accumulated deficit		(175,718	)		(689,836	)
Treasury stock, at cost (0 and 512,278 shares, respectively)		—			(6,352	)
Accumulated other comprehensive (loss)		(3,907	)		(11,921	)
Total shareholders’ equity		1,889,093			1,349,920
Total liabilities and shareholders’ equity	$	6,031,241		$	2,582,891

See accompanying notes to consolidated financial statements.

F-3

WARNER CHILCOTT PUBLIC LIMITED COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands except per share amounts)

	Year Ended December 31,
	2009			2008			2007
REVENUE:
Net sales	$	1,384,605		$	918,992		$	888,192
Other revenue		51,211			19,133			11,369
Total revenue		1,435,816			938,125			899,561
COSTS, EXPENSES AND OTHER:
Cost of sales (excludes amortization and impairment of intangible assets)		320,278			198,785			185,990
Selling, general and administrative		436,384			192,650			265,822
(Gain) on sale of assets		(393,095	)		—			—
Research and development		76,737			49,956			54,510
Amortization of intangible assets		312,172			223,913			228,330
Impairment of intangible assets		—			163,316			—
Interest (income)		(162	)		(1,293	)		(4,806	)
Interest expense		124,779			94,409			122,424
INCOME BEFORE TAXES		558,723			16,389			47,291
Provision for income taxes		44,605			24,746			18,416
NET INCOME / (LOSS)	$	514,118		$	(8,357	)	$	28,875
Earnings / (Loss) Per Share:
Basic	$	2.05		$	(0.03	)	$	0.12
Diluted	$	2.05		$	(0.03	)	$	0.12

See accompanying notes to consolidated financial statements.

F-4

WARNER CHILCOTT PUBLIC LIMITED COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(All amounts in thousands except share amounts)

	Number of Ordinary shares		Common Stock		Additional Paid-in Capital			Accumulated deficit			Accumulated Other Comprehensive Income / (Loss)			Treasury Stock			Total
Balance as of December 31, 2006	250,557,866		$	2,506	$	2,040,877		$	(710,156	)	$	1,335		$	(6,330	)	$	1,328,232
Net income	—			—		—			28,875			—			—			28,875
Stock compensation	17,155			—		6,115			—			—			—			6,115
Adoption of ASC 740	—			—		—			(198	)		—			—			(198	)
Exercise of non-qualified options to purchase Ordinary Shares	8,690			—		172			—			—			—			172
Other comprehensive (loss)	—			—		—			—			(8,776	)		—			(8,776	)
Balance as of December 31, 2007	250,583,711		$	2,506	$	2,047,164		$	(681,479	)	$	(7,441	)	$	(6,330	)	$	1,354,420
Net (loss)	—			—		—			(8,357	)		—			—			(8,357	)
Stock compensation	191,720			2		7,925			—			—			—			7,927
Purchase of treasury shares	(22,268	)		—		—			—			—			(22	)		(22	)
Exercise of non-qualified options to purchase Ordinary Shares	28,815			—		432			—			—			—			432
Other comprehensive (loss)	—			—		—			—			(4,480	)		—			(4,480	)
Balance as of December 31, 2008	250,781,978		$	2,508	$	2,055,521		$	(689,836	)	$	(11,921	)	$	(6,352	)	$	1,349,920
Net income	—			—		—			514,118			—			—			514,118
Stock compensation	554,065			5		13,067			—			—			—			13,072
Retirement of treasury stock	—			—		(6,352	)		—			—			6,352			—
Exercise of non-qualified options to purchase Ordinary Shares	258,644			3		3,966			—			—			—			3,969
Other comprehensive income	—			—		—			—			8,014			—			8,014
Balance as of December 31, 2009	251,594,687		$	2,516	$	2,066,202		$	(175,718	)	$	(3,907	)	$	—		$	1,889,093

See accompanying notes to consolidated financial statements.

F-5

WARNER CHILCOTT PUBLIC LIMITED COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended December 31,
	2009			2008			2007
Net Income / (Loss)	$	514,118		$	(8,357	)	$	28,875
Other comprehensive (loss) / income:
Cumulative translation adjustment		(4,268	)		(5,362	)		524
Unrealized gain / (loss) on interest rate swaps (net of tax of $(174), $365 and $(537), respectively)		8,513			882			(9,300	)
Actuarial gains related to defined benefit plans (net of tax of $1,577)		3,769			—			—
Total other comprehensive income / (loss)		8,014			(4,480	)		(8,776	)
Comprehensive Income / (Loss)	$	522,132		$	(12,837	)	$	20,099

See accompanying notes to consolidated financial statements.

F-6

WARNER CHILCOTT PUBLIC LIMITED COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2009			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income / (loss)	$	514,118		$	(8,357	)	$	28,875
Adjustments to reconcile net income / (loss) to net cash provided by operating activities:
Depreciation		14,727			11,275			10,250
Amortization of intangible assets		312,172			223,913			228,330
Impairment of intangible assets		—			163,316			—
Write-off of fair value step-up on acquired inventories		73,493			—			—
(Gain) on sale of assets		(393,095	)		—			—
Provision for inventory obsolescence		11,540			14,730			10,948
Deferred income taxes		(67,877	)		(16,307	)		(28,706	)
Amortization of debt finance costs		30,306			9,480			13,813
Stock compensation expense		13,072			7,927			6,115
Changes in assets and liabilities:
(Increase) / decrease in accounts receivable, prepaid and other assets		(18,132	)		(15,234	)		11,753
(Increase) / decrease in inventories		(8,513	)		(18,475	)		1,397
(Decrease) / increase in accounts payable, accrued expenses and other liabilities		(15,516	)		6,811			22,529
Increase / (decrease) in income taxes and other, net		35,611			(65,797	)		34,246
Net cash provided by operating activities		501,906			313,282			339,550
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of intangible assets		(11,600	)		(51,600	)		(24,000	)
Purchase of business, net of cash acquired (Note 4)		(2,869,378	)		—			—
Proceeds from the sale of assets		1,000,000			—			—
Capital expenditures		(44,014	)		(20,314	)		(18,798	)
Net cash (used in) investing activities		(1,924,992	)		(71,914	)		(42,798	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Term borrowings under New Senior Secured Credit Facilities		2,950,000			—			—
Redemption of 8.75% senior subordinated notes due 2015 (“Notes”)		(290,540	)		(8,887	)		—
Term repayments under Prior Senior Secured Credit Facilities		(582,557	)		(227,682	)		(350,511	)
Payments for debt finance costs		(155,081	)		—			—
Proceeds from the exercise of non-qualified options to purchase ordinary shares		3,969			432			172
Other		395			(101	)		(101	)
Net cash provided by / (used in) financing activities		1,926,186			(236,238	)		(350,440	)
Net increase / (decrease) in cash and cash equivalents		503,100			5,130			(53,688	)
Cash and cash equivalents, beginning of period		35,906			30,776			84,464
Cash and cash equivalents, end of period	$	539,006		$	35,906		$	30,776
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	104,678		$	87,901		$	111,346
Income taxes paid, net	$	71,601		$	99,466		$	9,603
SCHEDULE OF NONCASH ACTIVITIES:
Increase / (decrease) in fair value of interest rate swaps, net	$	8,513		$	882		$	(9,300	)

See accompanying notes to consolidated financial statements.

F-7

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

1. The Company

Warner Chilcott Public Limited Company is an Irish company, which together with its wholly-owned subsidiaries (collectively, “Warner Chilcott,” or the “Company”) has operations in the United States, Puerto Rico, the United Kingdom (“UK”), the Republic of Ireland, Australia, Canada and many Western European countries. These consolidated financial statements include the accounts of Warner Chilcott Public Limited Company and all of its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). As further discussed in Note 4, these financial statements reflect the results of operations of The Procter & Gamble Company’s (“P&G”) global branded prescription pharmaceutical business (“PGP”) subsequent to the October 30, 2009 acquisition of PGP. The Company’s fiscal year ends on December 31.

The Company is a leading global specialty pharmaceutical company currently focused on the gastroenterology, women’s healthcare, dermatology and urology segments of the North American and Western European pharmaceuticals markets. The Company is fully integrated with internal resources dedicated to the development, manufacture and promotion of its products. The Company’s portfolio of pharmaceutical products is promoted primarily in North America and Western Europe by the Company’s sales and marketing organization. The Company operates manufacturing facilities in Fajardo and Manati, Puerto Rico, Larne, Northern Ireland and Weiterstadt, Germany.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. The consolidated financial information for the Company presented herein reflects all financial information that is, in the opinion of management, necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. All intercompany transactions and balances have been eliminated in consolidation.

Acquisitions

The consolidated financial statements reflect the acquisition of an acquired business, including the acquisition of PGP, after the completion of the acquisition and are not restated. The Company accounts for acquired businesses using the purchase method of accounting, which requires that most assets acquired and liabilities assumed be recorded at the date of acquisition at their fair values. Any excess of the purchase price over the assigned values of the net assets acquired is recorded as goodwill. When the Company has acquired net assets that do not constitute a business under U.S. GAAP, no goodwill has been recognized.

Reclassifications

The Company has made certain reclassifications to prior period information to conform to current period presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported financial position at the date of the financial statements and the reported results of operations during the reporting period. Actual results could differ from those estimates.

F-8

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively based on such periodic evaluations.

Foreign Currency

The Company has operations in the United States (“U.S.”), Puerto Rico, UK, Republic of Ireland, Australia, Canada and many Western European countries. The results of its non-U.S. operations are translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transaction. Translation adjustments are reflected in Shareholders’ equity and are included as a component of other comprehensive income / (loss).

The Company realizes foreign currency gains / (losses) in the normal course of business based on movement in the applicable exchange rates. Any gains / (losses) are included as a component of selling, general and administrative expenses.

Derivative Financial Instruments

The Company manages its exposure to certain market risks, including foreign exchange and interest rate risks, through the use of derivative financial instruments and accounts for them in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 815 “Derivatives and Hedging” (“ASC 815”).

On the date on which the Company enters into a derivative contract, it designates the derivative as: (i) a hedge of the fair value of a recognized asset or liability (fair value hedge), (ii) a hedge of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (cash flow hedge), (iii) a foreign currency fair value or cash flow hedge (foreign currency hedge) or (iv) a derivative instrument that is not designated for hedge accounting treatment. Changes in fair value of derivative financial instruments are recorded as adjustments to the assets or liabilities being hedged and are recorded in the statement of operations for derivatives that do not qualify for hedge accounting. Changes in fair value of derivative financial instruments are recorded as adjustments to the assets or liabilities being hedged and are recorded in comprehensive income / (loss), if the derivative is designated and qualifies for hedge accounting.

Revenue Recognition

Revenue from product sales is recognized when title and risk of loss to the product transfers to the customer, which is based on the transaction shipping terms. Recognition of revenue also requires reasonable assurance of the collection of a fixed amount of sales proceeds and the completion of all performance obligations. The Company warrants products against defects and for specific quality standards, permitting the return of products under certain circumstances. Product sales are recorded net of all sales-related deductions including, but not limited to: sales returns, rebates, customer loyalty programs and fee for service arrangements with certain distributors. The Company establishes accruals for its sales-related deductions in the same period that it recognizes the related sales based on select criteria for estimating such contra revenues. These reserves reduce revenues and are included as either a reduction of accounts receivable or as a component of accrued expenses. Included in net sales are amounts earned under contract manufacturing agreements with third parties.

On October 30, 2009, pursuant to the purchase agreement dated August 24, 2009 (as amended, the “Purchase Agreement”), between the Company and P&G, the Company acquired the global branded prescription

F-9

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

pharmaceutical business (“PGP”) of P&G for $2,919,261 in cash and the assumption of certain liabilities (the “PGP Acquisition”). As a result of the PGP acquisition, the Company began to offer Medicare rebates and assumed significant managed care contracts in 2009. The costs incurred by the Company in connection with these rebates are considered sales-related deductions which reduce reported net sales. The Company estimates the accruals for these programs, based on estimated utilization rates, costs related to the programs and other historical data. In 2009, the Company initiated customer loyalty programs related to DORYX 150 mg, LOESTRIN 24 FE, and TACLONEX ointment 100 mg. These customer loyalty programs “cap” the per prescription co-pay amount paid by the Company’s ultimate customers. The costs incurred by the Company in connection with the customer loyalty programs are considered sales-related deductions which reduce reported net sales. The Company estimates the accruals for these programs, based on estimated redemption rates, costs per redemption and other historical data. In March 2009, the Department of Defense (“DoD”) implemented the National Defense Authorization Act of 2008 authorizing the DoD to access discounted pricing for pharmaceuticals dispensed at retail pharmacies to TRICARE beneficiaries (e.g., members of the United States armed forces, their dependants and military retirees). Accordingly, the Company is required to pay rebates to the DoD for purchases under this program. The TRICARE rebates are reflected as a reduction of net sales. As of December 31, 2009 and 2008, the amounts related to all sales-related deductions included as a reduction of accounts receivable were $41,828 and $12,836, respectively. The amounts included in accrued liabilities were $333,291 and $76,683 (of which $106,378 and $61,282 related to reserves for product returns) as of December 31, 2009 and 2008, respectively.

The Company recognizes revenue related to licensing rights to sell products using the Company’s patents, based on third-party sales, as earned in accordance with contract terms when the third-party sales can be reasonably estimated and collection is reasonably assured. These amounts are included as a component of “other revenue”. The Company also has agreements with other pharmaceutical companies to co-promote certain products. Revenues and related product costs are recognized on a gross basis in transactions where the Company is deemed to be the principal in the transaction. Revenues earned based on upon a percentage of the co-promotion partners’ net sales are recognized, on a net basis, when the co-promote partners ship the related products and title passes to their customers. Contractual payments due to co-promotion partners are included within selling, general & administrative (“SG&A”) expense and contractual payments due from co-promotion partners are included within other revenue. Total other revenue for the years ended December 31, 2009, 2008 and 2007 was $51,211, $19,133, and $11,369, respectively.

Advertising and Promotion (“A&P”)

Costs associated with A&P of the Company’s products are expensed as incurred and are included in SG&A expenses. A&P expenses totaled $61,089, $47,252 and $81,002 in the years ended December 31, 2009, 2008 and 2007, respectively. Included in A&P are direct-to-consumer advertising expenses which totaled $5,476, $8,550 and $33,900 in the years ended December 31, 2009, 2008 and 2007, respectively.

Research and Development (“R&D”)

R&D costs are expensed as incurred. Milestone payments made to third parties in connection with R&D collaborations are expensed as incurred up to the point of regulatory approval. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the respective intangible asset based on future use and anticipated cash flows for the asset. Amounts capitalized for such payments are included in intangible assets, net of accumulated amortization. In connection with the adoption of ASC 805 “Business Combinations” (“ASC 805”) on January 1, 2009, the Company capitalized acquired in-process research and development (“IPR&D”) acquired through the acquisition of a business as part of

F-10

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

non-amortizable intangible assets. These costs will begin to be amortized if the associated regulatory approval is received. If regulatory approval is not received, and the R&D study is considered to be no longer viable, the IPR&D would be considered impaired. Total IPR&D, included as a component of intangible assets, was $247,588 as of December 31, 2009.

Income Taxes

Income taxes are accounted for under ASC Topic 740 “Income Taxes” (“ASC 740”). Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the consolidated financial statements. Deferred tax liabilities and assets are determined based on the differences between the book and tax bases of particular assets and liabilities and operating loss carryforwards, using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Litigation and Contingencies

The Company is subject to litigation and contingencies in the ordinary course of business. Additionally, the Company, in consultation with its counsel, assesses the need to record a liability for contingencies on a case-by-case basis in accordance with ASC Topic 450 “Contingencies”. Accruals are recorded when the Company determines that a loss related to a matter is both probable and reasonably estimable, based on existing information. These accruals are adjusted periodically as assessment efforts progress or as additional information becomes available. In addition to case-by-case contingencies, the Company self-insures for certain liabilities not covered under its litigation insurance based on an estimate of potential claims. The Company develops such estimates in conjunction with its insurance providers and outside counsel.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on deposit and money market accounts with original maturities of three months or less.

Inventories

Inventories are stated at the lower of cost of goods or market value. Cost is determined based on a first-in, first-out basis and includes transportation and handling costs. In the case of manufactured products, cost includes material, labor and applicable manufacturing overhead. Provisions are made for obsolete, slow moving or defective items, where appropriate. As of December 31, 2009, inventories included a fair value step-up adjustment associated with the PGP acquisition of $105,504. This one-time increase in the cost of inventory is expected to be recognized in the statement of operations in 2010.

Product samples are stated at cost of goods and are included in prepaid expenses and other current assets.

Property, Plant and Equipment

Fixed assets are valued at acquisition cost plus any direct expenses of acquisition. Property, plant and equipment are depreciated over their estimated useful lives, principally using the straight-line method. Interest incurred as part of the cost of constructing fixed assets is capitalized and amortized over the life of the asset. No depreciation is charged on land. The Company utilizes licensed software as part of its operating environment. The costs of licensing and implementing enterprise resource planning software are capitalized up to the point of

F-11

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

implementation and then amortized over the estimated useful life of the software in accordance with ASC Topic 350-40 “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”.

The estimated useful lives used by the Company to calculate depreciation are (in years):

Buildings	20
Plant and machinery	10
Computer equipment and software	3 – 5
Furniture and fixtures	10
Automobiles	3 – 4

Intangible Assets and Goodwill

In accordance with ASC 805, net assets of companies acquired in purchase transactions are recorded at their fair value on the date of acquisition. As such, the historical cost basis of individual acquired assets and liabilities are adjusted to reflect their fair value on the date of acquisition. The Company has recorded intangible assets primarily related to marketed products, IPR&D and goodwill. Identifiable intangible assets such as those related to marketed products or IPR&D projects, are measured at their respective fair values as of the acquisition date. The Company believes the fair values assigned to its acquired intangible assets are based on reasonable estimates and assumptions given the available facts and circumstances as of the acquisition dates. Discounted cash flow models are used in valuing these intangible assets, and these models require the use of significant estimates and assumptions including but not limited to:

• estimates of revenues and operating profits related to the products or product candidates;

• the probability of success for unapproved product candidates considering their stages of development;

• the time and resources needed to complete the development and approval of product candidates;

• the life of the potential commercialized products and associated risks, including the inherent difficulties and uncertainties in developing a product candidate such as obtaining U.S. Food and Drug Administration (“FDA”) and other regulatory approvals; and

• risks related to the viability of and potential alternative treatments in any future target markets.

Identified intangibles, other than indefinite-lived intangible assets, are amortized on an accelerated or straight-line basis over their estimated useful life. This determination is made based on the specific asset and the timing of recoverability from expected future cash flows. The majority of the Company’s identifiable intangible assets are owned by one of its Puerto Rican subsidiaries. The Company continually reviews and assesses the long range cash flow forecast for all its products. As a result of changing assumptions in evaluating the recoverability of intangible assets, some assets may be impaired and some assets which are not impaired may be subject to a change in amortization recognized in future periods to better match expected future cash flows.

Goodwill represents the excess of acquisition costs over the fair value of the net assets of the businesses purchased. Goodwill is not amortized and is reviewed for potential impairment on an annual basis, or if events or circumstances indicate, a potential impairment. This analysis is performed at the reporting unit level. The fair value of the Company’s reporting unit is compared with its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not considered impaired. If the carrying value of the reporting unit exceeds its fair value, then the implied fair value of the reporting unit’s goodwill as defined in ASC 350, “Intangibles—Goodwill and other,” (“ASC 350”) is compared with the carrying

F-12

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

amount of that goodwill. An impairment loss would be recorded if the carrying value of the reporting unit’s goodwill exceeds its implied fair value. The Company has one reporting unit where goodwill resides and performed its annual impairment test in the fourth quarter of the year ended December 31, 2009, noting no impairment.

Definite-lived intangible assets are evaluated for impairment in accordance with ASC 350. An impairment loss would be recognized if the carrying value of an intangible asset were not recoverable. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the asset. The Company’s intangible assets consist of trademarks, patents and other intellectual property and are amortized on either a straight-line or accelerated basis over the individual asset’s estimated useful lives not to exceed 15 years. As of December 31, 2009, the weighted average amortization period of intangible assets was approximately 3.5 years. In addition, the Company has valued a trademark with an indefinite life which is not amortized; however, the carrying value would be adjusted if it were determined that the fair value had declined. The Company performs an impairment test annually on its trademark. The Company performed its annual impairment test on its trademark in the fourth quarter of the year ended December 31, 2009, noting no impairment. As of December 31, 2009, the Company also had non-amortizable IPR&D intangible assets. The Company continuously reviews its products’ remaining useful lives based on each product family’s estimated future cash flows.

In connection with the Company’s annual review of its intangible assets, in the fourth quarter of 2008 the Company recorded a non-cash impairment charge of $163,316 relating to its OVCON / FEMCON FE product family. Based on changes in a number of assumptions, including those relating to the allocation of the Company’s expected future promotional emphasis between LOESTRIN 24 FE, FEMCON FE and other oral contraceptives currently in development and its product viability estimates in light of the future expected entrance of generic competition for FEMCON FE, the projected future revenue and related cash flows for the OVCON / FEMCON FE product family declined compared to previous forecasts. The undiscounted cash flows relating to this product family no longer exceeded the book value of the intangible assets. The Company estimated the fair value of the product family using a discounted cash flow analysis. The fair value was compared to the then current carrying value of the intangible asset for this product family and the difference was recorded as an impairment expense in the quarter ended December 31, 2008 as follows:

	Net Book Value prior to Impairment		Impairment Charge		Ending Net Adjusted Book Value
Product
OVCON / FEMCON FE product family	$	268,913	$	163,316	$	105,597

Deferred Loan Costs

Expenses associated with the issuance of debt instruments are capitalized and are being amortized over the term of the respective financing arrangements using the effective interest method. When long-term debt is paid down in advance, the loan fees associated with the prepaid debt are expensed as a component of interest expense in addition to the normal amortization expense recognized. Interest expense resulting from amortization and write-offs of loan fees amounted to $30,306, $9,480 and $13,813 in the years ended December 31, 2009, 2008 and 2007, respectively. The year ended December 31, 2009 included the write-off of $7,838 of debt fees relating to the Prior Senior Secured Credit Facilities and $6,071 in connection with the tender for a portion of the Notes. Deferred loan costs were $140,474 and $19,929 as of December 31, 2009 and December 31, 2008, respectively, and are included in other non-current assets in the consolidated balance sheet.

F-13

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Stock-Based Compensation

The Company accounts for stock-based compensation under ASC Topic 718 “Compensation – Stock Compensation,” (“ASC 718”) which requires that new, modified and unvested share-based compensation arrangements with employees, such as stock options and restricted stock grants, be measured at fair value and recognized as compensation expense over the vesting periods.

Defined Benefit Plans

Following the PGP Acquisition, the Company provides defined benefit pension plans for certain of its European employees. The Company recognizes the overfunded or underfunded status of each of its defined benefit plans as an asset or liability on its consolidated balance sheet. The obligations are generally measured at the actuarial present value of all benefits attributable to employee service rendered, as provided by the applicable benefit formula. The estimates of the obligations and related expense of these plans recorded in the financial statements are based on certain assumptions. The most significant assumptions relate to discount rate and expected return on plan assets. Other assumptions used may include employee demographic factors such as compensation rate increases, retirement patterns, expected employee turnover and participant mortality rates. The difference between these assumptions and actual experience results in the recognition of an asset or liability based upon a net actuarial (gain)/loss. If the total net actuarial (gain)/loss included in accumulated other comprehensive loss exceeds a threshold of 10% of the greater of the projected benefit obligation or the market related value of plan assets, it is subject to amortization and recorded as a component of net periodic pension cost over the average remaining service lives of the employees participating in the pension plan. Net periodic benefit costs are recognized in the consolidated statement of operations.

Recent Accounting Pronouncements

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”, formerly (EITF) issue 08-01). ASU 2009-13 establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities, and provides amendments to the criteria for separating deliverables, and measuring and allocating arrangement consideration to one or more units of accounting. This standard is effective on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the potential effect, if any, the adoption of ASU 2009-13 will have on its financial position or results of operations.

In August 2009, the FASB issued ASU 2009-05, Measuring Liabilities at Fair Value (“ASU 2009-05”). ASU 2009-05 provides guidance on measuring the fair value of liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). This pronouncement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The adoption of ASC 820-10 did not have an impact on the Company’s consolidated financial position or results of operations .

In July 2009, the FASB issued ASC Topic 105 (“ASC 105”) (formerly Statement of Financial Standards (SFAS) No. 168, The Hierarchy of Generally Accepted Accounting Principles). ASC 105 contains guidance which reduces the U.S. GAAP hierarchy to two levels, one that is authoritative and one that is not. This pronouncement is effective September 15, 2009. The adoption of this pronouncement did not have an effect on the consolidated financial statements.

In June 2009, the FASB issued guidance now codified within ASC Topic 810, Consolidation (“ASC 810”). ASC 810 requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or

F-14

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the enterprise that has both the power to direct the activities of a variable interest entity that most significantly impacts the entity’s economic performance, and the obligation to absorb losses or the right to receive benefits of the entity that could potentially be significant to the variable interest entity. This pronouncement also requires ongoing reassessments of whether an enterprise is the primary beneficiary and eliminates the quantitative approach previously required for determining the primary beneficiary. New provisions of this pronouncement are effective January 1, 2010. The Company is currently evaluating the impact of adopting this pronouncement, but does not expect the adoption to have a material effect on its financial position or results of operations.

In December 2008, the FASB issued guidance now codified within ASC Topic 715, Compensation—Retirement Benefits (“ASC 715”). ASC 715 provides guidance on an employer’s disclosures about plan assets of a defined benefit plan or other post-retirement plans, enabling users of the financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the annual reporting date. Disclosures will provide users an understanding of significant concentrations of risk in plan assets. The guidance shall be applied prospectively for fiscal years ending after December 15, 2009, with early application permitted. The Company adopted the guidance for the year ended December 31, 2009. The adoption is for disclosure purposes only and did not have an impact on the Company’s financial position or results of operations.

In December 2007, the FASB issued guidance now codified within ASC 810. ASC 810 requires entities to report non-controlling minority interests in subsidiaries as equity in consolidated financial statements. The amendments are effective for fiscal years beginning on or after December 15, 2008 and were adopted by the Company on January 1, 2009 on a prospective basis. The adoption did not have a material impact on the Company’s financial position or results of operations.

In December 2007, the FASB issued guidance now codified within ASC 805. ASC 805 requires the acquiring entity in a business combination to record all assets acquired and liabilities assumed at their respective acquisition-date fair value and also changes other practices. ASC 805 also changes the definition of a business to exclude consideration of certain resulting outputs used to generate revenue. ASC 805 is effective for fiscal years beginning after December 15, 2008, or January 1, 2009 for the Company, and should be applied prospectively to business combinations for which the acquisition date is on or after January 1, 2009. The Company adopted ASC 805 on January 1, 2009. See “Note 4—PGP Acquisition” for PGP purchase accounting details.

In June 2007, the FASB issued guidance now codified in ASC 808-10 Collaborative Arrangements defining a collaborative arrangement as one in which the participants are actively involved and are exposed to significant risks and rewards that depend on the ultimate commercial success of the endeavor. Revenues and costs incurred with third-parties in connection with collaborative arrangements are presented gross or net based on the criteria in ASC 605-45-45 Principal Agent Considerations and other accounting literature. Payments to or from collaborators are evaluated and presented based on the nature of the arrangement and its terms, the nature of the entity’s business, and whether those payments are within the scope of other accounting literature. The nature and purpose of collaborative arrangements are disclosed along with the accounting policies and the classification of significant financial statement amounts related to the arrangements. The guidance is effective for fiscal years beginning after December 15, 2008 and was adopted by the Company on January 1, 2009. See “Note 7—Collaboration Agreements” for details on the Company’s significant arrangements.

F-15

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

3. Redomestication

In prior periods, the Company’s consolidated financial statements presented the accounts of Warner Chilcott Limited, a Bermuda company, and all of its wholly-owned subsidiaries. In May 2009, the Board of Directors of Warner Chilcott Limited announced that it had unanimously approved the redomestication of the company from Bermuda to Ireland, subject to the approval of a scheme of arrangement by the company’s stockholders and the approval of the Supreme Court of Bermuda. On August 5, 2009 and August 14, 2009, respectively, the scheme of arrangement was approved by the shareholders of Warner Chilcott Limited and the Supreme Court of Bermuda. At 7:30 pm on August 20, 2009, the effective time of the scheme of arrangement, each holder of Warner Chilcott Limited’s outstanding Class A common shares, par value $0.01 per share, received ordinary shares, par value $0.01 per share, of Warner Chilcott plc on a one-for-one basis. As a result of the transaction, Warner Chilcott plc, a public limited company organized in, and a tax resident of, Ireland, became the ultimate public holding company of the Warner Chilcott group. On August 21, 2009, the shares of Warner Chilcott plc began trading on the NASDAQ Global Market under the symbol “WCRX,” the same symbol under which Warner Chilcott Limited’s shares previously traded. References throughout to “we”, “our” or the “Company” refer to Warner Chilcott Limited and its subsidiaries prior to the effective time of the scheme of arrangement and to Warner Chilcott plc and its subsidiaries since the effective time of the scheme of arrangement. In addition, references throughout this Form 10-K and the Notes to the Consolidated Financial Statements to “ordinary shares” refer to Warner Chilcott Limited’s Class A common shares, par value $0.01 per share, prior to the effective time of the scheme of arrangement and to the Company’s ordinary shares, par value $0.01 per share, since the effective time of the scheme of arrangement. The redomestication did not have an impact on the Company’s financial position, results of operations or cash flows in any periods presented.

4. Acquisitions

PGP Acquisition

On October 30, 2009, pursuant to the Purchase Agreement between the Company and P&G, the Company acquired PGP for $2,919,261 in cash and the assumption of certain liabilities. The purchase price remains subject to certain post-closing price adjustments. Under the terms of the Purchase Agreement, the Company acquired P&G’s portfolio of branded pharmaceutical products, prescription drug pipeline, manufacturing facilities in Puerto Rico and Germany and a net receivable owed from P&G of approximately $60,000. The total purchase price of $2,919,261 was allocated to the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date. PGP has two primary products: ASACOL and ACTONEL. ASACOL is the leading treatment for ulcerative colitis in the U.S. market for orally administered 5-aminosalicylic acid (“5-ASA”) products. ACTONEL is the leading branded product in the U.S. non-injectable osteoporosis market for the prevention and treatment of osteoporosis in women. In addition to ASACOL and ACTONEL, PGP markets several other products, including ENABLEX, which serves the overactive bladder market. The Company pursued the acquisition of PGP to expand its women’s healthcare product line, add a specialty segment in gastroenterology, establish itself in the urology market and expand the Company’s reach into markets outside of the U.S., that include Canada, most of the major markets in Western Europe and Australia.

F-16

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The acquisition of PGP has been accounted for as a business combination using the acquisition method of accounting. The results of operations of PGP since October 30, 2009 have been included in the Company’s consolidated statement of operations. The total revenues of PGP included in the Company’s consolidated results of operations for the year ended December 31, 2009 were $374,014. The purchase price allocation presented below is considered preliminary pending completion of the final valuation. Final determination of the fair values may result in further adjustments to the values presented below.

Purchase Price:
Cash consideration	$	2,919,261
Identifiable net assets:
Trade accounts receivable (approximates contractual value)	$	298,248
Inventories		256,214
Other current and long term assets		79,169
Property, plant and equipment		85,069
Intangible assets—intellectual property		2,587,208
IPR&D		247,588
Other current and long term liabilities		(645,468	)
Deferred income taxes, net		(50,703	)
Total identifiable net assets		2,857,325
Goodwill		61,936
Total	$	2,919,261

The fair value of receivables acquired was $298,248, with gross contractual amounts receivable of $324,760. The goodwill associated with this acquisition is reported within the Company’s North America segment. The goodwill results from expected synergies from the transaction, including complementary products that will enhance the Company’s overall product portfolio, which the Company believes will result in incremental revenue and profitability.

Intangible Assets

A substantial portion of the assets acquired consisted of intangible assets related to PGP’s marketed products and PGP’s IPR&D projects. Management determined that the estimated acquisition-date fair values of the intangible assets related to the marketed products and IPR&D projects were $2,587,208 and $247,588, respectively.

The two most significant intangible assets related to the PGP’s marketed products was $530,351 related to ACTONEL and $1,859,257 related to ASACOL. In accordance with ASC 350 the Company has determined that these intangible assets have finite useful lives and will be amortized over their respective useful lives.

The most significant intangible asset related to the IPR&D projects was $241,447 for the follow-on drug candidate to an existing product in post-menopausal osteoporosis. In accordance with the guidance in ASC 350, intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts. During the period the assets are considered indefinite-lived they will not be amortized but will be tested for impairment on an annual basis and between annual tests if the Company becomes aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. If and when development is complete,

F-17

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time.

The estimated fair value of the intangible assets related to the marketed products and IPR&D projects was determined using the income approach, which discounts expected future cash flows to present value. The Company estimated the fair value of these intangible assets using a present value discount rate ranging from 12.0% to 13.5%, and ranging from 16.5% to 19.0%, for the marketed products and IPR&D, respectively, which is based on the estimated weighted-average cost of capital for companies with profiles substantially similar to that of PGP. This is comparable to the estimated internal rate of return for PGP’s operations and represents the rate that market participants would use to value the intangible assets. Some of the other significant assumptions inherent in the development of the identifiable intangible asset valuations, from the perspective of a market participant, include the estimated net cash flows for each year for each project or product (including net revenues, cost of sales, research and development costs, selling and marketing costs and contributory asset charges), the assessment of each asset’s life cycle, competitive trends impacting the asset and each cash flow stream and other factors. For the intangible assets related to the IPR&D projects, the Company compensated for the differing phases of development of each project by probability-adjusting its estimation of the expected future cash flows associated with each project. The Company then determined the present value of the expected future cash flows using the discount rate ranging from 16.5 % to 19.0%. The projected cash flows from the IPR&D projects were based on key assumptions such as estimates of revenues and operating profits related to the projects considering their stages of development; the time and resources needed to complete the development and approval of the related product candidates; the life of the potential commercialized products and associated risks, including the inherent difficulties and uncertainties in developing a drug compound such as obtaining marketing approval from the FDA and other regulatory agencies; and risks related to the viability of and potential alternative treatments in any future target markets.

The intangible asset related to PGP’s marketed products are amortized over their estimated useful life using an amortization rate derived from the forecasted future product sales for these products. The weighted-average amortization period for these intangible assets is approximately 4 years.

Deferred Tax Assets and Deferred Tax Liabilities

Net deferred tax liabilities of $50,703, resulting from the acquisition, were primarily related to the difference between the book basis and tax basis of the intangible assets related to the marketed products and IPR&D projects. Pursuant to ASC 740-10-3-2, deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not (a likelihood of greater than 50 percent) that some portion or all of the deferred tax assets will not be realized. At the date of acquisition, the Company concluded, that it is more likely than not that it will not realize the benefits from deferred tax assets resulting from certain NOLs. As a result, the Company has recorded a valuation allowance of $11,042 to reduce these deferred tax assets.

Pro Forma Information (unaudited)

The following summarized pro forma consolidated income statement information assumes that the PGP Acquisition occurred as of January 1, 2008. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as increased depreciation and amortization expense on assets acquired from PGP resulting from the fair valuation of assets acquired and the impact of acquisition financing in place at October 30, 2009. The pro forma results do not include any anticipated cost synergies or other effects of the planned integration of

F-18

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

PGP. These pro forma results are for comparative purposes only and may not be indicative of the results that would have occurred if the Company had completed these acquisitions as of the periods shown below or the results that will be attained in the future:

	Year Ended December 31,
	2009		2008
Total revenues(1)	$	3,258,019	$	3,353,019
Net income / (loss)(1)	$	692,102	$	(176,229	)

(1) The pro forma amounts have not been adjusted to remove the impacts of the LEO Transaction (discussed in Note 5) for the periods presented.

Acquired Contingencies

Liabilities assumed for PGP on October 30, 2009 included certain contingent liabilities valued at approximately $5,000 which were valued in accordance with the FASB ASC 450, “Accounting for Contingencies.”

Financing for PGP Acquisition

To finance the PGP Acquisition, the Company used a combination of cash on hand and borrowings under its New Senior Secured Credit Facilities (see Note 13).

LEO agreements

In September 2005, the Company entered into agreements with LEO under which the Company acquired the rights to certain products under development. LEO also granted the Company a right of first refusal and last offer for the U.S. sales and marketing rights to dermatology products developed by LEO through 2010. In September 2007, the Company made a $10,000 payment under this agreement as a result of the FDA’s acceptance of LEO’s New Drug Application (“NDA”) submission for TACLONEX scalp topical suspension (“TACLONEX scalp”), which was included in R&D in the year ended December 31, 2007. In June 2008, the Company made a $40,000 milestone payment under this agreement as a result of the FDA’s approval of the NDA for TACLONEX scalp. This $40,000 payment was recorded as an intangible asset as part of the DOVONEX/TACLONEX product family. These agreements were terminated in connection with the LEO Transaction on September 23, 2009.

5. LEO Transaction

On September 23, 2009, the Company entered into a definitive asset purchase agreement (the “LEO Transaction Agreement”) with LEO Pharma A/S (“LEO”) pursuant to which LEO paid the Company $1,000,000 in cash in order to terminate the Company’s exclusive license to distribute LEO’s DOVONEX and TACLONEX products (including all dermatology products in LEO’s development pipeline) in the United States and to acquire certain assets related to the Company’s distribution of DOVONEX and TACLONEX products in the United States. The transaction (the “LEO Transaction”) closed simultaneously with the execution of the LEO Transaction Agreement. In connection with the LEO Transaction, the Company entered into a distribution agreement with LEO pursuant to which the Company agreed to, among other things, (1) continue to distribute DOVONEX and TACLONEX for LEO, for a distribution fee, through September 23, 2010 and (2) purchase inventories of DOVONEX and TACLONEX from LEO. In addition, the Company agreed to provide certain transition services for LEO for a period of up to one year after the closing.

F-19

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The LEO Transaction resulted in a gain of $380,088, net of tax, which was calculated as follows:

Cash purchase price	$	1,000,000
Write-off of goodwill associated with the group of assets sold		(251,616	)
Write-off of DOVONEX/TACLONEX product family intangible assets		(220,072	)
Product supply advance		(104,122	)
Closing costs and other		(31,095	)
Pre-tax gain on the LEO Transaction		393,095
Provision for income taxes		(13,007	)
After-tax gain on the LEO Transaction	$	380,088

In addition, during the quarter ended September 30, 2009, the Company recorded a deferred gain of $68,919 relating to the sale of certain inventories to LEO in connection with the LEO Transaction. In the fourth quarter of 2009, the Company recognized $34,184 of the deferred gain as a reduction to cost of sales ($33,500 net of tax). However, the remaining $34,735 of the deferred gain is expected to be recognized during 2010 as the Company continues to distribute products for LEO under the distribution agreement. The aggregate gain from the LEO Transaction is expected to be $462,014 (or $447,629 net of tax).

The Company used approximately $481,798 of the proceeds from the LEO Transaction to repay the entire remaining principal balance of the loans outstanding under its Prior Senior Secured Credit Facilities (the “Prior Senior Secured Credit Facilities”) of $479,830, as well as accrued and unpaid interest and fees of $1,968. This repayment resulted in the termination of the Prior Senior Secured Credit Facilities, including the write-off of $6,583 related to deferred loan costs.

F-20

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

6. Earnings Per Share

The Company accounts for EPS in accordance with ASC Topic 260, “Earnings Per Share” and the related guidance, which requires two calculations of Earnings Per Share (“EPS”) to be disclosed: basic EPS and diluted EPS. The numerator in calculating basic and diluted EPS is an amount equal to consolidated net income / (loss) in the years ended December 31, 2009, 2008 and 2007, respectively. The denominator in calculating basic and diluted EPS is the weighted average shares outstanding plus the dilutive effect of stock option grants and restricted share grants, when applicable. The following is the calculation of EPS for the years ended December 31, 2009, 2008 and 2007:

	Year Ended December 31, 2009		Year Ended December 31, 2008			Year Ended December 31, 2007
Net income / (loss) available to common shareholders	$	514,118	$	(8,357	)	$	28,875
Weighted average number of ordinary and potential ordinary shares outstanding:
Basic number of ordinary shares outstanding		250,564,791		249,807,332			248,916,157
Dilutive effect of stock option grants and unvested restricted stock grants		654,197		—			1,537,883
Diluted number of ordinary and potential ordinary shares outstanding		251,218,988		249,807,332			250,454,040
Earnings per ordinary share:
Basic	$	2.05	$	(0.03	)	$	0.12
Diluted	$	2.05	$	(0.03	)	$	0.12
Amounts not included in calculation of diluted EPS as their impact was anti-dilutive under the treasury stock method:
Stock options to purchase ordinary shares		6,144,603		4,074,236			3,073,607
Unvested restricted stock grants		552,164		974,647			137,597

7. Collaboration Agreements

As a result of the PGP Acquisition, the Company has entered into collaborative arrangements to develop and commercialize drug candidates. Collaborative activities include research and development, marketing and selling (including promotional activities and physician detailing), manufacturing and distribution. These collaborations often require milestone and royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development, as well as expense reimbursements or payments to the third party. Each collaboration is unique in nature and the Company’s more significant arrangements are discussed below.

Sanofi

The Company and Sanofi-Aventis US LLC (“Sanofi”) are parties to an agreement to co-promote ACTONEL on a global basis, excluding Japan. Pursuant to the agreement, a management committee comprised of equal representation from the Company and Sanofi is responsible for overseeing the development and promotion of ACTONEL. The Company’s rights and obligations are specified by geographic market. In certain geographic markets, the Company shares selling and A&P costs as well as product profits based on contractual percentages. In geographic markets where the Company is deemed to be the principal in transactions with customers, revenues and related product costs are recognized on a gross basis. The Company’s share of selling,

F-21

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

A&P and contractual expenses are recognized in SG&A expenses. In geographic markets where the Company is not the principal in transactions with customers, revenue is recognized on a net basis, in other revenue for amounts earned based on Sanofi’s sale transactions with its customers. The Sanofi agreement expires on January 1, 2015. For the year ended December 31, 2009, the Company recognized net sales and other revenue related to ACTONEL of $213,686 and $8,331, respectively, and co-promotion expenses related to the Sanofi agreement of $98,900 were recognized in SG&A expense.

Novartis

The Company and Novartis are parties to an agreement to co-promote ENABLEX, developed by Novartis, in the U.S. The Company shares expenses with Novartis pursuant to the agreement and these costs are included within SG&A. The Company receives a contractual percentage of Novartis’ sales of ENABLEX, which is recorded, on a net basis, in other revenue. Under the agreement which expires in August 2016, the Company may be required to make payments to Novartis upon the achievement of various sales milestones that could aggregate up to $15,000. For the year ended December  31, 2009, the Company recognized other revenue related to ENABLEX of $14,943.

8. Derivatives and Fair Value of Financial Instruments

Derivative Financial Instruments

Derivative financial instruments are measured at fair value as defined by ASC 820, and are recognized as assets or liabilities on the balance sheet with changes in the fair value of the derivatives recognized in either net income or comprehensive income, depending on the timing and designated purpose of the derivative.

The Company entered into an interest rate swap contract covering a portion of its variable rate debt under our term loan indebtedness under our Prior Senior Secured Credit Facilities with affiliates of Morgan Stanley. The swap fixed the interest rate on the covered portion of the Company’s variable rate debt, hedging a portion of its exposure to potentially adverse movements in interest rates under its Prior Senior Secured Credit Facilities.

For all prior periods, the derivative instrument was designated as a cash flow hedge with the related gains/(losses) recorded in other comprehensive income (net of tax) with an offsetting amount included in other non-current liabilities. During the quarter ended September 30, 2009, as a result of the cash received from the LEO Transaction, the Prior Senior Secured Credit Facilities were terminated, resulting in the elimination of the variable rate debt that the interest rate swap had previously hedged. As a result, the derivative instrument was no longer an effective cash flow hedge and the related payment made in the last quarter the interest rate swap was still in effect of $2,528 was recognized in the statement of operations as a component of interest expense. The gains/(losses) recorded in other comprehensive income were $8,513, $882 and $(9,300) in the years ended December 31, 2009, 2008 and 2007, respectively.

The Company adopted ASC 820 on January 1, 2008, for its financial assets and financial liabilities. ASC 820 defines fair value, provides guidance for measuring fair value and requires certain disclosures. ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

F-22

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

• Level 2: Inputs, other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Unobservable inputs that reflect the Company’s own assumptions.

The fair value of the Company’s interest rate swap was determined under Level 3 based upon unobservable market inputs provided by an independent third party financial institution as defined by ASC 820. The reconciliation of the fair value (net of tax) of the interest rate swap is as follows:

Value of interest rate swaps as of December 31, 2007	$	(9,395	)
Total gains included in other comprehensive (loss) for year ended December 31, 2008		882
Value of interest rate swaps as of December 31, 2008		(8,513	)
Total gains included in other comprehensive income for the year ended December 31, 2009		8,513
Value of interest rate swaps as of December 31, 2009	$	0

Other Financial Instruments

The carrying amounts reported in the consolidated balance sheets as of December 31, 2009 and December 31, 2008 for cash and cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments. The Company’s debt outstanding under its New Senior Secured Credit Facilities approximates fair value since interest is at variable rates and it re-prices frequently. The Company’s Notes were publicly traded securities. The fair value of the Company’s Notes, based on available market quotes, was $93,709 ($89,460 book value) and $349,600 ($380,000 book value) as of December 31, 2009 and December 31, 2008, respectively.

9. Inventories

Inventories consist of the following:

	As of December 31, 2009		As of December 31, 2008
Finished goods	$	179,347	$	45,566
Work-in-progress / Bulk		34,084		3,859
Raw materials		22,772		8,351
	$	236,203	$	57,776

Amounts above are net of $7,495 and $12,965 related to inventory obsolescence reserves as of December 31, 2009 and December 31, 2008, respectively. As of December 31, 2009, finished goods inventories included a fair market step-up adjustment related to the PGP Acquisition of $105,504. This one-time increase in the cost of inventory is expected to be recognized in the statement of operations in 2010.

Product samples are stated at cost ($5,017 and $3,618 as of December 31, 2009 and December 31, 2008, respectively) and are included in prepaid expenses and other current assets.

F-23

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

10. Property, Plant and Equipment, net

Property, plant and equipment, net, including additions as a result of the PGP Acquisition, consist of the following:

	As of December 31, 2009		As of December 31, 2008
Land and buildings	$	85,910	$	22,300
Plant and machinery		43,379		24,772
Computer equipment and software		44,000		24,815
Furniture and fixtures		4,470		2,443
Automobiles		4,320		482
Construction in Progress		35,605		12,856
		217,684		87,668
Less accumulated depreciation		39,859		26,760
	$	177,825	$	60,908

Depreciation expense was $14,727, $11,275 and $10,250 in the years ended December 31, 2009, 2008 and 2007, respectively.

11. Goodwill and Intangible Assets

In connection with the PGP Acquisition, the Company recognized goodwill as the excess cost of the acquired entity over the net fair value amounts assigned to all assets and liabilities acquired. Goodwill recognized in connection with the PGP Acquisition was $61,936 and has been allocated to the North American reporting unit. The Company’s goodwill and a trademark have been deemed to have indefinite lives and are not amortized. The following table represents the Company’s changes in goodwill during the year ended December 31, 2009:

Balance, January 1, 2009	$	1,250,324
Reduction resulting from the LEO Transaction		(251,616	)
Increase related to the PGP Acquisition		61,936
Balance, December 31, 2009	$	1,060,644

There were no changes to goodwill in the comparable period in 2008. Additionally, there were no accumulated impairment related losses to goodwill.

IPR&D acquired through the acquisition of a business is capitalized as non-amortizable intangible assets. These costs will begin to be amortized if the associated regulatory approval is received. If regulatory approval is not received, and the R&D study is considered to be no longer viable, the IPR&D would be considered impaired. Until such time that both the two events occur, IPR&D is treated as an indefinite-lived intangible asset. The Company’s licensing agreements and certain trademarks that do not have indefinite lives are being amortized on either a straight-line or accelerated basis over their useful lives not to exceed 15 years.

F-24

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Components of the Company’s intangible assets as of December 31, 2009, consist of the following:

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Definite-lived intangible assets
ASACOL	$	1,856,293	$	40,558	$	1,815,735
ACTONEL		528,906		33,307		495,599
ESTRACE Cream		411,000		209,495		201,505
OVCON / FEMCON FE product family		401,000		344,748		56,252
DORYX		331,300		159,614		171,686
FEMHRT product family		315,600		279,564		36,036
ESTROSTEP FE		199,100		186,124		12,976
ENABLEX		90,731		3,707		87,024
PREVISCAN		51,099		3,783		47,316
ESTRACE Tablets		31,500		10,500		21,000
FEMRING		29,301		15,058		14,243
CACIT		17,186		441		16,745
MACROBID		16,739		1,239		15,500
Other products intellectual property		128,657		95,476		33,181
Total Definite-lived intangible assets		4,408,412		1,383,614		3,024,798
Indefinite-lived intangible assets
Trademark		30,000		—		30,000
IPR&D		247,588		—		247,588
Total intangible assets, net	$	4,686,000	$	1,383,614	$	3,302,386

Aggregate amortization expense related to intangible assets was $312,172, $387,229 (including a $163,316 non-cash impairment charge) and $228,330 for the years ended December 31, 2009, 2008 and 2007, respectively. Included in amortization expense in the year ended December 31, 2009 was $16,107 relating to the DOVONEX/TACLONEX product family which was divested during the third quarter. The gross carrying value related to these assets was $289,536 and accumulated amortization was $69,464, which was written-off and included as a component of the gain resulting from the LEO Transaction (also see Note 5).

Estimated amortization expense based on current forecasts (excluding indefinite-lived intangible assets) for each of the next five years is as follows:

	Amortization
2010	$	647,223
2011		505,085
2012		420,048
2013		369,000
2014		293,308
Thereafter		790,134
		3,024,798

F-25

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

12. Accrued Expenses

Accrued expenses consist of the following:

	As of December 31, 2009		As of December 31, 2008
Product rebates accruals (commercial and government)	$	182,017	$	9,684
ACTONEL co-promotion liability		169,114		—
Sales returns reserve		106,378		61,282
Customer loyalty and coupon programs		44,897		5,718
Payroll, commissions, and employee costs		33,677		15,055
Severance accruals		33,133		—
Contractual obligations		21,787		13,272
Professional fees		18,002		2,075
Advertising and promotion		8,829		815
Value-added tax liabilities		7,465		—
Research and development expense accruals		7,101		4,858
Deferred income		5,741		5,083
Interest payable		3,729		13,934
Uncertain tax positions(1)		1,943		2,450
Obligations under product licensing and distribution agreements		—		14,363
Other		18,629		3,164
Total	$	662,442	$	151,753

(1) As of December 31, 2009 and 2008, all income tax liabilities were related to reserves recorded under ASC 740. In addition, reserves included as a component of other non-current liabilities as of December 31, 2009 and 2008 totaled $9,694 and $2,328, respectively.

The increase in accrued expenses was primarily due to product rebates and sales return reserves, liabilities to collaboration partners and certain employee costs, primarily attributable to the PGP Acquisition. The ACTONEL co-promote liability is to the Company’s collaboration partner, Sanofi and is further discussed in Note 7.

13. Indebtedness

New Senior Secured Credit Facilities

On October 30, 2009, Warner Chilcott Holdings Company III, Limited (“Holdings III”), WC Luxco S.à r.l. (the “Luxco Borrower”), Warner Chilcott Corporation (“WCC”) (the “US Borrower”), Warner Chilcott Company, LLC (“WCCL”) (the “PR Borrower”, and together with the Luxco Borrower and the US Borrower, the “Borrowers”) entered into a credit agreement (the “Credit Agreement”) with a syndicate of lenders (the “Lenders”), Credit Suisse, Cayman Islands Branch as administrative agent, Bank of America Securities LLC as syndication agent and JPMorgan Chase Bank, N.A. as documentation agent, pursuant to which the Lenders have provided senior secured credit facilities (the “New Senior Secured Credit Facilities”) in an aggregate amount of $3,200,000 comprised of (i) $2,950,000 in aggregate term loan facilities and (ii) a $250,000 revolving credit facility with a five-year maturity that is available to all Borrowers. The term loan facilities were initially comprised of (i) a Term A facility in the amount of $1,000,000 with a five-year maturity that was borrowed by the PR Borrower, (ii) a Term B facility in the amount of $1,600,000 with a five-and-a-half year maturity ($500,000 of which was borrowed by the US Borrower and $1,100,000 of which was borrowed by the PR

F-26

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Borrower) and (iii) a delayed- draw term loan facility in the amount of $350,000. The Borrowers borrowed a total of $2,600,000 under the term loan facilities and made no borrowings under the delayed-draw term loan facility or the revolving credit facility on October 30, 2009 to fund the PGP Acquisition. The interest rates on the borrowings under the New Senior Secured Credit Facilities, other than swing line loans, are (1) for the Term A facility, LIBOR (with a floor of 2.25%) plus 3.25%, or ABR, as defined, plus 2.25% and (2) for the Term B facility and the revolving credit facility, LIBOR (with a floor of 2.25%) plus 3.50% or ABR, as defined, plus 2.50%.

The proceeds of the term loan facilities (other than the delayed-draw term loan facility, as described below), together with cash on hand, were used to fund the PGP Acquisition, to consummate the other transactions contemplated thereby and to pay fees and expenses in connection therewith. The Borrowers may use the proceeds of the revolving credit facility for working capital and general corporate purposes. The revolving credit facility provides for a $20,000 sublimit for swing line loans and a $50,000 sublimit for the issuance of standby letters of credit. Any swing line loans and letters of credit would reduce the available commitment under the revolving credit facility on a dollar-for-dollar basis.

On December 16, 2009, the Borrowers entered into an amendment (“Amendment No. 1”) to the Credit Agreement, pursuant to which the Credit Agreement was amended to create a new tranche of term loans which was borrowed on December 30, 2009 by the US Borrower in an aggregate principal amount of $350,000 in order to finance, together with cash on hand, the repurchase or redemption (as described below) of any and all of the issued and outstanding Notes. On December 16, 2009, the outstanding delayed-draw term loan facility was terminated.

The loans and other obligations under the New Senior Secured Credit Facilities (including in respect of hedging agreements and cash management obligations) are (i) guaranteed by Holdings III and substantially all of its subsidiaries (subject to certain exceptions and limitations) and (ii) secured by substantially all of the assets of the Borrowers and each guarantor (subject to certain exceptions and limitations).

The New Senior Secured Credit Facilities contain a financial covenant that requires the ratio of total indebtedness to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of Holdings III (both as defined in the New Senior Secured Credit Facilities) not to exceed certain levels. The New Senior Secured Credit Facilities also contain a financial covenant that requires Holdings III to maintain a minimum ratio of EBITDA to interest expense (as defined in the New Senior Secured Credit Facilities) and other covenants that limit or restrict, among other things, the ability of Holdings III and certain of its subsidiaries to incur additional indebtedness, incur liens, prepay subordinated debt, make loans and investments, merge or consolidate, sell assets, change business or amend the terms of subordinated debt and restrict the payment of dividends. As of December 31, 2009, Holdings III was in compliance with all covenants under the New Senior Secured Credit Facilities.

The New Senior Secured Credit Facilities specify certain customary events of default including, without limitation, non-payment of principal or interest, violation of covenants, breaches of representations and warranties in any material respect, cross default of cross acceleration of certain other material indebtedness, material judgments and liabilities, certain ERISA events, and invalidity of guarantees and security documents under the New Senior Secured Credit Facilities.

Prior Senior Secured Credit Facilities

On January 18, 2005, Holdings III and its subsidiaries, WCC and WCCL, entered into the $1,790,000 Prior Senior Secured Credit Facilities with Credit Suisse as administrative agent and lender, and the other lenders and

F-27

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

parties thereto. The Prior Senior Secured Credit Facilities consisted of $1,640,000 of term loans (including $240,000 of delayed-draw term loans) and a $150,000 revolving credit facility, of which $30,000 and $15,000 were available for letters of credit and swing line loans, respectively, to WCC and WCCL. All of the outstanding debt under the Prior Senior Secured Credit Facilities was repaid with a portion of the proceeds of the LEO Transaction.

8.75% Notes

On January 18, 2005, Warner Chilcott Corporation (“WCC”), a wholly-owned U.S. subsidiary, issued $600,000 aggregate principal amount of Notes. The Notes were initially guaranteed on a senior subordinated basis by the Company, Holdings III, WC Luxco S.à.r.l., Warner Chilcott Intermediate (Luxembourg) S.à.r.l., WC Pharmaceuticals I Limited, the U.S. operating subsidiary (Warner Chilcott (US), LLC) and WCCL (collectively, the “Guarantors”). Interest payments on the Notes were due semi-annually in arrears on each February 1 and August 1. The issuance costs related to the Notes were being amortized to interest expense over the ten-year term of the Notes using the effective interest method.

On December 15, 2009, WCC commenced a cash tender offer pursuant to an Offer to Purchase and Consent Solicitation (the “Offer to Purchase”) for any and all of its remaining $380,000 aggregate principal amount of outstanding Notes. WCC also commenced a solicitation of consents to certain proposed amendments to the Indenture, dated as of January 18, 2005, governing the Notes by and among WCC, the guarantors named therein and Wells Fargo Bank, National Association, as the Trustee (the “Indenture”). As set forth in the Offer to Purchase, the proposed amendments would, among other things, eliminate substantially all of the restrictive covenants and certain events of default and eliminate or modify related provisions contained in the Indenture. In connection with the Offer to Purchase, WCC purchased $290,540 aggregate principal amount of the Notes in December of 2009 for a total price of $304,341 (104.75% of the principal amount), plus accrued interest. On December 29, 2009 (the “Consent Date”), the Company had received consents from holders of approximately 76% of the Notes as of the Consent Date. The consents were sufficient to affect all of the proposed amendments to the Indenture. On December 30, 2009, the Company, the guarantors named therein and Wells Fargo Bank, National Association, as the Trustee, executed a supplemental indenture to the Indenture, effecting the proposed amendments to the Indenture. The supplemental indenture was binding on the holders of Notes not purchased in the tender offer.

Following the Company’s acceptance for purchase of $290,540 aggregate principal amount of the Notes on December 30, 2009, $89,460 aggregate principal amount of the Notes remained outstanding. In January of 2010, WCC received and accepted for purchase approximately $2,000 aggregate principal amount of the Notes. Thus, in total, WCC received and accepted for purchase approximately $292,540 aggregate principal amount of the Notes, representing approximately 77% of the aggregate principal amount of the Notes outstanding prior to the tender offer. On February 1, 2010, WCC redeemed all of the remaining Notes outstanding in accordance with the Indenture. The redemption price for the redeemed Notes was $1,043.75 per $1,000.00 principal amount plus accrued and unpaid interest.

F-28

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Components of Indebtedness

As of December 31, 2009 and 2008, the Company’s outstanding debt included the following:

	Current Portion as of December 31, 2009		Long-Term Portion as of December 31, 2009		Total Outstanding as of December 31, 2009
Revolving credit loan	$	—	$	—	$	—
Term loans		119,500		2,830,500		2,950,000
Notes		89,460		—		89,460
Total	$	208,960	$	2,830,500	$	3,039,460

	Current Portion as of December 31, 2008		Long-Term Portion as of December 31, 2008		Total Outstanding as of December 31, 2008
Revolving credit loan	$	—	$	—	$	—
Term loans		5,977		576,580		582,557
Notes		—		380,000		380,000
Total	$	5,977	$	956,580	$	962,557

As of December 31, 2009, mandatory principal repayments of long-term debt in each of the five years ending December 31, 2010 through 2014 and thereafter were as follows:

Year Ending December 31,	Aggregate Maturities (in millions)
2010	$	208,960
2011		219,500
2012		219,500
2013		219,500
2014		319,500
Thereafter		1,852,500
Total long-term debt	$	3,039,460

14. Stock-Based Compensation Plans

The Company applied the provisions of ASC 718 during all periods presented. All share-based compensation to employees, including grants of non-qualified options to purchase ordinary shares and grants of restricted ordinary shares are measured at fair value on the date of grant and are recognized in the statement of operations as compensation expense over their vesting periods. For purposes of computing the amounts of share-based compensation expensed in any period, the Company treats option or share grants that time-vest as serial grants with separate vesting dates. This treatment results in accelerated recognition of share-based compensation expense whereby 52% of the compensation is recognized in year one, 27% is recognized in year two, 15% is recognized in year three, and 6% is recognized in the final year of vesting.

Total stock compensation expense recognized for the years ended December 31, 2009, 2008 and 2007 was $13,072, $7,927 and $6,115 (related tax benefits were $3,306, $2,291 and $1,934, respectively), respectively.

F-29

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Unrecognized future compensation expense was $12,912 as of December 31, 2009 which will be recognized as an expense over a remaining weighted average period of 1.12 years. On August 21, 2009, the Company registered 17,284,730 shares of its ordinary shares for issuance under the Warner Chilcott Equity Incentive Plan.

The Company has granted equity-based incentives to its employees comprised of restricted ordinary shares and non-qualified options to purchase ordinary shares. Restricted ordinary shares are granted and expensed, using the market price per share on the applicable grant date, over a four year vesting period. Non-qualified options to purchase ordinary shares are granted to employees at exercise prices per share equal to the closing market price per share on the date of grant. The fair value of options is determined on the grant dates using the Black-Scholes method of valuation and that amount is recognized as an expense over the four year vesting period. The options have a term of ten years.

In establishing the value of the options on the grant dates during 2007, the Company assumed that the ordinary shares, although having limited volatility history, had a similar volatility as a defined group of comparable companies. Beginning with the grant dates in 2008, the Company used its actual historical volatility for its ordinary shares to estimate the expected volatility at each grant date. The Company assumes that the options will be exercised, on average, in six years. Using the Black-Scholes valuation model, the fair value of the options is based on the following assumptions:

	2009 Grants	2008 Grants	2007 Grants
Dividend yield	None	None	None
Expected volatility	35.00%	35.00%	35.00 – 50.00%
Risk-free interest rate	2.35 – 3.84%	2.24 – 3.98%	4.03 – 5.03%
Expected term (years)	6.00	6.00	6.00

The weighted average remaining contractual term of all outstanding options to purchase ordinary shares granted is 7.34 years.

The following is a summary of equity award activity for unvested restricted ordinary shares in the period from December 31, 2006 through December 31, 2009:

(in thousands except per share amounts)	Shares		Weighted Average Fair Value on Grant Date
Unvested restricted ordinary shares at December 31, 2006	2,663		$	2.25
Granted shares	24		$	16.82
Vested shares	(1,467	)		1.55
Forfeited shares	(7	)		15.24
Unvested restricted ordinary shares at December 31, 2007	1,213		$	3.30
Granted shares	218		$	17.29
Repurchased shares	(22	)		1.00
Vested shares	(852	)		1.98
Forfeited shares	(27	)		15.65
Unvested restricted ordinary shares at December 31, 2008	530		$	10.66
Granted shares	576		$	13.70
Vested shares	(308	)		6.30
Forfeited shares	(23	)		15.24
Unvested restricted ordinary shares at December 31, 2009	775		$	14.52

F-30

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The following is a summary of equity award activity for non-qualified options to purchase ordinary shares in the period from December 31, 2006 through December 31, 2009:

(in thousands except per share amounts)	Options		Weighted Average Fair Value on Grant Date		Weighted Average Exercise Price
Balance at December 31, 2006	3,068		$	3.01	$	19.99
Granted options	134		$	8.77	$	16.84
Exercised options	(9	)		8.02		15.00
Forfeited options	(119	)		8.10		15.14
Balance at December 31, 2007	3,074		$	3.05	$	20.05
Granted options	1,263		$	6.86	$	16.84
Exercised options	(29	)		8.01		14.97
Forfeited options	(234	)		7.41		15.70
Balance at December 31, 2008	4,074		$	3.95	$	19.34
Granted options	2,796		$	4.99	$	13.01
Exercised options	(259	)		7.78		15.44
Forfeited options	(290	)		6.24		14.41
Balance at December 31, 2009	6,321		$	4.14	$	16.93
Vested and exercisable at December 31, 2009	2,614		$	2.06	$	21.04

The intrinsic value of non-qualified options to purchase ordinary shares is calculated as the difference between the closing price of the Company’s common stock and the exercise price of the non-qualified options to purchase ordinary shares that had a strike price below the closing price. The intrinsic value for the non-qualified options to purchase ordinary shares that are “in-the-money” as of December 31, 2009 is as follows:

(in thousands except per share amounts)	Number of options	Weighted Average Exercise Price		Closing Stock Price		Intrinsic Value
Balance outstanding at December 31, 2009	6,305	$	16.90	$	28.47	$	72,949
Vested and exercisable at December 31, 2009	2,614	$	21.04	$	28.47	$	19,422

15. Commitments and Contingencies

Purchase Commitments

The Company has a contingent purchase obligation in connection with a product acquired in 2003 (FEMHRT) and had a contingent purchase obligation with a separate product acquired in 2003 (ESTROSTEP FE) which expired in the third quarter of 2007. The remaining contingency of $2,900 is based on FEMHRT maintaining market exclusivity through the first quarter of 2010. Payments related to the two products totaled $11,600, $11,600 and $24,000 in the years ended December 31, 2009, 2008 and 2007, respectively. Pursuant to an agreement to settle certain patent litigation, the Company granted Barr Pharmaceuticals, Inc. (now Teva Pharmaceuticals Industries, Ltd. (together with its subsidiaries, “Teva”)), a non-exclusive license to launch a generic version of FEMHRT in November 2009, six months prior to the expiration of its patent with respect to this product. As of the date of this Form 10-K, to the Company’s knowledge, Teva has not launched a generic version of FEMHRT.

F-31

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The Company has non-cancelable commitments under minimum purchase requirements with multiple suppliers which aggregate to $18,287. The Company’s aggregate remaining purchase commitments for the next five years as of December 31, 2009 are approximately:

Year
2010	$	5,423
2011		11,999
2012		865
2013		—
2014		—

The Company also has outstanding non-cancelable purchase commitments for inventories with multiple suppliers totaling $40,893 and commitments of $20,078 relating to certain capital expenditures, which are payable within one year, as well as commitments for cancellation of services of $7,982.

Product Development Agreements

In July 2007, the Company entered into an agreement with Paratek Pharmaceuticals, Inc. (“Paratek”) under which the Company acquired certain rights to novel tetracyclines under development for the treatment of acne and rosacea. The Company paid an upfront fee of $4,000 and agreed to reimburse Paratek for R&D expenses incurred during the term of the agreement. The Company may make additional payments to Paratek upon the achievement of various developmental milestones that could aggregate up to $24,500. In addition, the Company agreed to pay royalties to Paratek based on the net sales, if any, of the products covered under the agreement.

In December 2008, the Company signed an agreement with Dong-A PharmTech Co. Ltd. (“Dong-A”), to develop and market its orally-administered udenafil product, a PDE5 inhibitor for the treatment of erectile dysfunction (“ED”) in the United States. The Company paid $2,000 in connection with signing the agreement, which was included in R&D expense for the year ended December 31, 2008. In March 2009, the Company paid $9,000 to Dong-A, which was included in R&D expense for the year ended December 31, 2009, upon the achievement of a developmental milestone under the agreement. The Company agreed to pay for all development costs incurred during the term of the agreement and may make an additional payment to Dong-A of $13,000 upon the achievement of a contractually-defined milestone. In addition, the Company agreed to pay a profit-split to Dong-A based on operating profit (as defined in the agreement), if any, from the product.

In February 2009, the Company acquired the U.S. rights to NexMed Inc.’s (“NexMed”) topically applied alprostadil cream for the treatment of ED and the previous license agreement between the Company and NexMed relating to the product was terminated. Under the terms of the acquisition agreements, the Company paid NexMed an up-front payment of $2,500, which was included in R&D expense in the year ended December 31, 2009, and agreed to pay a milestone payment of $2,500 to NexMed upon the FDA approval of the product New Drug Application. The Company is currently working to prepare its response to the non-approvable letter that the FDA delivered to NexMed in July 2008 with respect to the product.

Product Development Agreements—PGP Acquisition

As part of the PGP Acquisition, the Company became party to certain agreements including:

In July 2005, PGP entered into a co-development and co-promotion agreement with Novartis under which Novartis agreed to co-develop and co-promote ENABLEX. Under the agreement, the Company may be required

F-32

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

to make payments to Novartis upon the achievement of various sales milestones that could aggregate up to $15,000.

In June 2006, PGP entered into an agreement with Watson under which PGP acquired the rights to certain products under development relating to trans-dermal delivery systems for testosterone for use in females. Under the product development agreement, the Company may be required to make additional payments to Watson upon the achievement of various developmental milestones that could aggregate up to $25,000. Further, the Company agreed to pay a supply fee and royalties to Watson on the net sales of those products.

In June 2007, PGP entered into an agreement with Dong Wha. Under the agreement, the PGP acquired an exclusive license to develop, manufacture and commercialize compounds world wide, excluding Asia, for the treatment of osteoporosis. The Company may make additional payments to Dong-Wha upon the achievement of various developmental milestones that could aggregate up to $181,000. In addition, the Company agreed to pay royalties to Dong-Wha based on the net sales, if any, of the products covered under the agreement.

Other

The Company and Sanofi are parties to an agreement to co-promote ACTONEL on a global basis, excluding Japan. Pursuant to the agreement, a management committee comprised of equal representation from the Company and Sanofi is responsible for overseeing the development and promotion of ACTONEL. The rights and obligations of the Company and Sanofi are specified by geographic market. In certain geographic markets, the Company and Sanofi share development and promotion costs as well as product profits based on contractual percentages. Pursuant to this agreement, the Company is obligated to incur an agreed upon amount for A&P and selling each fiscal year.

As mentioned above, the Company and Novartis are parties to an agreement to co-promote ENABLEX, developed by Novartis, in the United States. The Company and Novartis share development and promotion costs pursuant to the agreement. Such costs incurred by the Company are included within SG&A. The Company receives a contractual percentage of Novartis’ sales of ENABLEX, which is recorded on a net basis in “other revenue”. Pursuant to this agreement, the Company is obligated to incur an agreed upon amount for A&P and selling each fiscal year.

F-33

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

16. Income Taxes

The Company operates in many tax jurisdictions: including the Republic of Ireland, the U.S., the UK, Puerto Rico, Germany, Switzerland, Canada and other Western European countries. The following table shows the principal reasons for the difference between the effective tax rate and the U.S. statutory income tax rate:

	Year Ended December 31,
	2009			2008			2007
U.S. statutory rate		35.0	%		35.0	%		35.0	%
Income before income taxes	$	558,723		$	16,389		$	47,291
Income tax provision/(benefit) at U.S. statutory rate	$	195,553		$	5,736		$	16,552
Meals and entertainment & other		3,733			3,857			4,370
Effect of foreign tax rates, net		(167,572	)		(42,405	)		(4,831	)
Tax rate differential on impairment of intangible assets		—			53,894			—
Tax reserves, including interest		6,176			672			4,654
U.S. state and local taxes		4,822			2,987			2,244
Tax credits		(850	)		(2,475	)		(631	)
Valuation allowances		2,174			1,480			(3,134	)
Other differences, net		569			1,000			(808	)
Provision for income taxes	$	44,605		$	24,746		$	18,416
Effective income tax rate		8.0	%		151.0	%		38.9	%

The components of income / (loss) before income taxes and the provision / (benefit) for income taxes are presented in the tables below:

	Year Ended December 31,
	2009			2008			2007
Income / (loss) before income taxes:
U.S.	$	50,742		$	56,687		$	30,606
Foreign.		507,981			(40,298	)		16,685
Total		558,723			16,389			47,291
Provision / (benefit) for current taxes:
Foreign		41,887			2,892			2,972
U.S. federal tax		60,184			38,046			35,844
U.S. state and local taxes		12,874			115			8,306
Total		114,945			41,053			47,122
(Benefit) / provision for deferred taxes:
Foreign		(27,586	)		(4,523	)		(2,305	)
U.S. federal tax		(39,044	)		(13,309	)		(21,547	)
U.S. state and local taxes		(3,710	)		1,525			(4,854	)
Total		(70,340	)		(16,307	)		(28,706	)
Total provision / (benefit) for income taxes	$	44,605		$	24,746		$	18,416

F-34

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Deferred income tax items arise because of differences in the book and tax treatment of certain assets and liabilities. The items giving rise to deferred tax assets and liabilities are summarized in the following table:

	As of December 31, 2009			As of December 31, 2008
Deferred tax assets:
Loss carryforwards	$	25,197		$	11,492
Accrued expenses		82,593			34,136
Inventory		16,885			18,367
Uncertain tax positions		1,425			1,019
State income taxes		638			1,201
Stock-based compensation		7,173			3,842
Property, plant and equipment allowances		6,072			1,545
Other		2,045			1,921
Gross deferred tax assets		142,028			73,523
Deferred tax liabilities:
Intangible assets		(134,747	)		(95,879	)
Other		(402	)		(333	)
Gross deferred tax liabilities		(135,149	)		(96,212	)
Valuation allowance		(22,182	)		(9,893	)
Net deferred tax liabilities	$	(15,303	)	$	(32,582	)

At December 31, 2009 and 2008, the Company had foreign net operating loss carryforwards available to offset future taxable income of $92,992 ($25,197 of related deferred tax assets) and $31,227 ($11,492 of related deferred tax assets). Included in these net operating loss carryforwards are $42,305 ($11,845 of related deferred tax assets) and $30,992 ($8,651 of related deferred tax assets) related to losses in the UK with an unlimited carryover period and $50,687 ($13,352 of related deferred tax assets) and $235 ($97 of related deferred tax assets) related to other foreign jurisdictions which will expire at various fiscal years between 7 and 15 years from now, if not utilized. For U.S. state and local tax purposes, the Company had net operating loss carryforwards of approximately $125,118 ($2,744 of related deferred tax assets) for 2007 which were utilized in full during 2008. The Company also had tax credits carryovers of $1,902 in Puerto Rico for 2008 with were utilized in full during 2009.

Based on all available evidence, both positive and negative, the Company determined that it is more likely than not that the deferred asset related to substantially all of the UK and other foreign jurisdictions’ cumulative gross net operating loss carryforwards, and certain other deferred assets, will not be realized. Accordingly, the Company recorded net, or after-tax, aggregate valuation allowances for the years ended December 31, 2009 and 2008 of $22,182 (or $82,698 on a gross basis) and $9,893 (or $30,050 on a gross basis), respectively. These valuation allowances related to (1) UK cumulative net operating losses, (2) other foreign cumulative net operating losses and (3) certain tax credits.

The Company intends to continue to reinvest accumulated earnings of its subsidiaries indefinitely; as such, no additional provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for differences related to investments in subsidiaries. As of December 31, 2009, the cumulative amount of the Company’s temporary difference relating to investments in subsidiaries that are essentially permanent in duration was approximately $847,000. The amount of the resulting unrecognized deferred tax liability related to this temporary differences was approximately $3,300.

F-35

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Currently, the Internal Revenue Service (“IRS”) is auditing the Company’s U.S. tax returns for the years ended December 31, 2005 and 2006. The years ended December 31, 2007 and 2008 are open for U.S. audit, but are not currently under audit. The years ended December 31, 2004 through December 31, 2007 have been settled with the Puerto Rican tax authorities. The year ended December 31, 2008 is open for audit by the Puerto Rican tax authorities. In addition, certain state and other foreign jurisdictions for various periods are under audit.

The Company adopted the provisions of ASC 740 “Income Taxes”, (formerly FIN 48) on January 1, 2007. As of December 31, 2009, 2008 and 2007, the Company’s liability for unrecognized tax benefits was $10,568, $3,527 and $46,803, respectively, excluding interest and penalties. The amount, if recognized, that would impact the effective tax rate is $10,568, $3,527 and $16,366 as of December 31, 2009, 2008 and 2007, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2009, 2008 and 2007 is as follows:

	Year Ended December 31,
	2009			2008			2007
Balance at January 1,	$	3,527		$	46,803		$	40,172
Additions based on tax positions related to current year		6,722			618			1,396
Additions for tax positions of prior years		361			191			5,235
Cash settlements with taxing authorities		(42	)		(44,085	)		—
Lapses of applicable statutes of limitations		—			—			—
Balance at December 31,	$	10,568		$	3,527		$	46,803

It is expected that the amount of unrecognized tax benefits may change in the next 12 months; however, the Company does not expect the change to have a significant impact on its results of operations, financial position and cash flows.

For the tax years ending September 30, 2003, September 30, 2004, and the short period ending January 17, 2005 (together, the “IRS Audit Period”), the Company recorded a liability for unrecognized tax benefits of $26,386. For the short tax period ending December 31, 2005 (the “2005 Period”), the Company recorded a liability for unrecognized tax benefits of $3,698. For the tax period ending December 31, 2006 (the “2006 Period”), the Company recorded a liability for unrecognized tax benefits of $7,708. In connection with these liabilities for unrecognized tax benefits, the Company also recorded a liability for unrecognized tax benefits related to certain state income tax returns for such periods in the amount of $6,293. During 2008, the Company settled with the IRS the audits relating to the IRS Audit Period (the “IRS Settlement”). Unrelated to the IRS Settlement, in February 2008 the Company’s U.S. operating entities entered into an Advanced Pricing Agreement (the “APA”) with the IRS covering the calendar years 2006 through 2010. Pursuant to the terms of the APA, the Company’s consolidated U.S. income tax return for the taxable year 2006 was amended to reflect an increase in U.S. taxable income. Although the short taxable period ended December 31, 2005 was not covered by the APA, based on discussions between the Company and the IRS, the Company applied the APA methodology to its computations for this period.

Based upon (i) the IRS Settlement, with respect to the IRS Audit Period, (ii) an estimate of U.S. federal taxes owed, with respect to the 2005 Period, (iii) the APA, with respect to the 2006 Period, and (iv) the state taxes owed with respect to the IRS Audit Period, the 2005 Period and the 2006 Period, the Company made cash payments during the year ended December 31, 2008 totaling $44,085. These cash payments resulted in the significant decrease in the Company’s liabilities for unrecognized tax benefits at December 31, 2008 as compared to December 31, 2007.

F-36

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in its provision / (benefit) for income taxes. During the years ended December 31, 2009, 2008 and 2007, the Company recognized approximately $407, $1,175 and $6,042 in interest and penalties, respectively. The Company had approximately $1,206, $1,242 and $9,774 for the payment of interest and penalties accrued at December 31, 2009, 2008 and 2007, respectively.

In February 2008, the Company’s U.S. operating entities entered into an Advanced Pricing Agreement (“APA”) with the IRS covering the calendar years 2006 through 2010. The APA is an agreement with the IRS that specifies the agreed upon terms under which the Company’s U.S. entities are compensated for distribution and other services provided for its affiliates in Puerto Rico and Ireland. The APA provides the Company with greater certainty with respect to the mix of pretax income in the various tax jurisdictions in which the Company operates. The APA provides the Company with greater certainty with respect to the mix of pretax income in the various tax jurisdictions in which the Company operates. The APA was applicable to the Company’s U.S. subsidiaries as they existed prior to the PGP Acquisition. The Company cannot ensure that it will be able to enter into a new APA covering calendar years after 2010 or that any new APA will contain terms comparable to those in its existing APA. If the Company does not enter into a new APA, while we believe that our transfer pricing arrangements comply with applicable U.S. tax rules, the IRS could challenge the Company’s transfer pricing arrangements.

In December 2009 the Commonwealth of Puerto Rico the Department of Economic Development and Commerce granted a tax ruling to the Company on behalf of its Puerto Rican subsidiaries for industrial development income derived from its manufacturing, servicing and licensing activities subject to a reduced 2% income tax rate. Continued qualification for the tax ruling is subject to certain requirements. The tax ruling is effective for the period January 1, 2010 through December 31, 2024.

17. Segment Information

After the PGP Acquisition, the Company organized its business into two reportable segments, North America (which includes the U.S., Canada and Puerto Rico) and the Rest of the World (“ROW”) consistent with how it manages its business and views the markets it serves. The Company manages its businesses separately in North America and ROW as components of an enterprise for which separate information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assess performance. Prior to the PGP Acquisition on October 30, 2009, all of the Company’s revenues were derived domestically through one reportable segment. With the PGP Acquisition, the Company has now expanded into Western Europe, Canada, the United Kingdom and Australia. In addition to managing the Company’s results of operations in the two reportable segments, the Company manages revenues at a brand level.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes interest, and is used by the chief operating decision maker to evaluate the success of a specific region. The Company believes that segment operating income is an appropriate measure for evaluating the operating performance of its segments. However, this measure should be considered in addition to, not a substitute for, or superior to, income from operations or other measures of financial performance prepared in accordance with generally accepted accounting principles. The other accounting policies of each of the two reporting segments are the same as those in the summary of significant accounting policies discussed in Note 2.

F-37

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The following represents the Company’s segment operating profit and a reconciliation to its consolidated income before taxes for the years ended December 31, 2009, 2008 and 2007:

	North America		ROW			Eliminations(1)			Total Company
Year Ended December 31, 2009
Total revenue	$	2,075,677	$	142,714		$	(782,575	)	$	1,435,816
Segment operating profit	$	708,053	$	(8,368	)	$	12,291		$	711,976
Corporate (costs)										(28,636	)
Interest (expense), net										(124,617	)
Income before taxes									$	558,723
Year Ended December 31, 2008
Total revenue	$	938,125	$	—		$	—		$	938,125
Segment operating profit	$	109,505	$	—		$	—		$	109,505
Corporate (costs)										—
Interest (expense), net										(93,116	)
Income before taxes									$	16,389
Year Ended December 31, 2007
Total revenue	$	899,561	$	—		$	—		$	899,561
Segment operating profit	$	164,909	$	—		$	—		$	164,909
Corporate (costs)										—
Interest (expense), net										(117,618	)
Income before taxes									$	47,291

(1) Eliminations represent inter-segment revenues and related cost of sales.

The Company had three customers who each accounted for greater than 10% of the total revenues in North American operating segment. There were no customers that accounted for greater than 10% of the total revenues in the ROW operating segment. Also see Note 20 for additional information on concentration of credit risk.

F-38

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The following table presents total revenues by product for the years ended December 31, 2009, 2008 and 2007:

	Year Ended December 31,
	2009		2008		2007
Revenue breakdown by product
LOESTRIN 24 FE	$	247,579	$	197,172	$	148,892
ACTONEL(1)		222,017		—		—
DORYX		209,951		158,944		115,772
TACLONEX		137,320		153,316		127,155
DOVONEX		132,648		123,338		145,311
ESTRACE Cream		115,946		83,820		73,105
ASACOL		114,943		—		—
FEMHRT		60,316		61,549		63,685
FEMCON FE		49,535		45,831		32,380
ENABLEX royalty		14,943		—		—
Other Hormone Therapy		26,944		25,896		28,973
Other Oral Contraceptives		23,641		33,701		85,643
Other products		39,158		16,762		41,617
Contract manufacturing product sales		12,938		18,663		25,659
Other revenue		27,937		19,133		11,369
Total revenue	$	1,435,816	$	938,125	$	899,561

(1) Other revenue related to ACTONEL is combined with its product net sales for the purposes of segment reporting.

The following tables present total assets and other selected balance sheet information as of December 31, 2009 and 2008:

	North America		ROW		Total Company
As of December 31, 2009
Property, plant and equipment, net	$	129,062	$	48,763	$	177,825
Intangible assets, net		3,105,543		196,843		3,302,386
Goodwill		1,060,644		—		1,060,644
Total assets		5,840,622		190,619		6,031,241
As of December 31, 2008
Property, plant and equipment, net	$	60,908	$	—	$	60,908
Intangible assets, net		993,798		—		993,798
Goodwill		1,250,324		—		1,250,324
Total assets		2,582,891		—		2,582,891

F-39

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The following tables present capital expenditures, amortization and impairment of intangible assets and depreciation expense for the years ended December 31, 2009, 2008 and 2007:

	North America		ROW		Total Company
Year ended December 31, 2009
Capital expenditures	$	40,468	$	3,546	$	44,014
Amortization and impairment of intangible assets		288,247		23,925		312,172
Depreciation expense		11,769		2,958		14,727
Year ended December 31, 2008
Capital expenditures	$	20,314	$	—	$	20,314
Amortization and impairment of intangible assets		387,229		—		387,229
Depreciation expense		11,275		—		11,275
Year ended December 31, 2007
Capital expenditures	$	18,798	$	—	$	18,798
Amortization and impairment of intangible assets		228,330		—		228,330
Depreciation expense		10,250		—		10,250

The following table presents long-lived assets (excluding goodwill and intangible assets) by country as of December 31, 2009 and 2008:

	As of December 31, 2009		As of December 31, 2008
U.S.	$	23,379	$	16,599
Puerto Rico		105,613		34,921
UK / Republic of Ireland		14,917		9,388
Germany		31,011		—
Other		2,905		—
Total long-lived assets	$	177,825	$	60,908

The following table presents total revenue by significant country of domicile for the years ended December 31, 2009, 2008 and 2007:

	Year ended December 31,
	2009		2008		2007
U.S.	$	1,272,233	$	908,707	$	865,450
Canada		24,399		—		—
Puerto Rico		23,407		29,418		34,111
UK / Republic of Ireland		21,387		—		—
Other		94,390		—		—
Total	$	1,435,816	$	938,125	$	899,561

F-40

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

18. Leases

The Company leases land, buildings, computer equipment and motor vehicles under operating and capital leases. The Company’s remaining commitments under the non-cancelable portion of all leases for the next five years and thereafter as of December 31, 2009 are:

2010	$	6,860
2011		3,178
2012		2,977
2013		1,276
2014		909
Thereafter		843
Total	$	16,043

Lease and rental expenses totaled $7,720, $7,250 and $7,793 in the years ended December 31, 2009, 2008 and 2007, respectively.

19. Legal Proceedings

General Matters

The Company is involved in various legal proceedings in the normal course of its business, including product liability and other litigation. The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable. The Company maintains insurance with respect to potential litigation in the normal course of its business based on its consultation with its insurance consultants and outside legal counsel, and in light of current market conditions, including cost and availability. In addition, the Company self-insures for certain liabilities not covered under its litigation insurance based on estimates of potential claims developed in consultation with its insurance consultants and outside legal counsel.

The following discussion is limited to the Company’s material on-going legal proceedings, including the Company’s legal proceedings as a result of the PGP Acquisition:

Hormone Therapy Product Liability Litigation

Approximately 709 product liability suits, including some with multiple plaintiffs, have been filed against, or tendered to, the Company related to its hormone therapy (“HT”) products, FEMHRT, ESTRACE, ESTRACE Cream and medroxyprogesterone acetate. Under the purchase and sale agreement pursuant to which the Company acquired FEMHRT from Pfizer Inc. (“Pfizer”) in 2003, the Company agreed to assume certain product liability exposure with respect to claims made against Pfizer after March 5, 2003 and tendered to the Company relating to FEMHRT products. The cases are in the early stages of litigation and the Company is in the process of analyzing and investigating the individual complaints.

The lawsuits were likely triggered by the July 2002 and March 2004 announcements by the National Institute of Health (“NIH”) of the terminations of two large-scale randomized controlled clinical trials, which were part of the Women’s Health Initiative (“WHI”), examining the long-term effect of HT on the prevention of coronary heart disease and osteoporotic fractures, and any associated risk for breast cancer in postmenopausal women. In the case of the trial terminated in 2002, which examined combined estrogen and progestogen therapy

F-41

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

(the “E&P Arm of the WHI Study”), the safety monitoring board determined that the risks of long-term estrogen and progestogen therapy exceeded the benefits, when compared to a placebo. WHI investigators found that combined estrogen and progestogen therapy did not prevent heart disease in the study subjects and, despite a decrease in the incidence of hip fracture and colorectal cancer, there was an increased risk of invasive breast cancer, coronary heart disease, stroke, blood clots and dementia. In the trial terminated in 2004, which examined estrogen therapy, the trial was ended one year early because the NIH did not believe that the results were likely to change in the time remaining in the trial and that the increased risk of stroke could not be justified for the additional data that could be collected in the remaining time. As in the E&P Arm of the WHI study, WHI investigators again found that estrogen only therapy did not prevent heart disease and, although study subjects experienced fewer hip fractures and no increase in the incidence of breast cancer compared to subjects randomized to placebo, there was an increased incidence of stroke and blood clots in the legs. The estrogen used in the WHI Study was conjugated equine estrogen and the progestin was medroxyprogesterone acetate, the compounds found in Premarin^® and Prempro™, products marketed by Wyeth (now a part of Pfizer). Numerous lawsuits were filed against Wyeth, as well as against other manufacturers of HT products, after the publication of the summary of the principal results of the E&P Arm of the WHI Study.

Approximately 80% of the complaints filed against, or tendered to, the Company did not specify the HT drug alleged to have caused the plaintiff’s injuries. These complaints broadly allege that the plaintiff suffered injury as a result of an HT product. The Company has sought the dismissal of lawsuits that, after further investigation, do not involve any of our products. The Company has successfully reduced the number of HT suits it will have to defend. Of the approximately 709 suits that were filed against, or tendered to, the Company, 473 have been dismissed and 94 involving ESTRACE have been successfully tendered to Bristol-Myers pursuant to an indemnification provision in the asset purchase agreement pursuant to which we acquired ESTRACE. The purchase agreement included an indemnification agreement whereby Bristol-Myers indemnified the Company for product liability exposure associated with ESTRACE products that were shipped prior to July 2001.

ONJ Product Liability Litigation

The Company is a defendant in approximately 81 cases involving 89 plaintiffs who allege, among other things, that the Company’s bisphosphonate prescription drug ACTONEL caused them to suffer osteonecrosis of the jaw (“ONJ”), a rare but serious condition that involves severe loss, or destruction, of the jawbone. These cases have been filed in either federal or state courts in the United States, except for one lawsuit in provincial court in Canada. Sanofi co-promotes ACTONEL with the Company and is a defendant in most of the cases, and in some of the cases, manufacturers of other bisphosphonate products are also named as defendants. Plaintiffs have typically asked for unspecified monetary and injunctive relief, as well as attorney’s fees. In addition, the Company is aware of three other potential claimants who are under a tolling agreement suspending the statutes of limitation related to their claims. The Company is in the initial stages of discovery in the litigation, and cannot at this time predict the outcome of these lawsuits and claims or their financial impact. Under the Collaboration Agreement Sanofi has agreed to indemnify the Company, subject to certain limitations, for 50% of the losses from any product liability claims relating to ACTONEL, which would include ONJ-related claims.

The Company may be liable for product liability, warranty or similar claims in relation to PGP products, including ONJ-related claims, that were pending as of the closing of the PGP Acquisition. The Company’s agreement with P&G provides that P&G will indemnify the Company for 50% of the losses from any such claims pending as of October 30, 2009, subject to certain limits. The Company’s product liability insurance may not provide coverage for any such claims.

The Company currently maintains product liability insurance coverage for claims between $25 million and $170 million, above which the Company is self-insured. The Company’s insurance may not apply to damages or

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WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

defense costs related to the above mentioned HT claims or the above mentioned ONJ claims, including any claim arising out of HT or ACTONEL products with labeling that does not conform completely to FDA approved labeling. Labeling changes for ESTRACE Tablets that conform to such communications are currently pending before the FDA. Although it is impossible to predict with certainty the outcome of any litigation, an unfavorable outcome in these proceedings is not anticipated. An estimate of the range of potential loss, if any, to us relating to these proceedings is not possible at this time.

ASACOL 400 mg Patent Matters

In September 2007, PGP and Medeva Pharma Suisse AG (“Medeva”) received a Paragraph IV certification notice letter from Roxane Laboratories, Inc. (“Roxane”), a subsidiary of Boehringher Ingelheim Corporation, indicating that Roxane had submitted to the FDA an Abbreviated New Drug Application (“ANDA”) seeking approval to manufacture and sell a generic version of PGP’s ASACOL 400 mg product (“ASACOL 400”). The notice letter contended that Medeva’s U.S. Patent No. 5,541,170 (the “‘170 Patent”) and U.S. Patent No. 5,541,171 (the “‘171 Patent”) , formulation and method patents which PGP exclusively licenses from Medeva covering the ASACOL 400 mg product (“ASACOL 400”), were invalid and not infringed. The ‘170 Patent and ‘171 Patent expire in July 2013. In October 2007, Medeva and PGP filed a patent lawsuit against Roxane in the U.S. District Court for the District of New Jersey alleging infringement of the ‘170 Patent. The lawsuit results in a stay of FDA approval of Roxane’s ANDA for 30 months from the date of PGP’s and Medeva’s receipt of such notice (i.e. until March 2010), subject to the prior resolution of the matter before the court. The trial has not yet been scheduled. However, unless the District Court decides earlier in its favor, Roxane has agreed not to launch a generic version of ASACOL 400 before November 1, 2010. In addition, Roxane has agreed that if the case is fully submitted to the District Court by November 1, 2010, it will not launch until the District Court decides the case. While the Company and Medeva intend to vigorously defend the ‘170 Patent and pursue their legal rights, the Company can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent of the ASACOL 400 mg product will not be approved and enter the market prior to the expiration of the ‘170 Patent in 2013.

ACTONEL Patent Matters

In July 2004, PGP received a Paragraph IV certification notice letter from a subsidiary of Teva Pharmaceutical Industries, Ltd. (together with its subsidiaries “Teva”) indicating that Teva had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of PGP’s ACTONEL product. The notice letter contended that PGP’s U.S. Patent No. 5,583,122 (the “‘122 Patent”), a new chemical entity patent expiring in June 2014 (including a 6-month pediatric extension of regulatory exclusivity), was invalid, unenforceable or not infringed. In August 2004, PGP filed a patent lawsuit against Teva in the U.S. District Court for the District of Delaware charging Teva with infringement of the ‘122 Patent. In January 2006, Teva admitted patent infringement but alleged that the ‘122 Patent was invalid and, in February 2008, the District Court decided in favor of PGP and upheld the ‘122 Patent as valid and enforceable. In May 2009, the U.S. Court of Appeals for the Federal Circuit unanimously upheld the decision of the District Court.

In August 2008, December 2008 and January 2009, PGP and Hoffman-La Roche Inc. (“Roche”) received Paragraph IV certification notice letters from Teva, Sun Pharma Global, Inc. (“Sun”) and Apotex Inc. and Apotex Corp. (together “Apotex”) indicating that each such company had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of the once-a-month ACTONEL product (“ACTONEL OaM”). The notice letters contended that Roche’s U.S. Patent No. 7,192,938 (the “‘938 Patent”), a method patent expiring in November 2023 (including a 6-month pediatric extension of regulatory exclusivity) which Roche licensed to PGP with respect to ACTONEL OaM, was invalid, unenforceable or not infringed. PGP and Roche

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WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

filed patent infringement suits against Teva in September 2008, Sun in January 2009 and Apotex in March 2009 in the U.S. District Court for the District of Delaware charging each with infringement of the ‘938 Patent. The lawsuits result in a stay of FDA approval of each defendant’s ANDA for 30 months from the date of PGP’s and Roche’s receipt of notice, subject to the prior resolution of the matters before the court. Teva delivered the first Paragraph IV certification notice letter to PGP and Roche. The stay of approval of Teva’s ANDA will expire on the earlier of February 2011 or the resolution of the suit. Additionally, ACTONEL OaM has FDA exclusivity through April 2011 and the underlying ‘122 Patent expires in June 2014 (including a 6-month extension of regulatory exclusivity). The suits against Teva and Apotex have been consolidated for pretrial purposes. While a pretrial schedule has been set, and a pretrial conference scheduled, no trial date has been set. While the Company and Roche intend to vigorously defend the ‘938 Patent and protect their legal rights, the Company can offer no assurance as to when the lawsuits will be decided, whether the lawsuits will be successful or that a generic equivalent of ACTONEL OaM will not be approved and enter the market prior to the expiration of the ‘938 Patent in 2023.

On December 1, 2009, the Company received a Paragraph IV certification notice letter from Aurobindo Pharma Limited (“Aurobindo”) regarding the Company’s ACTONEL 5, 30 and 35 mg dosage strengths tablets (“ACTONEL Tablets”), which are covered by the Company’s U.S. Patent No. 6,165,513 (the “‘513 Patent”), as well as U.S. Patent Nos. 5,994,329, 6,015,801, 6,432,932 and 6,465,443, owned by Merck & Co., Inc. (“Merck”) and licensed by the Company (the “Merck Patents”). The Paragraph IV certification notice letter advised the Company of the filing of an ANDA with the FDA requesting approval to manufacture and sell a generic version of ACTONEL Tablets prior to the expiration of the ‘513 patent in 2018 and the Merck Patents in 2019. Merck did not assert the Merck Patents in any of the prior ACTONEL patent litigation. The Company has elected not to bring an infringement action with respect to this ANDA. In addition, Aurobindo did not certify against the ‘122 Patent, which expires in June 2014 (including a 6-month extension of regulatory exclusivity) and covers all of the Company’s ACTONEL products (including the ACTONEL Tablets). As a result, the Company does not believe that Aurobindo will be permitted to market its proposed ANDA product prior to the expiration of Teva’s 180-day period of marketing exclusivity following the June 2014 expiration (including a 6-month extension of regulatory exclusivity) of the ‘122 Patent.

On February 12, 2010, the Company received a Paragraph IV certification notice letter from Mylan Pharmaceuticals Inc. (“Mylan”) regarding the Company’s ACTONEL With Calcium Tablets (Copackaged) (“ACTONEL/Calcium”), which are covered by the Company’s ‘513 Patent, as well as the Merck Patents owned by Merck and licensed by the Company. The Paragraph IV certification letter advised the Company of the filing of an ANDA with the FDA requesting approval to manufacture and sell a generic version of ACTONEL/Calcium prior to the expiration of the ‘513 patent in 2018 and the Merck Patents in 2019. The certification notice letter sets forth allegations of non-infringement and/or the invalidity of the ‘513 and Merck patents. Merck did not assert the Merck Patents in any of the prior ACTONEL patent litigation. The Company previously discontinued sales of the ACTONEL/Calcium and has elected not to bring an infringement action with respect to this ANDA. In addition, Mylan did not certify against the ‘122 Patent which expires in June 2014 (including a 6-month extension of regulatory exclusivity) and covers all of the Company’s ACTONEL products (including ACTONEL/Calcium). As a result, the Company does not believe that Mylan will be permitted to market its proposed ANDA product prior to the expiration of Teva’s 180-day period of marketing exclusivity following the June 2014 expiration (including a 6-month extension of regulatory exclusivity) of the ‘122 Patent.

On February 24, 2010, the Company received a Paragraph IV certification notice letter from Mylan indicating that it had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of several of the Company’s ACTONEL tablets, including ACTONEL OaM. The notice letter contends that the ‘513 Patent, the Merck Patents and the ‘938 Patent which cover the products are invalid and/or will not be

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WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

infringed. Mylan did not certify against the ‘122 Patent which expires in June 2014 (including a 6-month extension of regulatory exclusivity) and covers all of the Company’s ACTONEL products. As a result, the Company does not believe that Mylan will be permitted to market its proposed ANDA products prior to the expiration of Teva’s 180-day period of marketing exclusivity following the June 2014 expiration of the ‘122 Patent (including a 6-month extension of regulatory exclusivity). The Company is currently reviewing the detail of the Paragraph IV certification notice letter and continues to have full confidence in its intellectual property protecting the ACTONEL tablets.

DORYX Patent Matters

As a result of the enactment of the QI Program Supplemental Funding Act of 2008 (the “QI Act”) on October 8, 2008, Mayne Pharma International Pty. Ltd.’s (“Mayne”) U.S. Patent No. 6,958,161 (the “‘161 Patent”) covering the Company’s DORYX product was submitted to the FDA for listing in the FDA’s Orange Book and potential generic competitors that had filed an Abbreviated New Drug Application (“ANDA”) prior to the listing of the ‘161 Patent were permitted to certify to the listed patent within 120 days of the enactment of the QI Act. In November and December 2008, and January 2009, the Company and Mayne received Paragraph IV certification notice letters from Actavis Elizabeth LLC (“Actavis”), Mutual Pharmaceutical Company, Inc. (“Mutual”), Mylan Pharmaceuticals Inc. (“Mylan”), Impax Laboratories, Inc. (“Impax”) and Sandoz Inc. (“Sandoz”) indicating that each had submitted to the FDA an ANDA seeking approval to manufacture and sell generic versions of DORYX 100 and 75 mg delayed-release tablets (“DORYX 100 and 75”). Those notice letters contend that the ‘161 Patent is invalid, unenforceable or not infringed. In December 2008 and January 2009, the Company and Mayne filed lawsuits against each of the potential generic competitors in the United States District Court for the District of New Jersey, charging them with infringement of the ‘161 Patent. In March 2009, the Company received the FDA’s response to a citizen petition that it had submitted requesting that the FDA impose a 30-month stay of approval on ANDAs referencing DORYX 100 and 75 that were filed prior to the listing of the ‘161 Patent under the transition rules of the QI Act. In its joint response to the citizen petitions of the Company and several other petitioners, the FDA took the position that a 30-month stay would not apply to approvals for such ANDAs. On November 9, 2009, pursuant to an agreement among the Company, Mayne and Mutual, the District Court dismissed the lawsuit against Mutual concerning generic versions of DORYX 100 and 75 following Mutual’s agreement to withdraw its ANDA with respect to such products.

In March 2009, the Company and Mayne received Paragraph IV certification notice letters from Impax and Mylan indicating that each had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of DORYX 150 mg delayed-release tablets (“DORYX 150”). The notice letters contend that the ‘161 Patent is not infringed. In March 2009, the Company and Mayne filed a lawsuit against Impax in the United States District Court for the District of New Jersey, charging Impax with infringement of the ‘161 Patent. In May 2009, the Company and Mayne filed a lawsuit against Mylan in the United States District Court for the District of New Jersey charging Mylan with infringement of the ‘161 Patent. In February 2010, the Company and Mayne received a Paragraph IV certification notice letter from Heritage Pharmaceuticals Inc. (“Heritage”) indicating that it had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of the DORYX 100 and 75 and DORYX 150 (together “DORYX 150, 100 and 75”). The notice letter contends that the ‘161 Patent is not infringed. The Company and Mayne are reviewing the Heritage notice letter and expect to file an infringement lawsuit against Heritage within 45 days of their receipt of the Paragraph IV certification notice letter. Based on the FDA’s March 2009 guidance, and assuming that the Company and Mayne bring suit against Heritage within the requisite period, the Company believes that because each of Impax’s and Mylan’s ANDAs with respect to generic versions of DORYX 150, and Heritage’s ANDA with respect to generic versions of DORYX 150, 100 and 75, were submitted after the listing of the ‘161 Patent in the FDA’s Orange Book, that the FDA will stay approval of these generic versions of the products for up to 30 months, subject to the prior resolution of the matter before the District Court.

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WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

In January 2010, the Company and Mayne received a Paragraph IV certification notice letter from Sandoz indicating that it had amended its ANDA previously submitted to the FDA requesting approval to manufacture and sell generic versions of DORYX 100 and 75 to include a generic version of DORXY 150. The notice letter contends that the ‘161 Patent is invalid, unenforceable or not infringed. In January 2010, the Company and Mayne filed a lawsuit against Sandoz in the United States District Court for the District of New Jersey charging Sandoz with infringement of the ‘161 Patent with respect to DORYX 150. While the Company can give no assurance, it believes that under current law, the FDA may not approve Sandoz’s amended ANDA with respect to DORYX 150 until 180 days following the date on which the “first filer” of an ANDA with respect to DORYX 150 enters the market, unless the first filer transfers or forfeits its first filer rights, for example by failing to begin marketing its product in a timely manner.

All of the actions against Actavis, Mylan, Impax and Sandoz relating to DORYX 100 and 75, as well as our lawsuits against Impax and Mylan relating to DORYX 150 have been consolidated for discovery purposes. The same is expected for the Sandoz DORYX 150 lawsuit. No trial date has been set by the District Court. While the Company and Mayne intend to vigorously defend the ‘161 Patent and pursue their legal rights, the Company can offer no assurance as to when the lawsuits will be decided, whether the lawsuits will be successful or that a generic equivalent of DORYX 150, 100 or 75 will not be approved and enter the market prior to the expiration of the ‘161 Patent in 2022.

LOESTRIN 24 FE Patent Matters

On July 31, 2009 the Company received a Paragraph IV certification notice letter from Lupin Ltd. indicating that it had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of the Company’s oral contraceptive, LOESTRIN 24 FE. The notice letter contends that the Company’s U.S. Patent No. 5,552,394 (the “‘394 Patent”) which covers LOESTRIN 24 FE and expires in 2014 is invalid, unenforceable or not infringed. In September 2009, the Company filed a lawsuit against Lupin Ltd. and its U.S. subsidiary, Lupin Pharmaceuticals, Inc. (collectively “Lupin”), in the District of Delaware charging Lupin with infringement of the ‘394 Patent. The lawsuit results in a stay of FDA approval of Lupin’s ANDA for 30 months from the date of the Company’s receipt of such notice, subject to the prior resolution of the matter before the court. On October 21, 2009 Lupin answered alleging invalidity and non-infringement of the ‘394 patent. No trial date has yet been set. In January 2009, the Company entered into a settlement and license agreement with Watson Pharmaceuticals, Inc. (together with its subsidiaries, “Watson”) to resolve patent litigation related to the ‘394 Patent. Under the agreement, Watson was permitted to commence marketing its generic equivalent product on the earlier of January 22, 2014 or the date on which another generic version of LOESTRIN 24 FE enters the U.S. market. Under current law, unless Watson forfeits its “first filer” status, the FDA may not approve Lupin’s ANDA until 180 days following the date on which Watson enters the market. The Company believes Watson may have forfeited its “first filer” status as a result of its failure to obtain approval by the FDA of its ANDA within the requisite period. As a result, while the Company has filed an infringement suit against Lupin and intends to vigorously defend the ‘394 Patent and pursue its legal rights, it can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent of LOESTRIN 24 FE will not be approved and enter the market prior to the expiration of the ‘394 Patent in 2014.

FEMCON FE Patent Matters

On July 31, 2009 the Company received a Paragraph IV certification notice letter from Lupin Ltd. indicating that it had submitted to the FDA an ANDA seeking approval to manufacture and sell a generic version of the Company’s oral contraceptive, FEMCON FE. The notice letter contends that the Company’s U.S. Patent No. 6,667,050 (the “‘050 Patent”) which covers FEMCON FE and expires in 2019 is invalid or not infringed. In September 2009, the Company filed a lawsuit against Lupin in the District of Delaware charging Lupin with

F-46

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

infringement of the ‘050 Patent. The lawsuit results in a stay of FDA approval of Lupin’s ANDA for 30 months from the date of the Company’s receipt of such notice, subject to the prior resolution of the matter before the court. On October 21, 2009, Lupin answered alleging invalidity and non-infringement of the ‘050 patent. No trial date has yet been set. In December 2008, the Company entered into a settlement and license agreement with a subsidiary of Barr Pharmaceuticals, Inc. (together with its subsidiaries, “Barr”), which was subsequently acquired by Teva, to resolve the Company’s patent litigation related to FEMCON FE. Under the terms of the agreement, Teva was not permitted to launch a generic version of FEMCON FE until the earlier of July 1, 2012 or, among other circumstances, the date that is two years following the date of the filing of a new ANDA with a Paragraph IV certification by a third-party. In January 2009, the Company entered into a settlement and license agreement with Watson to resolve patent litigation related to FEMCON FE. Under the agreement, Watson was permitted to commence marketing its generic equivalent product on the earlier of 180 days after Teva enters the market with a generic equivalent product, or January 1, 2013. If Lupin filed its ANDA with respect to FEMCON FE during 2009 and Teva’s ANDA with respect to a generic version of FEMCON FE is approved, Teva may be able to enter the market with a generic version of FEMCON as early as 2011. While the Company has filed an infringement suit against Lupin and intends to vigorously defend the ‘050 Patent and pursue its legal rights, it can offer no assurance as to when the lawsuit will be decided, whether the lawsuit will be successful or that a generic equivalent of FEMCON FE will not be approved and enter the market prior to the expiration of the ‘050 Patent in 2019.

False Claims Act Litigation

In December 2009, the Company was served with a civil complaint brought by an individual plaintiff, purportedly on behalf of the United States, alleging that the Company and over 20 other pharmaceutical manufacturers violated the False Claims Act (“FCA”), 31 U.S.C. § 3729(a)(1)(A), (B), by submitting false records or statements to the federal government, thereby causing Medicaid to pay for unapproved or ineffective drugs. The plaintiff’s original complaint was filed under seal in 2002, but was not served on the Company until 2009. The complaint alleges that the Company submitted to the Centers for Medicare and Medicaid Services (“CMS”) false information regarding the safety and effectiveness of certain nitroglycerin transdermal products. The plaintiff alleges that CMS included these products in its list of reimbursable prescription drugs and that, as a consequence federal Medicaid allegedly reimbursed state Medicaid programs for a portion of the cost of such products. The plaintiff asserts that from 1996 until 2003 the federal Medicaid program paid approximately $9.8 million to reimburse the states for the Company’s nitroglycerin transdermal products. The complaint seeks treble damages; a civil penalty of up to ten thousands dollars for each alleged false claim; and costs, expenses and attorneys’ fees.

The Company’s response to the complaint is currently due in April 2010. The Company intends to defend this action vigorously and currently believes that the complaint lacks merit. The Company has a number of defenses to the allegations in the Complaint and anticipates filing a motion to dismiss the action.

Securities Litigation

In November 2006, the Company and certain of its officers, were named as defendants in Albano v. Warner Chilcott Limited et al., a class action lawsuit filed in the U.S. District Court for the Southern District of New York. Subsequently, similar purported class action lawsuits were filed. The complaints asserted claims under the Securities Act of 1933 on behalf of a class consisting of all those who were allegedly damaged as a result of acquiring the Company’s common stock in connection with its IPO between September 20, 2006 and September 26, 2006. A consolidated amended complaint, which added as defendants the lead underwriters for the IPO, was filed on May 4, 2007. The consolidated amended complaint alleges, among other things, that the

F-47

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Company omitted and/or misstated certain facts concerning its planned transition from the sale of OVCON 35 to the sale of its new patented product, OVCON 35 FE (now FEMCON FE). The Company and the individual defendants answered the complaint on June 18, 2007. The District Court certified the plaintiff class on February 4, 2008.

On April 25, 2008, the Company reached an agreement in principle to settle the class action lawsuit. The terms of the settlement included a cash payment of $16,500, which was made to the plaintiffs in 2008. The majority of the settlement was funded by insurance proceeds and did not have a material adverse impact on the Company’s financial position, results of operations or cash flows. The settlement was submitted to the District Court for approval at a fairness hearing held on April 30, 2009. No shareholder objected to or opted out of the settlement. On July 14, 2009, the District Court issued a final judgment and order of dismissal with prejudice that resolved all claims asserted against the Company and the other defendants in this case.

20. Concentration of Credit Risk, Reliance on Significant Suppliers and Reliance on Major Products

The Company primarily distributes its pharmaceutical products through wholesalers and distributors. The Company considers there to be a concentration risk for all customers that represent 10% or more of the Company’s net sales and/or 10% of the Company’s gross accounts receivable. As of December 31, 2009 and 2008, gross accounts receivable from Cardinal Health, Inc. totaled $109,632 and $39,036, respectively. Gross accounts receivable from McKesson Corporation as of December 31, 2009 and 2008 totaled $91,356 and $34,083, respectively. As of December 31, 2009 and 2008, gross accounts receivable from AmerisourceBergen Corporation totaled $46,804 and $13,805, respectively. In addition to trading partners, the Company was owed a net receivable of $76,941 from P&G from the PGP Acquisition and the related transition services agreement as of December 31, 2009. This net receivable was included as a component of prepaid expenses and other current assets in the Company’s consolidated balance sheet. The tables below include the results of operations of PGP from October 30, 2009.

The following table shows revenues to customers that accounted for more than 10% of the Company’s total revenues:

	Year Ended December 31,
	2009		2008		2007
Cardinal Health, Inc.	31	%	40	%	36	%
McKesson Corporation	26	%	36	%	35	%
AmerisourceBergen Corporation	9	%	10	%	10	%

The following table shows revenue generated from products provided by significant suppliers as a percentage of total revenues. In the event that a supplier suffers an event that causes it to be unable to manufacture the Company’s product requirements for a sustained period, the resulting shortages of inventory could have a material adverse effect on the business of the Company.

	Year Ended December 31,
	2009		2008		2007
LEO Pharma	19	%	29	%	30	%
Mayne Pharma International Pty. Ltd.	15	%	17	%	13	%
Teva (formerly Barr)	5	%	9	%	10	%

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WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

Net sales of the following products accounted for more than 10% of total revenue:

	Year Ended December 31,
	2009		2008		2007
LOESTRIN 24 FE	17	%	21	%	17	%
DORYX	15	%	17	%	13	%
ACTONEL	15	%	—		—
TACLONEX	10	%	16	%	14	%
DOVONEX	9	%	13	%	16	%

The Company has approximately 95% of its cash on hand as of December 31, 2009 with two financial institutions.

21. Retirement Plans

Defined Contribution Plans

The Company has defined contribution plans which cover the majority of its U.S. employees, as well as employees in certain other countries assumed in the PGP Acquisition. For U.S. employees, the Company makes matching contributions to a 401(k) savings plan. Similar defined contribution plans are in place in Puerto Rico, Western Europe, Canada and Australia. The U.S. plan provides eligible employees with the option to defer amounts not in excess of 15% of his or her compensation. The Company makes matching contributions to the plan on behalf of all participants who make elective deferrals. The Company contributes and allocates to each participant’s account matching contributions equal to 75% of up to 6% of the participant’s compensation. The Company’s contributions vest at 25% per year up to 100% at the participant’s completion of four years of employment. The U.S. defined contribution plan comprises the majority of the expense for the Company’s defined contribution plans.

The Company’s total global contributions to all plans were $3,876, $2,840 and $2,869 in the years ended December 31, 2009, 2008 and 2007, respectively.

Defined Benefit Retirement Plans

As part of the PGP Acquisition, the Company assumed defined benefit retirement pension plans to certain employees in Western Europe. Retirement benefits are generally based on an employee’s years of service and compensation. Funding requirements are determined on an individual country and plan basis and subject to local country practices and market circumstances. The Switzerland plan is partially employee funded, but the employee contributions were not material. For the period since the PGP Acquisition (October 30, 2009 to December 31, 2009), the Company did not contribute any amounts to the defined benefit plans. The Company expects to contribute approximately $60,000 to these non-U.S. retirement plans during 2010 as further discussed below. Prior to the PGP Acquisition, the Company did not offer any defined benefit pension plans.

P&G was bound contractually, as a result of the PGP Acquisition, to transfer a portion of the assets in their defined benefit trusts related to Germany and Switzerland to the Warner Chilcott trusts. As of December 31, 2009, the final asset transfers had not taken place but have been included in the plan asset amounts disclosed below as these are trust to trust transfers. Additionally, as a term to the purchase agreement P&G agreed to transfer in cash, the shortfall between the projected benefit obligation (“PBO”) of the defined benefit plans being assumed by the Company at the acquisition date and the trust assets described above. The PBO calculation is based on a methodology agreed to by the Company and P&G. The expected cash due from P&G was recorded as

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WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

a receivable in the purchase price allocation on the Company’s books and was not reflected in the plan asset amounts at December 31, 2009, disclosed below.

In connection with the PGP Acquisition, the Company recorded benefit obligations equal to the difference between the projected benefit obligation and the fair value of plan assets. Upon the PGP Acquisition, the Company acquired the plan assets and assumed the pension obligations for both active PGP employees and retirees covered by the PGP defined benefit plans as of October 30, 2009. As of October 30, 2009, the benefit obligation and plan assets were as follows:

	Non-U.S. Plans Defined Benefit
Projected benefit obligation at October 30, 2009	$	88,782
Fair value of plan assets at October 30, 2009		8,519

Net periodic benefit cost of the defined benefit plans was as follows for the period October 30, 2009 to December 31, 2009:

	Non-U.S. Plans Defined Benefit
Service cost	$	391
Interest cost		679
Expected return on plan assets		(81	)
Net periodic benefit cost	$	989

Benefit obligation and asset data for the defined benefit plans for the period October 30, 2009 to December 31, 2009, using a December 31 measurement date, were as follows:

	Non-U.S. Plans Defined Benefit
Change in Benefit Obligation
Benefit obligation at October 30, 2009	$	88,782
Service cost		391
Interest cost		679
Plan participants’ contributions		20
Actuarial (gain) /loss		(5,465	)
Benefits paid		(603	)
Foreign currency exchange rate changes		(2,425	)
Benefit obligation at December 31, 2009	$	81,379
Change in Plan Assets
Fair value of plan assets at October 30, 2009	$	8,519
Actual return on plan assets		81
Plan participants’ contributions		20
Benefits paid		(603	)
Foreign currency exchange rate changes & other		55
Fair value of plan assets at December 31, 2009	$	8,072
Funded status at end of year	$	(73,307	)
Accumulated benefit obligation at December 31, 2009	$	72,176

F-50

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The following table outlines the funded status amount recognized in the consolidated balance sheet as of December 31, 2009:

	Non-U.S. Plans Defined Benefit
Current liabilities	$	(633	)
Noncurrent liabilities		(72,674	)
	$	(73,307	)

The underfunding of pension benefits is primarily a function of the different funding incentives that exist outside of the U.S. In certain countries, there are no legal requirements or financial incentives provided to companies to pre-fund pension obligations. In these instances, benefit payments are typically paid directly from the Company’s cash as they become due.

Balances recognized within accumulated other comprehensive loss that have not been recognized as components of net periodic benefit costs as of December 31, 2009 is as follows:

	Non-U.S. Plans Defined Benefit
Net actuarial loss/(gain)	$	(5,346	)

The Company does not expect to amortize any amounts from accumulated other comprehensive income to net periodic benefit costs during 2010.

Information for defined benefit plans with an accumulated benefit obligation in excess of plan assets at December 31, 2009 is presented below:

	Non-U.S. Plans
Projected benefit obligations	$	79,488
Accumulated benefit obligations	$	70,699
Plan assets	$	6,410

Information for defined benefit plans that have projected benefit obligations in excess of plan assets at December 31, 2009 is presented below:

	Non-U.S. Plans
Projected benefit obligations	$	81,379
Plan assets	$	8,072

Assumptions and Investment Policies

Weighted average assumptions used to calculate the projected benefit obligations of the Company’s defined benefit pension as of December 31, 2009 are as follows:

	Defined Benefit
Non-U.S. assumed discount rate	5.1	%
Non-U.S. average long-term pay progression	3.0	%

F-51

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

These assumptions are weighted to reflect each country that may have an impact on the cost of providing retirement benefits.

Weighted average assumptions used to calculate the net periodic benefit cost of the Company’s defined benefit pension plans for the period from October 30, 2009 to December 31, 2009 were as follows:

	Defined Benefit
Non-U.S. assumed discount rate	4.7	%
Non-U.S. assumed long-term rate of return on plan assets:	6.1	%
Non-U.S. average long-term pay progression	3.0	%

In order to select a discount rate for purposes of valuing the plan obligations the Company uses returns of long term investment grade bonds. For non-U.S. plans, available indices are adjusted as needed to fit the estimated duration of the plan liabilities.

Several factors are considered in developing the estimate for the long-term expected rate of return on plan assets. For the defined benefit retirement plans, these include historical rates of return of broad equity and bond indices and projected long-term rates of return obtained from pension investment consultants. The results are adjusted for the payments of reasonable expense of the plan from plan assets. The expected long-term rates of return for plan assets are 7.4% – 7.6% for equities and 3.6% – 4.0% for bonds. The Company believes that these assumptions are appropriate based upon the mix of the investments and the long-term nature of the plan’s investments.

The following table projects the benefits expected to be paid to participants from the plans in each of the following years, which reflect expected future service, as appropriate. The majority of the payments will be paid from plan assets and not company assets.

Expected Benefit Payments	Non-U.S. Defined Benefit
For the year ending December 31,
2010	$	3,545
2011		3,596
2012		3,633
2013		3,555
2014		3,753
2015 – 2019		22,799

Plan Assets

At December 31, 2009 the plan asset transfers for the Germany and Switzerland plans had not taken place, as a result the Company had not allocated assets to the Warner Chilcott trusts. The Company’s management, along with the trustee of the plans’ assets will minimize investment risk by thoroughly assessing potential investments based on indicators of historical returns and current ratings. Additionally, investments will be diversified by type and geography.

F-52

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

The following table presents information about the plan’s target asset allocation:

Asset Class(1)	Target Allocation
Equity securities	77.5	%
Fixed income securities and cash and cash equivalents	22.5	%

(1) Actual allocations as of December 31, 2009 are not provided as the plan asset transfers had not taken place.

Actual asset allocations for the plans, aggregated by the level in the fair value hierarchy, will be disclosed following the final asset transfers.

22. Related Parties

On November 25, 2009, 20,000,000 of the Company’s ordinary shares (23,000,000 after the over-allotment) were sold to the public on behalf of its principal security holders, directors and executive officers, and other selling shareholders. The Company did not receive any proceeds in connection with this transaction.

23. Valuation and Qualifying Accounts

A summary of the valuation and qualifying accounts is as follows:

	Balance at Beginning of Period		Additions, Costs and Expenses		PGP Additions, Costs and Expenses		Deductions, Write-offs & other		Balance at End of Period
Revenue Reserves(a)
Year Ended December 31, 2009	$	89,519	$	358,537	$	207,971	$	280,908	$	375,119
Year Ended December 31, 2008		66,209		172,038		—		148,728		89,519
Year Ended December 31, 2007		50,561		138,688		—		123,040		66,209
Deferred income tax valuation allowances:
Year Ended December 31, 2009	$	9,893	$	2,917	$	11,042	$	1,670	$	22,182
Year Ended December 31, 2008		11,759		1,480		—		3,346		9,893
Year Ended December 31, 2007		17,802		490		—		6,533		11,759

(a) See Note 2 for additional description of revenue reserve categories.

F-53

WARNER CHILCOTT PUBLIC LIMITED COMPANY

Notes to Consolidated Financial Statements – (continued)

(All amounts in the thousands except share amounts, per share amounts or unless otherwise noted)

24. Quarterly Data (unaudited)

A summary of the quarterly results of operations is as follows:

	Quarter Ended
	March 31,		June 30,		September 30,			December 31,
Year Ended December 31, 2009
Total Revenues	$	245,989	$	250,816	$	252,795		$	686,216
Cost of Sales (excluding amortization)		48,750		46,962		44,366			180,200
(Gain) on sale of assets		—		—		(393,095	)		—
Amortization of intangible assets		56,993		56,992		56,993			141,194
Net Income / (Loss)		43,336		56,023		424,245			(9,486	)
Earnings (loss) per Share:
Basic	$	0.17	$	0.22	$	1.69		$	(0.04	)
Diluted		0.17		0.22		1.69			(0.04	)
Year Ended December 31, 2008
Total Revenues	$	229,483	$	234,216	$	231,939		$	242,487
Cost of Sales (excluding amortization and impairment)		47,770		51,012		46,810			53,193
Amortization and impairment of intangible assets		52,613		53,137		59,080			222,399
Net Income / (Loss)		33,658		33,568		40,089			(115,672	)
Earnings (loss) per Share:
Basic	$	0.13	$	0.13	$	0.16		$	(0.46	)
Diluted		0.13		0.13		0.16			(0.46	)

25. Subsequent Event

In January of 2010, WCC received and accepted for purchase approximately $2,000 aggregate principal amount of the Notes validly tendered in the Offer to Purchase. On February 1, 2010, WCC redeemed all of the remaining Notes outstanding in accordance with the Indenture. The redemption price for the redeemed Notes was $1,043.75 per $1,000.00 principal amount plus accrued and unpaid interest.

F-54

EX-2.3

Exhibit 2.3

Transition Services Agreement

by and between

The Procter & Gamble Company

and

Company

Effective as of October 30, 2009

TABLE OF CONTENTS

PAGE

ARTICLE 1

DEFINITIONS

ARTICLE 2

TERM; SERVICES AND CONTROLS PROCESS

Section 2.01.	Term	6
Section 2.02.	Scope of Services	6
Section 2.03.	Performance	6
Section 2.04.	Substantive Business Decisions; Compliance; Medical Decisions	7
ARTICLE 3
SERVICE PROVIDER SUBCONTRACTORS
Section 3.01.	Subcontractors	8
ARTICLE 4
RELATIONSHIP MANAGEMENT
Section 4.01.	Relationship Managers	8
Section 4.02.	Regulatory Review	9
Section 4.03.	Books and Records	9
Section 4.04.	Change Management Process	9
ARTICLE 5
FACILITIES; PERSONNEL
Section 5.01.	Use of Customer Facilities	10
Section 5.02.	Service Provider Facilities and Systems	10
Section 5.03.	Unavailability of Service Provider Personnel; Access to Service Provider Consultants and Legal Advisors	10
ARTICLE 6
TECHNOLOGY, SOFTWARE AND PROPRIETARY RIGHTS
Section 6.01.	Customer Owned Technology	12
Section 6.02.	Service Provider Owned Technology	12
Section 6.03.	No Implied Licenses; Residuals	12
Section 6.04.	Required Consents	13

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ARTICLE 7
CUSTOMER DATA AND PHYSICAL SECURITY
Section 7.01.	Definition	13
Section 7.02.	Ownership	14
Section 7.03.	Data Security	14
Section 7.04.	Physical Security for Facilities	14
Section 7.05.	HIPAA and Data Protection	14
ARTICLE 8
CONFIDENTIALITY
Section 8.01.	Confidential Information	14
Section 8.02.	Obligations	14
Section 8.03.	Exceptions To Confidential Treatment	15
Section 8.04.	Return or Destruction	15
ARTICLE 9
COMPENSATION
Section 9.01.	Service Fee	15
Section 9.02.	Other Expenses	16
Section 9.03.	Taxes	16
Section 9.04.	Invoicing and Payment	16
ARTICLE 10
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 10.01.	Representations and Warranties	18
Section 10.02.	Standard of Care	18
Section 10.03.	Disclaimer	18
ARTICLE 11
INDEMNITIES, PROCEDURES AND LIMITATIONS
Section 11.01.	Indemnification by Customer	19
Section 11.02.	Indemnification by Service Provider	19
Section 11.03.	Indemnification Procedures; Calculation of Indemnity Payments	20
Section 11.04.	Limitations on Liability	20
Section 11.05.	Indemnification and Limitations on Liability Relating to Negligence and Strict Liability	21
Section 11.06.	Sole Remedy	21
Section 11.07.	Waiver of Subrogation	21

ii

ARTICLE 12
TERMINATION
Section 12.01.	Termination Rights	21
Section 12.02.	Termination for Non-Payment	22
Section 12.03.	Survival	22
Section 12.04.	Rights Upon Termination or Expiration	23
ARTICLE 13
GENERAL
Section 13.01.	Construction	23
Section 13.02.	Binding Effect; No Assignment	24
Section 13.03.	Counterparts	24
Section 13.04.	Entire Agreement	24
Section 13.05.	Dispute Resolution	24
Section 13.06.	Force Majeure	24
Section 13.07.	Further Assurances	25
Section 13.08.	Governing Law	25
Section 13.09.	Commencement of Proceedings	25
Section 13.10.	Independent Contractors	25
Section 13.11.	Notices	25
Section 13.12.	Publicity	26
Section 13.13.	Amendments and Waivers	26
Section 13.14.	Severability	27
Section 13.15.	No Third-Party Beneficiaries	27
Section 13.16.	Limitation for Proceedings	27
Section 13.17.	Real Estate	27

SCHEDULES
Schedule A	–	Services
Schedule A-1	–	Order to Cash
Schedule A-2	–	Plants
Schedule A-3	–	Sales and Marketing
Schedule A-4	–	R&D and Regulatory
Schedule A-5	–	Workplace & Infrastructure Solutions
Schedule A-6	–	Finance
Schedule A-7	–	Human Resources
Schedule A-8	–	Purchasing & Product Supply Management
Schedule A-9	–	GBS
Schedule A-10	–	Legal
Schedule A-11	–	One Time Costs
Schedule B	–	Pricing
Schedule C	–	Service Provider Consultants
Schedule D	–	P&G Domestic Facilities to be Licensed to Purchaser
Schedule E	–	P&G Foreign Facilities to be Licensed to Purchaser

iii

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (this “Agreement”) is entered into effective October 30, 2009 (the “Effective Date”) by and between Warner Chilcott plc, a public limited company organized under the laws of Ireland (“Customer”) and The Procter & Gamble Company, an Ohio corporation (“Service Provider”).

WHEREAS, Customer desires to obtain from Service Provider the information technology, business process and other services described in this Agreement and the schedules attached hereto (such schedules, the “Schedules”) on the terms and conditions as set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

“Additional Services” has the meaning set forth in Section 2.03(a).

“Agreement” has the meaning set forth in the Preamble.

“Base Services” has the meaning set forth in Section 2.03(a).

“Change Management Process” has the meaning set forth in Section 4.04(a).

“Charges” has the meaning set forth in Section 9.01.

“Collections Completion Date” means 11:59 p.m. in the applicable jurisdiction on the last day for which Service Provider performs the Collection Services.

“Collection Services” has the meaning set forth in Section 9.04(a).

“Confidential Information” has the meaning set forth in Section 8.01.

“Consulting Services” has the meaning set forth in Section 5.03(b)(i).

“Customer” has the meaning set forth in the Preamble. References herein to “Customer” shall include the “Recipients” to the extent the context requires.

“Customer Data” has the meaning set forth in Section 7.01.

“Customer Equipment” means all Equipment owned or leased (other than from Service Provider) by Customer that is used in connection with the Services.

“Customer Facilities” has the meaning set forth in Section 5.01(a).

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“Customer Indemnitees” has the meaning set forth in Section 11.02.

“Customer Owned Technology” has the meaning set forth in Section 6.01(a).

“Customer Software” means all Software owned by, or provided under license (other than from Service Provider) to, Customer that is used in connection with the Services (and all modifications, replacements, upgrades, enhancements, documentation, materials and media relating to the foregoing).

“Customer System” means an interconnected grouping of Customer Equipment and/or Customer Software that is used in connection with the Services, and all additions, modifications, substitutions, upgrades or enhancements thereto.

“Customer Technology” means Customer Owned Technology and Customer Third Party Technology.

“Customer Third Party Technology” means all Technology licensed (other than by Service Provider) to Customer that is provided to Service Provider for use in connection with the Services.

“Default” has the meaning set forth in Section 12.01(a).

“Dispute Date” has the meaning set forth in Section 13.05.

“Effective Date” has the meaning set forth in the Preamble.

“Equipment” means computer and telecommunications equipment (without regard to the entity owning or leasing such equipment) including: (i) servers, personal computers, and associated attachments, accessories, peripheral devices and other equipment; and (ii) private branch exchanges, multiplexors, modems, CSUs/DSUs, hubs, bridges, routers, switches and other telecommunications equipment.

“FDA” means the United States Food and Drug Administration.

“Force Majeure Event” has the meaning set forth in Section 13.06(a).

“Full Set of Interdependent Services” has the meaning set forth in Section 12.01(b)(ii).

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996.

“Indemnitee” means, as applicable, a Customer Indemnitee or Service Provider Indemnitee.

“Information” means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, Contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, databases, disks, diskettes, tapes, computer programs or other

2

software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data, but in any case excluding back-up tapes.

“Interest Rate” means a fluctuating interest rate equal at all times to the prime rate of interest announced publicly from time to time by Citibank, N.A. (or its successor or another major money center commercial bank agreed to by the Parties), plus three percent (3%), but in no case higher than the maximum rate permitted by Law.

“Losses” means losses, damages, liabilities, or expenses (including reasonable third-party legal fees and expenses in connection with the investigation or prosecution of any third-party claim or any claim solely between the Parties hereto).

“Net Remittance” means the amount payable by Service Provider to Customer or Customer to Service Provider, as the case may be, equaling, for any given period of time, Net Sales less the Charges, Out-of-Pocket Expenses, and Taxes related to the Services for each calendar month.

“Net Sales” means gross sales of Products to customers (WAC times units sold) less all sales related deductions as defined by US GAAP including, without limitation, quantity discounts, returns, cash discounts and all other payments to consumers and trade determined by Customer considering Service Provider’s accounting procedures applied based on past practices and the ordinary course of business prior to Closing.

“Notice of Intent to Terminate for Convenience” has the meaning set forth in Section 12.01(b)(i).

“Occupancy Arrangements” has the meaning set forth in Section 13.17.

“Orders” means any orders, judgments, injunctions, awards, decrees, writs or other legally enforceable requirement handed down, adopted or imposed by, including any consent decree, settlement Contract or similar written Contract with, any Governmental Entity.

“Out-of-Pocket Expenses” has the meaning set forth in Section 9.02.

“Parties” shall mean Customer and Service Provider.

“Products” means the products sold by the Pharmaceuticals Business for which Service Provider provides the Collection Services.

“Purchase Agreement” means that certain Purchase Agreement, dated as of August 24, 2009, by and between Customer and Service Provider, relating to the acquisition of the Pharmaceuticals Business by Customer from Service Provider.

“Recipient” has the meaning set forth in Section 2.03(c).

“Recipient Personnel” means any employees of any Recipient.

3

“Relationship Manager” has the meaning set forth in Section 4.01.

“Remote Location” means any location where (i) Services are not provided either on the date of the execution of the Purchase Agreement or the Effective Date and (ii) Service Provider reasonably determines in good faith that the provision of Services at such location would materially increase Service Provider’s cost to provide such Services and Customer has not agreed to reimburse Service Provider for such costs.

“Required Consents” means (i) all consents required at any time to grant Service Provider the right to use and/or access Customer Third Party Technology, Customer Software, Customer Equipment, the Customer System and Recipient’s Software and Equipment in connection with providing the Services; (ii) all consents required at any time to grant Customer and the Recipients, to the extent necessary to exercise their rights or perform their obligations under this Agreement, the right to use and/or access Service Provider Technology, Service Provider Software, Service Provider Equipment and the Service Provider System; and (iii) all other consents, including consents to modification of third-party licenses or other Contracts, required from third parties at any time in connection with Service Provider’s provision of the Services.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“Schedules” has the meaning set forth in the WHEREAS clause.

“Service Bundle” has the meaning set forth in Section 9.01.

“Service Provider” has the meaning set forth in the Preamble.

“Service Provider Affiliate” means any Affiliate of Service Provider.

“Service Provider Consultants” has the meaning set forth in Section 5.03(b)(i).

“Service Provider Equipment” means all Equipment owned or leased by Service Provider or a Service Provider Affiliate or Subcontractor and used in connection with the Services.

“Service Provider Facilities” has the meaning given in Section 5.02(a).

“Service Provider Indemnitees” has the meaning set forth in Section 11.01.

“Service Provider Owned Technology” has the meaning set forth in Section 6.02(a).

“Service Provider Personnel” means those employees, representatives, contractors and agents of Service Provider, Subcontractors and Service Provider Affiliates who perform any Services under this Agreement.

“Service Provider Software” means all software programs and programming owned by, or provided under license to, Service Provider and used to provide the Services (and all modifications, replacements, upgrades, enhancements, documentation, materials and media relating to the foregoing).

4

“Service Provider System” means an interconnected grouping of Service Provider Equipment and/or Service Provider Software used in connection with the Services, and all additions, modifications, substitutions, upgrades or enhancements thereto.

“Service Provider Technology” means Service Provider Owned Technology and Service Provider Third Party Technology.

“Service Provider Third Party Technology” means all Technology licensed (other than by Service Provider) to Customer that is provided to Service Provider for use in connection with the Services.

“Services” means the Base Services, the Consulting Services, any Additional Services and any Termination Assistance Services.

“Settlement Report” has the meaning set forth in Section 9.04(b).

“Software” means programs and programming (including the supporting documentation, media, on-line help facilities and tutorials).

“Subcontractors” means Service Provider’s contractors that perform a portion of the Services.

“Subsidiary” of any Person, means a corporation or other organization whether, incorporated or unincorporated, of which at least a majority of the securities, or interests having by the terms thereof ordinary voting power to elect at least a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization, is directly or indirectly owned or Controlled by such Person or by any one or more of its Subsidiaries.

“Technology” means all formulae; algorithms; processes; procedures; designs; ideas; concepts; research; inventions and invention disclosures (whether or not patentable or reduced to practice); know-how, proprietary information and methodologies; trade secrets; technology; computer software (in both object and source code form); databases; specifications; and all records thereof, including documentation, design documents and analyses, studies, programming tools, plans, models, flow charts, reports and drawings, and all Intellectual Property rights subsisting in any of the foregoing.

“Term” has the meaning set forth in Section 2.01.

“Termination Assistance Services” has the meaning set forth in Section 12.04.

“Termination for Convenience Notice” has the meaning set forth in Section 12.01(b).

Any capitalized term used but not defined herein will have the meaning set forth in the Purchase Agreement.

5

ARTICLE 2

TERM; SERVICES AND CONTROLS PROCESS

Section 2.01. Term. The term of this Agreement will begin on the Effective Date and end at midnight on the one (1) year anniversary of the Effective Date (the “Term”), unless earlier terminated in accordance with the terms of this Agreement. Customer may extend the Term as to all or any individual Service(s) (to the extent such individual Service(s) can be segregated from the other Services which are not being extended) for one month periods up to an aggregate of six (6) additional months by providing to Service Provider sixty (60) days advance written notice. The Parties will use reasonable best efforts to complete the transition of the Services from Service Provider to Customer within the first eighteen (18) months following the Effective Date. If such transition of the Services is not completed within such period the Parties will negotiate in good faith a further extension of the Term.

Section 2.02. Scope of Services. The Parties acknowledge and agree that the Services shall be provided solely to support the Pharmaceuticals Business as operated by Customer and its Subsidiaries during the Term.

Section 2.03. Performance.

(a) Performance. Service Provider will provide the services described in Schedule A (the “Base Services”) and the Consulting Services. Services provided by Service Provider under this Agreement may be provided by Service Provider directly or through any of its Subsidiaries at Service Provider’s discretion. To the extent that additional services may be required, but are not identified as a Base Service or a Consulting Service, Customer may request Service Provider to provide such additional services (each such additional service, an “Additional Service” and collectively the “Additional Services”). Upon Customer’s request, the Parties shall act reasonably and negotiate in good faith to determine and mutually agree as quickly as possible the scope of each Additional Service requested by Customer as well as the costs and duration of such Additional Services and, upon such mutual agreement, the Parties shall amend the Schedules to reflect the addition of any Additional Services, and, if necessary, the body of this Agreement. Unless otherwise agreed by the Parties, until the execution of any such amendments, Service Provider shall not be obligated to provide any such Additional Services.

(b) Commencement of Services. Unless otherwise specified on Schedule A, Service Provider will begin to provide the Base Services and the Consulting Services on the Effective Date; provided that, with respect to any Local Pharmaceutical Business that Service Provider operates pursuant to Section 5.22(c) of the Purchase Agreement, Service Provider will begin to provide the Base Services and the Consulting Services to any such Local Pharmaceutical Business on the date that closing occurs in such jurisdiction, and prior to any such closing, Charges for Services provided with respect to any such Local Pharmaceutical Business will not be made under this Agreement.

(c) Recipients. Service Provider will provide the Services to the Pharmaceuticals Business as operated by Customer and its Subsidiaries during the Term and, if requested by Customer, to Customer or any of Customer’s Subsidiaries to the extent required by Customer to conduct the Pharmaceuticals Business as operated by Customer and its Subsidiaries during the Term (each, a “Recipient”).

6

(d) Subsequent Adjustments. The Parties acknowledge (i) that certain Assets that may be required for the provision of the Services by Service Provider may have been included in the Pharmaceuticals Business Assets transferred to Customer at Closing and that, as a result, Service Provider may not be able to provide certain Services and (ii) that certain Services relating to Customer’s accounts payable and banking cannot be provided unless Customer establishes banking relationships with certain banks used by Service Provider. Accordingly, the Parties agree that, to the extent Service Provider cannot provide a Service due to either of the foregoing reasons, the Parties shall promptly amend Schedule A to reflect any necessary changes to the Services. If such change in the Services results in a material increase or decrease in the Services provided, then the Parties will make an equitable adjustment to the Charges to reflect the adjusted scope of the Services.

Section 2.04. Substantive Business Decisions; Compliance; Medical Decisions.

(a) Notwithstanding anything to the contrary contained in this Agreement or the accompanying Schedules, none of Service Provider, the Service Provider Affiliates, Subcontractors or the Service Provider Personnel shall make any substantive final business decisions with respect to Customer in performing the Services; it being understood, however, that Service Provider will, upon Customer’s request, make recommendations on the operation and management of the Pharmaceuticals Business as part of performing the Services. All substantive final business decisions made in connection with the business of Customer will be made exclusively by Customer. Subject to the terms of the Purchase Agreement, third-party claims arising from substantive final business decisions made in connection with the business of Customer, other than third-party claims subject to Service Provider’s indemnity obligations under Article 11, will be exclusively the liability of Customer.

(b) Notwithstanding anything to the contrary contained in this Agreement or the accompanying Schedules, Customer understands and agrees that Service Provider is not responsible for ensuring Customer’s regulatory and legal compliance, whether with respect to FDA matters, Sarbanes-Oxley, public financial reporting or otherwise, and that the Services are not a substitute for Customer’s performance of such compliance obligation or the engagement of advisors appropriate for such compliance. All regulatory and legal compliance matters relating to the business of Customer will be exclusively the responsibility of Customer. Subject to the terms of the Purchase Agreement, third-party claims arising from regulatory and legal compliance matters relating to the business of Customer, other than third-party claims subject to Service Provider’s indemnity obligations under Article 11, will be exclusively the liability of Customer.

(c) Notwithstanding anything to the contrary contained in this Agreement or the accompanying Schedules, Customer understands and agrees that Service Provider is not engaged in the practice of medicine and that the Services are not a substitute for competent medical and scientific advisors. All substantive final medical practice management and patient care decisions made in connection with the business of Customer will be made exclusively by Customer. Subject to the terms of the Purchase Agreement, third-party claims arising from substantive final

7

medical practice management and patient care decisions made in connection with the business of Customer, other than third-party claims subject to Service Provider’s indemnity obligations under Article 11, will be exclusively the liability of Customer. Service Provider agrees that it will promptly notify Customer in the event that Service Provider or any of Service Provider Affiliates or Service Provider Personnel are debarred or convicted of a crime for which a person can be debarred under Section 306(a) or 306(b) of the Generic Drug Enforcement Act of 1992.

(d) Service Provider shall provide the Services in compliance with Law applicable to Service Provider.

(e) Each provision of this Agreement and the accompanying Schedules shall be interpreted in a manner consistent with this Section 2.04.

ARTICLE 3

SERVICE PROVIDER SUBCONTRACTORS

Section 3.01. Subcontractors.

(a) Use of Subcontractors. Service Provider reserves the right to use Subcontractors to assist Service Provider in the provision of the Services as Service Provider deems appropriate. On the Closing Date, Service Provider shall provide a list of any additional Subcontractors that have been engaged by Service Provider during the period between the execution date of the Purchase Agreement and the Closing to provide the Services. At any time following the Closing Date, Service Provider shall give Customer reasonable prior written notice of its intent to use any additional Subcontractors for the provision of any Services.

(b) Service Provider Responsibility for Subcontractors. Unless otherwise agreed in writing between Service Provider and Customer, Service Provider will be responsible for the Services performed by Subcontractors, and Service Provider will be Customer’s sole point of contact regarding the Services, including with respect to payment.

ARTICLE 4

RELATIONSHIP MANAGEMENT

Section 4.01. Relationship Managers. Each Party will appoint an individual (each, a “Relationship Manager”) who, from the Effective Date until replaced by the appointing Party, will serve as that Party’s representative under this Agreement during the Term. Each Relationship Manager will (a) have overall responsibility for managing and coordinating the performance of the appointing Party’s obligations under this Agreement, and (b) be authorized to act for and on behalf of the appointing Party concerning all matters relating to this Agreement. The Relationship Managers shall cooperate and be in contact either in person or over the phone on a regular basis. Neither Party will reassign a Relationship Manager, unless it provides at least ten (10) days prior written notice to the other Party. If a Party terminates the employment of or reassigns its Relationship Manager or its Relationship Manager resigns, dies or becomes disabled, such Party will appoint a new Relationship Manager within thirty (30) days after the reassignment, resignation, death or disability.

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Section 4.02. Regulatory Review. Each Party will notify the other promptly of any formal request or Order by a Governmental Entity to examine records regarding Customer that are maintained by Service Provider or to examine Service Provider’s performance of the Services. Service Provider will cooperate with any such examination. Customer will reimburse Service Provider for the reasonable out-of-pocket costs Service Provider incurs in connection with such examination solely to the extent such examination relates to the Services or records regarding Customer.

Section 4.03. Books and Records. During the Term, Service Provider shall be provided with reasonable access, at no cost to Service Provider, to Customer’s books and records to the extent necessary for Service Provider to fulfill its obligations under this Agreement.

Section 4.04. Change Management Process.

(a) Service Provider will use the same change management process for changes to the Services that Service Provider uses to manage changes for Service Provider’s own businesses that use the same or similar services (the “Change Management Process”); provided that Service Provider shall remain responsible for the performance of Services in accordance with the terms of this Agreement, and provided further that Service Provider may not increase the Charges payable to Service Provider by Customer for any Service. Service Provider shall furnish to Customer substantially the same notice (with respect to the content and the timing of the notice) as Service Provider furnishes to its own organization with respect to such modifications or changes. In connection with the Change Management Process, Service Provider will give Customer at least sixty (60) days advance notice regarding any such change that would be reasonably expected to materially impact the Pharmaceuticals Business as operated by Customer and its Subsidiaries during the Term or Customer’s use of the Services. At Customer’s request, the Parties will immediately begin discussions in good faith to identify any reasonable accommodations of Customer’s needs or requests with respect to the changed Services, provided that the ultimate decision whether and how to implement any change in the Services shall be made solely by Service Provider, and Service Provider shall not be obligated to maintain any legacy system as an accommodation to Customer in the event of any such change in the Services. No advance notice by Service Provider to Customer shall be required in the event of any emergency need for a change in the Services, whether to maintain the Services or to maintain Service Provider’s provision of interrelated services internally or to third parties.

(b) For the avoidance of doubt, Service Provider reserves the right to make changes to the Services in the ordinary course of business to conduct Service Provider’s planned maintenance and upgrade activities; provided that Service Provider will provide notice as soon as is practicable, but never less than reasonable prior notice of any such planned maintenance and upgrade activities. Customer acknowledges that its failure to comply with Service Provider’s then-current work processes, policies, and procedures for use of the Services may impair performance or utility of the Services.

(c) In connection with any changes to the Services contemplated by Section 4.04(a) or Section 4.04(b), Service Provider shall use reasonable best efforts to minimize costs to be incurred by Customer and to otherwise minimize interruptions to the Pharmaceuticals Business as operated by Customer and its Subsidiaries during the Term, in particular during the transition

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of any Services to Customer or when Customer is otherwise completing activities or operations that may be particularly sensitive to its business (i.e., preparing financial statements to meet its public company reporting requirements).

ARTICLE 5

FACILITIES; PERSONNEL

Section 5.01. Use of Customer Facilities. (a) General. Customer will provide Service Provider, at no charge, with (i) access to Customer’s premises to the extent reasonably necessary to enable Service Provider to provide the Services (collectively, the “Customer Facilities”) and (ii) office support services for the Service Provider Personnel utilizing such Customer Facilities to the extent reasonably necessary.

(b) Service Provider’s Obligations. To the extent Service Provider is using any part of a Customer Facility to perform the Services, Service Provider will comply with Customer’s standard policies and procedures, as made available to Service Provider, regarding access to and use of the Customer Facilities.

Section 5.02. Service Provider Facilities and Systems. (a) Service Provider Facilities. Service Provider may perform the Services in such facilities maintained by Service Provider, its Subcontractors or Service Provider Affiliates (collectively, “Service Provider Facilities”) as Service Provider reasonably deems appropriate.

(b) Access to Service Provider Systems. Customer will, and will require that all Recipient Personnel who have access to Service Provider Systems in accordance with the provisions of Section 10.02(b), including computer or electronic data storage systems, limit their access to those portions of such systems for which they are authorized in connection with their receipt and use of the Services. Customer will (i) limit such access to those Recipient Personnel who are authorized to use the Services in accordance with the provisions of Section 10.02(b), (ii) maintain and, upon request, make available to Service Provider a written list of the names of each individual who will be granted such access, and (iii) adhere to Service Provider’s security rules and procedures for use of Service Provider Systems so long as Service Provider provides such rules and procedures to Customer. All user identification numbers and passwords disclosed to (i) Recipients to permit any Recipient Personnel to access the Service Provider Systems or (ii) to Service Provider, Service Provider Affiliates or Subcontractors to permit any Service Provider Personnel to access the Customer Systems will be deemed to be, and will be treated as, Confidential Information. Customer will cooperate with Service Provider in the investigation of any apparent unauthorized access by Recipient Personnel to Service Provider Systems. Service Provider shall, in its sole discretion, be entitled to approve or restrict access to Service Provider Systems by any contractor of Customer.

Section 5.03. Unavailability of Service Provider Personnel; Access to Service Provider Consultants and Legal Advisors.

(a) Unavailability of Service Provider Personnel. Subject to Section 5.03(b)(i), if for any reason any Service Provider Personnel is unavailable to perform any Service listed on Schedule A, and the loss of availability of such Service Provider Personnel materially impacts

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Service Provider’s ability to perform such Service, Service Provider shall, at Service Provider’s sole discretion, appoint Service Provider Personnel who can serve as a reasonable substitute for such Service Provider Personnel or negotiate in good faith with Customer to determine an alternate means by which Customer can receive such Services. Customer agrees to provide reasonable cooperation as requested by Service Provider with respect to the transition of Service Provider Personnel in connection with the circumstances described in this Section 5.03(a).

(b) Access to Service Provider Consultants and Legal Advisors.

(i) Access to Service Provider Consultants. Service Provider and Customer agree that the Service Provider Personnel listed on Schedule C (“Service Provider Consultants”) shall provide consulting services to Customer on the terms and for the periods set forth on Schedule C (such services, the “Consulting Services”). During such periods the Service Provider Consultants shall continue to be employees of the Service Provider (including with respect to any employee benefit obligations) but will provide the Consulting Services described on Schedule C for Customer and the Recipients. Service Provider shall charge Customer for the provision of the Service Provider Consultants and their Consulting Services as set forth on Schedule C. Notwithstanding the foregoing, if as a result of death, disability, incapacity or termination of employment any Service Provider Personnel acting as a Service Provider Consultant is unavailable to perform such Consulting Services, and such Consulting Services provided by such Service Provider Consultant are still reasonably required by Customer at the time of such Service Provider Consultant’s death, disability, incapacity or termination of employment, Service Provider shall, in consultation with Customer, appoint Service Provider Personnel who can serve as a reasonable substitute for such Service Provider Consultant or negotiate in good faith with Customer to determine an alternate means by which Customer can receive such Consulting Services. Customer agrees to provide reasonable cooperation as requested by Service Provider with respect to the transition of any Service Provider Consultant in connection with the circumstances described in this Section 5.03(b)(i).

(ii) Access to Legal Advisors. In connection with the transition of legal Services, Service Provider will provide Customer, free of charge, with access to its internal and external legal advisors during the Term, solely for the purpose of obtaining and transferring information regarding the Services and the Pharmaceuticals Business and ongoing legal matters pertaining thereto (including, but not limited to, Contracts relating to the Pharmaceuticals Business). Service Provider will appoint a Service Provider employee to act as intermediary and contact for Customer’s queries in connection with this Section 5.03(b)(ii) and shall cooperate in good faith and cause its internal and external legal advisors to support Customer and provide Customer with any reasonably requested information. For the avoidance of doubt, Service Provider does not grant Customer the right to obtain legal advice from Service Provider’s internal and external legal advisors pursuant to this Section 5.03(b)(ii), and Service Provider shall not be responsible for covering the cost of any legal advice received by Customer from any of Service Provider’s external legal advisors.

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ARTICLE 6

TECHNOLOGY, SOFTWARE AND PROPRIETARY RIGHTS

Section 6.01. Customer Owned Technology. (a) Definition. The term “Customer Owned Technology” means: (i) Technology owned by Customer or any of its Affiliates; (ii) Technology developed or acquired by Customer or its third-party service providers (other than Service Provider) after the Effective Date; (iii) derivative works, modifications and enhancements to any of the foregoing; and (iv) all Intellectual Property rights subsisting in any of the foregoing.

(b) Ownership by Customer; License to Service Provider. Customer Owned Technology will be owned exclusively by Customer. As of the Effective Date, Customer hereby grants, and shall cause its Affiliates to grant, to Service Provider (and solely to the extent necessary for Service Provider to provide the Services, to Subcontractors) a non-exclusive, worldwide, non-transferable (except as provided in Section 13.02), revocable, fully paid-up, royalty-free right and license, solely during the Term, to, for the express and sole purpose of providing the Services, (i) access, use, execute, reproduce, display, perform, modify, enhance, distribute and create derivative works of the Customer Owned Technology made available by Customer to Service Provider pursuant to this Agreement, and (ii) use the Customer Third Party Technology. Except as otherwise requested or approved by Customer, Service Provider will, and will cause the Service Provider Personnel to, cease all use of Customer Technology upon the later of the end of the Term and the completion of any Termination Assistance Services and the Parties agree that such license will terminate at such date.

Section 6.02. Service Provider Owned Technology. (a) Definition. The term “Service Provider Owned Technology” means Technology owned by Service Provider or a Service Provider Affiliate or Subcontractor and used in connection with the Services, including any modifications, enhancements or derivative works of such Technology or any new Technology developed by Service Provider.

(b) Ownership by Service Provider; License to Customer. Service Provider Owned Technology will be owned exclusively by Service Provider. In addition to any other license rights granted hereunder, Service Provider hereby grants, and shall cause its Affiliates to grant, to each Recipient a nonexclusive, worldwide, non-transferable (except as provided in Section 13.02), fully paid-up, royalty-free right and license, during the Term, to the extent required to fully and completely use the Services, to use all Intellectual Property rights in Service Provider Technology, subject to Section 6.04. The Parties acknowledge that such right and license will terminate upon the termination of the Services. As between the Parties, all Internet addresses, network identification, access codes and telephone numbers provided or issued to Customer or its users by Service Provider or Service Provider Personnel, and not transferred to Customer pursuant to the Purchase Agreement, shall be and remain the sole property of Service Provider.

Section 6.03. No Implied Licenses; Residuals. Except as expressly specified in this Agreement, nothing in this Agreement will be deemed to grant to one Party, by implication, estoppel or otherwise, license rights, ownership rights or any other Intellectual Property rights in any Technology owned by the other Party or any Affiliate of the other Party. Service Provider shall be free to use its general knowledge, skills and experience, and any ideas, concepts, know how, and techniques that are required or used in the course of providing the Services.

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Section 6.04. Required Consents. (a) Prior to the Effective Date, Service Provider will use its commercially reasonable efforts to identify and obtain Required Consents. Service Provider makes no warranty as to the receipt of any Required Consents prior to the Effective Date.

(b) If at any time after the Effective Date either Party identifies or becomes aware of the need to obtain a Required Consent, such Party shall promptly inform the other Party.

(c) After the Effective Date, Service Provider and Customer shall use their respective commercially reasonable efforts to obtain any Required Consents not obtained by Service Provider prior to the Effective Date.

(d) The Parties will each pay fifty percent (50%) of the costs incurred in order to obtain Required Consents, but Service Provider’s share of such costs shall be limited to a maximum of three million dollars ($3,000,000) less the Service Provider’s share of costs of any consents paid for as set forth on Schedule 5.06 of the Purchase Agreement; provided that after Service Provider’s payments of its share of such costs have reached such limit, Customer shall pay 100% of such costs; and provided further that Service Provider shall not obtain any Required Consent that requires any payment without the prior consent of Customer. With the prior consent of Customer, Service Provider may also obtain such Required Consents prior to the Effective Date subject to such cost sharing obligation, which costs will be reconciled after the Effective Date pursuant to the terms of the immediately preceding sentence. If the parties determine that such Required Consent cannot be obtained or Customer elects not to obtain such Required Consent, the Parties shall work together in good faith to determine and adopt such alternative approaches as are necessary and sufficient to provide the Services without such Required Consent. If despite using commercially reasonable efforts, the Parties are unable to adopt an alternative approach, then the affected Services shall be terminated and the Parties will equitably adjust the pricing to reflect the reduced scope of Services; provided, however, that Service Provider may elect, at its sole discretion and cost, to provide an affected Service despite the absence of a Required Consent; provided, further that, in the event that Service Provider makes such election without the prior approval of Customer, Service Provider shall be solely responsible for, and shall indemnify Customer in accordance with the terms of Article 11 with respect to, any Liability arising as a result of Service Provider providing such Service despite the absence of a Required Consent.

ARTICLE 7

CUSTOMER DATA AND PHYSICAL SECURITY

Section 7.01. Definition. The term “Customer Data” means (a) any Information of Customer, its Affiliates or Recipients, or their respective vendors, customers or other business partners that is provided to or obtained by Service Provider in the performance of its obligations under this Agreement, including Information regarding Customer’s businesses, customers, operations, facilities, products, consumer markets, assets and finances, and (b) any Information specific to Customer or Customer’s business that is collected or processed in connection with the Services. For avoidance of doubt, Customer Data does not include Information about the Service Provider Systems or Service Provider Technology.

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Section 7.02. Ownership. As between Customer and Service Provider, Customer owns and will continue to own all right, title and interest in and to all Customer Data. Service Provider shall not sell, assign, lease or otherwise dispose of or commercially exploit Customer Data.

Section 7.03. Data Security. Service Provider will establish and maintain safeguards against the destruction, loss or alteration of Customer Data in its possession that are no less rigorous than those in effect for Service Provider’s operations.

Section 7.04. Physical Security for Facilities. Service Provider will be responsible for all security procedures at any Service Provider Facilities. Customer will be responsible for all security procedures at any Customer Facilities.

Section 7.05. HIPAA and Data Protection. Service Provider shall not be obligated to perform any Services contrary to the provisions of HIPAA or any other applicable Law relating to data privacy or data protection.

ARTICLE 8

CONFIDENTIALITY

Section 8.01. Confidential Information. As used herein, “Confidential Information” means any Information of Service Provider or Customer (including all Customer Data) that is not generally known to the public and at the time of disclosure is identified, or would reasonably be understood by the receiving Party, to be proprietary or confidential, whether disclosed in oral, written, visual, electronic or other form, and which the receiving Party (or its contractors or agents) observes or learns in connection with this Agreement. Confidential Information includes: (a) business plans, strategies, forecasts, projects and analyses; (b) financial information and fee structures; (c) business processes, methods and models; (d) employee and vendor information; (e) hardware and system designs, architectures, structure and protocols; (f) product and service specifications; (g) manufacturing, purchasing, logistics, sales and marketing information; and (h) the terms and conditions of this Agreement.

Section 8.02. Obligations. The receiving Party will use the same care and discretion to avoid disclosure, publication or dissemination of any Confidential Information received from the disclosing Party as the receiving Party uses with its own similar information that it does not wish to disclose, publish or disseminate (and in any event will use commercially reasonable efforts in such regard). The receiving Party will: (a) use the disclosing Party’s Confidential Information only in connection with the performance of its obligations under this Agreement or the full enjoyment of its rights hereunder; and (b) not disclose the disclosing Party’s Confidential Information except to (i) its employees, agents and contractors, who have a need to know such Confidential Information in connection with the performance of its obligations under this Agreement or the full enjoyment of its rights hereunder and who have executed Contracts obligating them to keep the Confidential Information confidential, or (ii) its legal, financial or other professional advisors as reasonably necessary. The receiving Party is liable for any unauthorized disclosure or use of Confidential Information by any of its personnel, agents,

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subcontractors or advisors. The receiving Party will promptly report to the disclosing Party any breaches in security of the receiving Party that may materially and adversely affect the disclosing Party and specify the corrective action taken. Information designated as confidential by Subcontractors shall be deemed Confidential Information hereunder. Customer shall follow any reasonable confidentiality requirements imposed by Subcontractors on Service Provider with respect to such Confidential Information if Service Provider gives Customer prior written notice of such requirements.

Section 8.03. Exceptions To Confidential Treatment. (a) The obligations set forth in Section 8.02 do not apply to any Confidential Information that the receiving Party can demonstrate: (i) is or becomes generally available to the public, other than as a result of a disclosure by the receiving Party or its Affiliates not otherwise permissible hereunder; (ii) was or became available to the receiving Party from a source other than the disclosing Party or its Affiliates; or (iii) is developed independently by the receiving Party without reference to the Confidential Information, except that, in the case of clause (ii), the source of such Confidential Information was not known by the receiving Party to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the disclosing Party with respect to such Confidential Information. Notwithstanding anything in this Section 8.03(a) to the contrary, Confidential Information of Customer related to Customer’s business which was separated from Service Provider will in no event be included within any exception herein and will be subject to Section 8.02 above.

(b) If a receiving Party is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) by any Governmental Entity or pursuant to applicable Law to disclose or provide any Confidential Information of the other Party, the Party receiving such request or demand will, subject to applicable Law, use commercially reasonable efforts to provide the other Party with written notice of such request or demand as promptly as practicable under the circumstances so that such other Party will have an opportunity to seek an appropriate protective Order. The Party receiving such request or demand agrees to take, and cause its representatives to take, at the requesting Party’s expense, all other reasonable steps necessary to obtain confidential treatment by the recipient. Subject to the foregoing, the Party that received such request or demand may thereafter disclose or provide any such Confidential Information, as the case may be, to the extent (and only in such amount) required by such Law (as so advised by counsel) or by lawful process or such Governmental Entity.

Section 8.04. Return or Destruction. Upon the termination or expiration of the Services, each Party will return or certify the destruction of the other Party’s Confidential Information in such other Party’s possession or control.

ARTICLE 9

COMPENSATION

Section 9.01. Service Fee. Customer will pay Service Provider a fee for each Service (each such fee, a “Charge” and collectively the “Charges”), which shall be calculated on the basis set forth on Schedule B. Upon early termination of any individual Service(s) pursuant to Section 12.01(b) hereof or otherwise, the Parties will cooperate in good faith to adjust the

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monthly Charges paid by Customer hereunder to correspond with the actual Service(s) being provided. Upon the extension of any individual Service(s) pursuant to Section 2.01 hereof, Customer will pay to Service Provider the charges set forth in Schedule B for such Service(s) for each month of additional service; provided, however, that if Customer extends only certain individual Services within an individual service bundle set forth in Schedule B (each such service bundle, a “Service Bundle”), the Parties will cooperate in good faith to adjust the monthly charges paid by Customer to correspond with the scope of Services in such Service Bundle which are being extended.

Section 9.02. Other Expenses. To the extent not included in the Charges, Customer will reimburse Service Provider for those reasonable out-of-pocket expenses incurred by Service Provider solely in connection with its performance of the Services (e.g., travel and freight expenses) (the “Out-of-Pocket Expenses”); provided, however, that such Out-of-Pocket Expenses will not include (i) payments to third parties for items that were routinely incurred by Service Provider prior to the Effective Date (such as for overhead and utilities, supplies, and the like) or (ii) Service Provider’s share of costs for Required Consents pursuant to Section 6.04(d); and provided further that Service Provider will consult with Customer prior to incurring any Out of Pocket Expenses that are individually in excess of $10,000 or, for a group of related expenses, in the aggregate in excess of $25,000, except for any group of expenses related to commonly recurring charges incurred in the ordinary course of business such as freight, prepaid advertising and product vouchers, or other mutually agreed groups of expenses.

Section 9.03. Taxes. In addition to paying the amounts described in Sections 9.01 and 9.02, Customer shall pay, and hold Service Provider harmless against, all sales, use or other Taxes, or other fees or assessments imposed by Law in connection with the provision of the Services, other than any income or franchise Taxes. Customer shall also provide Service Provider with timely resale or other applicable exemption certificates. Service Provider and Customer shall cooperate with each other and use commercially reasonable efforts to assist the other in entering into such arrangements as the other may reasonably request in order to minimize, to the extent lawful and feasible, the payment or assessment of any Taxes relating to the transactions contemplated by this Agreement, including, where appropriate, requiring their Affiliates within a country to enter into a companion Contract for purchase of Services within such country; provided, however, that nothing in this Section 9.03 shall obligate Service Provider to cooperate with, or assist, Customer in any arrangement proposed by Customer that would, in Service Provider’s reasonable discretion, have a detrimental effect on Service Provider or any Service Provider Affiliate with respect to Taxes.

Section 9.04. Invoicing and Payment.

(a) Net Remittance. From the Effective Date through the Collections Completion Date, Service Provider will directly collect and receive payment from trade customers with respect to Product shipments (the “Collection Services”). Service Provider shall calculate the Net Remittance for each calendar month and provide Customer with a Settlement Report. If the Net Remittance is (i) positive, Service Provider shall pay the Net Remittance to Customer or (ii) negative, Customer shall pay the Net Remittance to Service Provider, in each case in accordance with Section 9.04(c).

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(b) Settlement Reports. Not later than twenty (20) Business Days following the end of each calendar month during the Term, Service Provider will submit a monthly settlement report (the “Settlement Report”) to Customer setting forth on a country-by-country basis the Net Sales for such lapsed month, detailing the breakdown of gross sales and sales related deductions to the extent reasonably available from Service Provider’s accounting systems, for such lapsed month (in local currency), the physical case volume data for all sales and shipments for such lapsed month, the calculation of the Charges, Out-of-Pocket Expenses and Taxes related to the Services, and the Net Remittance for such calendar month. All Settlement Reports will be based on the actual sales of Products to customers. Within twenty (20) Business Days following the end of the calendar month in which the Collections Completion Date occurs or the Term ends, Service Provider shall send a final Settlement Report to Customer.

(c) Invoicing and Payment Due Date. Service Provider will provide Customer monthly with an invoice for the amount of Net Remittance in case of a negative Net Remittance, and Customer will provide Service Provider monthly with an invoice for the amount of Net Remittance in case of a positive Net Remittance, in each case in United States dollars. Foreign currency will be converted to U.S. dollars at the exchange rate reported by Citibank, N.A. as of the penultimate Business Day of each lapsed month. Payment by Customer in case of a negative Net Remittance and by Service Provider in case of a positive Net Remittance is due thirty (30) days following the date of invoice. Following the Collections Completion Date, Service Provider will invoice Customer monthly in United States dollars. Payments past due shall bear interest calculated on a per annum basis from the due date to the date of actual payment at the Interest Rate; any such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed. Customer or Service Provider, as the case may be, shall make payments under this Agreement by electronic funds transfer in accordance with payment instructions provided by Service Provider or Customer from time to time.

(d) Amounts in Dispute. Each Party agrees that it will, unless otherwise directed by the other Party, continue performing its obligations under this Agreement while any dispute with respect to the Services hereunder is being resolved until this Agreement expires or is terminated in accordance with its terms, except that Service Provider may suspend performance of some or all of the Services in the case of such a dispute with regards to Customer’s alleged failure to pay amounts in excess of ten million dollars ($10,000,000), provided, however that if Customer pays such disputed amounts, Service Provider shall continue to perform its obligations under this Agreement and such payment shall not constitute a waiver of any claims that Customer may have with respect to such disputed amounts. Any invoiced amounts which Customer does not dispute must be paid in accordance with the terms of Section 9.04(c). Customer may withhold any disputed amounts on an invoice until such time as such dispute is resolved in accordance with the terms of this Agreement; provided that in the event of resolution of such dispute, any amounts owed by Customer to Service Provider in accordance with the resolution of such dispute is due within thirty (30) days of the date of the resolution of such dispute, after which time the Interest Rate shall be applied to any such amounts which remain unpaid.

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ARTICLE 10

REPRESENTATIONS AND WARRANTIES; COVENANTS

Section 10.01. Representations and Warranties. (a) Authority. Each Party represents and warrants to the other that: (i) it has all requisite legal and corporate power to execute and deliver this Agreement; (ii) it has taken all corporate action necessary for the authorization, execution and delivery of this Agreement; (iii) it is not a party to a Contract with any other person, firm, corporation or other entity that would interfere with its obligations hereunder; and (iv) this Agreement is a legal, valid and binding obligation of it, enforceable against it in accordance with the terms of this Agreement. Each Party’s warranty in clause (iii) above is subject to the obtainment of all Required Consents.

(b) Good Standing. Each Party represents and warrants that it is duly licensed or qualified to do business and is in good standing in every jurisdiction in which a license or other qualification is required for the conduct of its business, except where the failure to be so licensed or qualified would have no material adverse effect on its ability to fulfill its obligations under this Agreement.

Section 10.02. Standard of Care. (a) The Service Provider will perform the Services using efforts and a degree of skill and care substantially similar to the efforts, skill and care that Service Provider applied to the performance of the Services for the Pharmaceuticals Business immediately prior to the execution of the Purchase Agreement. The Services will be provided from the location that Service Provider deems appropriate, in consultation with Customer. The Services will include reports provided by Service Provider for the Pharmaceuticals Business immediately prior to the Effective Date, and thereafter will continue to be provided in substantially the same manner as Service Provider generally provides such reports for its own retained businesses, except to the extent the reports are limited or changed because of the separation of Customer’s and Service Provider’s businesses as contemplated by the Purchase Agreement.

(b) In no event will Service Provider be required to do any of the following: (i) make any customization to the Services (or Service Provider’s associated systems or processes) that are unique to Customer, other than customizations that Service Provider elects to make to support its own shared services environment or that are part of the Base Services or the Consulting Services, (ii) provide Services at any Remote Location, (iii) provide any Service that is specifically listed on Schedule A as being provided only at a specific location at any alternate location; or (iv) subject to Section 9.04(b), provide reports incremental to those provided prior to the Effective Date; provided that in all cases Service Provider will be obligated to provide the Services. Service Provider will provide reasonable access to the Service Provider Systems to Recipient Personnel who may reasonably require such access in connection with receiving the Services.

Section 10.03. Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 10, SERVICE PROVIDER MAKES NO, AND HEREBY EXPRESSLY DISCLAIMS ANY, REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE WHATSOEVER, INCLUDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND THOSE ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE.

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ARTICLE 11

INDEMNITIES, PROCEDURES AND LIMITATIONS

Section 11.01. Indemnification by Customer. Customer agrees to indemnify, hold harmless and defend Service Provider and Service Provider Affiliates and their respective agents, directors, officers, employees, stockholders and representatives, successors and assignees (collectively, the “Service Provider Indemnitees”) from and against any and all Losses suffered or incurred by any Service Provider Indemnitee arising out of any of the following:

(a) any breach of this Agreement by Customer or its Affiliates;

(b) third-party claims for which Customer is liable under Section 2.04;

(c) any Taxes, together with interest and penalties, that are the responsibility of Customer under Section 9.03;

(d) any gross negligence or willful misconduct of Customer or any Recipient in connection with the use of the Services;

(e) any alleged infringement or misappropriation by Customer or any Recipient of any Software, Technology or any other Intellectual Property developed, used, or made accessible in connection with the Services, except to the extent caused by infringement or misappropriation by Service Provider, Service Provider Affiliates or any of their respective Subcontractors or the Service Provider Personnel of such Software, Technology, or other Intellectual Property, or by the violation by any such Persons of any license terms or usage instructions pertaining thereto; or

(f) any personal injury to employees of Customer or its Affiliates (or any other persons designated by Customer) while at facilities of Service Provider, to the extent such Losses do not result from the negligence or willful misconduct of Service Provider.

Section 11.02. Indemnification by Service Provider. Service Provider agrees to indemnify, hold harmless and defend Customer and its Affiliates and their respective agents, directors, officers, employees, stockholders and representatives, successors and assignees (collectively, the “Customer Indemnitees”) from and against any and all Losses suffered or incurred by any Customer Indemnitee arising out of any of the following:

(a) any breach of this Agreement by Service Provider, its Affiliates, Subcontractors or Service Provider Personnel, but only to the extent that such Losses are direct Losses of Customer and do not arise from third-party claims against the Customer Indemnitees;

(b) any gross negligence or willful misconduct of Service Provider, its Affiliates, Subcontractors or Service Provider Personnel in connection with the provision of the Services;

(c) Service Provider’s election not to obtain a Required Consent, as set forth in Section 6.04(d);

(d) any alleged infringement or misappropriation by Service Provider, its Affiliates, Subcontractors and Service Provider Personnel of any Software, Technology or any other

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Intellectual Property developed, used, or made accessible in connection with the Services, except to the extent caused by infringement or misappropriation by Customer or a Recipient or any of their respective contractors of such Software, Technology, or other Intellectual Property, or by the violation by any such Persons of any license terms or usage instructions provided to Customer by Service Provider; or

(e) any personal injury to employees of Service Provider or Service Provider Affiliates (or any other persons designated by Service Provider) while at facilities of Customer, to the extent such Losses do not result from the negligence or willful misconduct of Customer.

Section 11.03. Indemnification Procedures; Calculation of Indemnity Payments.

(a) Indemnification Procedures. The provisions of Section 9.05 of the Purchase Agreement relating to indemnification procedures shall be incorporated by reference herein, mutatis mutandis, provided that, for the purposes of interpreting this Agreement, Section 9.05 of the Purchase Agreement shall be read as follows: (i) all references to “Section 9.03” shall be replaced with “Section 11.02,” (ii) all references to “Section 9.04” shall be replaced by “Section 11.01,” (iii) all references to “Article IX” shall be replaced by “Article 11,” (iv) all references to “Taxes” shall be ignored, and (v) all references to “Article X” shall be replaced with “Article 13”.

(b) Calculation of Indemnity Payments. The provisions of Section 9.07 of the Purchase Agreement relating to the calculation of indemnity payments shall be incorporated by reference herein, mutatis mutandis, provided that, for the purposes of interpreting this Agreement, all references to “Article IX” in Section 9.07 of the Purchase Agreement shall be replaced with “Article 11.”

Section 11.04. Limitations on Liability. (a) Except for Losses arising out of or resulting from (i) the gross negligence or willful misconduct of Service Provider, its Affiliates or Service Provider Personnel or breach of Article 8, (ii) non-payment of Net Remittances, or (iii) Service Provider’s indemnity obligations for third-party claims set forth in Section 11.02, the total aggregate liability of Service Provider for breach of this Agreement shall be limited to twenty million dollars ($20,000,000); provided that in the event of Losses arising from gross negligence or willful misconduct of a Subcontractor or employees, representatives, contractors or agents of a Subcontractor, such limit shall be the greater of (i) the amounts recoverable by Service Provider from such Subcontractor in connection with such Losses or (ii) twenty million dollars ($20,000,000).

(b) Except for Losses arising out of or resulting from (i) the gross negligence or willful misconduct of Customer or its Affiliates or breach of Article 8, (ii) non-payment of Charges, Out-of-Pocket Expenses and Taxes due under this Agreement, or (iii) Customer’s indemnity obligations for third-party claims set forth in Section 11.01, the total aggregate liability of Customer for breach of this Agreement shall be limited to twenty million dollars ($20,000,000).

(c) Each Party shall use its commercially reasonable efforts to mitigate Losses for which it seeks recourse hereunder, including by promptly pursuing recovery under available insurance policies, provided, however, that the failure of such Party to successfully mitigate such Losses shall not affect such Party’s right to seek recourse with respect to such Losses so long as such Party shall have used its commercially reasonable efforts to mitigate.

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(d) EXCEPT IN THE CASE OF WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, NO PARTY TO THIS AGREEMENT OR ITS AFFILIATES SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO ANY OTHER PARTY HERETO OR ITS AFFILIATES FOR EXEMPLARY, SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES, LOST PROFITS, LOST SALES, BUSINESS INTERRUPTIONS OR LOST BUSINESS OPPORTUNITIES THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE (OR FAILURE TO PERFORM) HEREUNDER, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR SUCH PARTY HAD BEEN APPRISED OF THE LIKELIHOOD THEREOF.

(e) Regardless of any other rights under any other agreements or mandatory provisions of Law, neither Service Provider nor Customer shall have the right to set-off the amount of any Losses it may have under this Agreement, whether contingent or otherwise, against any amount owed by such Party to the other Party, whether under this Agreement or otherwise.

Section 11.05. Indemnification and Limitations on Liability Relating to Negligence and Strict Liability. EXCEPT AS EXPRESSLY PROVIDED HEREIN, ALL LIMITATIONS ON LIABILITY CONTAINED IN SECTION 11.04 AND ALL INDEMNITIES SHALL APPLY WHETHER OR NOT THE INDEMNITEE OR PARTY CLAIMING DAMAGES WAS OR IS CLAIMED TO BE PASSIVELY, CONCURRENTLY OR ACTIVELY NEGLIGENT, AND REGARDLESS OF WHETHER LIABILITY WITHOUT FAULT IS IMPOSED OR SOUGHT TO BE IMPOSED ON SUCH INDEMNITEE OR PARTY.

Section 11.06. Sole Remedy. From and after the Effective Date, the sole and exclusive remedy of a Party to this Agreement with respect to any and all claims relating to this Agreement, the provision of the Services or any other obligations hereunder (other than claims of, or causes of action arising from, fraud and except for seeking specific performance or other equitable relief to require a party to perform its obligations under this Agreement) shall be pursuant to the indemnification provisions set forth in this Article 11.

Section 11.07. Waiver of Subrogation. Service Provider shall use commercially reasonable efforts to cause its insurers to waive their rights of subrogation against Customer with respect to any Losses. Likewise, Customer shall use commercially reasonable efforts to cause its insurers to waive their rights of subrogation against Service Provider with respect to any Losses.

ARTICLE 12

TERMINATION

Section 12.01. Termination Rights. (a) Termination for Cause. In addition to, and not in limitation of, any other termination rights set forth in this Agreement, either Party may, by giving written notice to the other Party, terminate this Agreement if such other Party commits a material breach of this Agreement (a “Default”) which Default is not cured within thirty (30) days after notice of the Default. Subject to Section 12.02, for purposes hereof, non-payment by Customer shall be deemed a Default.

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(b) Termination for Convenience. Customer may terminate this Agreement at any time by giving Service Provider at least sixty (60) days prior written notice (such notice, the “Termination for Convenience Notice”) designating the termination date. If Customer seeks to terminate some, but less than all, of the Services, then the following procedures shall apply:

(i) prior to giving any Termination for Convenience Notice for less than all the Services, Customer must provide Service Provider notice of its intent to terminate some, but less than all, of the Services (such notice, a “Notice of Intent to Terminate for Convenience”);

(ii) within fifteen (15) days following receipt of a Notice of Intent to Terminate for Convenience from Customer, Service Provider will identify to Customer the interdependencies among Services, if any, that may exist that require Service Provider to terminate additional Services in connection with termination of the Services that Customer has selected for termination (the “Full Set of Interdependent Services”); and

(iii) only after identification of the Full Set of Interdependent Services may Customer give such a Termination for Convenience Notice, and such Termination for Convenience Notice must terminate such Full Set of Interdependent Services. Promptly following any termination the Parties shall determine an equitable reduction of the Charges.

(c) Liability. Upon any such termination for convenience, the Parties will equitably adjust the pricing to reflect the reduced scope of the Services. As of the effective date of such termination, Service Provider shall no longer provide the terminated Services, Customer shall no longer be obligated to pay Charges, Out-of Pocket Expenses or Taxes for, or the relevant portion of, the terminated Services. Customer will remain liable for fees and expenses for all properly performed Services up to the effective date of such termination.

(d) For Insolvency. If either Party (i) files for bankruptcy, (ii) becomes or is declared insolvent, or is the subject of any Proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency or the appointment of a receiver or similar officer for Service Provider, (iii) makes an assignment for the benefit of all or substantially all of its creditors, (iv) takes any corporate action for its winding-up, dissolution or administration, or (v) enters into a Contract for the extension or readjustment of substantially all of its obligations, then the other Party may terminate this Agreement for cause as of a date specified in a written termination notice.

Section 12.02. Termination for Non-Payment. Service Provider may, upon written notice to Customer, terminate this Agreement if Customer has failed to pay any undisputed charges within thirty (30) days after receiving written notice from Service Provider of the possibility of termination for failure to make such payments.

Section 12.03. Survival. Upon termination of this Agreement in accordance with its terms, this Agreement shall terminate and will be of no further force or effect, except the following provisions shall survive termination of this Agreement: Section 2.04, Section 4.02, Section 6.01(b), Section 6.02(b), Section 6.03, Section 7.02 and Section 12.03 and Articles 1, 8, 11 and 13.

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Section 12.04. Rights Upon Termination or Expiration. At Customer’s request and expense, Service Provider will provide Customer with reasonable information and assistance to facilitate the transition responsibility for the Services to Customer or its designee (“Termination Assistance Services”). The provision of such Termination Assistance Services shall be subject to the Parties’ agreement on a detailed work plan and the availability of the applicable Service Provider resources. In no event shall Service Provider be required to provide any specialized or customized services as part of the Termination Assistance Services.

ARTICLE 13

GENERAL

Section 13.01. Construction. (a) References to Customer Includes Recipients. Customer is fully responsible and liable for the Recipients’ compliance with this Agreement, and any actions, omissions, or materials provided by any Recipients other than Customer shall be deemed to be Customer’s actions, omissions, or materials provided by Customer.

(b) General. All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. In the event of any conflict between the provisions of the body of this Agreement and the Schedules, the provisions of the body of this Agreement shall control. The descriptive headings of the several Articles and Sections of this Agreement and the Schedules to this Agreement and the Table of Contents to this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (i) “or” is not exclusive and “include”, “includes” and “including” are not limiting and shall be deemed to be followed by the words “without limitation”; (ii) “hereof”, “hereto”, “hereby”, “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (iii) “date hereof” refers to the date of this Agreement; (iv) “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if”; (v) definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (vi) references to an agreement or instrument mean such agreement or instrument as from time to time amended, modified or supplemented; (vii) references to a Person are also to its permitted successors and assigns; (viii) references to an “Article”, “Section” or “Schedule” refer to an Article of, a Section of, or Schedule to, this Agreement unless otherwise expressly specified; (ix) words importing the masculine gender include the feminine or neuter and, in each case, vice versa; and (x) any reference to a day or to a date shall be to such day or date in the Eastern time zone of the United States.

(c) Joint Drafting. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties hereto, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

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Section 13.02. Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any of the rights and obligations of the Parties hereunder may be assigned by either Party hereto without the prior written consent of the other Party hereto. Any attempted assignment or transfer in violation of this Section 13.02 shall be void.

Section 13.03. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when each Party hereto shall have received one or more counterparts hereof signed by the other Party hereto.

Section 13.04. Entire Agreement. This Agreement and Schedules attached hereto constitute the entire understanding between the Parties with respect to the subject matter hereof and supersede all other understandings and negotiations with respect thereto.

Section 13.05. Dispute Resolution. Any dispute arising under this Agreement shall be considered in person or by telephone by both Parties’ Relationship Managers within seven (7) days after receipt of a notice from either Party specifying the nature of the dispute (the date of receipt of such notice by the relevant Party, the “Dispute Date”). If for any reason, including the failure to meet or communicate, the Relationship Managers have not resolved such dispute to the satisfaction of both Parties within thirty (30) days after the Dispute Date, then either Party may commence Proceedings for the resolution of such dispute, subject to the terms of this Agreement. Notwithstanding the foregoing, the terms of this Section 13.05 shall not apply in the event that indemnification is being pursued in accordance with Article 11.

Section 13.06. Force Majeure. (a) “Force Majeure Event” means any event beyond the reasonable control of the Party affected that significantly interferes with the performance by such Party of its obligations under this Agreement, including acts of God, civil disturbances, interruptions by Orders, present and future valid Orders of any regulatory body having proper jurisdiction, acts of the public enemy, wars, riots, blockades, insurrections, epidemics, landslides, lightning, earthquakes, fire, storm, floods, washouts, explosions, breakage or accident to machinery, or, with respect to Service Provider, the strikes, lockouts or industrial disputes or disturbances of Subcontractors.

(b) If a Force Majeure Event is claimed by either Party, the Party making such claim shall orally notify the other Party as soon as reasonably possible after the occurrence of such Force Majeure Event and, in addition, shall provide the other Party with written notice of such Force Majeure Event within five (5) days after the occurrence of such Force Majeure Event.

(c) Except for Customer’s obligations to make payments hereunder, neither Party hereto will be liable for any nonperformance or delay in performance of the terms of this Agreement when such failure is due to a Force Majeure Event. If either Party relies on the occurrence of a Force Majeure Event as a basis for being excused from performance of its obligations hereunder, such Party relying on the Force Majeure Event shall (i) provide an

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estimate of the expected duration of the Force Majeure Event and its probable impact on performance of such Party’s obligations hereunder and (ii) provide prompt notice to the other Party of the cessation of the Force Majeure Event. If Service Provider does not perform all or any of the Services due to a Force Majeure Event, Customer will not be obligated to pay the Charges for such Service.

(d) Upon the occurrence of a Force Majeure Event, the same will, so far as possible, be remedied using commercially reasonable efforts. It is understood and agreed that nothing in this Section 13.06(d) shall require the settlement of strikes, lockouts or industrial disputes or disturbances by acceding to the demands of any opposing party therein when such course is inadvisable in the discretion of the Party having the difficulty.

Section 13.07. Further Assurances. In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties hereto will cooperate with each other and use commercially reasonable efforts to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement.

Section 13.08. Governing Law. This Agreement and any disputes arising under or related hereto (whether for breach of contract, tortious conduct or otherwise) shall be governed and construed in accordance with the laws of the State of New York, without reference to its conflicts of law principles.

Section 13.09. Commencement of Proceedings. Service Provider irrevocably agrees that any legal Proceeding brought by it or any Service Provider Affiliate against Customer or any of its Affiliates arising out of or in connection with this Agreement or disputes relating hereto (whether for breach of contract, tortious conduct or otherwise) shall be brought exclusively in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Delaware, and Service Provider hereby irrevocably accepts and submits to the exclusive jurisdiction and venue of the aforesaid courts in personam, with respect to any such Proceeding.

Section 13.10. Independent Contractors. Service Provider is an independent contractor, with all of the attendant rights and liabilities of an independent contractor, and not an employee of Customer or, except for authorizations specifically described in a Schedule with respect to a particular function, an agent of Customer. Any provision in this Agreement, or any action by Customer, that may appear to give Customer the right to direct or control Service Provider in performing under this Agreement means that Service Provider shall follow the desires of Customer in results only.

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Section 13.11. Notices. All notices, requests, permissions, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) five business days following sending by registered or certified mail, postage prepaid, (b) when sent, if sent by facsimile, provided that the facsimile transmission is promptly confirmed by telephone, (c) when delivered, if delivered personally to the intended recipient and (d) one business day following sending by overnight delivery via a national courier service and, in each case, addressed to a Party at the following address for such Party:

If to Service Provider:

The Procter & Gamble Company

Mason Business Center

8700 Mason Montgomery Road

Box 2180 Mason, Ohio 45040

Attn: Daniel Hecht, Relationship Manager

Facsimile: (513) 622-2236

With a copy to:

The Procter & Gamble Company

One Procter & Gamble Plaza

Cincinnati, Ohio 45202

Attn: Associate General Counsel – Global Transactions

Facsimile: (513) 983-7635

If to Customer:

Warner Chilcott

100 Enterprise Drive

Rockaway, New Jersey 07866

Attention: Izumi Hara, General Counsel

Facsimile: (973) 442-3310

With a copy to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention: George R. Bason, Jr., Michael Davis

Facsimile: (212) 450-3800

Section 13.12. Publicity. Except as otherwise required by Law, each of Service Provider and Customer will consult with the other and obtain the prior written consent of the other before issuing, or permitting any agent or Affiliate to issue, any press releases or otherwise making, or permitting any agent or Affiliate to make, any public statements with respect to this Agreement or the transactions contemplated hereby.

Section 13.13. Amendments and Waivers. This Agreement and the Schedules may be amended, modified, superseded or canceled and any of the terms, covenants, representations, warranties or conditions hereof may be waived only by an instrument in writing signed by the Parties hereto or, in the case of a waiver, by or on behalf of the Party waiving compliance. No course of dealing between the Parties shall be effective to amend or waive any provision of this Agreement.

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Section 13.14. Severability. In the event that any provision contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any jurisdiction, such provision shall be ineffective as to such jurisdiction to the extent of such invalidity, illegality or unenforceability without invalidating or affecting the remaining provisions hereof or affecting the validity, legality or enforceability of such provision in any other jurisdiction.

Section 13.15. No Third-Party Beneficiaries. Except with respect to Indemnitees pursuant to Article 11, this Agreement is for the sole benefit of the Parties hereto and their respective successors and permitted assigns and nothing herein expressed or implied shall give or be construed to give any Person, other than the Parties hereto and their successors and permitted assigns, any legal or equitable rights hereunder.

Section 13.16. Limitation for Proceedings. Any Proceeding for breach of this Agreement must be commenced within one (1) year after the expiration or termination of this Agreement, except for Proceedings for breach of Article 11, which must be commenced within one (1) year of receipt of the third-party claim subject to such Proceedings.

Section 13.17. Real Estate. Promptly after the execution of the Purchase Agreement, P&G and Purchaser shall negotiate in good faith arrangements (the “Occupancy Arrangements”) by which Customer’s employees may occupy premises owned or leased by P&G or its Affiliates after the Closing Date for the purpose of conducting the Pharmaceuticals Business as operated by Customer and its Subsidiaries. The terms of the Occupancy Arrangements shall be substantially as set forth on Schedules D and E hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, Service Provider and Customer have duly executed this Agreement as of the date first written above.

THE PROCTER & GAMBLE COMPANY
by:	/s/ Teri L. List
	Name:
	Title:
WARNER CHILCOTT PLC
by:	/s/ Izumi Hara
	Name:	Izumi Hara
	Title:	Senior Vice President, General Counsel and Corporate Secretary

[Signature page to Transition Services Agreement]

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WARNER CHILCOTT PLC
by:	/s/ Claire Gilligan
	Name:	Claire Gilligan
	Title:	Vice President, UK Operations

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EX-10.26

Exhibit 10.26

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of October 20, 2009, between WARNER CHILCOTT (US), LLC (the “Company”), and Mahdi Fawzi, Ph.D. (“Executive”).

RECITALS

WHEREAS, Executive and the Company desire to enter into this Agreement in order to set forth the terms and conditions upon which Executive will serve as the President, Research & Development of the Company’s ultimate parent company, Warner Chilcott plc, an Irish company (“Warner Chilcott”).

NOW THEREFORE in consideration of the promises and mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Employment.

(a) Executive shall be employed by the Company and will have the title of President, Research & Development of the Company and Warner Chilcott. Executive shall have authority, duties and responsibilities as are commensurate with Executive’s position. Executive agrees to render full time services under this Agreement in performing such duties and responsibilities.

(b) Executive shall perform substantially all of his duties under this Agreement at the Company’s Rockaway, New Jersey office provided, however, that the Executive may be required to perform incidental services outside the United States from time to time. Executive may from time to time be required to perform duties commensurate with Executive’s position on behalf of any of Warner Chilcott or any of its direct or indirect subsidiaries (collectively, the “Group Companies”) in addition to the duties described in Section 1(a), and Executive may be appointed an officer or officers of one or more Group Companies in addition to his titles described in Section 1(a). Such duties shall be performed, and appointments accepted, by Executive without additional compensation or remuneration.

(c) Executive accepts such employment and agrees to render the services described above to the best of his abilities in a diligent, trustworthy, businesslike and efficient manner. It shall not be a violation of this Agreement for Executive to serve on civic or charitable boards or committees so long as such activities do not significantly interfere with Executive’s commitment to work in accordance with this Agreement. With the prior written consent of Warner

Chilcott’s Board of Directors (the “Board”), which consent shall not be unreasonably refused or delayed, and so long as such activities do not significantly interfere with Executive’s commitment to work in accordance with this Agreement, Executive may serve on corporate boards or committees.

2. Term of Employment. Executive’s employment by the Company shall commence on the date hereof and shall continue unless terminated as hereinafter provided (the “Employment Period”). Executive may terminate his employment during the Employment Period with twelve months written notice to the Company. If the Company gives Executive notice of termination without cause, Executive shall be entitled to the severance payments provided in Section 4(d) hereof.

3. Base Salary and Benefits.

(a) Base Salary. Commencing as of the date hereof, and thereafter during the Employment Period, Executive’s base salary shall be $500,000.00 per annum, (as adjusted from time to time, the “Base Salary”). The Base Salary may be adjusted from time to time as set forth in Section 3(e). The Base Salary shall be payable in regular installments in accordance with the Company’s general payroll practices and shall be subject to customary withholding.

(b) Business Expenses. The Company shall reimburse Executive for all reasonable expenses incurred by him during the Employment Period in the course of performing his duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses. The parties agree that such expenses shall include, by way of example and not limitation, cellular telephone service and home fax machine and telephone line.

(c) Employee Benefits. Except as specifically set forth herein, Executive shall be entitled to participate, on a basis comparable to other key executives of the Company, in any benefit plan, incentive compensation plan or program of any Group Company for which key executives of the Company are or shall become eligible, including, without limitation, pension, 401(k), life and disability insurance and share plans, subject to the approval of the Compensation Committee of the Board (or, if there is no such committee, subject to the approval of the Board), and the terms and conditions of such plans and schemes.

(d) Annual Bonus. Executive shall be eligible during the Employment Period to receive an annual cash bonus (the “Cash Bonus”) in such amount, if any, as is determined in the sole discretion of the Board, in a target amount equal to a minimum of 50% of his then current Base Salary (the “Target Bonus”) based on the achievement of performance goals established by the Board.

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Such bonus shall be provided on such terms and in such amounts, if any, as the Board may deem appropriate in its sole discretion. With respect to the Company’s fiscal year ending December 31, 2009, Executive shall be eligible for a Cash Bonus with such amount pro-rated to reflect the portion of the fiscal year for which services are rendered.

(e) Annual Review of Base Salary and Cash Bonus. The Compensation Committee of the Board (or, if no such committee exists, the Board) shall review each year the Base Salary and Target Bonus in accordance with the compensation policies and practices of Warner Chilcott and/or the Company; provided, that, in no event shall Executive’s Base Salary be reduced below $500,000.00, in no event shall the Target Bonus be reduced, and in no event shall the Company, the Compensation Committee of the Board or the Board be obligated to increase the Base Salary or Target Bonus.

(f) Vacation. Executive shall be entitled to vacation time with compensation of twenty days per annum during the Employment Period. Executive shall also be entitled to all paid holidays given by the Company to its key officers.

(g) Sign-on Bonus. On November 10, 2009, Executive shall receive a sign-on bonus of $100,000.

(h) Grant of Ordinary Shares. On the date hereof, Executive shall receive a grant pursuant to Warner Chilcott’s Equity Incentive Plan (the “Incentive Plan”) of ordinary shares with an aggregate equity value of $604,250, calculated using the closing price on the date hereof (“Restricted Ordinary Shares”) on the terms and subject to the conditions set forth in that certain Share Award Agreement, dated as of the date hereof by and among Warner Chilcott and Executive, including that such Restricted Ordinary Shares will vest ratably over four years in 25% increments commencing with the first anniversary of the date of grant, subject to 100% vesting upon the consummation of a Change of Control. Such grant of Restricted Ordinary Shares will be made under the Incentive Plan in lieu of the annual grant for which Executive would otherwise have been eligible in the first quarter of 2010. Executive will not be eligible to receive a 2010 annual equity award under the Incentive Plan but will be eligible for such annual awards commencing in 2011.

(i) Grant of Non-Qualified Share Options. On the date hereof, Executive shall receive pursuant to the Incentive Plan a non-qualified option award to purchase ordinary shares with an aggregate equity value of $604,250, calculated by, and with an exercise price equal to, the closing price of the Company’s ordinary shares on the date hereof, the vesting of which will occur ratably over four years in 25% increments commencing with the first anniversary

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of the date of grant, subject to 100% vesting upon the consummation of a Change of Control, and which will be subject to other terms and conditions, in each case as more specifically set forth in that certain Share Option Award Agreement, dated as of the date hereof. Such grant of non-qualified share options will be made under the Incentive Plan in lieu of the annual grant for which Executive would otherwise have been eligible in the first quarter of 2010. Executive will not be eligible to receive a 2010 annual equity award under the Incentive Plan but will be eligible for such annual awards commencing in 2011.

4. Termination.

(a) If Executive shall die during the Employment Period, Executive’s employment hereunder shall terminate effective as of the date of Executive’s death, except that Executive’s surviving spouse and dependents or, if none, his estate, shall be entitled to receive an amount equal to Executive’s then current Base Salary for a period of 12 months plus all other amounts and benefits to which Executive is entitled, including without limitation, expense reimbursement amounts accrued to the effective date of termination and amounts and benefits owing under the terms of any benefit plan of any Group Company in which Executive participates, such payments to be payable during the 12 month period after Executive’s last day of active employment in equal monthly installments. In addition, Executive’s surviving spouse and dependents shall be entitled to continued participation in the Company’s health and welfare plans in which Executive was participating immediately prior to such termination, to the extent, and in the manner, provided for pursuant to such health and welfare plans, at the Company’s expense, for a period of 12 months following such termination of employment; provided, that if such benefits cannot be provided under the applicable plan, Executive’s surviving spouse or dependents shall receive the cash value thereof plus an appropriate tax gross-up in equal monthly installments during the 12 months following such termination of employment.

(b) At the sole discretion of the Board, Executive’s employment hereunder may be terminated by the Company if Executive is disabled (as defined below) and shall have been absent from his duties with the Company on a full time basis for 180 consecutive days, and, within 30 days after written notice by the Company to do so, the Executive shall not have returned to the performance of his duties hereunder on a full time basis. In the event of such termination, Executive shall be entitled to receive (so long as he executes and delivers the Company’s standard form of release within 60 days following Executive’s termination of employment) an amount equal to the amount set forth in Section 4(d)(i) below, plus all other amounts and benefits to which Executive is entitled, including without limitation, expense reimbursement amounts accrued to the effective date of termination and amounts and benefits owing under the terms of any benefit plan of any Group Company in which Executive participates, all

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such payments to be payable during the 24 month period after Executive’s last day of active employment in equal monthly installments; provided that, for the avoidance of doubt, the proviso at the end of Section 4(d) shall not apply to payments pursuant to this Section 4(b). As used herein, the term “disabled” shall (i) mean that Executive is unable, as a result of a medically determinable physical or mental impairment, to perform the duties and services of his position, or (ii) have the meaning specified in any disability insurance policy maintained by the Company, whichever is more favorable to the Executive.

(c) The Company may, by notice to Executive, terminate Executive’s employment hereunder for cause. As used herein, “cause” shall mean (i) the conviction of Executive of a felony (other than violation of a motor vehicle or moving violation law) or conviction of a misdemeanor if such misdemeanor involves moral turpitude; or (ii) Executive’s voluntary engagement in conduct constituting larceny, embezzlement, conversion or any other act involving the misappropriation of any Group Company funds in the course of his employment; or (iii) Executive’s willful refusal (following written notice) to carry out specific directions of the Board, the Board of Directors of the Company or the Board of Directors of any other Group Company of which Executive is an officer, which directions shall be consistent with the provisions hereof; or (iv) Executive’s committing any act of gross negligence or intentional misconduct in the performance or non-performance of his duties hereunder; or (v) any material breach by Executive of any material provision of this Agreement (other than for reasons related only to the business performance of the Company or business results achieved by Executive). For purposes of this Section 4(c), no act or failure to act on Executive’s part shall be considered to be reason for termination for cause if done, or omitted to be done, by Executive in good faith and with the reasonable belief that the action or omission was in the best interests of the Company. Upon the termination of Executive’s employment for cause, the Company shall pay to Executive (x) his Base Salary accrued through the effective date of termination, payable at the time such payment is otherwise due and payable hereunder, and (y) all other amounts and benefits to which Executive is entitled, including, without limitation, vacation pay and expense reimbursement amounts accrued to the effective date of termination and amounts and benefits owing under the terms of any benefit plan of any Group Company in which Executive participates and Executive shall not be entitled to any severance payments.

(d) The Executive and the Company agree that the Company in its absolute discretion, may terminate Executive’s employment hereunder without cause provided, however that in such event Executive shall be entitled to receive (so long as he executes and delivers the Company’s standard form of release within 60 days following Executive’s termination of employment): (i) an amount equal to (x) 200% of Executive’s Base Salary in effect as of the date Executive’s

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employment with the Company is terminated plus (y) 200% of the Cash Bonus paid (or payable in the event the full amount has not then been paid) to such Executive with respect to the calendar year immediately preceding the year in which Executive’s employment with the Company terminated, and (ii) all other amounts and benefits to which Executive is entitled, including without limitation, expense reimbursement amounts accrued to the effective date of termination and amounts and benefits owing under the terms of any benefit plan of any Group Company in which Executive participates, in each case such payments to be payable during the 24 month period after Executive’s last day of active employment in equal monthly installments, provided, however, that if such termination occurs in connection with or within two years of a Change of Control, then such amounts shall be payable as a lump sum cash payment within 10 days after Executive’s last day of active employment.

(e) Executive’s employment may be terminated by the Executive,

(i) for Good Reason. For purposes of this Agreement, “Good Reason” shall mean: (A) the assignment to Executive of duties materially inconsistent with Executive’s position (including status, offices, titles, and reporting requirements), authority, duties or responsibilities as contemplated by Section 1(a) hereof, or any other action by the Company or Warner Chilcott which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or Warner Chilcott promptly after receipt of notice thereof given by Executive; (B) any failure by the Company to comply with any of the provisions of Section 3 hereof, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive; (C) the Company’s requiring Executive to be based at any office or location other than as provided in Section 1(b); (D) any purported termination by the Company of Executive’s employment otherwise than as expressly permitted by this Agreement; or (E) any failure by the Company to obtain an express assumption of this Agreement by a successor as required pursuant to Section 15 hereof. Upon any termination pursuant to this Section 4(e), Executive shall be entitled (so long as he executes and delivers the Company’s standard form of release within 60 days following Executive’s termination of employment) to the payments specified in Section 4(d) paid in the manner set forth therein.

(ii) by resignation or retirement. If Executive resigns or retires, this Agreement shall terminate as of the effective date of Executive’s retirement or resignation and thereupon Executive shall be entitled solely to the payments and benefits set forth in Section 4(c).

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5. Gross-Up Payment.

(a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that any payment or consideration received by Executive from a Group Company (or any Person whose actions result in a change in ownership or effective control or in the ownership of a substantial portion of assets of the Group Companies covered by Section 280G(b)(2) of the Internal Revenue Code of 1986 of the United States, as amended (the “Code”), or any Person affiliated with any Group Company or any such Person) in connection with a Change of Control or any other change in ownership or control or substantial portion of assets for purposes of Section 280G (in each case whether paid or payable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 5(a)) (any such payment or consideration described in such clauses (i) or (ii), a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties are hereinafter collectively referred to as the “Excise Tax”), the Company shall pay to Executive at the time specified in Section 5(e) below an additional amount (a “Gross-Up Payment”) such that the net amount of the Gross-Up Payment retained by Executive, after deduction of all federal, state and local income tax (and any interest and penalties imposed with respect thereto), employment tax and Excise Tax on the Gross-Up Payment, shall be equal to the amount of the Excise Tax imposed on such Payment.

(b) For purposes of the foregoing Section 5(a), the proper amounts, if any, of the Excise Tax and the Gross-Up Payment shall be determined in the first instance by the Company. Such determination by the Company shall be promptly communicated in writing by the Company to Executive. Within 10 days of being provided with written notice of any such determination, Executive may provide written notice to the Compensation Committee of the Board (or, if there is no such Compensation Committee, the Board) of any disagreement, in which event the amounts, if any, of the Excise Tax and the Gross-Up Payment shall be determined by an independent accounting firm mutually selected by the Company and Executive in which event the Company shall bear the costs of retaining such independent accounting firm. The determination of the Company (or in the event of disagreement, the accounting firm selected) shall be final and nonreviewable.

(c) For purposes of determining whether any of the Payments will be subject to the Excise Tax and the amount of such Excise Tax under Section 5(a), any payments or benefits received or to be received by Executive in connection with a termination of employment shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess

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parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax unless the Company or the accounting firm selected above, as applicable, determines based on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, with substantial authority (within the meaning of Section 6662 of the Code), such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code.

(d) For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of tax in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of tax in the state and locality of Executive’s residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; provided, however, that to the extent (but only to the extent) required to comply with Regulation §409A-3(i)(l)(v) under the Code, the amount of the Gross-Up Payment shall be equal to all of the Federal, state and local taxes imposed on Executive as a result of the Excise Tax and Gross-Up Payment.

(e) The Gross-Up Payments provided for in Section 5(a) shall be made in a cash, lump-sum payment to the Executive (or appropriate taxing authority on Executive’s behalf) when due but in no event later than the end of the year following the year in which Executive remits the Excise Tax, net of any required tax withholdings, upon the later of (i) the fifth business day following the effective date of termination, or (ii) the calculation of the amount of the Gross-Up Payment under Section 5(b). Any Gross-Up Payment required hereunder that is not made in a timely manner shall bear interest at a rate equal to the prime rate quoted on the date the payment is first overdue by Citibank N.A., New York, New York plus two percent until paid.

(f) As a result of the uncertainty in the application of Section 280G of the Code at the time of a determination hereunder, it is possible that payments will be made by the Company which should not have been made under Section 4(f) (“Overpayment”) or that additional payments which are not made by the Company pursuant to Section 5(a) should have been made (“Underpayment”). In the event that there is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that an Overpayment has been made, any such Overpayment shall be promptly reimbursed by the Executive to the Company. In the event there is a final determination by the Internal Revenue Service, a final determination by a court of competent

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jurisdiction or a change in the provisions of the Code or regulations pursuant to which an Underpayment arises under this Agreement, any such Underpayment shall be promptly paid by the Company to the Executive, together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

(g) Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of or in any contract or agreement with the Company or any other Group Company at or subsequent to the date of termination of Executive’s employment for any reason shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

6. Confidential Information.

(a) Executive acknowledges and agrees that the information, observations and data obtained by him concerning any Group Company while employed by the Company or any other Group Company (“Confidential Information”) are the property of Warner Chilcott and/or the relevant Group Company (as appropriate). Therefore, Executive agrees to keep secret and retain in the strictest confidence all Confidential Information, including without limitation, trade “know-how” secrets, customer lists, pricing policies, operational methods, technical processes, formulae, inventions and research projects and other business affairs of any Group Company, learned by him prior to or after the date of this Agreement, and not to disclose them to anyone outside the Group Companies, either during or after his employment with the Company, except: (i) in the course of performing his duties hereunder; (ii) with Warner Chilcott’s express written consent; (iii) to the extent that the Confidential Information becomes generally known to and available for use by the public other than as a result of Executive’s acts or omissions; or (iv) where required to be disclosed by court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (iv) of the preceding sentence, Executive promptly, but in no event more than 48 hours after learning of such subpoena, court order or other governmental process, shall notify the Company, by personal delivery or fax (pursuant to Section 11 hereof), and, at the Company’s expense, shall take all reasonably necessary steps requested by the Company to defend against the enforcement of such subpoena, court order or other governmental process and permit any Group Company to intervene and participate with counsel of its own choice in any related proceeding.

(b) Executive shall deliver to the Company at the termination of his employment, or at any other time the Company may request, all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and copies thereof) relating to the Confidential

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Information, Work Product (as defined below) or the business of the Company or any other Group Company which he may then possess or have under his control.

7. Inventions and Patents. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patents, patent applications and all similar or related information (whether or not patentable) which relate to a Group Company’s actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive while employed by the Company or any other Group Company (“Work Product”) belong to the applicable Group Company. Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after his employment) to seek and obtain intellectual property protection on behalf of the applicable Group Company and establish and confirm the applicable Group Company’s ownership (including, without limitation, assignments, consents, powers of attorney and other instruments).

8. Indemnification. The Company will indemnify Executive and his legal representatives to the fullest extent permitted by applicable laws and the existing organizational documents of the Company or any other applicable laws or the provisions of any other corporate document of the Company, and Executive shall be entitled to the protection of any insurance policies the Company may elect to obtain generally for the benefit of its directors and officers, against all costs, charges and expenses whatsoever incurred or sustained by him or his legal representatives in connection with any action, suit or proceeding to which he or his legal representatives may be made a party by reason of him being or having been a director or officer of the Company or any other Group Company or actions taken purportedly on behalf of the Company or any other Group Company. The Company shall advance to Executive the amount of his expenses incurred in connection with any proceeding relating to such service or function to the fullest extent legally permissible under applicable law. The indemnification and expense reimbursement obligations of the Company in this Section 8 will continue as to Executive after he ceases to be an officer of the Company and shall inure to the benefit of his heirs, executors and administrators. The Company shall not, without Executive’s written consent, cause or permit any amendment of the Company’s governing documents which would adversely affect Executive’s rights to indemnification and expense reimbursement thereunder.

9. Non-Compete; Non-Solicitation.

(a) Subject to Section 1(c) hereof, Executive covenants and agrees that, during the Employment Period and for the following periods after the termination of this Agreement howsoever arising, except with the prior written consent of the Board, which shall not be unreasonably refused or delayed, directly or indirectly,

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either alone or jointly with or on behalf of any person, firm, company or entity and whether on his own account or as principal, partner, shareholder, director, employee, consultant or in any other capacity whatsoever, Executive shall not:

(i) for the Applicable Period following termination, in the Relevant Territory (as defined in Section 9(b) below), and in competition with the Company or any of the Relevant Group Companies, engage, assist or be interested in any undertaking which provides services or products similar to those provided by the Company or any of the Relevant Group Companies;

(ii) for the Applicable Period following termination, in the Relevant Territory, solicit or interfere with or endeavor to entice away from the Company or any of the Relevant Group Companies any Person who is a customer or Potential Customer of the Company or any of the Relevant Group Companies;

(iii) for the Applicable Period following termination, in the Relevant Territory, be concerned with the supply of services or products to any Person which is a customer or Potential Customer of the Company or any of the Relevant Group Companies where such services or products are in competition with those services or products supplied by the Company or any of the Relevant Group Companies;

(iv) for the Applicable Period following termination, offer to employ, or engage or solicit the employment or engagement of, any Person who immediately prior to the date of termination was an employee, contractor or director of the Company or any of the Relevant Group Companies (whether or not such Person would commit any breach of their contract of employment or engagement by reason of leaving the service of such company).

(v) represent himself as being in any way connected with or interested in the business of the Company or any of the Relevant Group Companies other than, if applicable, in his capacity as a shareholder of any of Warner Chilcott or Warner II.

(b) For the purposes of this Agreement:

(i) “Applicable Period” means

(i) 24 months in the event of a termination of Executive’s employment hereunder pursuant to Section 4(b) hereof (termination as a result of disability of Executive), Section 4(d) hereof (termination by Company without cause) or

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4(e)(i) hereof (termination by Executive resignation with Good Reason),

(ii) 6 months in the event of a termination of Executive’s employment hereunder pursuant to Section 4(e)(ii) hereof (Executive resignation or retirement), provided, that, such 6 month period shall be increased to 12 months if the Company elects, in its sole discretion, to pay Executive an amount equal to (x) 100% of Executive’s Base Salary in effect as of the date Executive’s employment with the Company is terminated plus (y) 100% of the Cash Bonus paid (or payable in the event the full amount has not then been paid) to such Executive with respect to the calendar year immediately preceding the year in which Executive’s employment with the Company terminated, such amount payable during the 12 month period after Executive’s last day of active employment in equal monthly installment, and

(iii) 6 months in the event of a termination of Executive’s employment hereunder pursuant to Section 4(c) hereof (termination by Company for cause);

(ii) “Person” means an individual, partnership, limited liability company, corporation, trust or any other entity;

(iii) “Potential Customer” means any Person that the Company or any of the Relevant Group Companies has actively solicited business during the 12 month period prior to Executive’s termination of employment;

(iv) a “Relevant Group Company” means the Company, Warner Chilcott and all direct and indirect subsidiaries thereof and, if applicable, their predecessors in business; and

(v) “Relevant Territory” means the area constituting the market of the Company or any of the Relevant Group Companies for products and services with which Executive shall have been concerned during the term of his employment with any Group Company.

(vi) “Sponsor” has the meaning ascribed to such terms in the Management Shareholders Agreement.

(c) Nothing contained in Section 9(a) shall prohibit Executive from holding shares or securities of a company any of whose shares or securities are

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quoted or traded on any recognized investment or stock exchange provided that any such holding shall not exceed three percent of the issued share capital of such company and is held passively by way of bona fide investment only.

(d) If, at the time of enforcement of this Section 9, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Executive agrees that the restrictions contained in this Section 9 are reasonable.

(e) In the event of the breach or a threatened breach by Executive of any of the provisions of this Section 9, the Company, in addition and supplementary to other rights and remedies existing in its favor, may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof (without posting of any bond).

10. Executive’s Representations. Executive hereby represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by Executive do not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he is bound, (ii) there exists no contract or agreement that restricts Executive’s ability to assume his role and duties hereunder or under which such role and duties will result in a conflict or breach thereunder, provided that, notwithstanding anything else contained herein, if such contract or agreement exists, all terms of Executive’s employment and any grant or award relating thereto that is contained herein or in any other contract, agreement, grant or award regarding such employment now in effect or entered into hereafter are void ab initio, and (iii) upon the execution and delivery of this Agreement by the parties, this Agreement will be the valid and binding obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents that he has had the opportunity to consult with independent legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

11. Notices. Any notice provided for in this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally (whether by overnight courier or otherwise) with receipt acknowledged or sent by registered or certified mail or equivalent, if available, postage prepaid, or by fax (which shall be confirmed by a writing sent by registered or certified mail or equivalent on the same day that such fax was sent), addressed to the parties at the

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following addresses or to such other address as such party shall hereafter specify by notice to the other:

Notices to Executive:	Mahdi Fawzi, Ph.D. One Dukes Court Morristown, NJ 07960
Notices to the Company:	Warner Chilcott (US), LLC Rockaway 80 Corporate Center 100 Enterprise Drive Rockaway, NJ 07866 (973) 442-3200 (Phone) (973) 442-3316 (Fax) Attention: General Counsel

12. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction (except with respect to Section 9, for which Section 9(d) shall apply), such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

13. Complete Agreement. This Agreement, together with any other agreements referred to herein (and any exhibits, schedules or other documents referred to herein or therein) constitutes the complete agreement and understanding among the parties and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, whether in term sheets, presentations or otherwise, which may have related to the subject matter hereof in any way.

14. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.

15. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

16. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive, the Company and their respective heirs, successors and assigns, except that Executive may not assign his rights or delegate his obligations hereunder without the prior written consent of

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the Company. The Company will require any successor to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

17. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any jurisdiction other than the State of New Jersey.

18. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

19. Arbitration. Any controversy or claim arising out of or relating to this Agreement, the making, interpretation or the breach thereof, other than (a) a claim solely for injunctive relief for any alleged breach of the provisions of Sections 6, 7 and/or 9 as to which the parties shall have the right to apply for specific performance to any court having equity jurisdiction; and (b) the determination of Excise Tax and Gross-Up Payment pursuant to Section 5 hereof; shall be settled by arbitration in New York City by one arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof and any party to the arbitration may, if he elects, institute proceedings in any court having jurisdiction for the specific performance of any such award. The powers of the arbitrator shall include, but not be limited to, the awarding of injunctive relief.

20. Legal Fees and Expenses. The Company agrees to pay, as incurred, to the full extent permitted by law, all reasonable legal fees and expenses which Executive may reasonably incur as a result of (a) review and/or any claims made regarding the Company’s determination of Excise Tax and Gross-Up Payment pursuant to Section 5 hereof, or (b) any contest brought in good faith (regardless of the outcome thereof) by the Company, Executive or others of the validity, or enforceability of, or liability under, any provision of this Agreement (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

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21. No Mitigation or Set-Off. The provisions of this Agreement are not intended to, nor shall they be construed to require that Executive mitigate the amount of any payment provided for in this Agreement by seeking or accepting other employment, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Executive as a result of his employment by another employer or otherwise. The Company’s obligations to make the payments to Executive required under this Agreement, and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action that the Company may have against Executive.

22. Tax Withholding. The parties agree to treat all amounts paid to Executive hereunder as compensation for services. Accordingly, the Company may withhold from any amount payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

23. Code Section 409A. Executive and the Company agree that it is the intent of the parties that this Agreement not violate any applicable provision of, or result in any additional tax or penalty under, Section 409A of the Code, and that to the extent any provisions of this Agreement do not comply with Section 409A of the Code, the parties will make such changes as are mutually agreed upon in order to comply with Section 409A of the Code. Notwithstanding any other provision with respect to the timing of payments under this Agreement, if, at the time of Executive’s termination of employment, Executive is deemed to be a “specified employee” of the Company within the meaning of Section 409A(a)(2)(B)(i) of the Code, then only to the extent necessary to comply with the requirements of Section 409A of the Code, any payments to which Executive may become entitled under this Agreement which are subject to Section 409A of the Code (and not otherwise exempt from its application) that are payable (i) in a lump sum within six months following the date of termination will be withheld until the first business day after the six month anniversary of the date of termination, at which time Executive shall be paid the amount of such lump sum payments in a lump sum and (ii) in installments within six months following the date of termination will be withheld until the first business day after the six month anniversary of the date of termination, at which time Executive shall be paid the aggregate amount of such installment payments in a lump sum, and after the first business day of the seventh month following the date of termination and continuing each month thereafter, Executive shall be paid the regular payments otherwise due to Executive in accordance with the payment terms and schedule set forth herein.

24. Certain Definitions. The following terms, as used in this Agreement, have the following meanings:

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“Change of Control” has the meaning ascribed to such term in the Management Shareholders Agreement.

“Management Shareholders Agreement” means that certain Management Shareholders Agreement dated as of March 28, 2005, by and among Warner Chilcott Holdings Company, Limited, Warner Chilcott Holdings Company II, Limited, Warner Chilcott Holdings Company III, Limited and the other parties thereto (as the same shall be amended, supplemented or modified from time to time) to the extent then in force.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

Warner Chilcott (US), LLC

/s/ Roger M. Boissonneault

Name:  Roger M. Boissonneault

Title:    Chief Executive Officer

EXECUTIVE

/s/ Mahdi Fawzi

Mahdi Fawzi, Ph.D.

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EX-10.48

Exhibit 10.48

WARNER CHILCOTT

EQUITY INCENTIVE PLAN

RESTRICTED SHARE UNIT AWARD AGREEMENT

You have been granted a Restricted Share Unit Award on the following terms and subject to the provisions of the Restricted Share Unit Award Agreement Terms and Conditions (“Attachment A”) appended hereto and the Warner Chilcott Equity Incentive Plan, as amended and restated (the “Plan”). Unless defined in this Restricted Share Unit Award Agreement (together with Attachment A and each annex thereto, the “Agreement”), capitalized terms will have the meanings ascribed to them in the Plan. In the event of a conflict among the provisions of the Plan, this Agreement and any descriptive materials provided to you, the provisions of the Plan will prevail.

Grantee:	[INSERT Full Name]
Total Number of Restricted Share Units:	[                    ]
Grant Date:	[                    ]
Vesting Schedule:	Ordinary vesting is 25% on each anniversary of the Grant Date. Special vesting provisions apply in certain events (see Attachment A).

Attachment A

RESTRICTED SHARE UNIT AWARD AGREEMENT

TERMS AND CONDITIONS

Section 1. Grant of Restricted Restricted Share Unit Award.

(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, Warner Chilcott plc (the “Company”) hereby grants to the Grantee on the Grant Date the number of Restricted Share Units set forth on the cover page of this Agreement on the terms set forth on the cover page and as more fully described herein.

(b) Plan and Defined Terms. This award is granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement. Capitalized terms, unless defined herein or in any attachment or annex hereto, shall have the meaning ascribed to them in the Plan.

(c) Additional Terms for Awards outside the United States. For a Grantee who resides or is employed outside the United States, this award may be subject to special terms and conditions set forth in Annex 1. In addition, if the Grantee relocates to one of the countries with additional provisions set forth in Annex 1, the special terms and conditions for such country shall apply to the Restricted Share Units, to the extent the Company determines that such application is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Company further reserves the right to impose other requirements on the Grantee’s participation in the Plan and on the Restricted Share Units, to the extent the Company determines that it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

Section 2. Issuance of Restricted Share Units.

(a) Restricted Share Unit Issuance. Each Restricted Share Unit shall represent the rights with respect to one ordinary share of the Company.

(b) Voting Rights. The Grantee shall not have voting rights with respect to the ordinary shares underlying the Restricted Share Units until such ordinary shares are delivered to the Grantee in accordance with Section 4.

(c) Dividends. All share dividends, if any, that are paid on ordinary shares underlying unvested Restricted Share Units and all share dividends, if any, that are paid on any share dividends relating to such ordinary shares (any such share dividends, “Share Dividends”) and all cash dividends paid on ordinary

Attachment A-1

shares underlying unvested Restricted Share Units (or on Share Dividends) (“Cash Dividends”) shall be treated as set forth in Section 3(b).

(d) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) as a result of the grant, vesting or settlement of this award as a condition to such grant, vesting or settlement, and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements.

Section 3. Certain Restrictions. The following provisions shall apply to each Restricted Share Unit until such Restricted Share Unit vests in accordance with Section 4:

(a) The Restricted Share Units shall not be assigned, sold, transferred or otherwise be subject to alienation by the Grantee or the Grantee’s spouse.

(b) All Share Dividends, all Cash Dividends and all new, substituted or additional securities or other property (“Additional Property”) that would be payable on the ordinary shares underlying the Restricted Share Units if such ordinary shares were issued and outstanding shall be notionally credited to the Grantee but retained and held by the Company subject to the same restrictions as the Restricted Share Units to which such Share Dividend, Cash Dividend or Additional Property relates and will be held in custody by the Company on the same terms as such Restricted Share Units.

(c) The holder of such Restricted Share Units shall have no liquidation rights with respect thereto.

(d) In the event that the Grantee’s employment with the Company or the applicable Subsidiary thereof is terminated by the Company (or the applicable Subsidiary thereof) for Cause or by the Grantee without Good Reason, all then unvested Restricted Share Units (and all Share Dividends, Cash Dividends and Additional Property related to such unvested Restricted Share Units) shall be forfeited, and all of the Grantee’s rights, or the rights of any spouse of such Grantee, to such unvested Restricted Share Units (and such Share Dividends, Cash Dividends and Additional Property) shall terminate and all unvested Restricted Share Units shall be redeemed and cancelled by the Company without consideration.

(e) In the event that the Grantee’s employment with the Company or the applicable Subsidiary thereof terminates for any reason other than as provided in Section 3(d), the vesting of unvested Restricted Share Units as of the date of such termination shall be governed by Section (f) of Annex 2 and all unvested Restricted Share Units as of such date of termination which do not become vested as a result of the application of such Section (f) shall be forfeited by the Grantee and redeemed and cancelled by the Company without consideration.

Attachment A-2

Section 4. Vesting of Restricted Share Units.

(a) Vesting. Subject to the provisions of this Agreement, the Restricted Share Units shall vest in accordance with the provisions of Annex 2.

(b) Effect of Vesting. Subject to the provisions of this Agreement, upon the vesting of any Restricted Share Units:

(i) the restrictions referred to in Section 3 shall cease to exist with respect to such Restricted Share Units;

(ii) the Company will cause a certificate or certificates to be issued and delivered or, if applicable, appropriate book entry measures to be taken for the number of ordinary shares underlying the Restricted Share Units which have so vested, and the number of ordinary shares represented by the Share Dividends, if any, paid with respect to such Restricted Share Units; and

(iii) the Company will cause to be delivered to the Grantee any Cash Dividends or Additional Property with respect to such vested Restricted Share Units that are held in the custody of the Company.

(c) Fully paid. All ordinary shares delivered pursuant to Section 4(b)(ii) shall be issued fully paid up to the nominal value of the ordinary shares and no further money shall be due and owing in respect of the issue of the ordinary shares. Any money required to pay up such ordinary shares may be received by the Company from a Subsidiary except where this would otherwise be prohibited by section 60 of the Irish Companies Act 1963.

Section 5. Adjustment of Shares.

In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of ordinary shares subject to this award) shall be adjusted as set forth in Section 14(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this award shall be subject to the agreement of merger or consolidation, as provided in Section 14(b) of the Plan.

Section 6. Miscellaneous Provisions.

(a) No Rights to Additional Awards or Retention. This award is a one-time discretionary award and nothing in this award or in the Plan shall confer upon the Grantee any claim to be granted future or additional awards under the Plan. The terms and conditions of this award need not be the same as with respect to other recipients of awards under the Plan. Nothing in this award or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary employing the Grantee), which rights are hereby expressly reserved by the Company, to terminate the Grantee’s Service at any time and for any reason, with

Attachment A-3

or without Cause and free from liability or any claim under the Plan unless otherwise expressly provided in the Plan or herein or in any other agreement binding the parties.

(b) Notices. Except as otherwise expressly provided herein, all notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:

If to the Company, to:

c/o Warner Chilcott (US), LLC

100 Enterprise Drive

Rockaway, NJ 07866

Attention: General Counsel

Facsimile: (973) 442-3283

If to the Grantee, to the address that he most recently provided to the Company, or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.

(c) Entire Agreement. This Agreement and the Plan and any other agreements referred to herein and therein and any annexes, attachments and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.

(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantee’s consent in accordance with the

Attachment A-4

provisions of the Plan or as otherwise set forth in this Agreement. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.

(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee.

(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

(g) Governing Law, Venue. All issues concerning the construction, validity and interpretation of this Agreement, and the rights and obligations of the parties hereunder, shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed entirely within such state, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the courts of the United States for the Southern District of New York, and, by delivery and acceptance of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.

(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:

Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference

Attachment A-5

only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.

Section References. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement.

Annexes. Any capitalized terms used in any annex or attachment to this Agreement but not otherwise defined therein have the meanings set forth in this Agreement or the Plan.

(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

(k) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Restricted Share Units pursuant to the provisions of this Agreement.

(l) Plan. The Grantee acknowledges and understands that material definitions and provisions concerning the Restricted Share Units and the Grantee’s rights and obligations with respect thereto are set forth in the Plan. The Grantee has read carefully, and understands, the provisions of such document.

Section 7. Definitions.

(a) “Affiliate” means, with respect to any Person, any other Person who, directly or indirectly, controls such first Person or is controlled by said Person or is under common control with said Person, where “control” means the power and ability to direct, directly or indirectly, or share equally in or cause the direction of, the management and/or policies of a Person, whether through ownership of voting shares or other equivalent interests of the controlled Person, by contract (including proxy) or otherwise.

(b) “Business Day” means any day except a Saturday, Sunday or other day on which applicable law authorizes or requires the closure of commercial banks in (i) Dublin, Ireland, (ii) New York City or, if applicable, (iii) the place in which notices, requests or other communications are received or sent by the Grantee.

Attachment A-6

(c) “Cause” has the meaning ascribed to such term in the Grantee’s employment or severance agreement, or if such Grantee is not a party to an employment or severance agreement or “Cause” is not defined therein, “Cause” means:

(i) the conviction of such Grantee of a felony or comparable crime under applicable local law (other than a violation of a motor vehicle or moving violation law) or conviction of such Grantee of a misdemeanor if such misdemeanor involves moral turpitude; or

(ii) voluntary engagement by such Grantee in conduct constituting larceny, embezzlement, conversion or any other act involving the misappropriation of any funds of the Company or any of its Subsidiaries in the course of such Grantee’s employment; or

(iii) the willful refusal (following written notice) by such Grantee to carry out specific directions of (A) the Company or (B) any of the Company’s Subsidiaries with which such Grantee is employed or of which such Grantee is an officer, which directions are consistent with such Grantee’s duties to the Company or any of the Company’s Subsidiaries, as the case may be; or

(iv) the material violation by such Grantee of any material provision of any employment, severance or related agreement to which Grantee is party (other than for reasons related only to the business performance of the Company or business results achieved by such Grantee); or

(v) the commission by such Grantee of any act of gross negligence or intentional misconduct in the performance of such Grantee’s duties as an employee of the Company or any of its Subsidiaries.

For purposes of this definition, no act or failure to act on such Grantee’s part shall be considered to be Cause if done, or omitted to be done, by such Grantee in good faith and with the reasonable belief that the action or omission was in the best interest of the Company or any of the Company’s Subsidiaries with which such Grantee is employed or of which such Grantee is an officer, as the case may be.

(d) “Change of Control” has the meaning ascribed to such term in the Plan.

(e) “Disability” has the meaning ascribed to such term in the Grantee’s employment or severance agreement, or if such Grantee is not a party to an employment or severance agreement or “Disability” is not defined therein, “Disability” has the meaning specified in any long-term disability insurance policy maintained by the Company.

Attachment A-7

(f) “Employee” means any individual who is a common-law employee of the Company or a Subsidiary thereof.

(g) “Good Reason”, with respect to any Grantee who is an employee of the Company, or any of its Subsidiaries (collectively, the “companies”), has the meaning ascribed to such term in such Grantee’s employment or severance agreement or, if such Grantee is not a party to an employment or severance agreement or “Good Reason” is not defined therein, “Good Reason” means:

(a) the assignment to the Grantee of duties materially inconsistent with such person’s position (including status, offices, titles and reporting requirements) or any other action by any of the companies which results in a diminution of such person’s position, authority, duties or responsibilities, or

(b) any of the companies requiring the Grantee to be based at any office or location other than the office or location for which such person was hired;

provided, that any event described in clauses (a) or (b) above shall constitute Good Reason only if the relevant company fails to cure such event within 30 days after such company’s receipt from the Grantee of written notice of the event which constitutes Good Reason; provided further, that Good Reason shall cease to exist for an event on the 90^th day following the later of its occurrence or such person’s knowledge thereof, unless such person has given the relevant company written notice thereof prior to such date.

(h) “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(i) “Service” means service as an Employee.

(j) “Subsidiary” means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.

Attachment A-8

ANNEX 1

Additional Terms and Conditions of the Restricted Share Unit Award

Agreement for Grants outside the United States

This Annex 1 includes additional terms and conditions that govern the Restricted Share Units granted in the countries identified below. These terms are general in nature and based on the securities, tax and other laws in effect in your country as of February 2010. Such laws are often complex and subject to frequent change. As such, the Company strongly recommends that you do not rely on this summary as your only source of information relating to the consequences of your Restricted Share Unit Award and participation in the Plan and further that you consult your personal tax or legal advisors for advice as to how the laws in your country apply to your situation. Finally, note that if you are a citizen or resident of a country other than the one in which you are working in, the information contained below may not be applicable to you. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement or the Plan.

All Restricted Share Unit Awards outside the United States — For awards of Restricted Share Units to Grantees outside the United States, the following additional terms apply:

A. Nature of Award.

i. The Restricted Share Units are an extraordinary item that do not constitute compensation of any kind for services of any kind rendered for the Company or any Affiliate and which are outside the scope of the Grantee’s employment contract, if any;

ii. The Restricted Share Units are not intended to replace any pension rights or compensation;

iii. The Restricted Share Units are not part of fixed, normal or expected compensation, salary or terms of employment for any purposes, including, without limitation, calculating any severance, resignation, termination , redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, any Subsidiary employing the Grantee or any Affiliate thereof; and

iv. Nothing in this Agreement or the Plan shall confer or otherwise give rise to any acquired rights and the Grantee’s acceptance and acknowledgment of this award shall constitute a waiver of any and all claims to the contrary.

Annex 1-1

B. Section 4 of the Agreement is amended to include the following additional subsection at the end thereof

“(d) In the event of termination of the Grantee’s employment (whether or not in breach of local labor laws), the Grantee’s right to vest in the Restricted Share Units under the Plan, if any, will, except as expressly provided in this Agreement, Annex 2 or in the Plan, terminate effective as of the date that the Grantee is no longer actively employed and will not be extended by any notice period (e.g. a period of “garden leave”) mandated under local law. In consideration of the award, the Grantee irrevocably releases the Company (and any Subsidiary employing the Grantee) and any Affiliate thereof from any claim or entitlement to compensation or damages arising from forfeiture of the Restricted Share Units resulting from termination of the Grantee’s employment.

C. Data Privacy.

The Grantee hereby explicitly consents to the collection, processing, transmission and storage, in any form whatsoever, of any data of a professional or personal nature described in this Agreement, the Plan and any other grant materials by and among as applicable, the Company, a Subsidiary employing the Grantee or any Affiliates thereof that is necessary, in the discretion of the Company, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan. The Company may share such information with any party located in the United States or elsewhere, including any trustee, registrar, administrative agent, broker, stock plan service provider or any other person assisting the Company with the implementation, administration, and management of this Restricted Share Unit Award and the Plan. The Grantee thus authorizes the Company and its Affiliates and any possible recipients described herein to receive, possess, use, retain and transfer the data in electronic or other form, for the sole purpose described herein. The Grantee understands that he or she may refuse or withdraw such consent or authorization without cost by contacting his or her local human resources representative, provided however, that the Grantee understands that such refusal or withdrawal may affect his or her ability to participate in the Plan.

Annex 1-2

Canada

i. Section 2(a) of the Agreement is deleted in its entirety and replaced as follows:

“(a) Restricted Share Unit Issuance. Each Restricted Share Unit shall represent the right to acquire one ordinary share of the Company.”

ii. Section 2(c) of the Agreement is deleted in its entirety and replaced as follows:

“(c) Dividends. The Grantee will not be entitled to share or cash dividends, if any, that are paid on any ordinary shares underlying unvested Restricted Share Units and any and all references in the Agreement to Share Dividends or Cash Dividends shall be of no force or effect.”

iii. Section 3(b) and Section 4(b)(iii) of the Agreement are each deleted in their entirety.

iv. Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

v. Section A of this Annex 1 shall not apply with respect to any Restricted Share Unit granted in Canada.

Annex 1-3

Germany

Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

Netherlands

Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

Spain

Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

Annex 1-4

Switzerland

Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

Annex 1-5

ANNEX 2

VESTING OF RESTRICTED SHARE UNITS

Subject to the terms set forth in the Agreement and the Plan, the Restricted Share Units vest as follows:

(a) 25% of the Restricted Share Units shall vest on the first anniversary of the Grant Date;

(b) 25% of the Restricted Share Units shall vest on the second anniversary of the Grant Date;

(c) 25% of the Restricted Share Units shall vest on the third anniversary of the Grant Date;

(d) 25% of the Restricted Share Units shall vest on the forth anniversary of the Grant Date (the first, second, third and forth anniversary of the Grant Date each a “Vesting Date”).

(e) In connection with a Change of Control, the Restricted Share Units still subject to vesting shall fully vest immediately prior to the consummation of the Change of Control.

(f) If, prior to a Vesting Date, the Grantee’s employment with the Company or one of its Subsidiaries is terminated due to death or Disability, by the employer without Cause or by the Grantee for Good Reason (the date of such termination of employment, the “Termination Date”), then a portion of the 25% of the Restricted Share Units which were otherwise due to vest on such Vesting Date shall vest on the Termination Date as follows:

(i) If the Termination Date is more than nine (9) months before the next Vesting Date, none of such Restricted Share Units shall vest;

(ii) If the Termination Date is more than six (6) months but no more than nine (9) months before the next Vesting Date, 25% of such Restricted Share Units shall vest;

(iii) If the Termination Date is more than three (3) months but no more than six (6) months before the next Vesting Date, 50% of such Restricted Share Units shall vest; and

(iv) If the Termination Date is three (3) months or less before the next Vesting Date, 75% of such Restricted Share Units shall vest.

Annex 2-1

EX-10.49

Exhibit 10.49

WARNER CHILCOTT

EQUITY INCENTIVE PLAN

RESTRICTED SHARE AWARD AGREEMENT

You have been granted a restricted share award (the “Restricted Share Award”) on the following terms and subject to the provisions of the Share Award Agreement Terms and Conditions (“Attachment A”) appended hereto and the Warner Chilcott Equity Incentive Plan, as amended and restated (the “Plan”). Unless defined in this Restricted Share Award Agreement (together with Attachment A and each annex thereto, the “Agreement”), capitalized terms will have the meanings ascribed to them in the Plan. In the event of a conflict among the provisions of the Plan, this Agreement and any descriptive materials provided to you, the provisions of the Plan will prevail.

Grantee:	[INSERT Full Name]
Total Number of Restricted Shares Underlying Award:	ordinary shares, par value $.01, of the Company (“Restricted Shares”)
Grant Date:
Vesting Schedule:	Ordinary vesting is 25% on each anniversary of the Grant Date. Special vesting provisions apply in certain events (see Attachment A).

Attachment A

SHARE AWARD AGREEMENT

TERMS AND CONDITIONS

Section 1. Grant of Restricted Share Award.

(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, Warner Chilcott plc (the “Company”) hereby grants to the Grantee on the Grant Date a Restricted Share Award bearing the terms set forth on the cover page of this Agreement as more fully described herein.

(b) Plan and Defined Terms. This award is granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement. Capitalized terms, unless defined herein or in any attachment or annex hereto, shall have the meaning ascribed to them in the Plan.

(c) Additional Terms for Awards outside the United States. For a Grantee who resides or is employed outside the United States, this award may be subject to special terms and conditions set forth in Annex 1. In addition, if the Grantee relocates to one of the countries with additional provisions set forth in Annex 1, the special terms and conditions for such country shall apply to the Restricted Shares, to the extent the Company determines that such application is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Company further reserves the right to impose other requirements on the Grantee’s participation in the Plan and on the Restricted Shares, to the extent the Company determines that it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

Section 2. Issuance of Shares.

(a) Share Issuance. The Company shall cause to be issued Restricted Shares representing this award, registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship).

(b) Voting Rights. The Grantee shall have voting rights with respect to the Restricted Shares.

(c) Dividends. All share dividends, if any, that are paid on unvested Restricted Shares and all share dividends, if any, that are paid on any share dividends (any such share dividends, “Restricted Share Dividends”) and all cash

Attachment A-1

dividends paid on unvested Restricted Shares (or on Restricted Share Dividends) (“Cash Dividends”) shall be treated as set forth in Section 3(b).

(d) Section 83(b) Election. A Grantee who is not a resident of or employed in Puerto Rico may choose to make an election under Section 83(b) of the Code, which would cause the Grantee currently to recognize income for U.S. federal income tax purposes in an amount equal to the excess (if any) of the FMV of the award (determined as of the date of the award) over the Purchase Price (if any), which excess will be subject to U.S. federal income tax. The form for making a Section 83(b) election is attached as Annex 3. The Grantee acknowledges that it is the Grantee’s sole responsibility to timely file the Section 83(b) election and that failure to file a Section 83(b) election within 30 days after the Grant Date may result in the recognition of ordinary income on any future appreciation on the Restricted Shares.

(e) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) as a result of the grant, vesting or settlement of this award and/or the filing of a tax election as a condition to the grant of this award, and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements.

Section 3. Certain Restrictions. The following provisions shall apply to each Restricted Share until such Restricted Share vests in accordance with Section 4:

(a) The Restricted Shares shall be issued in the name of the Grantee in book entry form and such shares shall not be assigned, sold, transferred or otherwise be subject to alienation by the Grantee or the Grantee’s spouse.

(b) All Restricted Share Dividends, all Cash Dividends and all new, substituted or additional securities or other property (“Additional Property”), shall be subject to the same restrictions as the Restricted Shares to which such Restricted Share Dividend, Cash Dividend or Additional Property relates and will be held in custody by the Company on the same terms as such Restricted Shares.

(c) The holder of such Restricted Shares shall have no liquidation rights with respect thereto.

(d) In the event that the Grantee’s employment with the Company or the applicable Subsidiary thereof is terminated by the Company (or the applicable Subsidiary thereof) for Cause or by the Grantee without Good Reason, then all unvested Restricted Shares (and all Restricted Share Dividends, Cash Dividends and Additional Property related to such unvested Restricted Shares) shall be forfeited, and all of the Grantee’s rights, or the rights of any spouse of such Grantee, to such unvested Restricted Shares (and such Restricted Share Dividends, Cash Dividends and Additional Property) shall terminate and all

Attachment A-2

unvested Restricted Shares shall be redeemed and cancelled by the Company without consideration.

(e) In the event that the Grantee’s employment with the Company or the applicable Subsidiary thereof terminates for any reason other than as provided in Section 3(d), the vesting of unvested Restricted Shares as of the date of such termination shall be governed by Section (f) of Annex 2 and all unvested Restricted Shares as of such date of termination which do not become vested as a result of the application of such Section (f) shall be forfeited by the Grantee and redeemed and cancelled by the Company without consideration.

Section 4. Vesting of Restricted Shares.

(a) Vesting. Subject to the provisions of this Agreement, the Restricted Shares shall vest in accordance with the provisions of Annex 2.

(b) Effect of Vesting. Subject to the provisions of this Agreement, upon the vesting of any Restricted Shares:

(i) the restrictions referred to in Section 3 shall cease to exist with respect to such Restricted Shares;

(ii) the Company will cause a certificate or certificates to be issued and delivered or, where applicable, appropriate book entry measures to be taken for the number of Restricted Shares which have so vested, and the number of shares represented by the Restricted Share Dividends, if any, paid with respect to such Restricted Shares; and

(iii) the Company will cause to be delivered to the Grantee any Cash Dividends or Additional Property with respect to such vested Restricted Shares that are held in the custody of the Company.

(c) Fully paid. All Restricted Shares delivered pursuant to Section 4(b)(ii) shall, unless otherwise specified by the Company at the date of grant, be issued fully paid up to the nominal value of the Restricted Shares and no further money shall be due and owing in respect of the issue of the Restricted Shares. Any money required to pay up such Restricted Shares may be received by the Company from a Subsidiary except where this would otherwise be prohibited by section 60 of the Irish Companies Act 1963.

Section 5. Adjustment of Shares.

In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of ordinary shares subject to this award) shall be adjusted as set forth in Section 14(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this award shall be subject to the agreement of merger or consolidation, as provided in Section 14(b) of the Plan.

Attachment A-3

Section 6. Miscellaneous Provisions.

(a) No Rights to Additional Awards or Retention. This award is a one-time discretionary award and nothing in this award or in the Plan shall confer upon the Grantee any claim to be granted future or additional awards under the Plan. The terms and conditions of this award need not be the same as with respect to other recipients of awards under the Plan. Nothing in this award or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary employing the Grantee), which rights are hereby expressly reserved by the Company, to terminate the Grantee’s Service at any time and for any reason, with or without Cause and free from liability or any claim under the Plan unless otherwise expressly provided in the Plan or herein or in any other agreement binding the parties.

(b) Notices. Except as otherwise expressly provided herein, all notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:

If to the Company, to:

c/o Warner Chilcott (US), LLC

100 Enterprise Drive

Rockaway, NJ 07866

Attention: General Counsel

Facsimile: (973) 442-3283

If to the Grantee, to the address that he most recently provided to the Company, or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.

Attachment A-4

(c) Entire Agreement. This Agreement and the Plan and any other agreements referred to herein and therein and any annexes, attachments and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.

(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantee’s consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.

(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee.

(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

(g) Governing Law, Venue. All issues concerning the construction, validity and interpretation of this Agreement, and the rights and obligations of the parties hereunder, shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed entirely within such state, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the courts of the United States for the Southern District of New York, and, by delivery and acceptance of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

Attachment A-5

(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.

(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:

Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.

Section References. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement.

Annexes. Any capitalized terms used in any annex or attachment to this Agreement but not otherwise defined therein have the meanings set forth in this Agreement or the Plan.

(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

(k) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Restricted Shares pursuant to the provisions of this Agreement.

(l) Plan. The Grantee acknowledges and understands that material definitions and provisions concerning the Restricted Shares and the Grantee’s rights and obligations with respect thereto are set forth in the Plan. The Grantee has read carefully, and understands, the provisions of such document.

Section 7. Definitions.

(a) “Affiliate” means, with respect to any Person, any other Person who, directly or indirectly, controls such first Person or is controlled by said

Attachment A-6

Person or is under common control with said Person, where “control” means the power and ability to direct, directly or indirectly, or share equally in or cause the direction of, the management and/or policies of a Person, whether through ownership of voting shares or other equivalent interests of the controlled Person, by contract (including proxy) or otherwise.

(b) “Business Day” means any day except a Saturday, Sunday or other day on which applicable law authorizes or requires the closure of commercial banks in (i) Dublin, Ireland, (ii) New York City or, if applicable, (iii) the place in which notices, requests or other communications are received or sent by the Grantee.

(c) “Cause” has the meaning ascribed to such term in the Grantee’s employment or severance agreement, or if such Grantee is not a party to an employment or severance agreement or “Cause” is not defined therein, “Cause” means:

(i) the conviction of such Grantee of a felony or comparable crime under applicable local law (other than a violation of a motor vehicle or moving violation law) or conviction of such Grantee of a misdemeanor if such misdemeanor involves moral turpitude; or

(ii) voluntary engagement by such Grantee in conduct constituting larceny, embezzlement, conversion or any other act involving the misappropriation of any funds of the Company or any of its Subsidiaries in the course of such Grantee’s employment; or

(iii) the willful refusal (following written notice) by such Grantee to carry out specific directions of (A) the Company or (B) any of the Company’s Subsidiaries with which such Grantee is employed or of which such Grantee is an officer, which directions are consistent with such Grantee’s duties to the Company or any of the Company’s Subsidiaries, as the case may be; or

(iv) the material violation by such Grantee of any material provision of any employment, severance or related agreement to which Grantee is party (other than for reasons related only to the business performance of the Company or business results achieved by such Grantee); or

(v) the commission by such Grantee of any act of gross negligence or intentional misconduct in the performance of such Grantee’s duties as an employee of the Company or any of its Subsidiaries.

For purposes of this definition, no act or failure to act on such Grantee’s part shall be considered to be Cause if done, or omitted to be done, by such Grantee in good faith and with the reasonable belief that the action or omission

Attachment A-7

was in the best interest of the Company or any of the Company’s Subsidiaries with which such Grantee is employed or of which such Grantee is an officer, as the case may be.

(d) “Change of Control” has the meaning ascribed to such term in the Plan.

(e) “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.

(f) “Disability” has the meaning ascribed to such term in the Grantee’s employment or severance agreement, or if such Grantee is not a party to an employment or severance agreement or “Disability” is not defined therein, “Disability” has the meaning specified in any long-term disability insurance policy maintained by the Company.

(g) “Disabled” has the meaning ascribed to such term in the Grantee’s employment or severance agreement, or if such Grantee is not a party to an employment or severance agreement or if “Disabled” is not defined therein, “Disabled” has the meaning specified in any long-term disability insurance policy maintained by the Company.

(h) “Employee” means any individual who is a common-law employee of the Company or a Subsidiary thereof.

(i) “FMV” with respect to a Restricted Share, means the closing price of an ordinary share as reported on the composite tape of the Nasdaq Global Market or any reporting system selected by the Board of Directors of the Company on the relevant dates or, if no sale of ordinary shares is reported for that date, on the date or dates that the Board of Directors of the Company determines in its sole discretion, to be appropriate for purposes of the valuation. Such determination shall be conclusive and binding on all persons.

(j) “Good Reason”, with respect to any Grantee who is an employee of the Company, or any of its Subsidiaries (collectively, the “companies”), has the meaning ascribed to such term in such Grantee’s employment or severance agreement or, if such Grantee is not a party to an employment or severance agreement or “Good Reason” is not defined therein, “Good Reason” means:

(a) the assignment to the Grantee of duties materially inconsistent with such person’s position (including status, offices, titles and reporting requirements) or any other action by any of the companies which results in a diminution of such person’s position, authority, duties or responsibilities, or

Attachment A-8

(b) any of the companies requiring the Grantee to be based at any office or location other than the office or location for which such person was hired;

provided, that any event described in clauses (a) or (b) above shall constitute Good Reason only if the relevant company fails to cure such event within 30 days after such company’s receipt from the Grantee of written notice of the event which constitutes Good Reason; provided further, that Good Reason shall cease to exist for an event on the 90^th day following the later of its occurrence or such person’s knowledge thereof, unless such person has given the relevant company written notice thereof prior to such date.

(k) “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(l) “Purchase Price” means the price, if any, paid by the Grantee for the Restricted Shares.

(m) “Service” means service as an Employee.

(n) “Subsidiary” means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.

Attachment A-9

ANNEX 1

Additional Terms and Conditions of the Share Award Agreement for

Awards outside the United States

This Annex 1 includes additional terms and conditions that govern Restricted Shares granted in the countries identified below. These terms are general in nature and based on the securities, tax and other laws in effect in your country as of February 2010. Such laws are often complex and subject to frequent change. As such, the Company strongly recommends that you do not rely on this summary as your only source of information relating to the consequences of your Restricted Share Award and participation in the Plan and further that you consult your personal tax or legal advisors for advice as to how the laws in your country apply to your situation. Finally, note that if you are a citizen or resident of a country other than the one in which you are working in, the information contained below may not be applicable to you. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement or the Plan.

All Restricted Share Awards outside the United States — For awards of Restricted Shares to Grantees outside the United States, the following additional terms apply:

A. Nature of Award.

i. The Restricted Shares are an extraordinary item that do not constitute compensation of any kind for services of any kind rendered for the Company or any Affiliate and which are outside the scope of the Grantee’s employment contract, if any;

ii. The Restricted Shares are not intended to replace any pension rights or compensation;

iii. The Restricted Shares are not part of fixed, normal or expected compensation, salary or terms of employment for any purposes, including, without limitation, calculating any severance, resignation, termination , redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, any Subsidiary employing the Grantee or any Affiliate thereof; and

iv. Nothing in this Restricted Share Award or the Plan shall confer or otherwise give rise to any acquired rights and the Grantee’s acceptance and acknowledgment of this award shall constitute a waiver of any and all claims to the contrary.

Annex 1-1

B. Section 4 of the Agreement is amended to include the following additional subsection at the end thereof

“(d) No Acquired Rights. In the event of termination of the Grantee’s employment (whether or not in breach of local labor laws), the Grantee’s right to vest in the Restricted Shares under the Plan, if any, will, except as expressly provided in this Agreement, Annex 2 or in the Plan, terminate effective as of the date that the Grantee is no longer actively employed and will not be extended by any notice period (e.g. a period of “garden leave”) mandated under local law. In consideration of the award, the Grantee irrevocably releases the Company (and any Subsidiary employing the Grantee) and any Affiliate thereof from any claim or entitlement to compensation or damages arising from forfeiture of the Restricted Shares resulting from termination of the Grantee’s employment.”

C. Data Privacy.

The Grantee hereby explicitly consents to the collection, processing, transmission and storage, in any form whatsoever, of any data of a professional or personal nature described in this Agreement, the Plan and any other grant materials by and among as applicable, the Company, a Subsidiary employing the Grantee or any Affiliates thereof that is necessary, in the discretion of the Company, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan. The Company may share such information with any party located in the United States or elsewhere, including any trustee, registrar, administrative agent, broker, stock plan service provider or any other person assisting the Company with the implementation, administration, and management of this Restricted Share Award and the Plan. The Grantee thus authorizes the Company and its Affiliates and any possible recipients described herein to receive, possess, use, retain and transfer the data in electronic or other form, for the sole purpose described herein. The Grantee understands that he or she may refuse or withdraw such consent or authorization without cost by contacting his or her local human resources representative, provided however, that the Grantee understands that such refusal or withdrawal may affect his or her ability to participate in the Plan.

Annex 1-2

Italy

Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

Puerto Rico

Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

United Kingdom

i. Section 1(d) of the Agreement is replaced in its entirety and the following provision applies in lieu thereof:

“(d) Section 431(1) Election. If the Grantee chooses, the Grantee may make an election under Section 431(1) of the Income Tax (Earnings and Pensions) Act 2003, which would cause the Grantee currently to recognize income for income tax purposes in an amount equal to the excess (if any) of the FMV of the award (determined as of the date of the award) over the Purchase Price (if any), which excess will be subject to income tax and National Insurance contributions. The form for making a Section 431(1) election is attached as Annex 4. The Grantee acknowledges that it is the Grantee’s responsibility to timely execute and return to his employer the Section 431(1) election and that failure to execute and file a Section 431(1) election within 14 days after the Grant Date may result in the recognition of ordinary income on any future appreciation on the Restricted Shares.”

Annex 1-3

ii. Section 6(b) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement by deletion of the address for the Company in Section 6(b) and the replacement thereof as follows:

If to the Company, to:

Annex 1-4

ANNEX 2

VESTING OF RESTRICTED SHARES

Subject to the terms set forth in the Agreement and the Plan, the Restricted Shares vest as follows:

(a) 25% of the Restricted Shares shall vest on the first anniversary of the Grant Date;

(b) 25% of the Restricted Shares shall vest on the second anniversary of the Grant Date;

(c) 25% of the Restricted Shares shall vest on the third anniversary of the Grant Date;

(d) 25% of the Restricted Shares shall vest on the forth anniversary of the Grant Date (the first, second, third and forth anniversary of the Grant Date each a “Vesting Date”).

(e) In connection with a Change of Control, the Restricted Shares still subject to vesting shall fully vest immediately prior to the consummation of the Change of Control.

(f) If, prior to a Vesting Date, the Grantee’s employment with the Company or one of its Subsidiaries is terminated due to death or Disability, by the employer without Cause or by the Grantee for Good Reason (the date of such termination of employment, the “Termination Date”), then a portion of the 25% of the Restricted Shares which were otherwise due to vest on such Vesting Date shall vest on the Termination Date as follows:

(i) If the Termination Date is more than nine (9) months before the next Vesting Date, none of such Restricted Shares shall vest;

(ii) If the Termination Date is more than six (6) months but no more than nine (9) months before the next Vesting Date, 25% of such Restricted Shares shall vest;

(iii) If the Termination Date is more than three (3) months but no more than six (6) months before the next Vesting Date, 50% of such Restricted Shares shall vest; and

(iv) If the Termination Date is three (3) months or less before the next Vesting Date, 75% of such Restricted Shares shall vest.

Annex 2-1

ANNEX 3

Section 83(b) Election

This statement is being made under Section 83(b) of the U.S. Internal Revenue Code, pursuant to Treas. Reg. Section 1.83-2.

(1) The taxpayer who performed the services is:

Name:                                                                                                                           

Address:                                                                                                                           

Social Security Number:                                                                                                       

(2) The property with respect to which the election is being made is              ordinary shares, par value $.01 per share, of Warner Chilcott plc (“Restricted Shares”).

(3) The property was issued on                             .

(4) The taxable year in which the election is being made is the calendar year                     .

(5) The property is subject to vesting as follows: the Restricted Shares will vest ratably over four years in 25% increments.

(6) The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) is $             per share.

(7) The amount paid for such property is $             per share.

(8) A copy of this statement was furnished to Warner Chilcott (US), LLC for whom taxpayer rendered the services underlying the transfer of property.

(9) This statement is executed on                                         .

Annex 3-1

Spouse (if any) Taxpayer

This election must be filed with the Internal Revenue Service Center with which taxpayer files his U.S. Federal income tax returns and must be made within 30 days after the execution date of the Share Award Agreement. This filing should be made by registered or certified mail, return receipt requested. You should deliver one copy of this form to the Company and retain two copies of the completed form for filing with your U.S. Federal and state tax returns for the current tax year and an additional copy for your records.

Annex 3-2

ANNEX 4

Section 431(1) Election

Joint Election under s431 ITEPA 2003 for full or partial disapplication of Chapter 2 Income Tax (Earnings and Pensions) Act 2003

Two Part Election (For this joint election to be valid both Parts A and B must be signed and dated)

Part A - To be completed by the Employee

1. Between

the Employee:                                                                                                                                   

[insert name of employee]

whose National Insurance Number is:                                                                                                           

[insert NINO]

and

the company (who is the Employee’s employer):                                                                                       

[insert name of company]

of Company Registration Number:                                                                                                                   

[insert CRN]

2. Purpose of Election

This joint election is made pursuant to section 431(1) or 431(2) Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.

The effect of an election under section 431(1) is that, for the relevant Income Tax and NIC purposes, the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply. An election under section 431(2) will ignore one or more of the restrictions in computing the charge on acquisition. Additional Income Tax

Annex 4-1

will be payable (with PAYE and NIC where the securities are Readily Convertible Assets).

Should the value of the securities fall following the acquisition, it is possible that Income Tax/NIC that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the Income Tax/NIC due by reason of this election. Should this be the case, there is no Income Tax/NIC relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner.

3. Application

This joint election is made not later than 14 days after the date of acquisition of the securities by the employee and applies to:

Number of securities:                                          [insert number]

Description of securities: Ordinary Shares of U.S.$0.01 each

Name of issuer of securities: Warner Chilcott plc

Acquired by the Employee on                                      [insert date] as Restricted Shares under the Warner Chilcott Equity Incentive Plan.

4. Extent of Application

This election disapplies S.431(1) ITEPA: All restrictions attaching to the securities.

5. Declaration

This election will become irrevocable upon the later of its signing or the acquisition of employment-related securities to which this election applies.

In signing this joint election, I agree to be bound by its terms as stated above.

	/             /
Signature of employee	Date

Annex 4-2

EX-10.50

Exhibit 10.50

WARNER CHILCOTT

EQUITY INCENTIVE PLAN

SHARE OPTION AWARD AGREEMENT

You have been granted an Option (the “Option”) on the following terms and subject to the provisions of the Share Option Award Agreement Terms and Conditions (“Attachment A”) appended hereto and the Warner Chilcott Equity Incentive Plan, as amended and restated (the “Plan”). Unless defined in this Share Option Award Agreement (together with Attachment A and each annex and exhibit thereto, the “Agreement”), capitalized terms will have the meanings ascribed to them in the Plan. In the event of a conflict among the provisions of the Plan, this Agreement and any descriptive materials provided to you, the provisions of the Plan will prevail.

Participant:	[INSERT FULL NAME] (the “Optionee”)
Total Number of Shares Underlying Option:	ordinary shares, par value $.01, of the Company (“Option Shares”)
Exercise Price per Share:	$ per share (the “Exercise Price”)
Grant Date:
Expiration Date:	Special early termination provisions apply to the Option in certain events (see Attachment A).
Vesting Schedule:	Ordinary vesting is 25% on each anniversary of the Grant Date. Special vesting provisions apply in certain events (see Attachment A).

Attachment A

SHARE OPTION AWARD AGREEMENT

TERMS AND CONDITIONS

Section 1. Grant of Option.

(a) Option. Subject to the terms and conditions of the Plan and this Agreement, Warner Chilcott plc (the “Company”) hereby grants to the Optionee on the Grant Date an option bearing the terms set forth on the cover page of this Agreement as more fully described herein. Any Option Shares acquired upon the exercise of this option are referred to herein as “Purchased Option Shares.” This option is not intended to be a Qualified Option or a UK Approved Option.

(b) Plan and Defined Terms. This option is granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement. Capitalized terms, unless defined herein or in any attachment or annex hereto, shall have the meanings ascribed to them in the Plan.

(c) Additional Terms for Grants outside the United States. For an Optionee who resides or is employed outside the United States, this option may be subject to special terms and conditions set forth in Annex 1. In addition, if the Optionee relocates to one of the countries with additional provisions included in Annex 1, the special terms and conditions for such country shall apply to the Optionee, to the extent the Company determines that such application is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Company further reserves the right to impose other requirements on the Optionee’s participation in the Plan and on the Restricted Shares, to the extent the Company determines that it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan and to require the Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

Section 2. Right to Exercise; Vesting.

This option may be exercised prior to its expiration to the extent it is vested with respect to any Option Shares in accordance with Section 3. Subject to Section 5(b), this option shall vest with respect to 25% of the Option Shares on each of the first, second, third and forth anniversary of the Grant Date (each a “Vesting Date”). Notwithstanding the vesting schedule in the immediately preceding sentence, if, prior to a Vesting Date, the Optionee’s employment with the Company or one of its Subsidiaries is terminated due to death or Disability, by the employer without Cause or by the Optionee for Good Reason (the date of

Attachment A-1

termination of an Optionee’s employment, the “Termination Date”), then a portion of the 25% of the Option Shares which were otherwise due to vest on the next Vesting Date following such termination of employment shall vest on the Termination Date as follows:

(a) If the Termination Date is more than nine (9) months before the next Vesting Date, none of such Option Shares shall vest;

(b) If the Termination Date is more than six (6) months but no more than nine (9) months before the next Vesting Date, 25% of such Option Shares shall vest;

(c) If the Termination Date is more than three (3) months but no more than six (6) months before the next Vesting Date, 50% of such Option Shares shall vest; and

(d) If the Termination Date is three (3) months or less before the next Vesting Date, 75% of such Option Shares shall vest.

Section 3. Exercise Procedures.

(a) Notice of Exercise. The Optionee may exercise this option prior to its expiration to the extent it is vested by giving written notice to the Company in the form attached hereto as Exhibit A (or such other form as may be prescribed by the Company from time to time, such form a “Notice of Exercise”) specifying the election to exercise this option, the number of vested Option Shares for which it is being exercised and the form of payment. The Notice of Exercise shall be signed by the Optionee. The Optionee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 4 for the full amount of the Purchase Price.

(b) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and, payment for the full amount of the Purchase Price as required by Section 3(a), the Company shall cause to be issued a certificate or certificates for the Purchased Option Shares, registered in the name of the Optionee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), or shall otherwise cause the issuance or recordation of the Purchase Option Shares to be effected in accordance with appropriate issuance, transfer and depository procedures.

(c) Cashless Exercise. Notwithstanding the foregoing, the Company may permit such other means of exercise of this option as it may deem reasonable and appropriate in its sole discretion (including, without limitation, broker-assisted cashless exercise).

Attachment A-2

(d) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) as a result of the exercise of this option, as a condition to the exercise of this option, and the Optionee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements.

Section 4. Payment for Shares.

(a) Cash, Check or Wire Transfer. In connection with an exercise of this option, all or part of the Purchase Price may be paid in cash, by check or by wire transfer.

(b) Other Methods of Payment for Shares. At the sole discretion of the Company, all or any part of the Purchase Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.

Section 5. Term and Expiration.

(a) Basic Term. Subject to earlier termination in accordance with this Agreement, this option shall expire on the date immediately preceding the tenth anniversary of the Grant Date.

(b) Change of Control. In connection with a Change of Control, any portion of this option not previously vested shall vest immediately prior to the consummation of such Change of Control. If, at the time of the Change of Control, the FMV of an Option Share does not exceed the Exercise Price, then this option shall immediately terminate in full and be of no further force or effect. If, at the time of the Change of Control, the FMV of an Option Share exceeds the Exercise Price, then the Company, in its sole discretion, may, in addition to any other action permitted pursuant to the terms of the Plan, (i) provide the Optionee a reasonable amount of time (in the Company’s sole discretion) to exercise this option and, if not exercised within such period, have this option terminate in full and be of no further force or effect, with respect to all Option Shares not previously purchased by the Optionee pursuant to an exercise of this option, or (ii) provide for the termination of this option in exchange for payment to the Optionee of the difference between (x) the FMV of all Option Shares not previously purchased by the Optionee and (y) the Purchase Price for such Option Shares.

(c) Termination of Service. The following shall apply upon termination of the Optionee’s Service:

(i) Cause. If the Optionee’s Service is terminated for Cause, then this option, whether or not vested, shall terminate in its entirety on the Termination Date and be of no further force or effect.

Attachment A-3

(ii) Other than Cause.

(A) Unvested. If the Optionee’s Service is terminated for any reason other than for Cause, then any portion of this option that is unvested shall terminate on the Termination Date and be of no further force or effect.

(B) Vested. If the Optionee’s Service is terminated for any reason other than for Cause, then any portion of this option that is vested but unexercised shall be exercisable by the Optionee with respect to the vested Option Shares at any time during the Termination Exercise Period by proper completion and execution of a Notice of Exercise pursuant to Section 3(a), payment of the Purchase Price and completion of all other exercise requirements under Section 3. Any vested but unexercised portion of this option remaining at the expiration of the Termination Exercise Period shall terminate in full and be of no further force or effect, provided that this Agreement shall continue to apply to all Option Shares which, at the end of such period, are Purchased Option Shares. The “Termination Exercise Period” means (1) with respect to any termination of Optionee’s Service for any reason other than for Cause, Optionee’s death or Optionee being Disabled, the period from the date of such termination to the date that is 60 Business Days after such termination, and (2) with respect to any termination of Optionee’s Service as a result of Optionee’s death or Optionee being Disabled, the period from the date of such termination to the date that is one year after such termination.

Section 6. Adjustment of Option Terms.

In the event of a Recapitalization, the terms of this option (including, without limitation, the number and kind of Shares subject to this option and the Exercise Price) shall be adjusted as set forth in Section 14(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this option shall be subject to the agreement of merger or consolidation, as provided in Section 14(b) of the Plan.

Section 7. Miscellaneous Provisions.

(a) Rights as a Shareholder. The Optionee shall not have any rights as a shareholder with respect to any Option Shares until the Optionee purchases Option Shares in accordance with this Agreement. Except as expressly provided by the Plan, no adjustment shall be made for dividends or other rights for which

Attachment A-4

the record date is prior to the issuance of Purchased Option Shares and the delivery of any certificate or certificates for such shares.

(b) No Rights to Additional Awards or Retention. This option is a discretionary one-time award and nothing in this option or in the Plan shall confer upon the Optionee any claim to be granted future or additional options under the Plan. The terms and conditions of this option need not be the same as with respect to other recipients of options under the Plan. Nothing in this option or in the Plan shall confer upon the Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary thereof employing or retaining the Optionee), which rights are hereby expressly reserved by the Company, to terminate the Optionee’s Service at any time and for any reason, with or without Cause and free from liability or any claim under the Plan unless otherwise expressly provided in the Plan or herein or in any other agreement binding the parties.

(c) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:

If to the Company, to:

c/o Warner Chilcott (US) LLC

100 Enterprise Drive

Rockaway, NJ 07866

Attention: General Counsel

Facsimile: (973) 442-3283

If to the Optionee, to the address that he most recently provided to the Company, or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation, mailing or delivery shall not

Attachment A-5

affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.

(d) Entire Agreement. This Agreement and the Plan and any other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.

(e) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Optionee, except that the Company may amend or modify this Agreement without the Optionee’s consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.

(f) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Optionee.

(g) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Optionee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Optionee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

(h) Governing Law, Venue. All issues concerning the construction, validity and interpretation of this Agreement, and the rights and obligations of the parties hereunder, shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed entirely within such state, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the courts of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the

Attachment A-6

exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

(i) Waiver of Jury Trial. The Optionee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.

(j) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:

Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.

Section References. All references in this Agreement to any “Section,” unless otherwise indicated, are to the corresponding Section of this Agreement.

(k) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

(l) Undertaking. The Optionee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Optionee or upon the option or the Option Shares pursuant to the provisions of this Agreement. The Company agrees to take whatever additional action and execute whatever additional documents are necessary or advisable to carry out or effect one or more of the obligations of the Company pursuant to the provisions of this Agreement.

Attachment A-7

(m) Plan. The Optionee acknowledges and understands that material definitions and provisions concerning the option, the Option Shares and the Optionee’s rights and obligations with respect thereto are set forth in the Plan. The Optionee has read carefully, and understands, the provisions of the Plan.

Section 8. Definitions.

“Business Day” means any day except a Saturday, Sunday or other day on which applicable law authorizes or requires the closure of commercial banks in (i) Dublin, Ireland, (ii) New York City or, if applicable, (iii) the place in which notices, requests or other communications are received or sent by the Optionee.

“Cause” has the meaning ascribed to such term in the Optionee’s employment or severance agreement, or if such Optionee is not a party to an employment or severance agreement or “Cause” is not defined therein, “Cause” means:

(i) the conviction of such Optionee of a felony or comparable crime under applicable local law (other than a violation of a motor vehicle or moving violation law) or conviction of such Optionee of a misdemeanor if such misdemeanor involves moral turpitude; or

(ii) voluntary engagement by such Optionee in conduct constituting larceny, embezzlement, conversion or any other act involving the misappropriation of any funds of the Company or any of its Subsidiaries in the course of such Optionee’s employment; or

(iii) the willful refusal (following written notice) by such Optionee to carry out specific directions of (A) the Company or (B) any of the Company’s Subsidiaries with which such Optionee is employed or of which such Optionee is an officer, which directions are consistent with such Optionee’s duties to the Company or any of the Company’s Subsidiaries, as the case may be; or

(iv) the material violation by such Optionee of any material provision of such Optionee’s employment, severance or related agreement (other than for reasons related only to the business performance of the Company or business results achieved by such Optionee); or

(v) the commission by such Optionee of any act of gross negligence or intentional misconduct in the performance of such Optionee’s duties as an employee of the Company or any of its Subsidiaries.

For purposes of this definition, no act or failure to act on such Optionee’s part shall be considered to be Cause if done, or omitted to be done, by such Optionee in good faith and with the reasonable belief that the action or omission

Attachment A-8

was in the best interest of the Company or any of the Company’s Subsidiaries with which such Optionee is employed or of which such Optionee is an officer, as the case may be.

“Change of Control” has the meaning ascribed to such term in the Plan. For the avoidance of doubt, a Change of Control shall not include an IPO unless the definition of Change of Control is otherwise satisfied.

“Disability” has the meaning ascribed to such term in the Optionee’s employment or severance agreement, or if such Optionee is not a party to an employment or severance agreement or “Disability” is not defined therein, “Disability” has the meaning specified in any long-term disability insurance policy maintained by the Company.

“Disabled” has the meaning ascribed to such term in the Optionee’s employment or severance agreement, or if such Optionee is not a party to an employment or severance agreement or if “Disabled” is not defined therein, “Disabled” has the meaning specified in any long-term disability insurance policy maintained by the Company.

“Employee” means any individual who is a common-law employee of the Company or a Subsidiary thereof.

“FMV” with respect to an Option Share, means the closing price of an ordinary share as reported on the composite tape of the Nasdaq Global Market or any reporting system selected by the Board of Directors of the Company on the relevant dates or, if no sale of ordinary shares is reported for that date, on the date or dates that the Board determines, in its sole discretion, to be appropriate for purposes of the valuation. Such determination shall be conclusive and binding on all persons.

“Good Reason”, with respect to any Optionee who is an employee of the Company, or any of its Subsidiaries (collectively, the “companies”), has the meaning ascribed to such term in such Optionee’s employment or severance agreement or, if such Optionee is not a party to an employment or severance agreement or “Good Reason” is not defined therein, “Good Reason” means:

(i) the assignment to the Optionee of duties materially inconsistent with such person’s position (including status, offices, titles and reporting requirements) or any other action by any of the companies which results in a diminution of such person’s position, authority, duties or responsibilities, or

(ii) any of the companies requiring the Optionee to be based at any office or location other than the office or location for which such person was hired;

Attachment A-9

provided, that any event described in clauses (i) or (ii) above shall constitute Good Reason only if the relevant company fails to cure such event within 30 days after such company’s receipt from the Optionee of written notice of the event which constitutes Good Reason; provided further, that Good Reason shall cease to exist for an event on the 90^th day following the later of its occurrence or such person’s knowledge thereof, unless such person has given the relevant company written notice thereof prior to such date.

“Qualified Option” means a stock option described in Section 422(b) of the U.S. Internal Revenue Code of 1986, as amended.

“Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

“Purchase Price” means, with respect to Option Shares being purchased pursuant to an exercise of this option (or with respect to which this option is being terminated pursuant to Section 5(b)), the Exercise Price multiplied by the number of such Option Shares with respect to which this option is being exercised (or with respect to which this option is being terminated pursuant to Section 5(b)).

“Service” means service as an Employee.

“Subsidiary” means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.

Attachment A-10

ANNEX 1

Additional Terms and Conditions of the Share Option Award Agreement for

Options Granted outside the United States

This Annex 1 includes additional terms and conditions that govern the options granted in the countries identified below. These terms are general in nature and based on the securities, tax and other laws in effect in your country as of February 2010. Such laws are often complex and subject to frequent change. As such, the Company strongly recommends that you do not rely on this summary as your only source of information relating to the consequences of your Share Option Award and participation in the Plan and further that you consult your personal tax or legal advisors for advice as to how the laws in your country apply to your situation. Finally, note that if you are a citizen or resident of a country other than the one in which you are working in, the information contained below may not be applicable to you. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement or the Plan.

All Options Granted outside the United States — For all awards of options granted outside the United States, the following additional terms apply:

A. Nature of Award.

i. The options are an extraordinary item that do not constitute compensation of any kind for services of any kind rendered for the Company or any Affiliate and which are outside the scope of the optionee’s employment contract, if any;

ii. The options are not intended to replace any pension rights or compensation;

iii. The options are not part of fixed, normal or expected compensation, salary or terms of employment for any purposes, including, without limitation, calculating any severance, resignation, termination , redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company (including any Subsidiary employing the Optionee) or any Affiliate thereof; and

iv. Nothing in this option or in the Plan shall confer or otherwise give rise to any acquired rights and the Optionee’s acceptance and acknowledgement of this option shall constitute a waiver of any and all claims to the contrary.

Annex 1-1

B. Section 5 of the Agreement is amended to include the following additional subsection at the end thereof

“(d) In the event of termination of the Optionee’s employment (whether or not in breach of local labor laws), the Optionee’s right to vest in the options under the Plan, if any, will, except as expressly provided in this Agreement, Annex 2 or in the Plan, terminate effective as of the date that the Optionee is no longer actively employed and will not be extended by any notice period (e.g. a period of “garden leave”) mandated under local law. In consideration of this Share Option Award, the Optionee irrevocably releases the Company (and any Subsidiary employing the Optionee) and any Affiliate thereof from any claim or entitlement to compensation or damages arising from forfeiture of the options resulting from termination of the Optionee’s employment.

C. Data Privacy.

The Optionee hereby explicitly consents to the collection, processing, transmission and storage, in any form whatsoever, of any data of a professional or personal nature described in this Agreement, the Plan and any other grant materials by and among as applicable, the Company, a Subsidiary employing the Optionee or any Affiliates thereof that is necessary, in the discretion of the Company, for the purposes of implementing, administering and managing the Optionee’s participation in the Plan. The Company may share such information with any party located in the United States or elsewhere, including any trustee, registrar, administrative agent, broker, stock plan service provider or any other person assisting the Company with the implementation, administration, and management of this Share Option Award and the Plan. The Optionee thus authorizes the Company and its Affiliates and any possible recipients described herein to receive, possess, use, retain and transfer the data in electronic or other form, for the sole purpose described herein. The Optionee understands that he or she may refuse or withdraw such consent or authorization without cost by contacting his or her local human resources representative, provided however, that the Optionee understands that such refusal or withdrawal may affect his or her ability to participate in the Plan.

Annex 1-2

Canada

i. Section 3(b) of the Agreement is amended to delete from such section, the phrase “(or in the names of such person and his spouse as community property or as joint tenants with right of survivorship).”

ii. Section 7 (c) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement (including the address in the Sample Notice of Exercise in Exhibit A) by deletion of the address for the Company in Section 7(c) and the replacement thereof as follows:

If to the Company, to:

iii. Section A of this Annex 1 shall not apply with respect to any option granted in Canada.

Germany

Section 7 (c) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement (including the address in the Sample Notice of Exercise in Exhibit A) by deletion of the address for the Company in Section 7(c) and the replacement thereof as follows:

If to the Company, to:

Annex 1-3

Italy

Section 7 (c) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement (including the address in the Sample Notice of Exercise in Exhibit A) by deletion of the address for the Company in Section 7(c) and the replacement thereof as follows:

If to the Company, to:

Netherlands

Section 7 (c) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement (including the address in the Sample Notice of Exercise in Exhibit A) by deletion of the address for the Company in Section 7(c) and the replacement thereof as follows:

If to the Company, to:

Spain

Section 7 (c) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement (including the address in the Sample Notice of Exercise in Exhibit A) by deletion of the address for the Company in Section 7(c) and the replacement thereof as follows:

If to the Company, to:

Switzerland

Section 7 (c) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement (including the address in the Sample Notice of Exercise in Exhibit A) by deletion of the address for the Company in Section 7(c) and the replacement thereof as follows:

If to the Company, to:

Annex 1-4

United Kingdom

Section 7 (c) of the Agreement is amended in the case of notices, requests and other communications to the Company under the Agreement (including the address in the Sample Notice of Exercise in Exhibit A) by deletion of the address for the Company in Section 7(c) and the replacement thereof as follows:

If to the Company, to:

Annex 1-5

EXHIBIT A

SAMPLE NOTICE OF EXERCISE

Warner Chilcott plc

c/o Warner Chilcott (US) LLC

100 Enterprise Drive

Rockaway, NJ 07866

To the Corporate Secretary:

I hereby exercise my share option granted pursuant to the Share Option Award Agreement (“Option Agreement”) under the Warner Chilcott Equity Incentive Plan, as amended and restated (the “Plan”) and notify you of my desire to purchase the shares that have been offered pursuant to the Plan and related Option Agreement as described below.

I shall pay for the shares or arrange for such payment by wire transfer, delivery of a check payable to Warner Chilcott plc (the “Company”) or as otherwise permitted under the Option Agreement in the amount described below in full payment for such shares plus all amounts required to be withheld by the Company or my employer (if different) under applicable law as a result of such exercise or shall provide such documentation as is satisfactory to the Company demonstrating that I am exempt from any withholding requirement.

This notice of exercise is delivered this      day of              (month)          (year).

Exercise Cost	Number of Shares	Exercise Price	$
Withholding			$
Total			$

Very truly yours,

Signature of Optionee

Optionee’s Name and Mailing Address

Optionee’s social security, social insurance or tax identification number:

Annex 1-6

EX-10.51

Exhibit 10.51

Warner Chilcott plc

P&G Pharmaceuticals Business

Transaction and Integration Incentive Program

Warner Chilcott plc, an Irish Company (the “Company”), in order to reward certain individuals involved in the Company’s acquisition and integration of the Proctor & Gamble global pharmaceuticals business and encourage the continued efforts of these and other critical individuals toward the integration of this business with the existing business of the Company, has adopted this P&G Pharmaceuticals Business Transaction and Integration Incentive Program (the “Program”) on the terms and conditions stated herein.

Eligible Participants: The initial participants in the Program (“Initial Participants”) shall be the Chief Executive Officer (“CEO”) and such other employees of the Company and its affiliates selected by the Company’s Compensation Committee (“Committee”), based on the recommendations of the CEO.

Additional employees of the Company and its affiliated entities (including employees of the entities associated with the acquired P&G’s pharmaceuticals business) may be selected for participation in the Program (“Additional Participants”), with the selection of the employees and the amount, timing, form and conditions of their incentives under the Program to be determined by the Committee, based on the recommendations of the CEO. The Initial Participants and Additional Participants shall be referred to collectively as the “Participants”.

Transaction Closing Bonuses: Within 30 days after the first closing with respect to the acquisition of P&G’s global pharmaceuticals business (which is expected to occur on October 30, 2009), each Initial Participant will receive the one-time cash award designated as the Transaction Bonus for such Initial Participant by the Committee, provided that such Initial Participant has not terminated employment with the Company and its affiliates as of the payment date.

An Additional Participant may receive a transaction bonus, the amount, form and terms of which shall be determined by the Committee, based on the recommendations of the CEO.

Integration Success Incentive: Each Initial Participant and each Additional Participant may be deemed eligible to receive an integration incentive, the amount, form and terms of which shall be determined by the Committee, based on the recommendations of the CEO (the “Integration Incentives”). The actual reward received by a Participant under the Participant’s Integration Incentive will be contingent on the achievement of the individual integration goals set for the Participant by the Committee as well as the Company’s achievement of global integration goals established by the Committee, including, but not limited to, the goals set forth on Schedule A. The period for the achievement of these goals is subject to the discretion of the Committee and any period for achievement established by the Committee may be shortened or extended by the Committee at any time without the consent of any Participant. The goals and the period for achievement of the goals with respect to each Participant will be established by the Committee in consultation with the CEO.

The Integration Incentive of each Participant may be provided in the form of cash and/or a Company equity award (e.g., stock options, restricted shares or restricted stock units), as determined by the Committee. The level of achievement of the applicable integration goals and the amount, form and terms of each Participant’s Integration Incentive, if any, will be determined by the Committee, based on the recommendations of the CEO, after the end of the measurement period applicable to the Participant. If any portion of a Participant’s Integration Incentive is provided in the form of a Company equity award, the value, number of shares covered, vesting and other terms of the of such award shall be determined by the Committee, based on the recommendations of the CEO. The actual amount of the Integration Incentive provided to a Participant will depend upon the achievement of the applicable individual goals and the global integration goals, as determined by the Committee and, accordingly, a Participant may receive none or a portion of the Integration Incentive designated for the Participant. A Participant will receive any Integration Incentive to which the Participant is deemed to be entitled after the Compensation Committee has made its determinations, provided that the Participant has not terminated employment as of the payment or equity grant date, as applicable. Any Participant whose employment with the Company and its affiliates has terminated for any

2

reason prior to the date of payment or grant of the Participant’s Integration Incentive shall not be entitled to any portion of the Integration Incentive.

Committee Authority: The Committee shall have the authority to: (1) interpret the Program, (2) make rules for the administration of the Program, (3) make all determinations necessary or appropriate under the Program, (4) amend the Program at any time, as it deems appropriate and (5) resolve all issues, questions and disputes under the Program, in each case in the Committee’s sole discretion. The entitlement of each Participant to incentives under the Program shall be subject to any such interpretations, rules, determinations, amendments and resolutions of the Committee, which shall be final and binding on all parties.

The Committee may delegate to any one or more of its members its authority to grant incentives to Additional Participants under the Program, based on the recommendations of the CEO; provided, however, that the full Committee shall determine the final Integration Incentive earned by each Participant as of June 30, 2010, including the amount, form and terms of each Participant’s final Integration Incentive, if any.

3

EX-10.57

Exhibit 10.57

CONFIDENTIAL TREATMENT REQUESTED UNDER

17 C.F.R. SECTIONS 200.80(b)(4), 200.83 AND 240.24b-2.

[*****] INDICATES OMITTED MATERIAL THAT IS THE

SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST

FILED SEPARATELY WITH THE COMMISSION.

THE OMITTED MATERIAL HAS BEEN FILED

SEPARATELY WITH THE COMMISSION.

AMENDED AND RESTATED

COLLABORATION AGREEMENT

by and between

THE PROCTER & GAMBLE COMPANY

and

PROCTER & GAMBLE PHARMACEUTICALS, INC.

and

AVENTIS PHARMACEUTICALS INC.

Dated October 8, 2004

TABLE OF CONTENTS

ARTICLE I - DEFINITIONS		1
ARTICLE II - COMPENSATION		15
A.	Milestone Payments to P&G	15
B.	Global Payment	15
ARTICLE III - OVERALL COLLABORATION STRUCTURE		15
A.	Alliance Management Structure	15
B.	Conduct of Work	17
C.	Costs and Expenses of Alliance Management	18
D.	Management of Product Improvements	19
E.	Costs and Expenses of Studies	19
F.	Labeling	20
G.	Research and Development	21
H.	Regulatory Decision-Making	23
I.	Employees	23
J.	Promotional Commitments	23
K.	Global Efforts	24
L.	2004 Efforts	24
ARTICLE IV - CO-PROMOTION TERRITORY		24
A.	Rights and Obligations of the Parties	24
B.	Promotion Efforts	25
C.	Marketing Efforts and R&D Efforts	29
D.	Other Expenses	30
E.	Recording of Sales	31
F.	Marketing Services Agreements	31
G.	Health Registrations	31
H.	Product Recalls	32
I.	Trademarks	33
J.	Conversion to Secondary Co-Promotion Territory	33
K.	Conversion of Italy	33
ARTICLE IVa - SECONDARY CO-PROMOTION TERRITORY		34
A.	Rights and Obligations of the Parties	34
B.	Promotion Efforts	34
C.	Marketing Efforts and Joint R&D Efforts	38
D.	Other Expenses	40
E.	Recording of Sales	40
F.	Marketing Services Agreements	40
G.	Health Registrations	41
H.	Product Recalls	43
I.	Trademarks	44

J.	Product Supply and Cost	44
K.	Expansion Countries	44
ARTICLE V - CO-MARKETING TERRITORY		45
A.	Rights of the Parties	45
B.	Independent Management	45
C.	Recording of Sales	45
D.	Expenses	46
E.	Health Registrations	46
F.	Product Recalls	47
G.	Trademarks	47
H.	Product Supply and Cost	48
ARTICLE VI - POTENTIAL CO-PROMOTION TERRITORY		48
A.	Rights and Obligations of the Parties	48
B.	Management Structure	49
C.	Recording of Sales	49
D.	Expenses	49
E.	Product Supply and Cost	49
F.	Health Registrations	50
G.	Product Recalls	52
H.	Trademarks	53
I.	Additions to the Potential Co-Promotion Territory	53
ARTICLE VII - CONVERTED TERRITORIES		53
A.	Conversion of Potential Co-Promotion Territory	53
B.	Primary Converted Co-Promotion Territory	55
C.	Secondary Converted Co-Promotion Territory	56
D.	Converted Co-Marketing Territory	57
E.	Conversion of Co-Marketing Territory to Co-Promotion Territory	58
F.	Limitation Upon or After Change in Control with Respect to P&G	60
ARTICLE VIII - [RESERVED]		60
ARTICLE IX - MANUFACTURING AND SUPPLY		60
ARTICLE X - WHITE SPACE TERRITORY		60
A.	Commercialization	61
B.	License Grant	61
C.	Failure to Comply with Sub-Licensing Obligations	61
D.	Recording of Sales	62
E.	Terms and Conditions of Sub-License Agreements	62
F.	Consideration	62
G.	Expenses	62

H.	Health Registrations	62
I.	Trademarks	63
J.	Conversion to Potential Co-Promotion Territory	63
K.	Product Supply and Cost	63
ARTICLE XI - ACTIVITIES OUTSIDE THE TERRITORY		64
ARTICLE XII - INTELLECTUAL PROPERTY DISCLOSURE, RIGHTS AND ENFORCEMENT		64
A.	Know-how	64
B.	Ownership of Patents	64
C.	Grant of License by API	64
D.	Filing, Prosecution and Maintenance of Patent Applications	64
E.	Patent Prosecution and Maintenance Responsibilities	65
F.	Enforcement of Patents	66
G.	Enforcement of Trademarks	68
H.	Limitation of Rights	70
ARTICLE XIII - CONFIDENTIALITY OF INFORMATION		70
A.	Non-Disclosure of Confidential Information	70
B.	Exceptions	70
C.	Publication	71
D.	Duration	71
E.	External Communications	72
F.	Merger of Prior Confidentiality Agreement	72
ARTICLE XIV - REPRESENTATIONS AND WARRANTIES		72
A.	Representations and Warranties of HMR	72
B.	Representations and Warranties of P&G	73
ARTICLE XV - INDEMNIFICATION		75
A.	Indemnification Obligations	75
B.	Procedures for Indemnification	76
ARTICLE XVI - DISPUTE RESOLUTION		77
A.	Dispute Resolution Process	77
B.	Arbitration	78
ARTICLE XVII - TERM AND TERMINATION		79
A.	Term of the Agreement	79
B.	Termination for Material Breach	81
C.	Termination for Bankruptcy	83
D.	Termination Prior to Third Milestone Payment	84
E.	Termination for Arbitral Decision Against a Party’s Vital Interest	84
F.	Termination by Mutual Consent	85
G.	Other Rights	85

H.	Other Collaboration Agreement Documents	85
I.	Survival of Liability	86
J.	Change in Control Put/Call Rights	86
ARTICLE XVIII - PRODUCT IMPROVEMENTS		89
A.	Proposed Product Improvements	89
B.	Product Improvements Initiated Prior to Product Improvement Trigger	89
C.	Product Improvements Initiated After Product Improvement Trigger	90
D.	Osteoarthritis Product Improvement	94
ARTICLE XIX - ADVERSE EVENT REPORTING		95
ARTICLE XX - COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS		95
ARTICLE XXI - ACCOUNTING		96
A.	Records	96
B.	Audit Procedure	96
C.	Audit Results	96
D.	Challenge Procedure	97
E.	Co-Marketing and Converted Co-Marketing Territories	97
F.	Merck License	97
ARTICLE XXII - COMMERCIALIZATION OF SECONDARY PRODUCTS		97
ARTICLE XXIII - RISEDRONATE OTC RIGHT		98
A.	P&G Exclusive Rights to OTC Products	98
B.	Remuneration of API Upon Introduction of OTC Product	98
ARTICLE XXIV - [RESERVED]		99
ARTICLE XXV - MISCELLANEOUS		99
A.	Use and Obligations of Affiliates	99
B.	Setoff	99
C.	Payment Method	99
D.	Currency Conversion	99
E.	Additional Agreements	100
F.	Withholding Tax	100
G.	Non-Assignment	100
H.	Force Majeure	100
I.	Governing Law	101
J.	Entire Agreement	101
K.	Severability	101
L.	Amendments	101
M.	Notices	101
N.	Waivers	102

O.	Survival	102
P.	Captions	102
Q.	Counterparts	102
R.	Original Agreement	102
S.	Cross Border Trade	102

List of Schedules and Exhibits

Schedule I-A -	API Patents
Schedule I-B -	Cost of Goods
Schedule I-C -	Net Outside Sales
Schedule I-D -	P&G Patents
Schedule I-E -	Example of FTE Calculation
Schedule I-F -	Potential Co-Promotion Territory
Schedule I-G -	Example of Threshold Amount Using CPIU
Schedule I-H -	Primary Detail Cost Determination
Schedule I-I -	Detail Definitions
Schedule I-J -	Detailing Effort Evaluation
Schedule I-K -	Co-Promotion Initial Marketing Spend and Secondary Co-Promotion Initial Marketing Spend
Schedule II(B) -	Calculation of Reimbursement Payment
Schedule III(A)(2)(a) -	Oversight Committee
Schedule III(A)(2)(b) -	Alliance Management Committee
Schedule III(A)(2)(c) -	Research & Development Committee
Schedule III (A)(2)(d) -	Global Commercial Steering Team
Schedule III(E) -	Listed Studies
Schedule III(G)(1) -	Current Programs
Schedule IV(B)(4) -	Base Detailing Efforts (Co-Promotion Territory)
Schedule IV(B)(7) -	Calculation of Actual Detailing Efforts and Detailing Efforts Service Mark Up
Schedule IV(B)(8) -	Under Performance of Detailing Efforts
Schedule IV(E)(2) -	Bundled Sales Calculation
Schedule IVa(B)(4) -	Base Detailing Efforts (Secondary Co-Promotion Territory)

Schedule VII(A)(2) -	Definition of Detailing Capacity for Conversion of Co-Promotion/Co-Marketing
Schedule VII(C)(1) -	Entry Payment
Schedule X(F) -	Calculation of Payments in White Space Territory
Schedule XIV(A)(1)(c) -	Collaboration Agreement Documents by HMR
Schedule XIV(B)(1)(c) -	Collaboration Agreement Documents by P&G
Schedule XIV(B)(2)(d) -	Pending Litigation
Exhibit A -	Listed Entities

AMENDED AND RESTATED COLLABORATION AGREEMENT

AMENDED AND RESTATED COLLABORATION AGREEMENT (this “Agreement”) dated as of the 8^th day of October, 2004 (the “A&R Agreement Effective Date”), between The Procter & Gamble Company, a corporation organized and existing under the laws of the State of Ohio, having offices at One Procter & Gamble Plaza, Cincinnati, Ohio, Procter & Gamble Pharmaceuticals, Inc., a corporation organized and existing under the laws of Ohio, having offices at One Procter & Gamble Plaza, Cincinnati, Ohio (collectively, “P&G”), and Aventis Pharmaceuticals Inc., a corporation organized and existing under the laws of Delaware with a place of business at 300 Somerset Corporate Boulevard, Bridgewater, New Jersey (“API”).

WHEREAS, P&G and Hoechst Aktiengesellschaft (“HMR”) entered into the Collaboration Agreement (as amended prior to the A&R Agreement Effective Date, the “Original Agreement”), dated April 30, 1997 (the “Original Agreement Effective Date”), pursuant to which HMR agreed to collaborate with P&G to commercialize the Product within the Territory pursuant to the Original Agreement and the other Collaboration Agreement Documents; and

WHEREAS, API is the successor to HMR’s rights and obligations under the Original Agreement, and P&G and API desire to continue the collaboration between the parties with respect to the Product and amend and restate the Original Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth, the parties to this Agreement hereby agree as follows:

ARTICLE I

DEFINITIONS

The following terms shall have the following meanings for purposes of the Collaboration Agreement Documents:

“Action” shall mean any claim, litigation, suit, cause of action, opposition proceeding, arbitration, mediation, or any other proceeding by or before any court, arbitrator, mediator or governmental authority.

“Actual Detailing Effort” (“ADE”) shall mean (a) for the time period prior to January 1, 2005, the actual Details, and (b) for the time period beginning January 1, 2005 and thereafter, the actual Primary Details and Secondary Details, as measured pursuant to Schedule I-J, in each case performed by a party in a particular country during a semi-annual period, as expressed in PDEs. If a party’s ADE exceeds its Detail Commitment, such ADE will be set to a level equal to such Detail Commitment.

“Affiliate” shall mean, with respect to a person, any other person directly or indirectly controlled by, controlling, or under common control with, such person.

“Alliance Detail Objective” shall mean, with respect to both parties in a particular country in a semi-annual period, the combined target level of Details agreed by both parties in such country as further described in Section IV(B)(4) and Section IVa(B)(4).

“Alliance General Manager” shall mean the cross-functional business manager described in Section III(A)(3).

“Alliance Management Committee” shall mean the committee described in Schedule III(A)(2)(b).

“ANDA” shall have the meaning set forth in Section XII(F)(1)(a).

“API Patent” shall mean the entire right, title and interest in the claim of a patent which: (a) claims an invention conceived and/or reduced to practice by or for API before or during the Term, regarding Risedronate, compositions containing Risedronate, or methods of making or using Risedronate; or (b) is otherwise acquired by API with the right to sublicense before or during the Term which would be infringed by the manufacture, use, import, or sale of a Product in the Territory. API Patents include, without limitation, the patents and patent applications listed in Schedule I-A (as may be amended as appropriate), and all continuing and divisional patent applications, continuations-in-part, reissue applications and all other related patent applications claiming priority, indirectly and directly, to said applications, and all patents issuing therefrom in the Territory as well as extensions thereof, including Supplementary Certificates of Protection of a member state of the European Community.

“API Product Improvement” shall have the meaning set forth in Section XVIII(C)(2).

“API Studies” shall have the meaning set forth in Section III(E)(2).

“Assertion” shall have the meaning set forth in Section XV(B)(1).

“Auditor” shall have the meaning set forth in Section XXI(B).

“Bankrupt Party” shall have the meaning set forth in Section XVII(C)(1).

“Budgetary CPI Adjustment” shall mean, for the United States, an adjustment on an annual basis for changes in inflation pursuant to the Consumer Price Index for all Urban Consumers published by the Bureau of Labor Statistics (CPI) and, for each other country, an adjustment on an annual basis for changes in inflation pursuant to the nearest equivalent to the CPI for that country, in each case beginning as of the A&R Agreement Effective Date and continuing during the Term.

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“Business Day” shall mean any day except a Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized to close. Any reference in this Agreement to “day,” whether or not capitalized, shall refer to a calendar day, not a Business Day.

“Capacity” shall have the meaning set forth in Section VII(A)(2).

“Change in Control” shall mean an event which shall be deemed to have occurred as to a party: (i) if such party shall consolidate or merge with another person or entity (other than an Affiliate of such party), or convey, sell or lease to another person or entity (other than an Affiliate of such party), all or substantially all of the stock, assets or business of such party taken as a whole, unless the stockholders of such party immediately prior to any such transaction own a majority of the voting stock of the merged, consolidated or acquiring entity after such transaction; or (ii) upon consummation of any transaction or event as a result of which any other person or entity (other than an Affiliate of such party) acquires or controls and is able to vote more than fifty percent (50%) of the voting stock of such party or if any such person or entity (other than an Affiliate of such party) acquires direct or indirect power to direct or cause the direction of the management and policies of such party as such policies relate to the Product within the Territory, whether by ownership of voting stock, by contract, or otherwise.

“Change in Control Request” shall have the meaning set forth in Section XVII(J)(1).

“Collaboration Agreement Documents” shall mean, with respect to the time period prior to the A&R Agreement Effective Date, the Original Agreement, or, with respect to the time period from and after the A&R Agreement Effective Date, this Agreement, and in each case the Supply Agreement, the Marketing Services Agreements and any and all other agreements executed between the parties to assist or facilitate the transactions contemplated by or otherwise related to the Original Agreement or this Agreement, as applicable.

“Co-Market” shall mean the independent marketing, promotion, detailing, distribution and sale of the Product by P&G and API under two or more separate trademarks within the same country pursuant to the terms and conditions of the Collaboration Agreement Documents.

“Co-Marketing Territory” shall mean an area within the Territory in which P&G and API Co-Market, which area, at the A&R Agreement Effective Date, consists of Italy.

“Commercial Expenses” shall mean external out of pocket costs and expenses and internal costs and expenses authorized by both parties for Marketing Efforts and Non-Detailing Promotion Efforts in connection with the Product.

“Commercial Value” shall have the meaning set forth in Section XVIII(C)(4)(d).

“Confidential Information” shall have the meaning set forth in Section XIII(A).

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“Contract Representative” shall mean a Representative who engages in Detailing Efforts and/or Non-Detailing Promotion Efforts with respect to the Product who is employed by a non-Affiliate third party or who is self-employed.

“Contract Year” shall mean each year beginning on any January 1 and ending on the next December 31.

“Control” shall mean, with respect to a person, such relationship as, in fact, constitutes actual control.

“Conversion Date” shall have the meanings set forth in Section VII(A) and Section VII(E).

“Conversion Notice” shall have the meanings set forth in Section VII(A) and Section VII(E).

“Converted Co-Marketing Territory” shall mean all countries formerly within the Potential Co-Promotion Territory with respect to which P&G has elected to convert the rights and obligations of the parties pursuant to Sections VII(A) and (D).

“Co-Promote” shall mean the marketing, promotion and detailing of the Product by P&G and API under one trademark within the same country pursuant to the terms and conditions of the Collaboration Agreement Documents.

“Co-Promotion Marketing Costs” (“CPMC”) shall have the meaning set forth in Section IV(F).

“Co-Promotion Minimum Marketing Spend” shall mean, for each country in the Co-Promotion Territory, an amount equal to the spending levels for each such country as set forth in Schedule I-K, as such amounts may be adjusted pursuant to the Budgetary CPI Adjustment on October 1 of each Contract Year beginning with October 1, 2005, such adjustment to be applicable to the spending levels for the following Contract Year; provided, however, that such minimum commitments will be renegotiated as required pursuant to Section III(J).

“Co-Promotion Service Mark Up” (“CPSMU”) shall have the meaning set forth in Section IV(F).

“Co-Promotion Territory” shall mean an area within the Territory, which area consists of (i) at the A&R Agreement Effective Date, the USA (including Puerto Rico), Canada, France, Belgium (including Luxembourg), The Netherlands and Germany, (ii) all countries formerly within the Co-Marketing Territory with respect to which P&G has revised the rights and obligations of the parties pursuant to Section VII(E), and (iii) Italy if the rights and obligations with respect to such country are revised by the parties pursuant to Section IV(K).

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“Cost of Goods” shall have the meaning set forth in Schedule I-B.

“Current Programs” shall have the meaning set forth in Section II(G)(1).

“Detail” or “Detailing” shall mean a presentation by a Representative to an office- or hospital-based physician, licensed physician assistant, nurse practitioner, or any other office- or hospital-based person who is legally permitted to prescribe prescription drugs during which such Representative promotes the Product (whether or not such promotion occupies the entire visit or only some portion thereof). A sample drop does not constitute a Detail. The terms “Primary Detail” and “Secondary Detail” shall have the meanings ascribed in Schedule I-I to this Agreement. Unless the parties agree that for a particular country it is practicable to track calls made upon hospital-based persons as Details, such efforts shall be included in Non-Detailing Promotion Efforts.

“Detail Adjustment Factor” (“DAF”) shall mean, with respect to a party in a particular country in a semi-annual period, the ratio of that party’s ADE for such country during that period to that party’s DC for such country during that period.

“Detail Commitment” (“DC”) shall mean, with respect to a party in a particular country in a semi-annual period, the specified level of Details to be performed by such party, measured in PDEs pursuant to Schedules IV(B)(4) and IVa(B)(4). Any Detail Commitment established for a party shall also include a profile (e.g., prescriber deciles, physician specialties, or where practicable, a defined list of prescribers) of prescriber targets for such party in such country in such semi-annual period.

“Detailing Efforts” shall mean all activities within the Territory involving the Detailing of the Product.

“Drug Dossier” shall mean a global data base for the purpose of filing and maintaining Health Registrations, maintained by P&G and updated from time to time, which shall include a copy of the underlying data supporting, and a copy of, the NDA and any other application for a Health Registration filed by P&G or API with the USFDA or any Ministry of Health and such other data files containing standard information regarding Products in a form acceptable for a later filing with a Ministry of Health. P&G will include, and API will submit to P&G for inclusion, in the Drug Dossier all studies involving the Product, and all registration documents, including supplements and updates, used to obtain or maintain marketing approval in any country in the Territory in which that party has the responsibility to obtain or maintain Health Registrations or other approvals.

“Entry Payment” means any payment calculated and to be paid as set forth on Schedule VII(C)(1).

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“Expansion Countries” shall mean Norway, Sweden, Finland, Denmark, Portugal, Austria, Switzerland, Greece, Mexico, Brazil and Australia.

“FDCA” shall mean the Food, Drug and Cosmetics Act of 1938, 21 United States Code 301 et. seq., as amended.

“First Extension Option” shall mean the extension of the Term by API pursuant to Section XVII(A)(2).

“First Option Extension Payment” shall mean the payment by API to P&G pursuant to Section XVII(A)(1), (2) or (3).

“Four Year R&D Plan” shall have the meaning set forth in Section III(G)(1).

“Full Time Equivalent” (“FTE”) shall mean a measurement of a party’s internal costs, where one FTE is the equivalent of the allocation of one hundred percent (100%) of one employee’s working hours in support of a particular effort. One FTE should represent the average annual cost for one employee performing a specific function in a specific country for a specific Contract Year. The cost of one FTE shall be agreed to by the parties and shall be applicable to both parties. Calculation of an FTE includes salary and benefits, bonuses and rewards, normal operating expenses (automobile, office supplies, office space, equipment, depreciation, repairs, maintenance, telephones, computers, etc.) and normal travel and meeting expenses. Examples of FTE calculations are included in Schedule I-E.

“Fully Dedicated Contract Representative” shall mean a Contract Representative engaged by a party that exclusively promotes the products owned, licensed or co-promoted by the party by which it is engaged.

“Future Programs” shall have the meaning set forth in Section III(G)(1).

“GMP” shall mean current Good Manufacturing Practices as defined in the FDCA and related regulations or any successor laws or regulations governing the manufacture of Product.

“GCS Team” shall mean the Global Commercial Steering Team described in Schedule III(A)(2)(d).

“Health Registration” shall mean any and all consents, licenses, authorizations, reimbursement pricing or approvals required by the USFDA or any Ministry of Health for the distribution, sale, manufacture, or testing of the Product, including, without limitation, an NDA or supplemental NDA or other application or supplemental application for a Health Registration.

“Indemnitee” shall have the meaning(s) set forth in Section XV.

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“Indemnitor” shall have the meaning(s) set forth in Section XV.

“Industry Expert” shall have the meaning set forth in Section III(G)(2).

“Infringement” shall have the meaning set forth in Section XII(G)(1).

“Invention” shall have the meaning set forth in Section XII(D)(1).

“Italy Conversion” shall have the meaning set forth in Section IV(K).

“Joint Forecast” shall have the meaning set forth in Section III(B)(3).

“Joint Product Improvement” shall have the meaning set forth in Section XVIII(A)(1).

“Joint Studies” shall have the meaning set forth in Section III(E)(3).

“Know-how” shall mean the entire right, title and interest in trade secret information or other confidential information, whether or not patentable, which is required for the research, development and commercialization of Product. “P&G Know-how” shall mean the entire right, title and interest in Know-how owned solely, owned jointly with a third party or otherwise possessed, in each case with the right to license, by P&G before or during the Term. “API Know-how” shall mean the entire right, title and interest in Know-how owned solely, owned jointly with a third party or otherwise possessed, in each case with the right to license, by API before or during the Term.

“Life Cycle Programs” shall have the meaning set forth in Section III(G)(1).

“Listed Studies” shall have the meaning set forth in Section III(E)(1).

“Losses” shall have the meaning set forth in Section XV(A).

“Marketing Efforts” shall mean any and all activities within the Territory undertaken by or for a party related to the marketing of the Product, including, without limitation, the undertaking of advertising, market research, conventions, symposia and marketing studies and which are not Detailing Efforts or Non-Detailing Promotional Efforts. The costs of Marketing Efforts shall include the actual cost of manufacturing and distributing samples of the Product.

“Marketing Services Agreement(s)” shall mean the agreements between P&G Affiliates and API Affiliates to be entered into pursuant to Section IV(F), Section IVa(F) and Section VII(B)(4).

“Merck License” means the License Agreement dated May 17, 2002, between P&G and Merck & Co. Inc.

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“Ministry of Health” shall mean the USFDA or other governmental agencies (within or outside the US) charged with the authority to regulate the pricing, marketing, promotion, manufacture, testing, distribution or sale of pharmaceutical products in a country or countries.

“NDA” shall mean a New Drug Application as described by the FDCA and regulations promulgated thereunder.

“Net Outside Sales” shall have the meaning set forth in Schedule I-C.

“Non-Detailing Promotion Effort” shall mean a presentation or other direct interface by a Representative with any customer who is not an office-based physician, licensed physician assistant, nurse practitioner, or other office-based person who is legally permitted to prescribe prescription drugs during which such Representative promotes the Product. This includes, but is not limited to, presentations or other direct interfaces by a Representative with wholesalers, retailers, chain drug stores, managed care organizations, government workers, opinion leaders, pharmacists, medical associations and patient associations. Unless the parties agree that for a particular country it is practicable to track calls made upon hospital-based persons as Details, such efforts shall be included in Non-Detailing Promotion Efforts.

“Non-R&D Promotional Commitments” shall have the meaning set forth in Section III(J).

“Non-Requesting Party” shall have the meaning set forth in Section XVII(J)(1).

“Notifying Party” shall have the meaning set forth in Section XII(G)(1).

“OA Milestone Payment” shall have the meaning set forth in Section XVIII(D)(3).

“OA Milestone Trigger” shall have the meaning set forth in Section XVIII(D)(3).

“OTC Product” shall mean human pharmaceutical products containing Risedronate which may legally be sold to an end-user consumer without a prescription from a health care practitioner and which can be legally advertised to the end consumer directly.

“Other Information” shall have the meaning set forth in Section XIII(A).

“Oversight Committee” shall mean the committee described in Schedule III(A)(2)(a).

“P&G Patent” shall mean the entire right, title and interest in the claim of a patent which: (a) is owned solely, owned jointly with a third party, or licensed with the right to sublicense by P&G during the Term in the Territory; and (b) without license, would be infringed by the manufacture, use, import, or sale of Product or of Risedronate for use in a Product in the Territory. P&G Patents include, without limitation, the patents and patent applications listed in Schedule I-D (as may be amended as appropriate), and all

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continuing and divisional patent applications, continuations-in-part, reissue applications and all other related patent applications claiming priority, indirectly and directly, to said applications, and all patents issuing therefrom in the Territory as well as extensions thereof, including Supplementary Certificates of Protection of a member state of the European Community.

“P&G Product Improvement” shall have the meaning set forth in Section XVIII(A).

“P&G Studies” shall have the meaning set forth in Section III(E)(1).

“Patent Application” shall have the meaning set forth in Section XII(D)(1).

“Patent Expiration Date” shall mean, with respect to any country within the Territory, the last date of expiration of a Valid Claim covering the Product under any API Patent, P&G Patent or other patent owned or controlled by a party to this Agreement or any of its Affiliates.

“Patent Extension Payment” shall have the meaning set forth in Section XVII(A)(3).

“PCCPSMU” shall have the meaning set forth in Section VII(B)(4).

“PDMA” shall mean the Prescription Drug Marketing Act of 1987, 21 United States Code 301 et. seq., as amended.

“Person” whether or not capitalized, shall mean, as the context requires, a natural person, corporation, partnership, limited liability company, an association, trust or other entity or organization, including, without limitation, a government or political subdivision or agency or instrumentality thereof.

“PMO” shall mean postmenopausal osteoporosis.

“Potential Co-Promotion Territory” shall mean an area which area, at the A&R Agreement Effective Date, consists of all countries set forth in Schedule I-F; provided, however, that any country with respect to which P&G has revised the rights and obligations of the parties pursuant to Article VII shall not be considered part of the Potential Co-Promotion Territory from and after the Conversion Date except to the extent provided for in Article VII.

“Pre-Agreed Option Consideration” shall have the meaning set forth in Section XVIII(C)(4)(b).

“Primary Converted Co-Promotion Territory” shall mean all countries formerly within the Potential Co-Promotion Territory with respect to which P&G has elected to convert the rights and obligations of the parties pursuant to Sections VII(A) and (B).

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“Primary Detail Cost” shall mean, with respect to each country in the Co-Promotion Territory or Secondary Co-Promotion Territory, the value of a Primary Detail. For each Contract Year, this value of a Primary Detail shall be established in accordance with Schedule I-H to this Agreement.

“Primary Detail Equivalent” (“PDE”) shall mean a measurement of Detailing Effort, where a Primary Detail shall have the value of *****. Unless the parties agree otherwise, the PDE for a Secondary Detail shall be *****. Unless the parties agree otherwise, all Details performed by Contract Representatives will have a PDE valued at 100% of the PDE value of Details performed by employee Representatives of a party.

“Product” shall mean any human pharmaceutical product containing Risedronate, including any Joint Product Improvement, but which product is not a P&G Product Improvement, an API Product Improvement or an OTC Product. Certain Sections of this Agreement refer to “P&G’s Product,” “API’s Product,” or “its Product.” Such terms refer to the Product marketed, promoted, sold or distributed by the party identified, but not to the Product marketed, promoted, sold or distributed by the other party, regardless of which party owns the trademark therefor.

“Product Components” shall mean any or all of the components required to manufacture, fabricate, package and label the Product.

“Product Improvement” shall mean any improvement, discovery, or invention dealing with the use or application of the Product, any indication for the Product other than Paget’s disease, PMO or corticosteroid induced osteoporosis, any new dosage form for the Product, any change in Product formulation and/or composition (including combination products containing Risedronate and another active ingredient) any change in Product dosage, including any change in the shape, size, or color of the Product and any material package or labeling change or enhancements intended for use in humans.

“Product Improvement Trigger” shall mean the date that API notifies P&G that it wishes to trigger the revised rights of the parties after such date, with respect to Product Improvements as set forth in Section XVIII(C), provided API provides such notice within thirty (30) days after the date API makes the Patent Extension Payment, if at all.

“Product Liability Action” shall mean any Action in which a third party alleges that ingestion or other medical use of the Product resulted in personal injury and/or economic harm.

“Promotion Efforts” shall mean any and all activities within the Territory related to the promotion and detailing of the Product and shall consist of Detailing Efforts and Non-Detailing Promotion Efforts.

“Promotional Actual Loss of Exclusivity” shall mean, with respect to a country, (i) the loss of marketing exclusivity (i.e., through loss of patent exclusivity, including expiration, invalidation or unenforceability, or any exclusivity granted by statute, law,

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regulation, rule or other act of a governmental authority) for any Product form representing more than ***** of the Net Outside Sales of the Product in such country for the prior Contract Year, (ii) the entry of a generic version of any Product form representing more than ***** of the Net Outside Sales of the Product in such country for the prior Contract Year, or (iii) reduction in Net Outside Sales of the Product in any Contract Year of ***** or more as compared to Net Outside Sales of the Product in the prior Contract Year.

“Promotional Loss of Exclusivity” shall mean either a Promotional Potential Loss of Exclusivity or a Promotional Actual Loss of Exclusivity.

“Promotional Potential Loss of Exclusivity” shall mean, with respect to a country, any event that a party determines in good faith could reasonably be expected to result in (i) the loss of marketing exclusivity for the Product in such country or (ii) the entry in such country of (A) a generic version of any dosage or form of the Product as marketed at the date of determination or (B) a generic version of a product in the bisphosphonate class substantially adversely affecting Product sales in such country.

“Put Interest” shall have the meaning set forth in Section XVII(J)(1).

“Put Price” shall have the meaning set forth in Section XVII(J)(1).

“Quarter” whether or not capitalized, shall mean any three-month period (i) beginning on any January 1 and ending on the next March 31, (ii) beginning on any April 1 and ending on the next June 30, (iii) beginning on any July 1 and ending on the next September 30, or (iv) beginning on any October 1 and ending on the next December 31.

“R&D Actual Loss of Exclusivity” shall mean a reduction in the global Net Outside Sales of the Product in any Contract Year of ***** or more as compared to global Net Outside Sales of the Product in the prior Contract Year.

“R&D Commitments” shall have the meaning set forth in Section III(G)(5).

“R&D Costs” shall mean all costs and expenses incurred in connection with any R&D Efforts, including the costs of agreed upon internal and external FTEs involved in such efforts.

“R&D Efforts” shall mean any and all activities within the Territory related to any Product Improvement, and any agreed clinical or pre-clinical study, process development or process improvement, regulatory filings or maintenance, pharmacovigilance, pharmacoeconomic studies, investigator-initiated grant studies or any other agreed research and development associated with the development or marketing of any Product conducted in accordance with the terms of this Agreement.

“R&D Leaders” shall mean the persons described in Schedule III(A)(2)(c).

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“R&D Loss of Exclusivity” shall mean either an R&D Potential Loss of Exclusivity or an R&D Actual Loss of Exclusivity.

“R&D Potential Loss of Exclusivity” shall mean any event that a party determines in good faith could reasonably be expected to result in a material adverse effect on the global Net Outside Sales of the Product.

“Representative” shall mean an individual (i) employed and trained by P&G or API or (ii) employed by a non-Affiliate third party or self-employed and trained by P&G or API, in either case, to make presentations about the Product to physicians, residents and other persons legally permitted to prescribe prescription drugs and/or to other persons who influence the sale of prescription pharmaceutical products, including, without limitation, pharmacists and appropriate employees of managed care organizations.

“Research & Development Committee” (“R&D Committee”) shall mean the committee described in Schedule III(A)(2)(c).

“Requesting Party” shall have the meaning set forth in Section XVII(J)(1).

“Responsible Party” shall have the meaning(s) set forth in Section XII(D)(1) and Section XII(G)(1).

“Risedronate” shall mean 2-(3-pyridyl)-hydroxyethane-1,1-bisphosphonic acid, and any pharmaceutically acceptable salt or ester thereof.

“Rules” shall have the meaning set forth in Section XVI(B)(1).

“Sales Adjustment Factor” (“SAF”) shall mean the ratio of the actual Net Outside Sales of the Product in a particular country during any semi-annual period to the Sales Objective in a particular country during any semi-annual period. If a SAF is greater than 1.0, it shall be set at 1.0.

“Sales Objective” (“SO”) shall mean, with respect to a particular country in a semi-annual period, the forecast level of Net Outside Sales of the Product, as agreed to by both parties.

“Secondary Converted Co-Promotion Marketing Costs” (“SCCPMC”) shall have the meaning set forth in Section VII(C)(2).

“Secondary Converted Co-Promotion Service Mark Up” (“SCCPSMU”) shall have the meaning set forth in Section VII(C)(2).

“Secondary Converted Co-Promotion Territory” shall mean all countries formerly within the Potential Co-Promotion Territory with respect to which P&G has elected to convert the rights and obligations of the parties pursuant to Sections VII(A) and (C).

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“Secondary Co-Promotion Marketing Costs” (“SCPMC”) shall have the meaning set forth in Section IVa(F).

“Secondary Co-Promotion Minimum Marketing Spend” shall mean, for each country in the Secondary Co-Promotion Territory, an amount equal to the spending levels for each such country as set forth in Schedule I-K, as such amounts may be adjusted pursuant to the Budgetary CPI Adjustment; provided, however, that such minimum commitments will be renegotiated as required pursuant to Section III(J).

“Secondary Co-Promotion Service Mark Up” (“SCPSMU”) shall have the meaning set forth in Section IVa(F).

“Secondary Co-Promotion Territory” shall mean an area which consists of (i) at the A&R Agreement Effective Date, the United Kingdom and the Republic of Ireland, (ii) the Expansion Countries which may become part of the Secondary Co-Promotion Territory in accordance with Section IVa(K), and (iii) all countries formerly within the Co-Marketing Territory with respect to which P&G has revised the rights and obligations of the parties pursuant to Section VII(E).

“Secondary Product” shall mean a bisphosphonate pharmaceutical product other than the Product.

“Second Extension Option” shall mean the extension of the Term by API pursuant to Section XVII(A)(3).

“Second Option Period” shall have the meaning set forth in Section XVII(A)(3).

“Spot Rate” shall have the meaning set forth in Section XXV(D).

“SOV Levels” shall mean detailing share of voice levels, measured and established for each country using IMS data or the equivalent.

“Sub-Licenses” shall have the meaning set forth in Section X(A).

“Supply Agreement” shall mean the Supply Agreement between Procter & Gamble Pharmaceuticals, Inc. and API (as successor in interest in Hoechst Marion Roussel Aktiengesellschaft) dated June 15, 1998, as amended by the parties to such agreement.

“Term” shall mean the period beginning on the Original Agreement Effective Date and ending on termination of this Agreement pursuant to Article XVII.

“Terminating Party” shall have the meaning set forth in Section XVII(C)(1).

“Territory” shall mean an area which consists of all countries in the world, except Japan. The Territory shall be divided initially into smaller areas: the Co-Promotion Territory, the Secondary Co-Promotion Territory, the Co-Marketing Territory, the Potential Co-

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Promotion Territory and the White Space Territory and, pursuant to Article VII, may be further divided to also include the Primary Converted Co-Promotion Territory and Secondary Converted Co-Promotion Territory and the Converted Co-Marketing Territory. Each such smaller area may be referred to in the Collaboration Agreement Documents as a “Sub-Territory.”

“Threshold Amount” shall mean, with respect to any four Quarter rolling period, ***** as adjusted on a monthly basis pursuant to the US Consumer Price Index for all Urban Consumers published by the Bureau of Labor Statistics (or nearest equivalent) beginning as of December 1, 1996, and continuing during the Term. Notwithstanding the foregoing, effective as of January 1, 2005, the Threshold Amount will be increased by *****, provided that for the purposes of calculating the Bonus pursuant to Schedule II(B) for the Quarter ending December 31, 2004, the foregoing increase shall not apply. The operation of the calculations set forth in this definition is demonstrated by the examples set forth in Schedule I-G.

“Total Net Outside Sales” shall mean the sum of all Net Outside Sales in the Territory.

“Trademark Expenses” shall mean the reasonable external out-of-pocket expenses of applying for, maintaining, enforcing and defending any trademark related to a Product.

“USA” or “US” shall mean the United States of America.

“USD” shall mean US Dollars, the lawful currency of the USA.

“USFDA” shall mean the Food and Drug Administration of the USA.

“Valid Claim” shall mean any claim in an unexpired API Patent, P&G Patent or other patent or patent application owned or controlled by a party to this Agreement or any of its Affiliates which claim has not been held unpatentable, unenforceable, or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through disclaimer by the patenting party.

“White Space Territory” shall mean an area, which area consists of all countries within the Territory which are not within the Co-Promotion Territory, the Secondary Co-Promotion Territory, the Co-Marketing Territory, the Potential Co-Promotion Territory, the Primary or Secondary Converted Co-Promotion Territories or the Converted Co-Marketing Territory.

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ARTICLE II

COMPENSATION

A. Milestone Payments to P&G. Subject to the terms and conditions of the Original Agreement, HMR shall pay the following non-refundable milestone payments, totaling in the aggregate *****:

1. First Milestone Payment. On the Original Agreement Effective Date, HMR shall pay to P&G *****.

2. Second Milestone Payment. HMR shall pay to P&G ***** on the earlier of (1) June 30, 1998, provided that at such date P&G continues to support the effort to gain approval of an NDA or supplemental NDA for the Product for PMO, or (2) the date on which the NDA or supplemental NDA for the Product with an indication for PMO is accepted for filing by the USFDA (such date shall be referred to as the “Second Milestone Date”), such payment to be made within seven (7) Business Days after the Second Milestone Date.

3. Third Milestone Payment. HMR shall pay to P&G ***** within seven (7) Business Days after the approval by the USFDA of an NDA or supplemental NDA for the Product with an indication for PMO.

4. Osteoarthritis Payment. By May 27, 1999, HMR agrees to pay P&G a non-refundable payment of *****.

B. Global Payment. In compensation for the monies and effort expended and to be expended by API in performance of its obligations hereunder, P&G shall, once for each Quarter during the Term, pay to API a global reimbursement payment calculated as set forth in Schedule II(B). If for any Quarter, the calculation of the global reimbursement payment under Schedule II(B) results in a deficit amount, API shall pay to P&G an amount equal to such deficit. Payments under this section shall be made within sixty (60) days of the end of the relevant Quarter.

ARTICLE III

OVERALL COLLABORATION STRUCTURE

A. Alliance Management Structure.

1. Principles. The parties wish to establish an effective and efficient management coordination system so as to optimize the long term global profitability of the Products. The parties have agreed that the oversight and management structures established by the parties should facilitate quick decision-making and issue resolution, that work in the alliance management structure should be organized and carried out around business needs, not functional grouping and that work should be done at the most efficient geographic and organizational level possible. The parties have also agreed that the alliance management structure should facilitate maximum allowable collaboration between the parties to achieve these

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goals, yet cause as little disruption as possible to the organizational structures of the parties and their Affiliates.

2. Committees. The parties have agreed to establish certain committees within the alliance management structure to assist in achieving the parties’ goals for the alliance. The parties shall establish and maintain an Oversight Committee, the functions, composition, meeting requirements, decision-making authority and record keeping requirements for which are set forth in Schedule III(A)(2)(a). The parties shall establish an Alliance Management Committee, the functions, composition, meeting requirements, decision-making authority and record keeping requirements for which are set forth in Schedule III(A)(2)(b). The parties shall establish a Research & Development Committee, the functions, composition, meeting requirements, decision-making authority and record keeping requirements for which are set forth in Schedule III(A)(2)(c). The parties shall establish a Global Commercial Steering Team, the functions, composition, meeting requirements, decision-making authority and record keeping requirements for which are set forth on Schedule III(A)(2)(d).

3. Alliance General Managers. Each company will appoint one experienced cross functional business manager to become the party’s Alliance General Manager. A party’s Alliance General Manager shall be accountable to the Oversight Committee and the Alliance Management Committee for creating and maintaining a collaborative work environment between the parties. Each party’s Alliance General Manager shall have the following responsibilities:

a. To lead execution work assigned by the Alliance Management Committee to the global level and to serve as the single unifying element in the organization of each party to ensure global consistency and simplification as appropriate in work assigned to the respective regions or countries within the regions; and

b. To coordinate the various functional representatives developing and executing global strategies and plans for the Product in the Territory; and

c. To interface as appropriate with the P&G development team responsible for obtaining Health Registrations in North America and the European Union for the Product; and

d. To provide single-point leadership for generating consensus both internally within their respective party’s organizations and externally across party lines regarding key global strategy and plan issues; and

e. To ensure the ability for rapid decision making regarding the execution of strategies and plans approved by the Alliance Management Committee to avoid the need for excessive Alliance Management Committee meetings and input; and

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f. To identify and raise cross company, cross region and/or cross function disputes to the Alliance Management Committee and (if needed) the Oversight Committee Leaders; and

g. To plan and coordinate both: (i) efforts aimed at establishing and maintaining the functionality of the alliance; and (ii) internal and external communications relating to the alliance, including conducting an annual audit of alliance functionality.

B. Conduct of Work. The Alliance Management Committee shall review and assign all work that needs to be completed to ensure a successful commercialization of the Product consistent with the parties’ purposes. The parties expect that much of the strategy and planning work on Products can be completed on a global or regional level and that the country organizations will be primarily responsible for tailoring and deploying global and regional plans. The Alliance Management Committee and the Alliance General Managers shall be responsible for structuring global work within the parties’ organizations as well as reviewing and approving work done at a global level. The region Presidents/Vice Presidents shall be responsible for reviewing, approving, structuring and delegating work assigned to their respective region, and country general managers shall be responsible for reviewing, approving, structuring and delegating work assigned to their respective countries. The Alliance General Managers shall also review work done at the regional level to ensure global consistency and simplification as is appropriate. The region Presidents/Vice Presidents shall also review work done at the country level to ensure regional consistency and simplification as is appropriate. The Alliance General Managers shall also facilitate communications between and among the regions and will serve as a resource for the regions.

1. Budgets and Forecasts. Formal budgets and forecasts will be developed annually at each geographic level for work to be performed in the following Contract Year, and these annual budgets and forecasts will be agreed in writing no later than October 31 of the then current Contract Year; provided, however, that the annual budget and forecast for Contract Year 2005 will be agreed in writing no later than November 15, 2004. In the event that such budgets and forecasts have not been completed and approved by December 1 of the then current Contract Year, such budgets and forecasts will be referred to the Oversight Committee which will meet as necessary to resolve any differences and finalize such budgets and forecasts by December 31 of the then current Contract Year. Each such budget and forecast will also include projections for the six-month period following the end of the Contract Year in question and contain sufficient detail for three six-month periods to allow the parties’ Finance organizations to develop pro-forma budgets and forecasts to accommodate both companies’ planning processes. Each party’s internal planning process should include the most current input from the joint profit and expense outlooks. The Alliance General Managers and the Alliance Management Committee shall approve budgets and forecasts at the global level; region Presidents/Vice Presidents shall approve budgets and

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forecasts delegated to the region level and country general managers shall approve budgets and forecasts delegated to the country level. The Alliance Management Committee shall also approve any budgets and forecasts delegated to the region level to the extent such budgets and forecasts have global impact; the region Presidents/Vice Presidents shall also approve any budgets and forecasts delegated to the country level to the extent such budgets and forecasts have regional impact. Only payments made or obligations incurred pursuant to budgets and forecasts approved at the appropriate level(s) shall be reimbursable.

2. Profit and Expense Reporting. The Alliance General Managers will develop a global Net Outside Sales forecast each month and a formal profit and expense outlook each six-month period. Formal changes to such profit and expense outlook recommended by the country general managers or region Presidents/Vice Presidents will be collected by the Alliance General Managers and reviewed and approved on a six-month basis by the Alliance Management Committee.

3. Long Term Joint Forecast. To further the parties’ objective of guiding investment choices and developing business strategies, the parties will cooperate to develop a joint forecast for the remaining period of the Term, taking into account sales, spending, costs, pricing, Product Improvements, Studies, competitive impacts, life cycle management and the matters covered by the budgets and forecasts described in Section III(B)(1), in each case by party, country and Product dosage and route of delivery as agreed by the Alliance General Managers (the “Joint Forecast”). The initial Joint Forecast will be finalized by November 1, 2005, and thereafter will be updated annually by agreement of the parties no later than October 31 of each year, it being understood that drafts of the Joint Forecast will be prepared for review and comment no later than September 30 of each year. Additionally, as soon as practicable after the A&R Agreement Effective Date, the parties will prepare an interim Joint Forecast for use by the parties from the A&R Agreement Effective Date until November 1, 2005. In the event that the Joint Forecast has not been completed by December 1 of any year, the Joint Forecast will be referred to the Oversight Committee which will convene a special meeting to resolve any differences between the parties and finalize the Joint Forecast by December 31 of such year, it being understood that agreement by the parties on the Joint Forecasts need only be achieved in the countries of the Co-Promotion Territory and the Secondary Co-Promotion Territory, and in all other countries the Joint Forecasts are only submitted to the other party for review and comment but not approval.

C. Costs and Expenses of Alliance Management. Other than as specifically set forth in this Agreement or the other Collaboration Agreement Documents, each party shall bear its own costs and expenses of maintaining the members of the Oversight Committee, the Alliance Management Committee and the Research & Development Committee appointed by it, including, without limitation, the costs and expenses of salaries, benefits and travel. Except as set forth in note 4 of Schedule II(B), all costs and expenses to be shared by the parties pursuant to this Agreement must be expenses incurred on a basis

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consistent with United Stated generally accepted accounting principles. Each invoice required to be provided to a party hereunder will be accompanied by appropriate and necessary supporting documentation.

D. Management of Product Improvements.

1. Task Forces. The GCS Team and/or the Research & Development Committee can create a task force to study the technical and commercial feasibility of any potential Product Improvement that it deems to be worthy of further consideration. If the task force agrees that there is merit for proceeding with development of the proposed Product Improvement, then the task force shall forward a formal written recommendation to the GCS Team and the Research & Development Committee that outlines the technical and commercial basis for development and the development plan and resource needs. If the GCS Team, in consultation with the Research & Development Committee, agrees that a project has potential scientific and commercial merit, a recommendation to pursue such Product Improvement will be forwarded to the Alliance Management Committee.

2. Development Teams. If the Alliance Management Committee agrees that a Product Improvement opportunity warrants further development and commercialization as a Joint Product Improvement, and subject to the provisions of Article XVIII, then the Research & Development Committee shall form a single development team with minimal duplicate resources to plan and execute the development and registration work.

3. Project Leaders. Each party shall appoint a project leader (who shall have a research and development background) to lead the single development team to ensure each party fully supports the overall development strategies and plan. These project leaders shall report to that member of the party’s Alliance Management Committee team responsible for research and development or an appropriate alternate, who is responsible for providing periodic updates on Product Improvements to the Alliance Management Committee and who will coordinate Alliance Management Committee reviews of each Joint Product Improvement at agreed to decision points.

E. Costs and Expenses of Studies. The R&D Costs of all P&G Studies, all R&D Costs related to R&D Efforts utilized exclusively by P&G in the Co-Marketing Territory or Converted Co-Marketing Territory and all R&D Costs related to any P&G Product Improvement shall be borne by P&G (such R&D Efforts, “P&G R&D Efforts,” and such R&D Costs, “P&G R&D Costs”). The R&D Costs of all API Studies, all R&D Costs related to R&D Efforts utilized exclusively by API in any Co-Marketing Territory, Converted Co-Marketing Territory, Potential Co-Promotion Territory, Primary Converted Co-Promotion Territory or White Space Territory and all R&D Costs related to any API Product Improvement shall be borne by API (such R&D Efforts, “API R&D Efforts,” and such R&D Costs, “API R&D Costs”). The R&D Costs of all Joint Studies, all R&D Costs related to Joint Product Improvements and all other R&D Efforts other

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than those set forth in the two immediately preceding sentences (such R&D Efforts, “Joint R&D Efforts,” and such R&D Costs, “Joint R&D Costs”) shall be borne equally by the parties on a global or local basis, as appropriate.

1. P&G Studies. As used herein, “P&G Studies” are the following:

a. the non-clinical and clinical studies set forth on Schedule III(E) (hereinafter “Listed Studies”); and

b. any non-clinical or clinical studies with respect to the Product which are utilized exclusively by P&G in any Co-Marketing Territory or Converted Co-Marketing Territory.

2. API Studies. As used herein, “API Studies” are any non-clinical or clinical studies with respect to the Product, other than P&G Studies, utilized exclusively by API in the Co-Marketing Territory, Converted Co-Marketing Territory, Potential Co-Promotion Territory, Primary Converted Co-Promotion Territory or White Space Territory.

3. Joint Studies. As used herein, “Joint Studies” are any non-clinical or clinical studies with respect to the Product which are conducted by or for P&G and API other than P&G Studies or API Studies.

4. Other Studies. Subject to Section XVIII(C), (a) P&G shall bear the cost and expense of any non-clinical or clinical studies with respect to any P&G Product Improvement or OTC Product which studies are conducted by or for P&G and which are not otherwise P&G Studies or Joint Studies, and (b) API shall bear the cost and expense of any non-clinical or clinical studies with respect to any API Product Improvement which studies are conducted by or for API and which are not otherwise Joint Studies.

5. Use of Studies. Once a study is completed and placed into the Drug Dossier, either party and/or both parties may use that study without further compensation. The parties shall work together to ensure that the use of any study will not jeopardize the publication plans for such study.

6. Review and Approval of R&D Efforts. All study protocols and other R&D Efforts involving the Product must be reviewed and approved by the Research & Development Committee pursuant to Schedule III(A)(2)(c).

F. Labeling. The Research & Development Committee shall have responsibility for determining all Product labeling, including, specifically, responsibility for maintaining consistency of Product labeling within the Territory. Neither party, nor any Affiliate or sublicensee or subdistributor, shall in any way commercialize any Product within the Territory using labeling other than labeling approved by the Research & Development Committee.

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G. Research & Development.

1. Four Year R&D Plan. Without limiting Section III(B)(1), as promptly as practicable after the A&R Agreement Effective Date, and in any case no later than December 31, 2004, the parties will use their reasonable best efforts to develop and agree to a rolling four-year research and development plan and budget, updated annually (the “Four Year R&D Plan”) for global annual research and development spending. The initial Four Year R&D Plan will cover the period from January 1, 2005 through December 31, 2008. The initial Four Year R&D Plan will consist of those life cycle management programs set forth on Schedule III(G)(1) (the “Current Programs”) and life cycle management programs foreseen at the time of the development of such Four Year R&D Plan (the “Future Programs” and, together with the Current Programs, the “Life Cycle Programs”). All Current Programs will remain funded as set forth on Schedule III(G)(1).

2. Modifications. Except as set forth in Section XVIII or in this Section III(G)(2), neither party shall terminate any ongoing Life Cycle Program or amend any Four Year R&D Plan, in each case that is approved in connection with the budget and forecast process described in Section III(B)(1), without the consent of the other party. Notwithstanding the foregoing, if either party in good faith believes that a significant safety concern relating to a Life Cycle Program exists and the other party does not consent to a termination of such Life Cycle Program in connection therewith, then the parties will within five (5) Business Days agree upon and appoint a non-Affiliate third party that is familiar with medical safety issues in the pharmaceutical industry (an “Industry Expert”) or, if the parties cannot so agree on one Industry Expert, each party will designate its own Industry Expert and such Industry Experts will jointly appoint a third Industry Expert within five (5) Business Days. The Industry Expert appointed pursuant to the preceding sentence will resolve the dispute within five (5) Business Days of their appointment.

3. Oncology Programs. Notwithstanding any other provision hereof, unless otherwise agreed by the parties, after the A&R Agreement Effective Date, API will continue to be responsible for leading the execution of research and development programs existing as of the A&R Agreement Effective Date in the oncology field pursuant to the Four Year R&D Plan.

4. R&D FTEs and Joint R&D Costs.

a. Following the determination described in the first sentence of Section III(G)(4)(b), the parties will determine the scope of work to be performed by internal resources and the number of FTEs required to perform such work. Based on such determination, the Research & Development Committee will in good faith determine the most efficient division of FTEs between P&G, API and non-Affiliate third parties and recommend such determination to the Alliance Management Committee for approval;

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provided, however, that each party may, at its option, perform up to fifty percent (50%) of the work to be performed in connection with research and development programs for the Product using its internal FTEs. The Alliance General Managers or other managers who commission Joint Studies, Joint Product Improvements or other research and development programs are authorized to reimburse a party in the event a party has a higher number of FTEs than the other party in respect of research and development programs for the Product. In furtherance of the foregoing, the parties will on a semi-annual basis be compensated and reimbursed for differences in FTE commitments agreed to in advance in the annual R&D Plan, taking into consideration any adjustments to such FTE commitments as a result of an amendment to an R&D Plan pursuant to Section III(G)(2). In furtherance of the foregoing, the party having the lower number of research and development FTEs shall pay to the other party an amount equal to fifty percent (50%) of the difference between the number of research and development FTEs provided by each party. Any such amounts shall be paid in USD no later than sixty (60) days following the expiration of the relevant semi-annual period.

b. Prior to either party incurring any Joint R&D Costs, the parties will establish and agree to appropriate levels of support for such Joint R&D Efforts. Except as otherwise provided in this Agreement and as specifically set forth in the first two sentences of Section III(E), all Joint R&D Costs will be shared equally by the parties. In furtherance of the foregoing, the party incurring the lesser amount of Joint R&D Costs in any Quarter shall make a payment to the other party in an amount such that the parties will then each have borne fifty percent (50%) of the Joint R&D Costs in such Quarter. Any such amounts shall be paid in USD no later than sixty (60) days following the expiration of the relevant Quarterly period.

5. R&D Commitments. In the event that one of the parties notifies the other party that it has reasonably determined that an R&D Loss of Exclusivity has occurred, the parties will discuss in good faith to determine whether it is advisable to reduce or otherwise modify the parties’ research and development obligations and commitments pursuant to Sections III(G)(1), IV(C)(4), IV(C)(5), IVa(C)(4) and IVa(C)(5) (collectively, the “R&D Commitments”). In the event that the parties cannot agree to any such reductions or modifications within thirty (30) days of the applicable notice, then (i) in the case of an R&D Potential Loss of Exclusivity, the then current R&D Commitments shall remain in effect in accordance with the terms of this Agreement or (ii) in the case of an R&D Actual Loss of Exclusivity, the then current R&D Commitments shall no longer apply and the parties will have no minimum research and development commitments for the remainder of the Term.

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6. Principles. For research and development purposes, in order to efficiently capitalize on the capabilities, expertise, and scale offered by each party, the alliance should be empowered to draw upon the available skills and resources of each party, with quality, timing and efficiency being the primary concerns and, subject to the terms of this Agreement, without the artificial constraint of trying to equalize effort across the parties.

H. Regulatory Decision-Making. Except as provided elsewhere in this Agreement, any disputes under this Agreement or any other Collaboration Agreement Document relating to any interaction with regulatory authorities in the Co-Promotion Territory or regulatory decision-making in connection therewith that a party reasonably determines in good faith could have a material adverse effect on the Product on a global basis may, at either party’s election, be immediately referred to the Oversight Committee, and each party will use best efforts to resolve any such issue within five (5) Business Days of such referral.

I. Employees. Both parties will assign high performing, highly rated employees to the development and commercialization efforts undertaken pursuant to this Agreement, consistent with such party’s practice for their other brands of similar commercial potential. Subject to reasonable career development requirements, each party will use its commercially reasonable efforts to ensure (a) that key employees working on the matters covered by this Agreement are maintained in their positions as long as practicable in such a manner so as to establish and maintain continuity and (b) that transition periods are adequate when such key employees no longer are available to work on such matters to ensure that the development and commercialization efforts undertaken pursuant to this Agreement are not significantly disrupted. To facilitate decision-making on brand strategies, plans, budgets, forecasts and executional responsibilities in Europe, each party will appoint and empower, or cause to be appointed and empowered, a single senior marketing manager, medical affairs manager and finance manager, each with authority and responsibility for Product for such party for the countries of the Co-Promotion Territory and Secondary Co-Promotion Territory in the European Union.

J. Promotional Commitments. In the event that one of the parties notifies the other party that it has reasonably determined that a Promotional Loss of Exclusivity has occurred in a given country, the parties will negotiate in good faith to determine whether it is advisable to reduce or otherwise modify the parties’ then current obligations and commitments to undertake Promotional Efforts or Marketing Efforts in the applicable country in the Co-Promotion Territory or Secondary Co-Promotion Territory pursuant to Sections IV(B)(4), IV(B)(7), IV(B)(9), IV(C)(2), IVa(B)(4), IVa(B)(7), IVa(B)(9) or IVa(C)(2) (collectively, the “Non-R&D Promotional Commitments”). In the event that the parties cannot mutually agree in good faith to any such reductions or modifications within thirty (30) days of the applicable notice, then (i) in the case of a Promotional Potential Loss of Exclusivity, the then current Promotional Commitments for such country shall remain in effect in accordance with the terms of this Agreement or (ii) in the case of a Promotional Actual Loss of Exclusivity, the then current Non-R&D Promotional Commitments for such country shall no longer apply and the parties will have no minimum Promotional Efforts or Marketing Efforts with respect to such country for the remainder of the Term.

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Without limiting the foregoing or any other provision hereof, for the two-year period ending on the expiration of the Term (as it may be extended pursuant to Section XVII(A)), the parties shall have no obligation to commit to minimum spending levels in respect of Promotional Efforts or Marketing Efforts in the Co-Promotion Territory or the Secondary Co-Promotion Territory, including without limitation pursuant to the Co-Promotion Minimum Marketing Spend or the Secondary Co-Promotion Minimum Marketing Spend.

K. Global Efforts. To support the marketing and development of Products across regions, the parties will develop global strategies and plans. Prior to the beginning of each Contract Year, the parties will establish each party’s obligation, if any, to undertake Marketing Efforts at the global level during such Contract Year, and a forecast of such efforts for the first six months of the subsequent Contract Year (i.e., from January of the Contract Year through June of the following Contract Year). Such Marketing Efforts data will be broken down in six month increments and will be approved by the Alliance Management Committee. The parties will ***** all pre-agreed Commercial Expenses associated with global Marketing Efforts. If the actual expenses and costs of one party incurred in conjunction with the agreed upon Marketing Efforts in a Contract Year exceeds the expenses and costs of the other party incurred in conjunction with the agreed upon Marketing Efforts, the other party will refund ***** of the difference as part of the global reimbursement payment pursuant to Section II(B); provided, however, any costs and expenses in excess of the pre-agreed budget for Commercial Expenses shall not be included in such reimbursement unless otherwise agreed in advance by the parties.

L. 2004 Efforts. Notwithstanding any other provision hereof, the R&D Efforts, Marketing Efforts and Promotion Efforts relating to the 2004 Contract Year that have been budgeted, planned and agreed to by the parties prior to the A&R Agreement Effective Date will remain the obligations in effect with respect thereto for such Contract Year

ARTICLE IV

CO-PROMOTION TERRITORY

With respect to the Co-Promotion Territory, the parties shall have the rights and obligations set forth in this Article IV.

A. Rights and Obligations of the Parties.

1. P&G hereby grants API the right to market, promote and detail Product in the Co-Promotion Territory. The rights granted to API pursuant to this Section IV(A)(1) shall terminate at the end of the Term.

2. API shall not sell, assign or otherwise transfer or grant to any non-Affiliate third party any or all of its rights or obligations regarding Product in the Co-Promotion Territory, other than as explicitly stated in the Collaboration Agreement Documents.

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3. P&G shall not grant any right to a non-Affiliate third party to market, promote or detail Product in the Co-Promotion Territory without the prior written consent of API. This Section IV(A)(3) shall not prohibit P&G from entering into arrangements with non-Affiliate third parties to physically distribute Products (for example, warehousing, order taking, invoicing and the like).

4. Each party shall use commercially reasonable efforts, at least equivalent to efforts used by the party with respect to other of its products of equivalent commercial value, to market, promote and detail the Product in the Co-Promotion Territory and P&G shall use such efforts to distribute and sell the Product in the Co-Promotion Territory in accordance with the terms and conditions of the Collaboration Agreement Documents.

B. Promotion Efforts. The parties shall have the obligations to undertake Promotion Efforts as set forth in this Section IV(B).

1. [Reserved].

2. Contract Years. Prior to the beginning of each Contract Year, the parties shall, on an annual basis, establish each party’s obligation, if any, to undertake Promotion Efforts within each country within the Co-Promotion Territory during the next Contract Year and a forecast of such efforts for the first six (6) months of the subsequent Contract Year in accordance with Section III(B)(1).

3. Considerations for Determining Promotion Efforts. In determining each party’s obligation to undertake Promotion Efforts within each country within the Co-Promotion Territory, the parties shall take into account the parties’ goal of maximizing sales and profits of the Product within the Co-Promotion Territory.

4. Obligation to Undertake Promotion Efforts. To establish each party’s obligations to undertake Promotion Efforts, the parties shall specify for each country in the Co-Promotion Territory for each semi-annual period an Alliance Detail Objective for both parties, a Sales Objective, a Primary Detail Cost, a Detail Commitment for each party and Non-Detailing Promotion Efforts for each party; provided, however, that in determining the Alliance Detail Objective, the parties will in good faith attempt to agree to target SOV Levels for each country that are (a) substantially competitive to the SOV Levels for the market-leading product most similar to the Product, without giving effect to temporary or unreasonable variations of such SOV Levels, and (b) consistent with the parties’ goal of maximizing sales and profits of the Product within the Co-Promotion Territory; provided, however that in the event the parties cannot agree for any country upon such target SOV Levels or cannot otherwise agree on the Alliance Detail Objective for such country, then the sum of the Alliance Detail Objectives for such country for the two semi-annual periods within a given Contract Year will equal at least ***** of the budgeted Detailing Efforts for

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Contract Year 2004, as set forth in Schedule IV(B)(4). In the event that the parties agree upon the Alliance Detail Objective, each party’s Detail Commitment shall be at least ***** of the agreed upon Alliance Detail Objective; in the event the parties do not agree on the Alliance Detail Objective, then the sum of each party’s Detail Commitment for the two semi-annual periods within a given Contract Year shall be at least ***** of the budgeted Detailing Efforts for Contract Year 2004, as set forth in Schedule IV(B)(4). During the relevant semi-annual period, each party shall use commercially reasonable efforts to undertake Promotion Efforts within the applicable area, as established by the parties. Either party may engage Contract Representatives to fulfill up to ***** of the Detailing Commitment for such party within such country during any semi-annual period. The other party must first consent to the identity of the Contract Representatives to be engaged, which consent shall not be unreasonably withheld. Any party which engages Contract Representatives shall, at its own expense, provide adequate training with respect to the Product to the Contract Representatives, and, any Contract Representatives engaged by either party to fulfill Detailing Efforts in excess of ***** of such party’s Detailing Commitment must be Fully Dedicated Contract Representatives. All Promotion Efforts shall be performed in accordance with approved labeling and all applicable laws and regulations in the relevant country. While undertaking Promotion Efforts, Representatives may distribute samples and promotional materials for the Product to physicians, residents and others legally entitled to prescribe prescription drugs. Representatives shall distribute only promotional materials approved by the parties for each country. The quantity of samples of the Product and promotional materials to be provided to the Representatives of each party shall be determined by the parties consistent with each party’s obligations to undertake Promotion Efforts.

5. Handling of Samples. Sampling will be conducted in accordance with applicable laws and regulations, including, without limitation, with respect to Product samples to be distributed within the USA, the PDMA. The parties’ Affiliates in each country of the Co-Promotion Territory shall agree on procedures for handling Product samples in such country, which procedures shall include tracking samples in each such country and the exchange between the parties’ Affiliates of reports covering Product sampling activities. Each P&G and API Affiliate shall also make available to the other party’s Affiliate in its country such original documentation concerning sampling activities as the other may need for compliance with applicable laws and regulations, including, without limitation, with respect to Product samples to be distributed in the USA, the PDMA.

6. Tracking Detailing Efforts. Each P&G Affiliate and API Affiliate in the Co-Promotion Territory shall keep track of the number and priority of targeted and non-targeted Details performed by their Representatives and by their Contract Representatives, if applicable, in accordance with their normal internal reporting procedures. Within thirty (30) days after the last day of each semi-annual period,

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each party’s Affiliate shall calculate their Actual Detailing Effort or ADE based upon actual Details performed as reflected in their respective internal selling records, and report to the other party’s Affiliate the number and priority of Details performed by its Representatives and Contract Representatives, if applicable, for such semi-annual period.

7. Detailing Efforts. In each country of the Co-Promotion Territory in each semi-annual period during the Term, P&G’s Affiliate shall, unless otherwise agreed by the Alliance Management Committee, purchase from API’s Affiliate in such country, and such API Affiliate shall provide to P&G’s Affiliate, API’s Detailing Efforts in such country; provided, however, such purchase and sale of Detailing Efforts shall not be considered in the calculation of P&G’s or API’s ADE for purposes of Section IV(B)(8). Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IV(F). Each party’s Affiliate has the right, but not the obligation, to perform the greater of (1) ***** of the required Detailing Efforts in a particular country and (2) the difference between *****. Each P&G Affiliate and API Affiliate in the Co-Promotion Territory shall keep track of the costs and expenses for Detailing Efforts incurred by such Affiliate. Within thirty (30) days after the last day of each semi-annual period, each Affiliate shall report to the other party’s Affiliate in such country the costs and expenses for such Affiliate’s Detailing Efforts for such semi-annual period and each API Affiliate shall invoice the P&G Affiliate in its country for, and each P&G Affiliate shall pay the API Affiliate in its country for, such costs and expenses, plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable. The operation of the calculations set forth in this Section IV(B)(7) is demonstrated by the examples set forth in Schedule IV(B)(7). Any amounts owed pursuant to this Section IV(B)(7) shall be paid pursuant to the applicable Marketing Services Agreement.

8. Under Performance of Detailing Efforts. The Marketing Services Agreement agreed between each party’s Affiliate in each country of the Co-Promotion Territory shall include (but shall not be limited to) the following terms and conditions:

a. If a party’s Affiliate’s Detail Adjustment Factor or DAF with respect to a semi-annual period in a country is:

1) greater than or equal to *****, then that party’s Affiliate shall not be obligated to pay to the other party’s Affiliate any amounts under this Section IV(B)(8); or

2) less than ***** and less than the other party’s Affiliate’s DAF in such country for such semi-annual period, then that party’s Affiliate shall be obligated to pay to the other party’s Affiliate an amount equal to the

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applicable Primary Detail Cost (for employee Representatives) multiplied by ***** as calculated pursuant to the following formula:

Penalty Amount = (Primary Detail Cost)* *****

3) less than ***** but greater than the other party’s Affiliate’s DAF in such country for such semi-annual period, then that party’s Affiliate shall be obligated to pay to the other party’s Affiliate an amount equal to the applicable Primary Detail Cost (for employee Representatives) multiplied by *****, as calculated pursuant to the following formula:

Penalty Amount = (Primary Detail Cost) * *****

b. The operation of the calculations set forth in this Section IV(B)(8) are demonstrated by the examples set forth in Schedule IV(B)(8). Any amounts owed pursuant to this Section IV(B)(8) shall be paid pursuant to the requirements of the applicable Marketing Services Agreement and Section IV(B)(10).

c. If a party’s Affiliate’s DAF in any country in the Co-Promotion Territory with respect to a semi-annual period is less than *****, and that party’s Affiliate’s DAF has been less than ***** for any other semi-annual period in the preceding three (3) semi-annual periods, then the other party’s Affiliate may refer the matter to arbitration under Section XVI(B)(2) for consideration of the issue of breach or material breach.

9. Non-Detailing Promotion Effort. In each country of the Co-Promotion Territory during the Term, P&G’s Affiliate in such country shall, unless otherwise agreed by the Alliance Management Committee, purchase from API’s Affiliate in such country, and such API Affiliate shall provide to P&G’s Affiliate in such country, Non-Detailing Promotion Effort. Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IV(F). The parties will establish and agree to appropriate levels of Non-Detailing Promotion Effort for each semi-annual period. Valuation of Non-Detailing Promotion Effort in a country shall be in terms of the number of Full Time Equivalents. Each party’s Affiliate has the right, but not the obligation, to perform ***** of the required Non-Detailing Promotion Effort in a particular country. Each P&G and API Affiliate in the Co-Promotion Territory shall keep track of the costs and expenses for Non-Detailing Promotion Efforts incurred by such Affiliate. Within thirty (30) days after the last

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day of each Quarter, each Affiliate shall report to the other party’s Affiliate in such country the costs and expenses for Non-Detailing Promotion Efforts incurred by such Affiliate for the Quarter and each API Affiliate shall invoice the P&G Affiliate in its country for, and each P&G Affiliate shall pay the API Affiliate in its country for such costs and expenses plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable.

10. Payment Terms. Any amounts payable pursuant to Section IV(B) and/or the Marketing Services Agreements shall be paid in local currency no later than sixty (60) days following the expiration of the relevant Quarter.

C. Marketing Efforts and R&D Efforts.

1. Product Identification. In all countries within the Co-Promotion Territory and to the extent legally permissible, both parties’ names and logos shall appear with equal prominence on Product labels and promotional materials. In any such country where this is not legally permitted, the parties agree to work together in good faith to identify a mechanism to allow the association of both parties’ names with the Product.

2. Obligations to Undertake Marketing Efforts. The parties shall, on a semi-annual basis, set forth in specific terms each party’s Affiliate’s obligation, if any, to undertake Marketing Efforts within each country within the Co-Promotion Territory to be performed during the next Contract Year, and a forecast of such efforts for the first six months of the subsequent Contract Year (i.e., from January of the Contract Year through June of the following Contract Year). During the Term, each party’s Affiliates will spend an amount each Contract Year at least equivalent to the Co-Promotion Minimum Marketing Spend. During each Quarter, each party’s Affiliate in each country of the Co-Promotion Territory shall use commercially reasonable efforts to undertake such Marketing Efforts within each such country. Except as otherwise permitted by this Agreement, no party shall engage any non-Affiliate third party to fulfill its obligations under this Section IV(C)(2) or to undertake any Marketing Efforts without the agreement of the other party.

3. Marketing Effort Costs. In each country of the Co-Promotion Territory during the Term, P&G’s Affiliate in such country shall, unless otherwise agreed by the Alliance Management Committee, purchase from API’s Affiliate in such country, and such API Affiliate shall provide to P&G’s Affiliate in such country, Marketing Efforts. Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IV(F). The parties shall establish and agree to appropriate levels of Marketing Effort for each Quarter. Each P&G and API Affiliate in the Co-Promotion Territory shall keep track of the costs and expenses for Marketing Efforts incurred by such Affiliate. Within thirty (30) days after the last day of each Quarter, each Affiliate shall report to the other party’s Affiliate in such

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country the costs and expenses for Marketing Efforts incurred by such Affiliate for the Quarter and each API Affiliate shall invoice the P&G Affiliate in its country for, and each P&G Affiliate shall pay the API Affiliate in its country for such costs and expenses plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable.

4. Obligations to Undertake Joint R&D Efforts. The parties shall, on a semi-annual basis, set forth in specific terms each party’s Affiliate’s obligation, if any, to undertake Joint R&D Efforts within each country within the Co-Promotion Territory to be performed during the next Contract Year, and a forecast of such efforts for the first six months of the subsequent Contract Year (i.e., from January of the Contract Year through June of the following Contract Year). During each Quarter, each party’s Affiliate in each country of the Co-Promotion Territory shall use commercially reasonable efforts to undertake such Joint R&D Efforts within each such country. Except as otherwise permitted by this Agreement, no party shall engage any non-Affiliate third party to fulfill its obligations under this Section IV(C)(4) or to undertake any Joint R&D Efforts without the agreement of the other party.

5. R&D Efforts and Joint R&D Costs. In each country of the Co-Promotion Territory during the Term, P&G’s Affiliate in such country shall, unless otherwise agreed by the Alliance Management Committee, purchase from API’s Affiliate in such country, and such API Affiliate shall provide to P&G’s Affiliate in such country, Joint R&D Efforts. Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IV(F). The parties shall establish and agree to appropriate levels of Joint R&D Effort for each Quarter. Each P&G Affiliate and API Affiliate in the Co-Promotion Territory shall keep track of the R&D Costs incurred by such Affiliate. Within thirty (30) days after the last day of each Quarter, each Affiliate shall report to the other party’s Affiliate in such country the Joint R&D Costs incurred by such Affiliate for the Quarter and each API Affiliate shall invoice the P&G Affiliate in its country for, and each P&G Affiliate shall pay the API Affiliate in its country for, such Joint R&D Costs plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable.

6. Payment Terms. Any amounts payable pursuant to Section IV(C)(3) or (5) and/or the Marketing Services Agreements shall be paid in local currency no later than sixty (60) days following the expiration of the relevant Quarter.

D. Other Expenses. Other than as specifically set forth in the Collaboration Agreement Documents, each party shall bear its own costs and expenses within the Co-Promotion Territory, including, without limitation, the costs and expenses of salaries, benefits and travel.

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E. Recording of Sales.

1. P&G Obligation. P&G’s Affiliate in each country of the Co-Promotion Territory shall solicit and accept orders for, and ship and invoice sales of, the Product from and to third parties in all countries within the Co-Promotion Territory at prices to be established solely by such Affiliate.

2. Bundled Sales. If the Product is sold or otherwise transferred as part of a package with other products, the Net Outside Sales for such Product shall be the Net Outside Sales applicable to such Product as if sold separately, less the pro-rata amount of any discount associated with the package. The operation of the calculations in this Section IV(E)(2) is demonstrated by the examples set forth in Schedule IV(E)(2).

F. Marketing Services Agreements. Unless the parties agree otherwise, P&G’s Affiliate in each country of the Co-Promotion Territory shall enter into a Marketing Services Agreement with the API Affiliate in such country pursuant to which P&G’s Affiliate shall purchase from API’s Affiliate, and API’s Affiliate shall provide to P&G’s Affiliate, API’s Affiliate’s Detailing Efforts (pursuant to Section IV(B)(7) hereof), Non-Detailing Promotion Efforts (pursuant to Section IV(B)(9) hereof), Marketing Efforts (pursuant to Section IV(C)(3) hereof) and Joint R&D Efforts (pursuant to Section IV(C)(5) hereof). For each Quarter during the Term, the total cost of all API’s Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts plus the total cost of all P&G Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts shall be defined as the Co-Promotion Marketing Costs or CPMC. The penalties provided pursuant to Section IV(B)(8)(a) shall not be included in the calculation of CPMC. For each Quarter during the Term, ***** of the total cost of all API’s Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts shall be defined as the Co-Promotion Service Mark Up or CPSMU. Local Marketing Services Agreements in all countries of the Co-Promotion Territory shall be implemented on or before January 1, 2005. Such Marketing Services Agreements will comply with this Agreement and in the case of discrepancies between the terms of this Agreement and any local Marketing Services Agreement, the terms and conditions of this Agreement shall prevail.

G. Health Registrations.

1. Ownership. Unless the Alliance Management Committee determines otherwise, P&G shall be the holder of all Health Registrations related to the Product in all countries within the Co-Promotion Territory.

2. Establishment. In each country within the Co-Promotion Territory, P&G shall undertake all commercially reasonable efforts to obtain all Health Registrations necessary, as the case may be, to market, promote, detail, distribute, sell and, if applicable, manufacture the Product in such countries, as soon as practicable after the Original Agreement Effective Date. If such filings have not been made in any country within three (3) months after the date of filing with the USFDA the NDA

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or supplemental NDA for PMO for the Product, then API shall have the right, but not the obligation, to undertake the efforts to obtain such Health Registrations. P&G will work with API to develop Health Registration packages and filing strategies for Paget’s disease, PMO, corticosteroid induced osteoporosis and other indications intended to maximize the commercial success of the Product. The parties will cooperate to develop strategies to extend or modify existing Health Registrations for the Product and to obtain Health Registrations for any Joint Product Improvement. If the parties disagree on the content of such Health Registration packages or filing strategies, said disagreement shall be immediately referred to the Oversight Committee Leaders for resolution and the party referring the disagreement to the Oversight Committee Leaders shall give notice of such disagreement to the other party in accordance with Section XXV(M). If the Oversight Committee Leaders or their designees cannot agree within five (5) Business Days of such referral, P&G’s position shall prevail. Internal administrative costs and expenses and all country specific registration fees (including without limitation user fees) of obtaining and maintaining Health Registrations within the Co-Promotion Territory shall be ***** as part of Joint R&D Costs.

3. Launch. P&G and API shall use commercially reasonable efforts to launch the Product as soon as practicable after the approval of any such Health Registration and other required approvals, such as pricing approvals, in the applicable country.

4. Maintenance. P&G shall use all commercially reasonable efforts to maintain in good order all Health Registrations held by it with respect to the Product within the Co-Promotion Territory, including, without limitation, the filing of all required reports with the applicable Ministry of Health. P&G shall not materially change, supplement or otherwise amend the Product’s labeling without the prior consent of API, which consent shall not be unreasonably withheld.

H. Product Recalls.

1. Decision-making Authority. With respect to any country within the Co-Promotion Territory, P&G shall have the sole discretion to determine whether and upon what terms and conditions the Product shall be recalled or otherwise withdrawn from sale to third parties within such country (for purposes of this Section IV(H), a “Recall”). Prior to making any Recall decision, however, P&G shall provide notice to API’s Alliance General Manager and in accordance with Section XXV(M), and use reasonable efforts to consult with API. P&G shall assume primary responsibility for discussions with regulatory officials within the applicable country within the Co-Promotion Territory regarding all aspects of the Recall decision and the execution thereof. Upon the request of P&G, API shall cooperate completely in all Recall efforts.

2. Expenses. P&G and API shall bear ***** all reasonable costs and expenses of any Recall within the Co-Promotion Territory; provided, however, that if such

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Recall is due in whole or in part to the gross negligence or intentional misconduct on the part of only one party, such party shall fully bear all of the cost and expense for the Recall. Determination of gross negligence or intentional misconduct shall be made by arbitration pursuant to Section XVI(B)(1).

I. Trademarks. In each country within the Co-Promotion Territory, the Product shall be sold under a trademark selected by P&G, in consultation with API, and owned by P&G. P&G shall be responsible for applying for, maintaining, enforcing and defending all trademarks related to the Product. Trademark Expenses shall be split *****.

J. Conversion to Secondary Co-Promotion Territory. At P&G’s sole discretion, a country within the Co-Promotion Territory may be converted to a Secondary Co-Promotion Territory country. The rights and obligations of the parties with respect to such converted country shall be the same as if such country was a Secondary Co-Promotion Territory.

K. Conversion of Italy. Notwithstanding the provisions of Article VII(E), in the event that the parties agree (1) that co-promotion of the Actonel business in Italy (“Actonel”) is a legally viable option and (2) to a level of Marketing Efforts in support of Actonel for the two-year period ending June 30, 2007, then API may, by giving P&G thirty (30) days prior notice provided before June 30, 2005, convert Italy from the Co-Marketing Territory into the Co-Promotion Territory (such conversion, the “Italy Conversion”); provided, however, that in such event Italy will not be deemed to have been converted under the provisions of Section VII(E). Following the Italy Conversion, and except as specifically set forth in this Section IV(K), the rights and obligations of the parties with respect to Italy will be the same as if Italy were within the Co-Promotion Territory on the date of such conversion. Upon such conversion, (1) P&G will thereafter have the exclusive right to solicit and accept orders for, and ship and invoice sales of, the Product to and from third parties in Italy, and (2) the parties will cooperate in good faith to convert Optinate prescribers to Actonel and to ensure a smooth and efficient transfer of inventories and product supply for the two brands. Notwithstanding the provisions of Section IV(B)(4), upon the Italy Conversion, in order to establish each party’s obligations to undertake Promotion Efforts in Italy, the parties shall specify for Italy for each semi-annual period an Alliance Detail Objective for both parties, a Sales Objective, a Primary Detail Cost, a Detail Commitment for each party and Non-Detailing Promotion Efforts for each party; provided, however, that in determining the Alliance Detail Objective, the parties will in good faith attempt to agree to target SOV Levels for Italy that are (a) substantially competitive to the SOV Levels for the market-leading product most similar to the Product, without giving effect to temporary or unreasonable variations of such SOV Levels, and (B) consistent with the parties’ goal of maximizing sales and profits of the Product within the Co-Promotion Territory; provided, however, that in the event the parties cannot agree upon such target SOV Levels, the Alliance Detail Objective for Italy will equal at least ***** of the combined budgeted Detail Efforts for P&G and API in Contract Year 2004. In the event that the parties agree upon the Alliance Detail Objective, each party’s Detail Commitment shall be *****

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of the agreed upon Alliance Detail Objective; in the event the parties do not agree on the Alliance Detail Objective, then each party’s Detail Commitment shall be at least ***** of the combined budgeted Detailing Efforts for P&G and API in Contract Year 2004. If, however, the parties do not agree to the Italy Conversion, then Italy will remain part of the Co-Marketing Territory. Without limiting the foregoing, API will use its commercially reasonable efforts to support and sustain the Optinate business prior to June 30, 2005.

ARTICLE IVa

SECONDARY CO-PROMOTION TERRITORY

With respect to the Secondary Co-Promotion Territory, the parties shall have the rights and obligations set forth in this Article IVa.

A. Rights and Obligations of the Parties.

1. P&G hereby grants API the right to market, promote, detail, distribute and sell Product in the Secondary Co-Promotion Territory. The rights granted to API pursuant to this Section IVa(A)(1) shall terminate at the end of the Term.

2. API shall not sell, assign or otherwise transfer or grant to any non-Affiliate third party any or all of its rights or obligations regarding Product in the Secondary Co-Promotion Territory, other than as explicitly stated in the Collaboration Agreement Documents. This Section IVa(A)(2) shall not prohibit API from entering into arrangements with non-Affiliate third parties to physically distribute Products (for example, warehousing, order taking, invoicing and the like).

3. P&G shall not grant any right to a non-Affiliate third party to market, promote, detail, distribute or sell Product in the Secondary Co-Promotion Territory without the prior written consent of API.

4. Each party shall use commercially reasonable efforts, at least equivalent to efforts used by the party with respect to other of its products of equivalent commercial value, to market, promote and detail the Product in the Secondary Co-Promotion Territory and P&G shall use such efforts to distribute and sell the Product in the Secondary Co-Promotion Territory in accordance with the terms and conditions of the Collaboration Agreement Documents.

B. Promotion Efforts. The parties shall have the obligations to undertake Promotion Efforts as set forth in this Section IVa(B).

1. [Reserved]

2. Contract Years. Prior to the beginning of each Contract Year, the parties shall, on an annual basis, establish each party’s obligation, if any, to undertake Promotion Efforts within each country within the Secondary Co-Promotion Territory during

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the next Contract Year and a forecast of such efforts for the first six (6) months of the subsequent Contract Year in accordance with Section III(B)(1).

3. Considerations for Determining Promotion Efforts. In determining each party’s obligation to undertake Promotion Efforts within each country within the Secondary Co-Promotion Territory, the parties shall take into account the parties’ goal of maximizing sales and profits of the Product within the Secondary Co-Promotion Territory.

4. Obligation to Undertake Promotion Efforts. To establish each party’s obligations to undertake Promotion Efforts, the parties shall specify for each country in the Secondary Co-Promotion Territory for each semi-annual period an Alliance Detail Objective for both parties, a Sales Objective, a Primary Detail Cost, a Detail Commitment for each party and Non-Detailing Promotion Efforts for each party; provided, however, that in determining the Alliance Detail Objective, the parties will in good faith attempt to agree to target SOV Levels for each country that are (a) substantially competitive to the SOV levels for the market-leading product most similar to the Product, without giving effort to temporary or unreasonable variations of such SOV Levels, and (b) consistent with the parties’ goal of maximizing sales and profits of the Product within the Secondary Co-Promotion Territory; provided, however that in the event the parties cannot agree for any country upon such target SOV Levels or cannot otherwise agree on the Alliance Detail Objective for such country, then the sum of the Alliance Detail Objectives for such country for the two semi-annual periods within a given Contract Year will equal at least ***** of the budgeted Detailing Efforts for Contract Year 2004, as set forth in Schedule IVa(B)(4). In the event that the parties agree upon the Alliance Detail Objective, each party’s Detail Commitment shall be at least ***** of the agreed upon Alliance Detail Objective; in the event the parties do not agree on the Alliance Detail Objective, then the sum of each party’s Detail Commitment for the two semi-annual periods within a given Contract year shall be at least ***** of the budgeted Detailing Efforts for Contract Year 2004, as set forth in Schedule IVa(B)(4). During the relevant semi-annual period, each party shall use commercially reasonable efforts to undertake Promotion Efforts within the applicable area, as established by the parties. Either party may engage Contract Representatives to fulfill up to ***** of the Detailing Commitment (***** in the case of Detailing in the United Kingdom and the Republic of Ireland) for such party within such country during any semi-annual period. The other party must first consent to the identity of the Contract Representatives to be engaged, which consent shall not be unreasonably withheld. Any party which engages Contract Representatives shall, at its own expense, provide adequate training with respect to the Product to the Contract Representatives, and, any Contract Representatives engaged by either party to fulfill Detailing Efforts in excess of ***** of such party’s Detailing Commitment must be Fully Dedicated Contract Representatives. All Detailing Efforts shall be performed in accordance

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with approved labeling and all applicable laws and regulations in the relevant country. While undertaking Promotion Efforts, Representatives may distribute samples and promotional materials for the Product to physicians, residents and others legally entitled to prescribe prescription drugs. Representatives shall distribute only promotional materials approved by the by the parties for each country. The quantity of samples of the Product and promotional materials to be provided to the Representatives of each party shall be determined by both parties consistent with each party’s obligations to undertake Promotion Efforts.

5. Handling of Samples. Sampling will be conducted in accordance with applicable laws and regulations. The parties’ Affiliates in each country of the Secondary Co-Promotion Territory shall agree on procedures for handling Product samples in such country, which procedures shall include tracking samples in each such country and the exchange between the parties’ Affiliates of reports covering Product sampling activities. Each P&G and API Affiliate shall also make available to the other party’s Affiliate in its country such original documentation concerning sampling activities as the other may need for compliance with applicable laws and regulations.

6. Tracking Detailing Efforts. Each P&G Affiliate and API Affiliate in the Secondary Co-Promotion Territory shall keep track of the number and priority of targeted and non-targeted Details performed by their Representatives and by their Contract Representatives, if applicable, in accordance with their normal internal reporting procedures. Within thirty (30) days after the last day of each semi-annual period, each party’s Affiliate shall calculate their Actual Detailing Effort or ADE based upon actual Details performed as reflected in their respective internal selling records, and report to the other party’s Affiliate the number and priority of Details performed by its Representatives and Contract Representatives, if applicable, for such semi-annual period.

7. Detailing Efforts. In each country of the Secondary Co-Promotion Territory in each semi-annual period during the Term, API’s Affiliate shall, unless otherwise agreed by the Alliance Management Committee, purchase from P&G’s Affiliate in such country, and such P&G Affiliate shall provide to API’s Affiliate, P&G’s Detailing Efforts in such country; provided, however, such purchase and sale of such Detailing Efforts shall not be considered in the calculation of P&G’s or API’s ADE for purposes of Section IVa(B)(8). Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IVa(F). Each party’s Affiliate has the right, but not the obligation, to perform the greater of (1) ***** of the required Detailing Efforts in a particular country and (2) the difference between ***** of the Alliance Detail Objective and the Detail Commitment for the other party or its Affiliate in such country. Each P&G and API Affiliate in the Secondary Co-Promotion Territory shall keep track of the costs and expenses for Detailing Efforts incurred by such Affiliate. Within thirty (30) days after the last day of each semi-annual period, each Affiliate shall report

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to the other party’s Affiliate in such country the costs and expenses for such Affiliate’s Detailing Efforts for such semi-annual period and each P&G Affiliate shall invoice the API Affiliate in its country for, and each API Affiliate shall pay the P&G Affiliate in its country for such costs and expenses, plus a service mark up of ***** of such costs and expenses, and VAT, if applicable. The operation of the calculations set forth in this Section IVa(B)(7) is demonstrated by the examples set forth in Schedule IV(B)(7). Any amounts owed pursuant to this Section IVa(B)(7) shall be paid pursuant to the applicable Marketing Services Agreement.

8. Under Performance of Detailing Efforts. The Marketing Services Agreement agreed between each party’s Affiliate in each country of the Secondary Co-Promotion Territory shall include (but shall not be limited to) the following terms and conditions:

a. If a party’s Affiliate’s Detail Adjustment Factor or DAF with respect to a semi-annual period in a country is:

1) greater than or equal to *****, then that party’s Affiliate shall not be obligated to pay to the other party’s Affiliate any amounts under this Section IVa(B)(8); or

2) less than ***** and less than the other party’s Affiliate’s DAF in such country for such semi-annual period, then that party’s Affiliate shall be obligated to pay to the other party’s Affiliate an amount equal to the applicable Primary Detail Cost (for employee Representatives) multiplied by *****, as calculated pursuant to the following formula:

Penalty Amount = (Primary Detail Cost)*(.5) * *****

3) less than ***** but greater than the other party’s Affiliate’s DAF in such country for such semi-annual period, then that party’s Affiliate shall be obligated to pay to the other party’s Affiliate an amount equal to the applicable Primary Detail Cost (for employee Representatives) multiplied by ***** as calculated pursuant to the following formula:

Penalty Amount = (Primary Detail Cost) * *****

b. The operation of the calculations set forth in this Section IVa(B)(8) are demonstrated by the examples set forth in Schedule IV(B)(8). Any

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amounts owed pursuant to this Section IVa(B)(8) shall be paid pursuant to the requirements of the applicable Marketing Services Agreement and Section IVa(B)(10).

c. If a party’s Affiliate’s DAF in any country in the Secondary Co-Promotion Territory with respect to a semi-annual period is less than *****, and that party’s Affiliate’s DAF has been less than ***** for any other semi-annual period in the preceding three (3) semi-annual periods, then the other party’s Affiliate may refer the matter to arbitration under Section XVI(B)(2) for consideration of the issue of breach or material breach.

9. Non-Detailing Promotion Effort. In each country of the Secondary Co-Promotion Territory during the Term, API’s Affiliate in such country shall, unless otherwise agreed by the Alliance Management Committee, purchase from P&G’s Affiliate in such country, and such P&G Affiliate shall provide to API’s Affiliate in such country, Non-Detailing Promotion Effort. Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IVa(F). The parties will establish and agree to appropriate levels of Non-Detailing Promotion Effort for each semi-annual period. Valuation of Non-Detailing Promotion Effort in a country shall be in terms of the number of Full Time Equivalents. Each party’s Affiliate has the right, but not the obligation, to perform half of the required Non-Detailing Promotion Effort in a particular country. Each P&G and API Affiliate in the Secondary Co-Promotion Territory shall keep track of the costs and expenses for Non-Detailing Promotion Efforts incurred by such Affiliate. Within thirty (30) days after the last day of each Quarter, each Affiliate shall report to the other party’s Affiliate in such country the costs and expenses for Non-Detailing Promotion Efforts incurred by such Affiliate for the Quarter and each P&G Affiliate shall invoice the API Affiliate in its country for, and each API Affiliate shall pay the P&G Affiliate in its country for such costs and expenses, plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable.

10. Payment Terms. Any amounts payable pursuant to Section IVa(B) and/or the Marketing Services Agreement shall be paid in local currency no later than sixty (60) days following the expiration of the relevant Quarter.

C. Marketing Efforts and Joint R&D Efforts.

1. Product Identification. In all countries within the Secondary Co-Promotion Territory and to the extent legally permissible, both parties’ names and logos shall appear with equal prominence on Product labels and promotional materials. In any such country where this is not legally permitted, the parties agree to work together in good faith to identify a mechanism to allow the association of both parties’ names with the Product.

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2. Obligations to Undertake Marketing Efforts. The parties shall, on a semi-annual basis, set forth in specific terms each party’s Affiliate’s obligation, if any, to undertake Marketing Efforts within each country within the Secondary Co-Promotion Territory to be performed during the next Contract Year, and a forecast of such efforts for the first six months of the subsequent Contract Year (i.e., from January of the Contract Year through June of the following Contract Year). During the Term, each party’s Affiliates will spend an amount each Contract Year at least equivalent to the Secondary Co-Promotion Minimum Marketing Spend. During each Quarter, each party’s Affiliate in each country of the Secondary Co-Promotion Territory shall use commercially reasonable efforts to undertake such Marketing Efforts within each such country. Except as otherwise permitted by this Agreement, no party shall engage any non-Affiliate third party to fulfill its obligations under this Section IVa(C)(2) or to undertake any Marketing Effort without the agreement of the other party.

3. Marketing Effort Costs. In each country of the Secondary Co-Promotion Territory during the Term, API’s Affiliate in such country shall, unless otherwise agreed by the Alliance Management Committee, purchase from P&G’s Affiliate in such country, and such P&G Affiliate shall provide to API’s Affiliate in such country, Marketing Efforts. Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IVa(F). The parties shall establish and agree to appropriate levels of Marketing Effort for each Quarter. Each P&G and API Affiliate in the Secondary Co-Promotion Territory shall keep track of the costs and expenses for Marketing Efforts incurred by such Affiliate. Within thirty (30) days after the last day of each Quarter, each Affiliate shall report to the other party’s Affiliate in such country the costs and expenses for Marketing Efforts incurred by such Affiliate for the Quarter and each P&G Affiliate shall invoice the API Affiliate in its country for, and each API Affiliate shall pay the P&G Affiliate in its country for such costs and expenses, plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable.

4. Obligations to Undertake Joint R&D Efforts. The parties shall, on a semi-annual basis, set forth in specific terms each party’s Affiliate’s obligation, if any, to undertake Joint R&D Efforts within each country within the Secondary Co-Promotion Territory to be performed during the next Contract Year, and a forecast of such efforts for the first six months of the subsequent Contract Year (i.e., from January of the Contract Year through June of the following Contract Year). During each Quarter, each party’s Affiliate in each country of the Secondary Co-Promotion Territory shall use commercially reasonable efforts to undertake such Joint R&D Efforts within each such country. Except as otherwise permitted by this Agreement, no party shall engage any non-Affiliate third party to fulfill its obligations under this Section IVa(C)(4) or to undertake any Joint R&D Efforts without the agreement of the other party.

5. Joint R&D Efforts and Joint R&D Costs. In each country of the Secondary Co-

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Promotion Territory during the Term, API’s Affiliate in such country shall, unless otherwise agreed by the Alliance Management Committee, purchase from P&G’s Affiliate in such country, and such P&G Affiliate shall provide to API’s Affiliate in such country, Joint R&D Efforts. Such purchase and sale of such services shall be pursuant to a Marketing Services Agreement to be agreed between such Affiliates pursuant to the terms of Section IVa(F). The parties shall establish and agree to appropriate levels of Joint R&D Effort for each Quarter. Each P&G Affiliate and API Affiliate in the Secondary Co-Promotion Territory shall keep track of the R&D Costs incurred by such Affiliate. Within thirty (30) days after the last day of each Quarter, each Affiliate shall report to the other party’s Affiliate in such country the Joint R&D Costs incurred by such Affiliate for the Quarter and each P&G Affiliate shall invoice the API Affiliate in its country for, and each API Affiliate shall pay the P&G Affiliate in its country for, such Joint R&D Costs plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable.

6. Payment Terms. Any amounts payable pursuant to Section IVa(C)(3) or (5) and/or the Marketing Services Agreements shall be paid in local currency no later than sixty (60) days following the expiration of the relevant Quarter.

D. Other Expenses. Other than as specifically set forth in the Collaboration Agreement Documents, each party shall bear its own costs and expenses within the Secondary Co-Promotion Territory, including, without limitation, the costs and expenses of salaries, benefits and travel.

E. Recording of Sales.

1. API Obligation. API’s Affiliate in each country in the Secondary Co-Promotion Territory shall solicit and accept orders for, and ship and invoice sales of, the Product from and to third parties in all countries within the Secondary Co-Promotion Territory at prices to be established solely by such Affiliate.

2. Bundled Sales. If the Product is sold or otherwise transferred as part of a package with other products, the Net Outside Sales for such Product shall be the Net Outside Sales applicable to such Product as if sold separately, less the pro-rata amount of any discount associated with the package. The operation of the calculations in this Section IVa(E)(2) is demonstrated by the examples set forth in Schedule IV(E)(2).

F. Marketing Services Agreements. Unless the parties agree otherwise, API’s Affiliate in each country of the Secondary Co-Promotion Territory shall enter into a Marketing Services Agreement with the P&G Affiliate in such country pursuant to which API’s Affiliate shall purchase from P&G’s Affiliate, and P&G’s Affiliate shall provide to API’s Affiliate, P&G’s Affiliate’s Detail Effort (pursuant to Section IVa(B)(7) hereof), Non-Detailing Promotion Efforts (pursuant to Section IVa(B)(9) hereof), Marketing Efforts (pursuant to Section IVa(C)(3) hereof) and Joint R&D Efforts (pursuant to Section

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IVa(C)(5) hereof). For each Quarter during the Term, the total cost of all P&G’s Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts plus the total cost of all API Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts shall be defined as the Secondary Co-Promotion Marketing Costs or SCPMC. Upon request by API, P&G shall provide to API’s Affiliates in the Secondary Co-Promotion Territory marketing allowances to reimburse increased marketing and promotion costs in the launch phase of any Product or Joint Product Improvement in the Secondary Co-Promotion Territory. The penalties provided pursuant to Section IV(a)(B)(8)(a) shall not be included in the calculation of SCPMC. For each Quarter during the Term, ***** of the total cost of all P&G’s Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts shall be defined as the Secondary Co-Promotion Service Mark Up or SCPSMU. Local Marketing Services Agreements in all countries of the Secondary Co-Promotion Territory shall be implemented on or before January 1, 2005. Such Marketing Services Agreements will comply with this Agreement and in the case of discrepancies between the terms of this Agreement and any local Marketing Services Agreement, the terms and conditions of this Agreement shall prevail.

G. Health Registrations.

1. Ownership. Unless the Alliance Management Committee determines otherwise, API shall be the holder of all Health Registrations related to the Product in all countries within the Secondary Co-Promotion Territory, except that P&G shall be the holder of all Health Registrations related to the Product in the United Kingdom and the Republic of Ireland.

2. Establishment.

a. The United Kingdom and Ireland. In the United Kingdom and the Republic of Ireland, P&G shall undertake all commercially reasonable efforts to obtain all Health Registrations necessary, as the case may be, to market, promote, detail, distribute, sell and, if applicable, manufacture the Product in such countries, as soon as practicable after the Original Agreement Effective Date. If such filings have not been made in any country within three (3) months after the date of filing with the USFDA the NDA or supplemental NDA for PMO for the Product, then API shall have the right, but not the obligation, to undertake the efforts to obtain such Health Registrations. P&G will work with API to develop Health Registration packages and filing strategies for Paget’s disease, PMO, corticosteroid induced osteoporosis and other indications intended to maximize the commercial success of the Product. The parties will cooperate to develop strategies to extend or modify existing Health Registrations for the Product and to obtain Health Registrations for any Joint Product Improvement. If the parties disagree on the content of such Health Registration packages or filing strategies, said disagreement shall be immediately referred to the Oversight Committee Leaders for

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resolution and the party referring the disagreement to the Oversight Committee Leaders shall give notice of such disagreement to the other party in accordance with Section XXV(M). If the Oversight Committee Leaders or their designees cannot agree within five (5) Business Days of such referral, P&G’s position shall prevail.

b. Other Countries in the European Union. P&G shall submit to the appropriate Ministry of Health all documentation necessary to obtain all Health Registrations required, as the case may be, to market, promote, sell and distribute and, if applicable, manufacture the Product within each country within the Secondary Co-Promotion Territory that is within the European Union and, in each such country, P&G shall use all commercially reasonable efforts to obtain each of such Health Registrations as soon as practicable after the filing thereof and shall transfer such Health Registrations to API promptly after obtaining such Health Registrations. P&G will work with API to develop Health Registration packages and filing strategies for Paget’s disease, PMO, corticosteroid induced osteoporosis and other indications intended to maximize the commercial success of the Product. The parties will cooperate to develop strategies to extend or modify existing Health Registrations for the Product and to obtain Health Registrations for any Joint Product Improvement. If the parties disagree on the content of such Health Registration packages or filing strategies, said disagreement shall be immediately forwarded to the Oversight Committee Leaders for resolution and the party referring the disagreement to the Oversight Committee Leaders shall give notice of such disagreement to the other party in accordance with Section XXV(M). If the Oversight Committee Leaders or their designees cannot agree within five (5) Business Days, P&G’s position shall prevail.

c. Countries Outside the European Union. API shall submit to the appropriate Ministry of Health, all documentation necessary to obtain all Health Registrations required, as the case may be, to market, promote, sell and distribute and, if applicable, manufacture the Product within each country within the Secondary Co-Promotion Territory other than any country in the European Union and in each such country, API shall use all commercially reasonable efforts to obtain each of such Health Registrations as soon as practicable after the filing thereof. Within six (6) months after the approval of any Health Registration in the Secondary Co-Promotion Territory and other required approvals, such as pricing approvals, API shall launch the Product in the applicable country. For purposes of this Section IVa(G), launch means the initiation of substantial efforts to market, promote, sell and distribute the Product, including, without limitation, significant Promotion Efforts with respect thereto. API shall also use commercially reasonable efforts to submit to the appropriate Ministry of Health all documentation necessary to extend or modify

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existing Health Registrations for the Product and to obtain Health Registrations for any Joint Product Improvement and that are required to market, promote, sell and distribute and, if applicable, manufacture the Product within each country within the Secondary Co-Promotion Territory that is not in the European Union. In each such country, API shall use all commercially reasonable efforts to obtain each such Health Registrations as soon as practicable after the filing thereof. To facilitate API’s efforts to obtain such Health Registrations with respect to its Product, P&G shall provide to API access to all non-clinical and clinical scientific data with respect to the Product as soon as practicable after the Original Agreement Effective Date and shall provide access to API to the Drug Dossier as soon as practicable. P&G shall use commercially reasonable efforts to aid API in the preparation of documents to be filed as part of any application for the Health Registration with any applicable Ministry of Health within the Secondary Co-Promotion Territory and the analysis of data derived from studies included in the Drug Dossier provided by P&G to API in order to facilitate timely filings by API with any applicable Ministry of Health. API shall be responsible for P&G’s external out of pocket costs related to such filing assistance.

3. Launch. P&G and API shall use commercially reasonable efforts to launch the Product as soon as practicable after the approval of any such Health Registration and other required approvals, such as pricing approvals, in the applicable country.

4. Maintenance. Each party shall use all commercially reasonable efforts to maintain in good order all Health Registrations held by it with respect to the Product within the Secondary Co-Promotion Territory, including, without limitation, the filing of all required reports with the applicable Ministry of Health. Such party shall not materially change, supplement or otherwise amend the Product’s labeling without the prior consent of the other party, which consent shall not be unreasonably withheld.

5. Regulatory Expenses. Internal administrative costs and expenses and all country specific registration fees (including without limitation user fees) of obtaining and maintaining Health Registrations within the Secondary Co-Promotion Territory shall be shared ***** as part of Joint R&D Costs.

H. Product Recalls.

1. Decision-making Authority. With respect to any country within the Secondary Co-Promotion Territory, the holder of the Health Registrations shall have the sole discretion to determine whether and upon what terms and conditions the Product shall be recalled or otherwise withdrawn from sale to third parties within such country (for purposes of this Section IVa(H), a “Recall”). Prior to making any Recall decision, however, the holder of the Health Registrations shall provide notice to the other party’s Alliance General Manager and in accordance with

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Section XXV(M), and use its reasonable efforts to consult with said party. The holder of the Health Registrations shall assume primary responsibility for discussions with regulatory officials within the applicable country within the Secondary Co-Promotion Territory regarding all aspects of the Recall decision and the execution thereof. Upon the request of the holder of the Health Registrations, the other party shall cooperate completely in all Recall efforts.

2. Expenses. P&G and API shall bear ***** all reasonable costs and expenses of any Recall within the Secondary Co-Promotion Territory; provided, however, that if such Recall is due in whole or in part to the gross negligence or intentional misconduct on the part of only one party, such party shall fully bear all of the cost and expense for the Recall. Determination of gross negligence or intentional misconduct shall be made by arbitration pursuant to Section XVI(B)(1).

I. Trademarks. In each country within the Secondary Co-Promotion Territory, the Product shall be sold under a trademark selected by P&G, in consultation with API, and owned by P&G. P&G shall be responsible for applying for, maintaining, enforcing and defending all trademarks related to the Product. Trademark Expenses shall be split *****.

J. Product Supply and Cost.

1. Supply. P&G shall supply Product to API pursuant to the Supply Agreement.

2. Obligation to Supply. Upon obtaining the Health Registrations, including but not limited to reimbursement pricing, in a particular country within the Secondary Co-Promotion Territory, as set forth in Section IVa(G)(2), P&G may elect not to supply Product to API based upon P&G’s determination in good faith that: (i) government reimbursement prices for Product in such country make the launch of Product in such country not commercially viable; (ii) labeling approved in such country by the Ministry of Health would have a material negative effect on commercial viability of the Product; or (iii) marketing studies required in such country by the Ministry of Health would have a material negative effect on commercial viability of the Product. P&G shall notify API that it has elected not to supply Product as soon as practicable, but not later than thirty (30) days after obtaining a Health Registration.

K. Expansion Countries. Notwithstanding any other provision hereof, upon three months prior notice to API (or six months prior notice in the event such notice is given after the first anniversary of the A&R Agreement Effective Date), P&G may elect to have any of the Expansion Countries become Secondary Co-Promotion Territory countries; provided, however, that, with respect to any such Expansion Country, P&G must commence Detailing Efforts with respect to the Product in such Expansion Country upon such conversion; provided, further, however, that such Expansion Countries will not be deemed to have been converted under the provisions of Article VII. The rights and obligations with respect to such Expansion Countries will be the same as if such

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Expansion Countries were within the Secondary Co-Promotion Territory on the date of such conversion.

ARTICLE V

CO-MARKETING TERRITORY

With respect to the Co-Marketing Territory, the parties shall have the rights and obligations set forth in this Article V.

A. Rights of the Parties.

1. P&G hereby grants API the right to register, market, promote, detail, distribute and sell Product in the Co-Marketing Territory.

2. Subject to the provisions of Section V(A)(4), API shall not sell, assign, or otherwise transfer or grant to any non-Affiliate third party any or all of its rights or obligations regarding Product in the Co-Marketing Territory, other than as explicitly stated in the Collaboration Agreement Documents. This Section V(A)(2) shall not prohibit API from entering into arrangements with non-Affiliate third parties to physically distribute Products (for example, warehousing, order taking, invoicing and the like).

3. P&G shall not grant to a non-Affiliate third party the right to register, market, promote, detail, distribute or sell Product in the Co-Marketing Territory without the prior written consent of API. This Section V(A)(3) shall not prohibit P&G from entering into arrangements with non-Affiliate third parties to physically distribute Products (for example, warehousing, order taking, invoicing and the like).

4. Each party shall use commercially reasonable efforts, comparable to efforts used by the party with respect to other of its products of equivalent commercial value, to register, market, promote, detail, distribute and sell the Product in the Co-Marketing Territory in accordance with the terms and conditions of the Collaboration Agreement Documents.

B. Independent Management. Each party shall maintain its own independent management and business operations and develop, maintain and execute its own marketing, promotion, detailing, distribution and sales plans with respect to its Product within the Co-Marketing Territory and such plans shall not be submitted to, nor approved by, any committee or team composed of representatives of both parties. Both parties shall have access to any and all non-clinical and clinical scientific data relating to the Products in the Co-Marketing Territory including the Drug Dossier.

C. Recording of Sales. Each party shall solicit and accept orders for, and ship and invoice sales of, its Product from and to third parties within the Co-Marketing Territory upon such terms and conditions as such party shall establish.

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D. Expenses.

1. Commercial Expenses. Except as otherwise set forth in the Collaboration Agreement Documents, each party shall bear its own costs and expenses, including, without limitation, Commercial Expenses and the cost of Detailing Efforts related to its Product.

2. Product Supply. P&G shall supply Product to API pursuant to the Supply Agreement.

E. Health Registrations.

1. Ownership. Unless the Alliance Management Committee determines otherwise, each party shall be the holder of all Health Registrations related to that party’s Product in all countries within the Co-Marketing Territory.

2. Establishment. P&G shall use all commercially reasonable efforts to obtain multiple Health Registrations necessary to market, promote, detail, distribute, manufacture and sell, as applicable, Product within the Co-Marketing Territory, as soon as practicable, and upon receipt of such Health Registrations, shall transfer one Health Registration to API in order to facilitate the contemporaneous launch of Product by P&G and API within the Co-Marketing Territory. In the event API elects to use two separate API Affiliate sales forces in the Co-Marketing Territory, P&G shall obtain and transfer two Health Registrations to API. P&G will work with API to develop Health Registration packages and filing strategies for Paget’s disease, PMO, corticosteroid induced osteoporosis and other indications intended to maximize the commercial success of the Product. The parties will cooperate to develop strategies to extend or modify existing Health Registrations for the Product and to obtain Health Registrations for any Joint Product Improvement. If the parties disagree on the content of such Health Registration packages or filing strategies, said disagreement shall be forwarded immediately to the Oversight Committee Leaders for resolution and the party referring the disagreement to the Oversight Committee Leaders shall give notice of such disagreement to the other party in accordance with Section XXV(M). If the Oversight Committee Leaders or their designees cannot agree within five (5) Business Days of such referral, P&G’s position shall prevail. Internal administrative costs and expenses of obtaining Health Registrations within the Co-Marketing Territory including all country specific costs and expenses (including without limitation user fees) shall be shared ***** as part of Joint R&D Costs.

3. Launch. P&G and API shall use commercially reasonable efforts to simultaneously launch the Product as soon as practicable after the approval of any such Health Registrations and other required approvals, such as pricing approvals, in the applicable country.

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4. Maintenance. Each party shall use all commercially reasonable efforts to maintain in good order all Health Registrations owned by it with respect to its Products within the Co-Marketing Territory, including, without limitation, the filing of all required reports with the applicable Ministry of Health. Each party shall notify the other and obtain the other party’s consent, which consent shall not be unreasonably withheld, prior to materially changing, supplementing or otherwise amending such party’s Product’s labeling. Each party shall bear all costs and expenses of maintaining such party’s respective Health Registration(s) within the Co-Marketing Territory.

F. Product Recalls.

1. Decision-making Authority. With respect to any country within the Co-Marketing Territory, each party shall have the sole discretion to determine whether and upon what terms and conditions its own Product shall be recalled or otherwise withdrawn from sale to third parties within the Co-Marketing Territory (for purposes of this Section V(F), a “Recall”). Prior to making any Recall decision, however, each party shall provide notice to the other party’s Alliance General Manager and in accordance with Section XXV(M) and use reasonable efforts to consult with the other party. Each party shall assume primary responsibility for discussions with regulatory officials within the Co-Marketing Territory regarding all aspects of the Recall decision and the execution thereof with respect to its own Product. Each party shall cooperate completely with the other in all Recall efforts.

2. Expenses. Each party shall bear all internal and external costs and expenses of any Recall of its Product within the Co-Marketing Territory; provided, however, that if such Recall is due in whole or in part to the gross negligence or intentional misconduct on the part of only one party, such party shall fully bear all of the cost and expense for the Recall. Determination of gross negligence or intentional misconduct shall be made by arbitration pursuant to Section XVI(B)(1).

G. Trademarks. In the Co-Marketing Territory, the Product to be sold by P&G shall bear a trademark selected by P&G and the Product to be sold by API shall bear a trademark selected by API, in consultation with P&G. P&G shall have the right to select the trademark to be used on P&G’s Product prior to API’s selection of the trademark to be used on API’s Product. P&G shall own all trademarks for API’s and P&G’s Products within the Co-Marketing Territory. P&G shall be responsible for applying for, maintaining, enforcing and defending all trademarks related to the Product. Trademark Expenses shall be split *****. The parties shall enter into appropriate trademark licenses if necessary or prudent to enable the parties to perform their respective obligations pursuant to the Collaboration Agreement Documents with respect to the Co-Marketing Territory.

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H. Product Supply and Cost. P&G shall supply Product to API pursuant to the Supply Agreement. If P&G elects not to launch its Product in any country in the Co-Marketing Territory based on P&G’s determination in good faith that (i) government reimbursement prices for P&G’s Product in such country make the launch of P&G’s Product in such country not commercially viable; (ii) labeling approved in such country by the Ministry of Health would have a material negative effect on commercial viability of P&G’s Product; or (iii) marketing studies required in such country by the Ministry of Health would have a material negative effect on commercial viability of P&G’s Product, then P&G may elect not to supply API’s Product to API. P&G shall notify API that it has elected not to supply Product as soon as practicable, but not later than thirty (30) days after obtaining the information herein above described. Upon request by API, P&G shall provide to API’s Affiliates in the Co-Marketing Territory marketing allowances to reimburse increased marketing and promotion costs in the launch phase of any Product or Joint Product Improvement in the Co-Marketing Territory.

ARTICLE VI

POTENTIAL CO-PROMOTION TERRITORY

With respect to the Potential Co-Promotion Territory, the parties shall have the rights and obligations set forth in this Article VI.

A. Rights and Obligations of the Parties.

1. P&G hereby grants API the right to market, promote, detail, distribute and sell Product in the Potential Co-Promotion Territory. The rights granted to API pursuant to this Section VI(A)(1) shall terminate at the end of the Term or, with respect to any country which is converted to a Primary or Secondary Converted Co-Promotion Territory or a Converted Co-Marketing Territory pursuant to Article VII, any country which is converted to a White Space Territory pursuant to Section VI(F) or any country that becomes part of the Secondary Co-Promotion Territory pursuant to Section IVa(K), upon such conversion.

2. API shall not sell, assign or otherwise transfer or grant to any non-Affiliate third party any or all of its rights or obligations regarding Product in the Potential Co-Promotion Territory, other than as explicitly stated in the Collaboration Agreement Documents. This Section VI(A)(2) shall not prohibit API from entering into arrangements with non-Affiliate third parties to physically distribute Products (for example, warehousing, order taking, invoicing and the like).

3. P&G shall not, and shall not grant any right to any third party to, market, promote, detail, distribute or sell the Product to any party except API in the Potential Co-Promotion Territory, without the prior written consent of API.

4. API shall use commercially reasonable efforts, at least equivalent to efforts used by API with respect to other of its products of equivalent commercial value, to commercialize the Product in the Potential Co-Promotion Territory.

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5. Notwithstanding any other provision hereof to the contrary, the parties’ rights and obligations with respect to Spain shall, to the extent inconsistent with this Article VI, be governed by the Consent Agreement among the parties hereto dated February 5, 2002.

B. Management Structure. API shall maintain its own management and business operations and develop, maintain and execute its own marketing, promotion, sales and distribution plans with respect to the Product within the Potential Co-Promotion Territory and such plans need not be submitted to, nor approved by, P&G; provided, however, API shall provide to P&G a report which sets forth a forecast of Net Outside Sales for the Potential Co-Promotion Territory, a forecast of required production of Product for the Potential Co-Promotion Territory for the eighteen (18) months following the first day of the next Contract Year, and a report on commercialization strategy and plans, a report of actual Net Outside Sales for the previous Contract Year and a report of actual Net Outside Sales for the previous 12-month period, such forecasts and reports to be reviewed and revised on a quarterly basis. API shall have access to all marketing, promotional and sales materials and clinical data previously developed in the Territory with respect to the Product, including the Drug Dossier.

C. Recording of Sales. API shall solicit and accept orders for, and ship and invoice sales of, the Product from and to third parties in all countries within the Potential Co-Promotion Territory at prices to be established solely by API.

D. Expenses. Except as otherwise stated in the Collaboration Agreement Documents, API shall bear all costs and expenses related to the Product within the Potential Co-Promotion Territory.

E. Product Supply and Cost.

1. Supply. P&G shall supply Product to API pursuant to the Supply Agreement. Upon request by API, P&G shall provide to API’s Affiliates in the Potential Co-Promotion Territory marketing allowances to reimburse increased marketing and promotion costs in the launch phase of any Product or Joint Product Improvement in the Potential Co-Promotion Territory.

2. Obligation to Supply. Upon obtaining the Health Registrations, including but not limited to reimbursement pricing, in a particular country within the Potential Co-Promotion Territory, as set forth in Section VI(F)(2), P&G may elect not to supply Product to API based on P&G’s determination in good faith that: (i) government reimbursement prices for Product in such country make the launch of Product in such country not commercially viable; (ii) labeling approved in such country by the Ministry of Health would have a material negative effect on commercial viability of the Product; or (iii) studies required in such country by the Ministry of Health would have a material negative effect on commercial viability of the Product. P&G shall notify API that is has elected not to supply

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Product as soon as practicable, but not later than thirty (30) days after API has obtained all the necessary authorizations to effectively market the Product, including, but not limited to, Health Registrations and reimbursement price.

F. Health Registrations.

1. Ownership. Unless determined otherwise by the Alliance Management Committee, API shall be the holder of all Health Registrations related to the Product in all countries within the Potential Co-Promotion Territory.

2. Establishment.

a. Countries in the European Union. Within three (3) months after the date of filing with the USFDA of the NDA or supplemental NDA for PMO for the Product, P&G shall submit to the appropriate Ministry of Health all documentation necessary to obtain all Health Registrations required, as the case may be, to market, promote, sell and distribute and, if applicable, manufacture the Product within each country within the Potential Co-Promotion Territory that is within the European Union and, in each such country, P&G shall use all commercially reasonable efforts to obtain each of such Health Registrations as soon as practicable after the filing thereof and shall transfer such Health Registrations to API promptly after obtaining such Health Registrations. P&G will work with API to develop Health Registration packages and filing strategies for Paget’s disease, PMO, corticosteroid induced osteoporosis and other indications intended to maximize the commercial success of the Product. The parties will cooperate to develop strategies to extend or modify existing Health Registrations for the Product and to obtain Health Registrations for any Joint Product Improvement. If the parties disagree on the content of such Health Registration packages or filing strategies, said disagreement shall be immediately forwarded to the Oversight Committee Leaders for resolution and the party referring the disagreement to the Oversight Committee Leaders shall give notice of such disagreement to the other party in accordance with Section XXV(M). If the Oversight Committee Leaders or their designees cannot agree within five (5) Business Days, P&G’s position shall prevail.

b. Countries Outside the European Union. Within the time period set forth on Schedule I-F, API shall submit to the appropriate Ministry of Health, all documentation necessary to obtain all Health Registrations required, as the case may be, to market, promote, sell and distribute and, if applicable, manufacture the Product within each country within the Potential Co-Promotion Territory other than any country in the European Union and in each such country, API shall use all commercially reasonable efforts to obtain each of such Health Registrations as soon as practicable after the filing thereof. Within six (6) months after the approval and transfer, if

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applicable, of any Health Registration in the Potential Co-Promotion Territory and other required approvals, such as pricing approvals, API shall launch the Product in the applicable country. For purposes of this Section VI(F), launch means the initiation of substantial efforts to market, promote, sell and distribute the Product, including, without limitation, significant Promotion Efforts with respect thereto. API shall also use commercially reasonable efforts to submit to the appropriate Ministry of Health all documentation necessary to extend or modify existing Health Registrations for the Product and to obtain Health Registrations for any Joint Product Improvement and that are required to market, promote, sell and distribute and, if applicable, manufacture the Product within each country within the Potential Co-Promotion Territory that is not in the European Union and in each such country shall use all commercially reasonable efforts to obtain each of such Health Registrations as soon as practicable after the filing thereof. In countries other than in the European Union, to facilitate API’s efforts to obtain such Health Registrations with respect to its Product, P&G shall provide to API access to all non-clinical and clinical scientific data with respect to the Product as soon as practicable after the Original Agreement Effective Date and shall provide access to API to the Drug Dossier as soon as practicable. P&G shall use commercially reasonable efforts to aid API in the preparation of documents to be filed as part of any application for the Health Registration with any applicable Ministry of Health within the Potential Co-Promotion Territory and the analysis of data derived from studies included in the Drug Dossier provided by P&G to API in order to facilitate timely filings by API with any applicable Ministry of Health. API shall be responsible for P&G’s external out of pocket costs related to such filing assistance.

3. Maintenance. Each party shall use all commercially reasonable efforts to maintain in good order all Health Registrations held by it with respect to the Product within the Potential Co-Promotion Territory, including, without limitation, the filing of all required reports with the applicable Ministry of Health. The holder of the Health Registrations shall not materially change, supplement or otherwise amend the Product’s labeling without the prior consent of the other party, which consent shall not be unreasonably withheld. API shall be responsible for P&G’s external out of pocket costs related to such maintenance assistance.

4. Failure to Comply. If API fails to satisfy, within the time periods described in Schedule I-F, any of its obligations to submit applications for any Health Registration related to the Product or to launch the Product, except if such failure to launch is due to (i) P&G’s election not to supply Product pursuant to Section VI(E)(2), (ii) failure of the manufacturer of Product to supply Product or (iii) conflicting or changing regulatory considerations in a particular country (e.g., requirement to obtain a Free Sale Certificate), (iv) failure of P&G to timely obtain and transfer a Health Registration to API, or (v) failure of P&G to use

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commercially reasonable efforts to aid in preparation of documents to be filed as part of an application for a Health Registration or analysis of data derived from studies included in, or access to, the Drug Dossier, then, upon P&G’s request, the grant of rights described in Section VI(A) shall be extinguished with respect to such country and such country shall no longer be considered a part of the Territory for purposes of the Collaboration Agreement Documents; provided, however, that the provisions of Article XXII shall continue to apply to API as if such country were still a part of the Territory. P&G shall be free to undertake any and all activities with respect to the Product within such country without compensation to API. If API has obtained any rights of any kind with respect to the Product within such country, then API shall immediately, upon P&G’s request, transfer title to all such rights to P&G or its designee, and if title to any such rights is not transferable, then API shall use all commercially reasonable efforts to enable P&G to make use of all such rights. Upon the transfer of title to such rights, P&G shall reimburse API for its usual, customary and reasonable costs and expenses associated with the procurement of such rights so transferred; provided, however, that P&G shall have no reimbursement obligations hereunder if API has not diligently pursued its obligations pursuant to this Section VI(F)(4). Notwithstanding the foregoing, if at the time of the expiration of any time period specified in Section VI(F)(2), the party responsible for obtaining the Health Registration or launching the Product in a country within the Potential Co-Promotion country is demonstrating a good faith effort to obtain a Health Registration or launch the Product, as the case may be, the parties agree to negotiate in good faith a reasonable extension to the applicable time period. The parties agree that P&G’s remedy for API’s failure to submit applications for Health Registrations or launch the Product is as set forth in this Section VII(F)(4), and such failure shall not constitute a breach of this Agreement.

5. Regulatory Expenses. Subject to the terms and conditions of the Collaboration Agreement Documents, the parties shall ***** as part of the Joint R&D Costs the administrative costs and expenses of obtaining Health Registrations within any country in the European Union which is also a Potential Co-Promotion country. With the exception of those costs and expenses paid by P&G pursuant to the preceding sentence, API shall be responsible for all other costs and expenses of obtaining and maintaining the Health Registrations in the Potential Co-Promotion Territory including, without limitation, all country specific costs and expenses including, without limitation, user fees.

G. Product Recalls.

1. Decision-making Authority. With respect to any country within the Potential Co-Promotion Territory, API shall have sole discretion within all countries within the Potential Co-Promotion Territory to determine whether and upon what terms and conditions the Product shall be recalled or otherwise withdrawn from sale to third parties (for purposes of this Section VI(G), a “Recall”). Prior to making any Recall decision, however, API shall provide notice to P&G’s Alliance General

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Manager and in accordance with Section XXV(M) and use reasonable efforts to consult with P&G. API shall assume primary responsibility for discussions with regulatory officials within the Potential Co-Promotion Territory regarding all aspects of the Recall decision and the execution thereof. Upon the request of API, P&G shall cooperate completely in all Recall efforts.

2. Expenses. The parties will bear equally all reasonable costs and expenses of any Recall within the Potential Co-Promotion Territory; provided, however, that if such Recall is due in whole or in part to the gross negligence or intentional misconduct on the part of only one party, such party shall fully bear all of the cost and expense for the Recall. Determination of gross negligence or intentional misconduct shall be made by arbitration pursuant to Section XVI(B)(1).

H. Trademarks. In the Potential Co-Promotion Territory, to the extent permitted, the Product shall be sold under the same trademark as used in the Co-Promotion Territory, or, if not permitted, under a trademark to be selected by API in consultation with P&G. To the extent permitted by law, P&G shall own all trademarks for the Product within the Potential Co-Promotion Territory. If P&G is not permitted by law to own any trademark for the Product in any country within the Potential Co-Promotion Territory, then API shall own such trademark. The owner of a trademark shall be responsible for applying for, maintaining, enforcing and defending all trademarks related to the Product. Trademark Expenses shall be split *****. The parties shall enter into appropriate trademark licenses if necessary or prudent to enable the parties to perform their respective obligations pursuant to the Collaboration Agreement Documents with respect to the Potential Co-Promotion Territory.

I. Additions to the Potential Co-Promotion Territory. No country may be added to the Potential Co-Promotion Territory except as set forth in Section X(J).

ARTICLE VII

CONVERTED TERRITORIES

A. Conversion of Potential Co-Promotion Territory. The parties anticipate that, during the Term, P&G may acquire the Capacity to Co-Promote or, if Co-Promotion is not legally permissible, Co-Market the Product within one or more countries in the Potential Co-Promotion Territory. If the conditions to conversion set forth below are fulfilled, then, depending upon the circumstances of the conversion, P&G may convert any country in the Potential Co-Promotion Territory into a Primary Converted Co-Promotion Territory, a Secondary Converted Co-Promotion Territory or a Converted Co-Marketing Territory on the terms and conditions set forth in this Article VII.

1. Conditions to Conversion. If, at any time during the Term, P&G acquires or develops Capacity in any country in the Potential Co-Promotion Territory, then P&G may convert the rights and obligations of the parties in such country and convert such country from a Potential Co-Promotion Territory country into a Primary Converted Co-Promotion Territory country, a Secondary Converted Co-

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Promotion Territory country or a Converted Co-Marketing Territory country pursuant to the terms of this Article VII. Any such conversion shall be upon twelve (12) months’ prior written notice (the “Conversion Notice”) to API pursuant to the terms and conditions set forth herein.

2. Definition of Capacity. “Capacity” as used herein shall mean the acquisition or development by P&G of: (1) the ability of P&G (or any P&G Affiliate) to Co-Promote or Co-Market the Product at a minimum of ***** of API’s Detailing Efforts in such country in the twelve (12) full calendar months prior to API’s receipt of the Conversion Notice, such acquisition or development to occur by the end of the twelfth (12^th) month following the Conversion Date, as measured on an annualized basis, and (2) the ability of P&G (or any P&G Affiliate) to Co-Promote or Co-Market the Product at a minimum of ***** of API’s Detailing Efforts in such country in the twelve (12) full calendar months prior to API’s receipt of the Conversion Notice, such acquisition or development to occur by the end of the twenty-fourth (24^th) month following the Conversion Date, as measured on an annualized basis. Examples illustrating the operation of this Section VII(A)(2) are set forth in Schedule VII(A)(2).

3. Background Information. At any time and to facilitate P&G’s consideration of whether and how to convert a country within the Potential Co-Promotion Territory, API shall provide to P&G any and all information P&G reasonably requests regarding the registration, marketing, promotion, detailing, distribution and sale of the Product in any such country in the Potential Co-Promotion Territory, including, without limitation, the level of Promotion Efforts, Marketing Efforts, R&D Efforts, Commercial Expenses and Net Outside Sales thereof.

4. Conversion Notice. Any Conversion Notice with respect to a country within the Potential Co-Promotion Territory shall set forth the country to be converted, whether the country will become part of the Primary Converted Co-Promotion Territory, the Secondary Converted Co-Promotion Territory or the Converted Co-Marketing Territory and the date of conversion of such country (the “Conversion Date”), which Conversion Date, unless agreed otherwise, shall not be less than twelve (12) months after the date of receipt of the Conversion Notice by API.

5. Consequences of Conversion. Any country converted hereunder shall not be considered to be part of the Potential Co-Promotion Territory from and after the applicable Conversion Date. Subject to the terms and conditions set forth in this Article VII, any country so converted shall be considered to be part of the Primary Converted Co-Promotion Territory, the Secondary Converted Co-Promotion Territory or the Converted Co-Marketing Territory, as the case may be, from and after the applicable Conversion Date.

6. Failure to Achieve Capacity. Should P&G fail to achieve Capacity by either of the target dates, the country shall revert to its Potential Co-Promotion Territory status and the parties will negotiate in good faith a payment intended to return

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API to the profit it would have achieved had the Conversion Notice not been sent and/or the Conversion Date not occurred.

B. Primary Converted Co-Promotion Territory. Subject to Section VII(D), if P&G elects (subject to the requirements of Section VII(A)), in its sole discretion, to convert any country in the Potential Co-Promotion Territory into a Primary Converted Co-Promotion Territory pursuant to this Article VII, then, upon such election, the following terms and conditions shall apply:

1. Management Structure; Detailing Efforts and Non-Detailing Promotion Efforts, Marketing Efforts and R&D Efforts. The management of the Product and the obligations of the parties to undertake Marketing Efforts, Promotion Efforts and R&D Efforts within any country in the Primary Converted Co-Promotion Territory shall be determined in accordance with Article VI of this Agreement as if such country were still within the Potential Co-Promotion Territory; provided, however, P&G shall have the right, but not the obligation, to undertake up to ***** of the Detailing Efforts and Non-Detailing Promotion Efforts within such country. API shall compensate P&G or P&G’s Affiliate for the Detailing Efforts and Non-Detailing Promotion Efforts actually undertaken within such country based on an agreed upon cost per Primary Detail Equivalent determined by reference to an average of the parties’ actual cost of performing a Primary Detail Equivalent. Other than as set forth in the immediately preceding sentence, P&G shall bear all costs and expenses of maintaining its own sales organization in the Primary Converted Co-Promotion Territory, including, without limitation, the training thereof. In the Primary Converted Co-Promotion Territory, to the extent legally permissible, both parties’ names and logos shall appear on Product labels and promotional materials with equal prominence. In any country in the Primary Converted Co-Promotion Territory where this is not legally permitted, the parties agree to work together in good faith to identify a mechanism to allow the association of both parties’ names with the Product. Except as set forth in this Section VII(B)(1), API shall continue to bear all Commercial Expenses related to the Product within the Primary Converted Co-Promotion Territory as if each country in the Primary Converted Co-Promotion Territory were within the Potential Co-Promotion Territory. Within thirty (30) days after the last day of each Quarter, each P&G Affiliate shall report to API’s Affiliate in such country P&G’s costs and expenses for Detailing Efforts and Non-Detailing Promotion Efforts incurred by P&G’s Affiliate for the Quarter and each P&G Affiliate shall invoice the API Affiliate in its country for, and each API Affiliate shall pay the P&G Affiliate in its country for, such costs and expenses plus a service mark up of ***** of such costs and expenses, plus VAT, if applicable.

2. Product Cost. API shall continue to pay P&G for Product pursuant to Section VI(E) as if such country in the Primary Converted Co-Promotion Territory were within the Potential Co-Promotion Territory.

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3. Other Rights and Obligations. Except as specifically set forth in the Collaboration Agreement Documents, all of the rights and obligations of the parties with respect to any country in the Primary Converted Co-Promotion Territory shall be the same as the rights and obligations of the parties with respect to the Potential Co-Promotion Territory, as if such country were within the Potential Co-Promotion Territory.

4. Marketing Services Agreements. Unless the parties agree otherwise, P&G’s Affiliate in each country of the Primary Converted Co-Promotion Territory shall enter into a Marketing Services Agreement with the API Affiliate in such country pursuant to which API’s Affiliate shall purchase from P&G’s Affiliate, and P&G’s Affiliate shall provide to API’s Affiliate, P&G’s Affiliate’s Detailing Efforts and Non-Detailing Promotion Efforts. For each Quarter during the Term, ***** of the total cost of all P&G’s Affiliates’ Detailing Efforts and Non-Detailing Promotion Efforts shall be defined as the Primary Converted Co-Promotion Service Mark Up or PCCPSMU. Local Marketing Services Agreements will comply with this Agreement and in the case of discrepancies between the terms of this Agreement and any local Marketing Services Agreement, the terms and conditions of this Agreement shall prevail.

C. Secondary Converted Co-Promotion Territory. Subject to Section VII(D), if P&G elects (subject to the requirements of Section VII(A)), in its sole discretion, to convert any country in the Potential Co-Promotion Territory into a Secondary Converted Co-Promotion Territory pursuant to this Article VII, then, upon such election, the following terms and conditions shall apply:

1. Entry Payment. In exchange for the right to Co-Promote the Product in any country which is to be converted into a Secondary Converted Co-Promotion Territory, P&G shall pay to API an Entry Payment calculated and to be paid as set forth on Schedule VII(C)(1) (the “Entry Payment”). Such payment shall be made on the Conversion Date.

2. Management Structure; Promotion Efforts, Marketing Efforts and R&D Efforts. The management of the Product and the obligations of the parties to undertake Marketing Efforts, Promotion Efforts and R&D Efforts and to be responsible for costs and expenses, including, without limitation, Commercial Expenses, within any country in the Secondary Converted Co-Promotion Territory shall be determined in accordance with Article IVa including, but not limited to, the provisions of Section IVa(F) as if such country were within the Secondary Co-Promotion Territory except that, for each Quarter during the Term, the total cost of all P&G’s Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts in the Secondary Converted Co-Promotion Territory plus the total cost of all API Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts in such countries shall be defined as the Secondary Converted Co-Promotion Marketing Costs or SCCPMC. In the Secondary Converted Co-Promotion

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Territory, to the extent legally permissible, both parties’ names and logos shall appear on Product labels and promotional materials with equal prominence. The penalties provided pursuant to Section IVa(B)(8)(a) shall not be included in the calculation of SCCPMC. For each Quarter during the Term, ***** of the total cost of all P&G’s Affiliates’ Detailing Efforts, Non-Detailing Promotion Efforts, Marketing Efforts and Joint R&D Efforts shall be defined as the Secondary Converted Co-Promotion Service Mark Up or SCCPSMU. In any country in the Secondary Converted Co-Promotion Territory where this is not legally permitted, the parties agree to work together in good faith to identify a mechanism to allow the association of both parties’ names with the Product.

3. Product Supply. API shall continue to pay P&G for Product pursuant to Section VI(E) as if such country in the Secondary Converted Co-Promotion Territory were within the Potential Co-Promotion Territory.

4. Other Rights and Obligations. Unless otherwise determined by the Alliance Management Committee, Products will continue to be sold in the Secondary Converted Co-Promotion Territory under the same Trademark as prior to conversion. Except as specifically set forth in the Collaboration Agreement Documents, all of the rights and obligations of the parties with respect to any country in the Secondary Converted Co-Promotion Territory and R&D Efforts shall be the same as the rights and obligations of the parties with respect to the Potential Co-Promotion Territory, as if such country were within the Potential Co-Promotion Territory.

D. Converted Co-Marketing Territory. If it is not legally permissible to Co-Promote the Product within any country in the Potential Co-Promotion Territory in which P&G acquires Capacity, but it is legally permissible to Co-Market the Product in such country, then Sections VII(B) and (C) shall not apply and P&G may elect (subject to the requirements of Section VII(A)), in its sole discretion, to convert any such country in the Potential Co-Promotion Territory into a Converted Co-Marketing Territory. If P&G elects, in its sole discretion, to convert any such country in the Potential Co-Promotion Territory into a Converted Co-Marketing Territory, then, upon such election, the following terms and conditions shall apply:

1. Entry Payment. In exchange for the right to Co-market the Product in any country which is to be converted into a Converted Co-Marketing Territory, P&G shall pay to API an Entry Payment calculated and to be paid as set forth on Schedule VII(C)(1). Such payment shall be made on the Conversion Date.

2. Management Structure; Promotion Efforts and Marketing Efforts. Upon payment of the Entry Payment with respect to any country in the Potential Co-Promotion Territory to be converted into a Converted Co-Marketing Territory, P&G shall have the right to Co-Market the Product in such country pursuant to Article V, as if such country were a country in the Co-Marketing Territory. API shall use commercially reasonable efforts to obtain a duplicate Health Registration with

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respect to the Product within such country and shall transfer such duplicate Health Registration to P&G or P&G’s Affiliate promptly upon approval of such Health Registration. API shall have the right to continue to sell Products under the same Trademark as prior to conversion. All other rights and obligations of the parties with respect to such country shall be the same as the rights and obligations of the parties with respect to the Co-Marketing Territory pursuant to Article V as if such country were within the Co-Marketing Territory.

3. Product Supply. API shall continue to pay P&G for Product pursuant to Section VI(E) as if such country in the Converted Co-Marketing Territory were within the Potential Co-Promotion Territory.

4. Other Rights and Obligations. Except as specifically set forth in the Collaboration Agreement Documents, all of the rights and obligations of the parties with respect to any country in the Converted Co-Marketing Territory shall be the same as the rights and obligations of the parties with respect to the Co-Marketing Territory, as if such country were within the Co-Marketing Territory, except that, subject to the terms and conditions of the Collaboration Agreement Documents, API shall be responsible for all internal administrative costs and expenses of obtaining Health Registrations within the Converted Co-Marketing Territory and each party shall be responsible for all country specific costs and expenses, including, without limitation, user fees, of obtaining such party’s respective Health Registration(s) within the Converted Co-Marketing Territory.

E. Conversion of Co-Marketing Territory to Co-Promotion Territory. The parties anticipate that, during the Term, it may become legally permissible to Co-Promote the Product within a country in the Co-Marketing Territory. If, at any time during the Term, it becomes legally permissible to Co-Promote the Product within any country in the Co-Marketing Territory, then P&G may elect, in its sole discretion, to convert any such country in the Co-Marketing Territory to a country in the Co-Promotion Territory or Secondary Co-Promotion Territory, as determined pursuant to Section VII(E)(4); provided, however, that P&G may not elect to convert Italy from a country in the Co-Marketing Territory to a country in the Co-Promotion Territory or Secondary Co-Promotion Territory prior to the expiration of API’s right to effectuate the Italy Conversion pursuant to Section IV(K). If P&G elects, in its sole discretion, to convert any such country in the Co-Marketing Territory, then, upon such election, the following terms and conditions shall apply:

1. Background Information. At any time and to facilitate P&G’s consideration of whether and how to convert a country within the Co-Marketing Territory, API shall provide to P&G any and all information P&G reasonably requests regarding the registration, marketing, promotion, detailing, distribution and sale of the Product in any such country in the Co-Marketing Territory, including, without limitation, the level of Promotion Efforts, Marketing Efforts, R&D Efforts, Commercial Expenses and Net Outside Sales thereof.

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2. Conversion of Co-Marketing Territory. Any such conversion shall be upon twelve (12) months prior written notice (the “Conversion Notice”) to API pursuant to the terms and conditions set forth herein. Any Conversion Notice with respect to a country within the Co-Marketing Territory shall set forth the country to be converted, whether the country will become part of the Co-Promotion Territory or the Secondary Co-Promotion Territory and the date of conversion of such country from part of the Co-Marketing Territory (the “Conversion Date”), which Conversion Date shall not be less than twelve (12) months after the date of receipt of the Conversion Notice by API.

3. Consequences of Conversion. Any country converted hereunder shall not be considered to be part of the Co-Marketing Territory from and after the applicable Conversion Date. Subject to the terms and conditions set forth in this Article VII, any country so converted shall be considered to be part of the Co-Promotion Territory or the Secondary Co-Promotion Territory, as determined pursuant to Section VII(E)(4) hereof, from and after the applicable Conversion Date.

4. Termination of a Party’s Right to Distribute. Prior to the Conversion Date, the parties shall agree to withdraw one Health Registration for the Product in the country to be converted. Unless otherwise agreed by the Alliance Management Committee, the Health Registration that will be withdrawn will be the Health Registration for which Net Outside Sales in the twelve (12) full calendar months prior to API’s receipt of the Conversion Notice are smaller. If the Health Registration to be withdrawn belongs to P&G or P&G’s Affiliate, then the country to be converted shall be considered to be part of the Secondary Co-Promotion Territory from and after the applicable Conversion Date and P&G shall cease distribution of its Product. If the Health Registration to be withdrawn belongs to API or API’s Affiliate, then the country to be converted shall be considered to be part of the Co-Promotion Territory from and after the applicable Conversion Date and API shall cease distribution of its Product.

5. Management Structure; Promotion Efforts, Marketing Efforts and R&D Efforts. The management of the Product and the obligations of the parties to undertake Marketing Efforts, Promotion Efforts and R&D Efforts and to be responsible for costs and expenses, including, without limitation, Commercial Expenses, within any country formerly within the Co-Marketing Territory and converted into the Co-Promotion Territory or the Secondary Co-Promotion Territory shall be determined in accordance with Article IV or IVa (as the case may be) as if such country were within the Co-Promotion Territory or the Secondary Co-Promotion Territory (as the case may be). To the extent legally permissible, both parties’ names and logos shall appear on Product labels and promotional materials with equal prominence; where this is not legally permitted, the parties agree to work together in good faith to identify a mechanism to allow the association of both parties’ names with the Product.

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6. Product Supply. If the country to be converted is to be converted to a Secondary Co-Promotion Territory, API shall pay P&G for Product pursuant to Section IVa(J).

7. Other Rights and Obligations. Unless otherwise determined by the Alliance Management Committee, Products will be sold under the same Trademark as the Health Registration under which sales will continue. Except as specifically set forth in the Collaboration Agreement Documents, all of the rights and obligations of the parties with respect to any country converted hereunder to a Co-Promotion Territory shall be the same as the rights and obligations of the parties with respect to the Co-Promotion Territory, as if such country were within the Co-Promotion Territory and all of the rights and obligations of the parties with respect to any country converted hereunder to a Secondary Co-Promotion Territory shall be the same as the rights and obligations of the parties with respect to the Secondary Co-Promotion Territory, as if such country were within the Secondary Co-Promotion Territory.

8. Costs and Fees. The sharing of costs and fees to be shared by the parties in any country to be converted hereunder shall be as set forth in Article IV (for countries to be converted to the Co-Promotion Territory) or Article IVa (for countries to be converted to the Secondary Co-Promotion Territory).

F. Limitation Upon or After Change in Control with Respect to P&G. Notwithstanding any other provision of the Collaboration Agreement Documents, no country may be converted pursuant to this Article VII upon or after a Change in Control of Procter & Gamble Pharmaceuticals, Inc.

ARTICLE VIII

[RESERVED]

ARTICLE IX

MANUFACTURING AND SUPPLY

Unless the parties determine otherwise, P&G shall manufacture and supply Products to be sold to third parties or API (as the case may be) in all countries within the Territory pursuant to the Supply Agreement. P&G and API may enter into an agreement which designates API to perform some or all contract manufacturing services for all or a portion of the manufacturing, packaging and labeling of the Product. In the event that there is insufficient Product to meet marketplace requirements, the Alliance Management Committee shall make a determination regarding appropriate allocation of Product in the Territory.

ARTICLE X

WHITE SPACE TERRITORY

With respect to the White Space Territory, the parties shall have the rights and obligations set forth in this Article X.

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A. Commercialization. Subject to the other terms of the Collaboration Agreement Documents, API shall use commercially reasonable efforts to enter into agreements (herein “Sub-Licenses”) with one or more third parties to commercialize the Product in the White Space Territory.

B. License Grant.

1. To facilitate Sub-Licenses, P&G hereby grants API a license under P&G Patents and P&G Know-how to develop, use, import, market, promote, distribute, offer to sell and sell Product in the White Space Territory. The license pursuant to this Section X(B)(1) shall terminate at the end of the Term, or earlier with respect to any country pursuant to the provisions of Section X(C).

2. Except as set forth in this Article X, API shall not license, sell, assign, or otherwise transfer or grant to any non-Affiliate third party any of its rights or obligations regarding Product in the White Space Territory, other than as explicitly stated in the Collaboration Agreement Documents.

3. P&G shall not grant any license to a non-Affiliate third party to develop, make, have made, use, import, market, promote, distribute, offer to sell or sell Product in the White Space Territory, without the prior written consent of API.

C. Failure to Comply with Sub-Licensing Obligations. If API fails to exert reasonable efforts to secure a Sub-License with respect to any country within the White Space Territory within thirty six (36) months after the filing of an NDA or supplemental NDA with the USFDA for the indication of PMO and such failure did not result from P&G’s rejection of a proposed Sub-License pursuant to Section X(E), then, upon P&G’s request, all rights to the Product within such country shall revert to P&G or its designee, the grant of rights described in Section X(A) shall be extinguished with respect to such country and such country shall no longer be considered a part of the Territory for purposes of the Collaboration Agreement Documents; provided, however, that the provisions of Article XXII shall continue to apply to API as if such country were still a part of the Territory. P&G shall be free to undertake any and all activities with respect to the Product within such country; provided, however, that to the extent P&G selects a non-Affiliate third party to commercialize the Product, API shall have the right to receive ***** of all consideration received by P&G in connection with the sale of the Product within such country, whether such consideration is in the form of royalties, direct sales, lump sum payments, profits from Product supply (transfer price less Cost of Goods) or otherwise. If API has obtained any Health Registrations, approvals, or rights of any kind with respect to the Product within such country, then API shall as soon as practicable, upon P&G’s request, transfer title to all such Health Registrations, approvals and rights to P&G or its designee, and if title to any such Health Registrations, approvals or rights is not transferable, then API shall use all commercially reasonable efforts to enable P&G to make use of all such Health Registrations, approvals and rights. Upon the transfer of title to such Health Registrations, P&G shall reimburse API for its reasonable costs and

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expenses associated with the procurement of such Health Registrations, approvals and rights so transferred. Notwithstanding the foregoing, if at the time of the expiration of any time period specified in this Section X(C), API is exerting reasonable efforts to secure a sub-license with respect to any country within the White Space Territory, the parties agree to negotiate in good faith a reasonable extension to the applicable time period. The parties agree that P&G’s remedy for API’s failure to secure a Sub-License is as set forth in this Section X(C), and such failure shall not constitute a breach of this Agreement.

D. Recording of Sales. Unless the parties otherwise agree, API shall solicit and accept orders for, and ship and invoice sales of, the Product from and to sub-licensees in all countries in the White Space Territory.

E. Terms and Conditions of Sub-License Agreements. API shall negotiate the terms and conditions of all Sub-Licenses. Prior to the execution thereof, API shall present any proposed Sub-License to P&G for P&G’s review and approval, such approval not to be unreasonably withheld.

F. Consideration.

1. Allocation. All consideration, whether in the form of royalties, lump sum payments, profits from Product supply (transfer price less Cost of Goods) or otherwise, paid by any third party to API pursuant to any Sub-License or to P&G shall be split *****.

2. Method of Payment. Within forty five (45) days after the last day of each Quarter, API shall submit to P&G a report setting forth in reasonable detail the consideration to be paid on a country by country basis for all countries within the White Space Territory for such Quarter. Based on these reports and the allocations and calculations set forth in this Section X(F), the parties shall calculate the amount owed by API to P&G or by P&G to API pursuant to this Section X(F). Any amounts owed pursuant to this Section X(F) shall be paid in the USA in USD no later than sixty (60) days after the expiration of the relevant Quarter. The operation of the calculations in this Section X(F) is demonstrated by the examples set forth in Schedule X(F).

G. Expenses. As between API and P&G, API shall bear all costs and expenses with respect to the marketing, promotion, detailing, distribution, sale or sub-licensing of Product within the White Space Territory, including, without limitation all costs and expenses of obtaining and maintaining Health Registrations for the Product (including user fees) and Commercial Expenses.

H. Health Registrations. It is anticipated that in the White Space Territory, the sub-licensee shall be the holder of all Health Registrations related to the Product. To facilitate the sub-licensee’s efforts to obtain such Health Registrations, API shall have the

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right to provide to such sub-licensee a copy of the Drug Dossier, or the appropriate components thereof.

I. Trademarks. In the White Space Territory, the Product shall be sold under a trademark to be selected by P&G in consultation with API. To the extent permitted by law, P&G shall own all trademarks for the Product within the White Space Territory. If P&G is not permitted by law to own any trademark for the Product in any country within the White Space Territory, then API shall own such trademark, and if API is not permitted by law to own such trademark, then the sub-licensee shall own such mark; provided, however, that the sub-licensee shall be required to transfer title to such trademark to P&G immediately upon the termination or expiration of the relevant Sub-License. Trademark Expenses shall be split *****. The owner of a trademark shall be responsible for applying for, maintaining, enforcing and defending all trademarks related to the Product. The parties and/or any sub-licensee shall enter into appropriate trademark licenses if necessary or prudent to enable the parties and/or any sub-licensee to perform their respective obligations pursuant to the Collaboration Agreement Documents and/or any Sub-License with respect to the White Space Territory.

J. Conversion to Potential Co-Promotion Territory. Based upon a determination by the Alliance Management Committee, a country within the White Space Territory may be added to the Potential Co-Promotion Territory. Such determination shall include establishing reasonable time periods for submitting Health Registrations and for launching the Product.

K. Product Supply and Cost.

1. Supply. P&G shall supply Product to API or to API’s sub-licensee pursuant to the Supply Agreement.

2. Obligation to Supply. Upon notice to API or API’s sub-licensee to P&G that API or API’s sub-licensee has obtained all approvals necessary and appropriate to launch the Product, including but not limited to reimbursement pricing, in a particular country within the White Space Territory, as set forth in Section X(H), P&G may elect not to supply Product to API or API’s sub-licensee based on P&G’s determination in good faith that: (i) government reimbursement prices for Product in such country make the launch of Product in such country not commercially viable; (ii) labeling approved in such country by the Ministry of Health would have a material negative effect on commercial viability of the Product; or (iii) studies required in such country by the Ministry of Health would have a material negative effect on commercial viability of the Product. P&G shall notify API or API’s sub-licensee that it has elected not to supply Product as soon as practicable, but not later than thirty (30) days after receipt of notice from API or API’s sub-licensee that it has obtained a Health Registration.

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ARTICLE XI

ACTIVITIES OUTSIDE THE TERRITORY

API acknowledges that P&G has entered into an agreement with Ajinomoto Co., Inc., dated December 8, 1992 (the “Japan Agreement”), dealing with the marketing, promotion, sale and distribution of Risedronate within the country of Japan. A copy of that agreement, with certain financial terms redacted, has been delivered to API. The parties agree that P&G’s performance of its obligations under the Japan Agreement shall not be deemed to be in conflict with or violate any of the terms and conditions of the Collaboration Agreement Documents. P&G represents to API that after January 1, 2001, the parties shall be free to undertake the rights and obligations set forth in the Collaboration Agreement Documents in New Zealand and Australia.

ARTICLE XII

INTELLECTUAL PROPERTY DISCLOSURE, RIGHTS AND ENFORCEMENT

A. Know-how. P&G shall promptly disclose to API all Know-how which is possessed by P&G as of the Original Agreement Effective Date, or comes into the possession of P&G during the Term. API shall promptly disclose to P&G all Know-how which is possessed by API as of the Original Agreement Effective Date, or comes into the possession of API during the Term. All such Know-how shall be considered Confidential Information subject to the obligations of Article XIII, and shall be subject to the licensing provisions of this Agreement.

B. Ownership of Patents. Any patent for an invention conceived or reduced to practice regarding Risedronate during the Term shall be owned:

1. by API (and shall be an API Patent), if said invention is conceived and reduced to practice solely by employees of API;

2. by P&G (and shall be a P&G Patent with respect to a Product) if said invention is conceived and reduced to practice solely by employees of P&G;

3. jointly, if said invention is conceived or reduced to practice jointly by employees of P&G and API.

Inventorship shall be determined according to the laws of the USA. Filing, prosecution, maintenance and enforcement of such patents shall be handled pursuant to Section XII(D).

C. Grant of License by API. API hereby grants to P&G a non-exclusive irrevocable, royalty-free, worldwide, license under API Patents and API Know-how, including the right to sublicense, to develop, make, have made, use, import, offer to sell and sell Risedronate and products containing Risedronate.

D. Filing, Prosecution and Maintenance of Patent Applications.

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1. API and P&G will discuss and evaluate Know-how disclosed pursuant to Section XII(A), and confer regarding the advisability of filing patent applications (herein “Patent Application”) claiming a potentially patentable invention regarding Risedronate (herein “Invention”). The party responsible (herein “Responsible Party”) for the filing, prosecution and maintenance of Patent Applications shall be: (1) P&G, if the subject Invention is made solely by employees of Procter & Gamble; (2) API, if the subject Invention is made solely by employees of API; or (3) determined by agreement of the parties, for all other Inventions, taking into account the nature of the Invention and the relationship of the Invention to inventions claimed in other patents or applications. Patent Applications, and patents issuing therefrom, claiming such other Inventions shall be considered a P&G Patent or an API Patent if the Responsible Party for the Patent Application is P&G or API, respectively, for the purposes of (and only for the purposes of) the responsibilities and obligations set forth in Sections XII(E), XII(F), and XII(G). API and P&G will discuss with each other the advisability of filing Patent Applications in countries beyond the country of initial filing.

2. The parties will cooperate so as to ensure all Patent Applications are filed before any public disclosures so as to ensure validity of any patents obtained outside of the USA. The Responsible Party will submit a substantially complete draft of each Patent Application to the other party at least thirty (30) days prior to the contemplated filing date and consider any comments of the other party; provided, however, in those circumstances where the Responsible Party believes time is of the essence, the Responsible Party will endeavor to provide the other party with such advance notice as it reasonably can under the circumstances. API and P&G will confer with each other regarding the prosecution of such Patent Applications and will copy each other with any official action and submission in such Patent Applications.

Copies shall be forwarded to:

Procter & Gamble Pharmaceuticals, Inc.

Attention: Associate General Counsel, Patents

8700 Mason-Montgomery Road

Cincinnati, Ohio 45040-8006

Aventis Pharmaceuticals Inc.

Attention: General Counsel

300 Somerset Boulevard

Bridgewater, New Jersey 08807

E. Patent Prosecution and Maintenance Responsibilities.

1. P&G shall diligently file, prosecute, issue, and maintain P&G Patents, at its own expense, according to its own internal standards and for effectively covering other inventions made by its employees or consultants. P&G shall pay all fees

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necessary to maintain P&G Patents for the full terms thereof. In the event P&G determines that it is unwilling or unable to prosecute or maintain a P&G Patent in a country, then P&G shall promptly notify API of said determination. API shall then have the right, but not the obligation, to assume prosecution and maintenance of said patent in said country.

2. API shall diligently file, prosecute, issue, and maintain API Patents, at its own expense, according to its own internal standards and for effectively covering other inventions made by its employees or consultants. API shall pay all fees necessary to maintain API Patents for the full terms thereof. In the event API determines that it is unwilling or unable to prosecute or maintain a API Patent in a country, then API shall promptly notify P&G of said determination. P&G shall then have the right, but not the obligation, to assume prosecution and maintenance of said patent in said country.

3. Each party shall provide (i) notice of patents relevant to a US NDA, prior to the time the NDA is filed, and (ii) immediate notice of the issuance of any patent which will be a P&G Patent or an API Patent or a patent on a Joint Product Improvement, giving the date of issue and patent number for each such patent and the parties will jointly decide within thirty (30) days of the patent issue date if the patent is to be listed pursuant to any Health Registration (particularly in Canada) and any pending or approved Health Registration or NDA in the United States for Product. Likewise, the parties shall provide immediate notice of any approved Health Registration and if patent term extensions (including Supplementary Protection Certificates in the European Union countries) are to be filed in any applicable country of the Territory. The parties will cooperate with each other in the preparation and filing of patent listings and patent term extensions, and in mutually deciding whether one, or both parties will proceed in filing of appropriate listing and patent term extension documents.

4. Each party will provide prompt notice to the other of any inquiries as to any P&G Patent or API Patent which have claims to manufacturing processes, which inquiries are provided pursuant to 35 U.S.C. § 271(g), and will cooperate with respect to responses thereto.

F. Enforcement of Patents.

1. Each party shall notify the other party within ten (10) business days after learning of any of the following events:

a. any patent nullity actions, any declaratory judgment actions, any alleged or threatened infringement of patents or patent applications, any alleged patent invalidity or non-infringement of patent or patents pursuant to a Paragraph IV patent certification by a party filing an Abbreviated New Drug Application (“ANDA”), or misappropriation of intellectual property with respect to a P&G Patent and/or an API Patent;

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b. if either party, or any of their respective Affiliates, shall be individually named as a defendant in a legal proceeding by a third party alleging infringement of a third party patent or other intellectual property right as a result of the manufacture, production, use development, manufacturing, selling or distribution of Risedronate and/or Product; or

c. any other information or notification regarding either a P&G Patent or an API Patent.

2. P&G shall have the first right to respond to, defend or prosecute any actions regarding the events set forth in Section XII(F)(1)(a) or XII(F)(1)(c) with respect to a P&G Patent, at its sole cost. In the event P&G elects to do so, API will cooperate with P&G and its legal counsel, join in such suits as may be brought by P&G, and be available at P&G’s reasonable request to assist in such proceedings at its own expense. P&G will use commercially reasonable efforts to provide to API working drafts of all proceeding documents sufficiently reasonably prior to the filing date to permit API a meaningful opportunity to review such documents and to provide comments thereon to P&G on a timely basis and P&G shall consider in good faith any comments of API and discuss with API any comments with which it may disagree; provided, however, in those circumstances where P&G believes time is of the essence, P&G will endeavor to provide API with such advance notice as it reasonably can under the circumstances. P&G and API will in good faith discuss and confer regarding the strategy for such proceedings. P&G, where able, will copy API on materials received during discovery.

3. API shall have the first right to respond to, defend or prosecute any actions regarding the events set forth in Section XII(F)(1)(a) or XII(F)(1)(c) with respect to a API Patent, at its sole cost. In the event API elects to do so, P&G will cooperate with API and its legal counsel, join in such suits as may be brought by API, and be available at API’s reasonable request to assist in such proceedings at its own expense. API will use commercially reasonable efforts to provide to P&G working drafts of all proceeding documents sufficiently reasonably prior to the filing date to permit P&G a meaningful opportunity to review such documents and to provide comments thereon to API on a timely basis and API shall consider in good faith any comments of P&G and discuss with P&G any comments with which it may disagree; provided, however, in those circumstances where API believes time is of the essence, API will endeavor to provide P&G with such advance notice as it reasonably can under the circumstances. P&G and API will in good faith discuss and confer regarding the strategy for such proceedings API, where able, will copy P&G on materials received during discovery.

4. If P&G elects not to respond to, defend or prosecute any actions, challenges, infringements, certifications, misappropriations or proceedings by a third party alleging infringement described in Section XII(F)(1) with twenty (20) days of becoming aware of or being notified of such actions, challenges, infringements,

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certifications, misappropriations or proceedings, or abandons such action, then, in such event, API shall have the option to do so at API’s sole cost, and P&G shall cooperate with and provide assistance to API at P&G’s expense.

5. If API elects not to respond to, defend or prosecute any actions, challenges, infringements, certifications, misappropriations or proceedings by a third party alleging infringement described in Section XII(F)(1) with twenty (20) days of becoming aware of or being notified of such actions, challenges, infringements, certifications, misappropriations or proceedings, or abandons such action, then, in such event, P&G shall have the option to do so at P&G’s sole cost, and API shall cooperate with and provide assistance to P&G at API’s expense.

6. Neither party will settle any suit or claim set forth in Section XII(F)(1) without obtaining the prior written consent of the other party.

7. All costs and damages obtained by or awarded to a party instituting an action pursuant to this Section XII(F) shall, after reimbursing each party for its out-of-pocket costs and reasonable expenses of said action, be *****. Any judgments awarded to a third party regarding an action described in Section XII(F)(1)(b) shall be split equally between the parties.

8. If P&G and API jointly determine that it is necessary or desirable to acquire any third party patent or license in connection with the development or manufacture and sale of Products in the Territory, including, without limitation, (a) in settlement of an action described in Section XII(F)(1)(b) and (b) the Merck License, then the costs of acquiring such third party patent or license shall be shared *****. For such third party licenses acquired after the A&R Agreement Effective Date, the costs of such acquisition, including upfront and milestone payments but excluding royalty or similar payments, shall be credited against the Patent Extension Payment to the extent that they relate to the period after December 31, 2019. In determining the extent to which these costs relate to the period after December 31, 2019, each such payment will be allocated proportionately across the period from the date of such payment until the end of the term of such third party license.

9. As soon as reasonably practicable after the A&R Agreement Effective Date, and no later than October 15, 2004, the parties will enter into a mutually acceptable common interest agreement regarding the patent litigation filed by The Procter & Gamble Company against Teva Pharmaceutical USA, Inc. on August 13, 2004.

G. Enforcement of Trademarks.

1. If either party learns of any infringement (herein “Infringement”) by a third party of a trademark under which a Product is sold in the Territory, said party (the “Notifying Party”) shall promptly advise the other party of all the relevant facts and circumstances known by the Notifying Party in connection with the

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Infringement. The party owning said trademark (herein the “Responsible Party”) shall have the right, but not the obligation, to institute such action as it deems appropriate to terminate said Infringement through negotiation, litigation and/or alternative dispute resolution means, at its sole discretion and at its sole cost. The Responsible Party shall have the right to control and to select counsel in any action initiated by the Responsible Party. The other party shall lend its name to the action, and provide such assistance as may be reasonably necessary. Any negotiated settlement shall be made only with the consent of the other party, which consent shall not be unreasonably withheld. Notwithstanding the other provisions of this Section, with respect to any Infringement where API is the Responsible Party, P&G shall have the right, but not the obligation, to institute such action as it deems appropriate to terminate said Infringement through negotiation, litigation and/or alternative dispute resolution means, at its sole discretion and at its sole cost. P&G shall have the right to control and to select counsel in any such action initiated by P&G. API shall lend its name to the action, and provide such assistance as may be reasonably necessary. Any negotiated settlement in such action shall be made only with the consent of API, which consent shall not be unreasonably withheld.

2. The other party may request the Responsible Party, by written notice, to take action under Section XII(G)(1) to terminate any Infringement. In the event the Responsible Party does not, within six (6) months after receiving said notice either:

a. terminate said Infringement; or

b. commence negotiation, litigation and/or alternative dispute resolution to terminate said Infringement; and thereafter prosecute said action with reasonable diligence;

then the other party shall have the right, but not the obligation, to institute such action as it deems appropriate to terminate said Infringement through negotiation, litigation and/or alternative dispute resolution means, at its sole cost. The other party shall have the right to control and to select counsel in any action initiated by the other party. Any negotiated settlement shall be made only with the consent of the Responsible Party, which shall not be unreasonably withheld. The Responsible Party shall lend its name to the action, and provide such assistance as may be reasonably necessary.

3. All costs and damages obtained by or awarded to either party instituting an action under Sections XII(G)(1) or (2) shall, after reimbursing said party for its out-of-pocket costs and reasonable expenses of said action, be *****.

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H. Limitation of Rights. Nothing in this Agreement shall be considered to be a grant of rights under any patents, issued or pending, or know-how possessed by either party, except as explicitly set forth herein.

ARTICLE XIII

CONFIDENTIALITY OF INFORMATION

A. Non-Disclosure of Confidential Information.

Each party shall maintain in confidence all information (herein “Confidential Information”), whether oral or written (including, without limitation, in electronic form), which:

1. is Know-how developed by that party or disclosed to it by the other party; or

2. relates to the terms of the Collaboration Agreement Documents or the Collaboration Agreement Documents; or

3. is other information (“Other Information”) disclosed by the other party which is considered confidential by the other party, and so designated as confidential in writing when first disclosed or within thirty (30) days after disclosure if the first disclosure is oral, or is the type of information which is generally considered by both parties to be confidential.

Except as set forth in Section XIII(C), Section XIII(E), or as may be necessary for the filing or prosecution of Patent Applications pursuant to Article XII, each party shall take all reasonable precautions to:

1. prevent disclosure of such Confidential Information to third parties;

2. use Know-how only for the purposes of exercising the rights and performing the obligations of the party pursuant to the Collaboration Agreement Documents; and

3. use Other Information only for the purposes permitted in the Collaboration Agreement Documents or the Collaboration Agreement Documents.

B. Exceptions. The foregoing confidentiality obligation shall not apply to a party with respect to information which:

1. is Other Information already in the possession of the party at the time of disclosure by the other party;

2. is or later becomes available to the public other than by default by the party;

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3. is received from a third party having no obligation of confidentiality to the other party;

4. is Other Information developed by the party entirely without reference or use of Other Information disclosed by the other party, as established by probative documentary evidence; or

5. is required to be disclosed by law or government regulation.

Furthermore, in the event that either party (a) becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) or (b) in the opinion of counsel, is required pursuant to law or a listing agreement with a securities exchange to disclose any Confidential Information, it shall provide the other party with prompt written notice of such requirement so that the other party may seek a protective order or other appropriate remedy and/or waive compliance with the terms of Section XIII(A). In the event that such protective order or other remedy is not obtained, or that the other party waives compliance with the provisions hereof, the disclosing party shall furnish only that portion of the Confidential Information which is, according to written opinion of counsel, legally required and shall exercise reasonable efforts to obtain assurance that the party to whom the Confidential Information is disclosed shall treat it as confidential.

C. Publication. It is understood the parties may wish to publish or otherwise disclose Know-how to a third party for publication in a reputable scientific forum (for example, as an abstract, poster presentation, lecture, article, book, or any other means of dissemination to the public). Such disclosures may be made to a third party regarding (1) preclinical research; (2) clinical research disclosing only data that have been locked, if disclosure presents no significant risk to regulatory filings and serves a compelling business reason for publication; and (3) other work by the parties, upon approval by the R&D Committee. No such disclosure shall be made to a third party until a patent application has been filed adequately describing and claiming any patentable invention embodied in such disclosure, pursuant to Article XII. A party wishing to make any such disclosure shall submit a complete written draft of the disclosure to the other party at least ninety (90) days prior to submission for publication of such draft, or an abstract of a proposed oral disclosure at least ninety (90) days prior to submission of such abstract or the oral disclosure, whichever is earlier. In the event that patent filings are necessary, public disclosure shall be delayed until said patent filings have been made. The other party shall have the right (i) to propose modifications to the publication for patent reasons, (ii) to request a delay in publication or presentation in order to protect patentable information or (iii) to request that the information be maintained as a trade secret and, in such case the other party shall not make such publication. Any disputes regarding proposed modifications, delays or maintaining trade secrets shall be resolved first by reference to the Research & Development Committee.

D. Duration. The obligations of the parties under this Article XIII shall survive until the fifth anniversary of the end of the Term. At the end of the Term, each of P&G and API

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shall return to the other or destroy all tangible forms of Confidential Information furnished by the other, including all copies thereof and all memoranda of oral disclosure, and if destroyed, such destruction shall be certified in writing to the other party by an officer of such party supervising such destruction. Notwithstanding the foregoing, each party may retain one copy of the other party’s Confidential Information to be kept in a confidential file in the office of its legal department solely for archival legal purposes.

E. External Communications. Any press releases or similar publicity with respect to the Collaboration Agreement Documents or the transactions contemplated therein shall be approved by both parties in advance, provided that such approval shall not be unreasonably withheld or delayed and that nothing in this Section XIII(E) shall prevent either party upon reasonable notice to the other party from making public announcements to comply with the requirements of law or any listing agreement with any national securities exchange or to inform their respective employees of the transactions contemplated therein.

F. Merger of Prior Confidentiality Agreement. Upon execution of the Original Agreement, the Confidentiality Agreement dated July 10, 1996, between Procter & Gamble Pharmaceuticals, Inc. and Roussel UCLAF terminated. All Information (as defined in such Confidentiality Agreement) exchanged between the parties and/or their Affiliates under that Confidentiality Agreement shall be deemed Confidential Information and subject to the terms of this Article XIII.

ARTICLE XIV

REPRESENTATIONS AND WARRANTIES

A. Representations and Warranties of HMR.

1. HMR represents and warrants to P&G the following, which shall be true and correct on the Original Agreement Effective Date and with respect to each of the other Collaboration Agreement Documents, as of the date of execution of each such Collaboration Agreement Document:

a. ORGANIZATION AND GOOD STANDING. HMR is a corporation duly organized, validly existing, and in good standing under the laws of the state or nation of its incorporation and has full corporate power to own its properties and conduct the business presently being conducted by it, and is duly qualified to do business in, and is in good standing under, the laws of all states and nations in which its activities or assets require such status, except in any case where the failure to be so qualified and in good standing would not be material.

b. POWER AND AUTHORITY. HMR has full corporate right, power and authority to perform its obligations pursuant to this Agreement, and this Agreement and the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of HMR.

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HMR has, or will have at the time of execution of those agreements, full corporate right, power and authority to perform its obligations pursuant to the other Collaboration Agreement Documents and the transactions contemplated thereby will have been duly and validly authorized by all necessary corporate action on the part of HMR. This Agreement has been duly and validly executed by HMR and the other Collaboration Agreement Documents have been or will have been duly and validly executed by HMR prior to their delivery. Upon execution and delivery of each of the Collaboration Agreement Documents, each will be the valid and binding obligation of HMR enforceable in accordance with its terms, subject to equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditor’s rights and remedies generally.

c. VIOLATIONS AND CONSENT. The execution, delivery and performance of this Agreement does not, and the consummation of the transactions therein contemplated will not violate any law, rule, regulation, order, judgment or decree binding on HMR or result in a breach of any term of the certificate of incorporation or by-laws of HMR or any contract, agreement or other instrument to which HMR is a party, except in each case to an extent not material. No authorization is required by HMR for the execution, delivery, or performance of this Agreement by HMR, except as set forth on Schedule XIV(A)(1)(c) or except in each case to an extent not material.

B. Representations and Warranties of P&G.

1. P&G represents and warrants to HMR the following, which shall be true and correct on the Original Agreement Effective Date and with respect to each of the other Collaboration Agreement Documents, as of the date of execution of each such Collaboration Agreement Document:

a. ORGANIZATION AND GOOD STANDING. P&G is a corporation duly organized, validly existing, and in good standing under the laws of the state or nation of its incorporation and has full corporate power to own its properties and conduct the business presently being conducted by it, and is duly qualified to do business in, and is in good standing under, the laws of all states and nations in which its activities or assets require such status, except in any case where the failure to be so qualified and in good standing would not be material.

b. POWER AND AUTHORITY. P&G has full corporate right, power and authority to perform its obligations pursuant to this Agreement, and this Agreement and the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of P&G. P&G has, or will have at the time of execution of those agreements, full corporate right, power and authority to perform its obligations pursuant to

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the other Collaboration Agreement Documents and the transactions contemplated thereby will have been duly and validly authorized by all necessary corporate action on the part of P&G. This Agreement has been duly and validly executed by P&G and the other Collaboration Agreement Documents have been or will have been duly and validly executed by P&G prior to their delivery. Upon execution and delivery of each of the Collaboration Agreement Documents, each will be the valid and binding obligation of P&G enforceable in accordance with its terms, subject to equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditor’s rights and remedies generally.

c. VIOLATIONS AND CONSENT. The execution, delivery and performance of this Agreement does not, and the consummation of the transactions therein contemplated will not violate any law, rule, regulation, order, judgment or decree binding on P&G or result in a breach of any term of the certificate of incorporation or by-laws of P&G or any contract, agreement or other instrument to which P&G is a party, except in each case to an extent not material. No authorization is required by P&G for the execution, delivery, or performance of this Agreement by P&G, except as set forth on Schedule XIV(B)(1)(c) or except in each case to an extent not material.

2. P&G represents and warrants to HMR that, as of the Original Agreement Effective Date:

a. to the best of P&G’s knowledge, P&G has disclosed to HMR all technical, scientific and regulatory information relating to the Product that has been requested by HMR ; and

b. to the best of P&G’s knowledge, the technical, scientific and regulatory information about the Product that P&G has disclosed to HMR is true, complete and correct in all material respects; and

c. it has all right, title and interest in the P&G Patents and P&G Know-how required in order to grant the rights and perform the obligations contemplated by this Agreement; and

d. except as set forth in Schedule XIV(B)(2)(d), there is no interference action or litigation pending with any third party, or to best of P&G’s knowledge, any threatened interference action or litigation with any third party, before any court or any other governmental entity of competent jurisdiction in regard to P&G Patents and P&G Know-how; and

3. P&G makes no warranty, express or implied, to HMR regarding:

a. the validity or enforceability of P&G Patents;

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b. the ability of HMR or its customers and licensees, to practice P&G Patents without infringing any rights (including patent rights) held by third parties; and

c. the utility, safety, merchantability, or fitness for any purpose of any products sold under the P&G Patents, including, without limitation, the Product.

ARTICLE XV

INDEMNIFICATION

A. Indemnification Obligations. Subject to the other terms and conditions of the Collaboration Agreement Documents, and except as otherwise provided in this Article XV, each party agrees to defend, indemnify and hold the other party and its Affiliates and their respective directors, officers and employees harmless from and against claims, losses, liabilities, damages, awards, costs and expenses (collectively referred to as “Losses”), including, without limitation, reasonable fees and expenses of attorneys, to the extent stated below:

1. Except as set forth in Section XV(A)(2), with respect to Losses arising out of or related to any third-party Product Liability Action brought against any party or its Affiliates or their respective directors, officers or employees (for purposes of this Section XV(A)(1), each, and collectively, the “Indemnitee”) within the Territory, except the Co-Marketing Territory or Converted Co-Marketing Territory, the other party shall defend, indemnify and hold such Indemnitee harmless from and against fifty percent (50%) of such Losses, except where such Indemnitee’s gross negligence or intentional misconduct was the sole cause of such Losses, in which case, such Indemnitee shall bear full responsibility for such Losses. Determination of gross negligence or intentional misconduct shall be determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties.

2. With respect to Losses arising out of or related to any third-party Action arising out of or related to any party’s (for purpose of this Section XV(A)(2), the “Indemnitor”) breach of a representation, warranty, covenant or other obligation of this Agreement, brought against the other party or its Affiliates or their respective directors, officers or employees (for purposes of this Section XV(A)(2) each and collectively, the “Indemnitee”) within the Territory, other than any Product Liability Action, the Indemnitor shall indemnify and hold harmless such Indemnitee from and against one hundred percent (100%) of such Losses caused by the Indemnitor’s breach.

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B. Procedures for Indemnification.

1. Promptly after receipt by any party or its directors, officers or employees (for purposes of this Section XV(B), each, and collectively, an “Indemnitee”) of notice of any Action which may give rise to Losses for which indemnity be sought against the other party (for purposes of this Section XV(B), the “Indemnitor”) under this Article XV (for purposes of this Section XV(B), such Action is referred to as an “Assertion”), the Indemnitee shall notify the Indemnitor in writing of the Assertion, but the failure to so notify the Indemnitor shall not relieve the Indemnitor of any liability it may have to the Indemnitee, except to the extent the Indemnitor has suffered actual prejudice thereby. The Indemnitor shall be entitled to participate in and, to the extent the Indemnitor elects by written notice to the Indemnitee within thirty (30) days after receipt by the Indemnitor of notice of such Assertion, to assume the defense of such Assertion, at its own expense, with counsel chosen by it, which shall be reasonably satisfactory to the Indemnitee; provided, however, that with respect to any Assertion for which indemnity may be sought pursuant to Section XV(A)(1), the Indemnitor shall not be entitled to assume the defense of such Assertion. Rather, the Indemnitor and Indemnitee shall consult with one another and shall agree as to which party shall manage the defense of such Assertion. The party chosen to defend such Assertion shall take all commercially reasonable steps to consult with the other party with respect to the resolution of such Assertion. With respect to any Assertion, the Indemnitee agrees to provide promptly the Indemnitor with (1) notice and copies of any documents served upon the Indemnitee and (2) all reasonable cooperation which the Indemnitor deems necessary to defend any Assertion, including, without limitation, providing the Indemnitor and its outside attorneys access to any potentially relevant documents, information, or individuals within the control of the Indemnitee, other than any privileged documents. If information of the Indemnitee which is not already covered by a secrecy obligation is contained in such documents or information, the Indemnitee and the Indemnitor shall enter into appropriate secrecy commitments to protect such documents or information. Notwithstanding that the Indemnitor shall have elected by written notice to assume the defense of any Assertion, the Indemnitee shall have the right to participate in the investigation and defense thereof, with separate counsel chosen by the Indemnitee, but in such event, the fees and expenses of such separate counsel shall be paid by the Indemnitee.

2. Notwithstanding anything in this Article XV to the contrary:

a. Indemnitor shall have no obligation with respect to an Assertion if, in connection therewith, Indemnitee, without the written consent of Indemnitor, shall settle or compromise any Assertion or other Action or consent to the entry of any judgment, and

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b. Indemnitee shall not, without the written consent of Indemnitor, (i) settle or compromise any Assertion or other Action or consent to the entry of any judgment which does not include as an unconditional term thereof the delivery by the claimant or plaintiff to Indemnitor of a duly executed written release of Indemnitor from all liability in respect of such Assertion or other Action, which release shall be reasonably satisfactory in form and substance to counsel for Indemnitor, or (ii) settle or compromise any Assertion or other Action in any manner that, in the sole judgment of Indemnitor or its counsel, may materially and adversely affect Indemnitor other than as a result of money damages or other money payments.

c. Upon the payment of any settlement or judgment pursuant to this Article XV, Indemnitor shall be subrogated to all rights and remedies of Indemnitee against any third party in respect of such Assertion to the extent of the amount so paid by Indemnitor.

3. The indemnity provided for by this Article XV shall be P&G’s or API’s exclusive source of recovery against the other party with respect to matters covered hereby.

ARTICLE XVI

DISPUTE RESOLUTION

A. Dispute Resolution Process.

1. The parties recognize that disputes as to certain matters may from time to time arise during the Term of this Agreement and the other Collaboration Agreement Documents, including any extension thereof. These may involve, without limitation, disputes concerning any party’s performance of its obligations pursuant to the Collaboration Agreement Documents or any decision or action permitted or required to be made or taken which decision or action is not expressly reserved to one party or the other. It is the objective of the parties to establish procedures to facilitate the resolution of disputes arising under the Collaboration Agreement Documents in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the parties agree to follow the procedures set forth in this Article XVI if and when any dispute arises under the Collaboration Agreement Documents, including, without limitation, any disagreement regarding whether this Article XVI is applicable to any such dispute.

2. Unless otherwise specifically set forth in the Collaboration Agreement Documents, any dispute arising out of or related to the Collaboration Agreement Documents shall be resolved by reference to the Alliance General Managers unless such dispute arises within, and/or cannot be resolved by, the Oversight Committee, in which case such dispute shall be promptly submitted to binding arbitration under Section XVI(B), at which time the arbitration period shall be

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considered to have commenced for such dispute. The following procedures shall apply prior to submission to arbitration:

a. If a dispute referred to the Alliance General Managers cannot be resolved within five (5) Business Days after the referral of such dispute to the Alliance General Managers, then the dispute shall be referred to the Oversight Committee Leaders.

b. The Alliance General Managers shall submit to the Oversight Committee Leaders a joint written request for resolution within five (5) Business Days of the failure of the Alliance General Managers to reach a resolution of the dispute, outlining the issue(s), the position of each of the parties with respect to the issue(s) and the basis for each party’s position on the issue(s). If a dispute referred to the Oversight Committee Leaders cannot be resolved within ten (10) Business Days of such request, the dispute shall be submitted to binding arbitration under Section XVI(B), and the arbitration period shall be considered to have commenced for that dispute.

B. Arbitration.

1. Arbitration of Disputes. The arbitration shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association and the Supplementary Procedures for Large, Complex Disputes then in effect (the “Rules”), except to the extent such rules conflict with this Section XVI(B). In any arbitration, Ohio law shall govern, except to the extent that such law conflicts with the Rules or this Section XVI(B). The parties further agree that each such dispute be submitted to a panel of three (3) impartial arbitrators with each party selecting one (1) arbitrator within fifteen (15) days after the commencement of the arbitration period and the two (2) selected arbitrators selecting a third arbitrator who is experienced in the pharmaceutical industry within thirty (30) days after the commencement of the arbitration period. Any arbitration hereunder shall commence within thirty (30) days after appointment of the third arbitrator and shall be held in New York, New York, USA. No discovery by either party shall be permitted unless the arbitrators determine that the party requesting such discovery has a substantial, demonstrable need. The arbitrators shall make final determinations as to any discovery disputes and all other procedural matters. If any party fails to comply with the procedures in any arbitration in a manner deemed material by the arbitrators, then the arbitrators shall fix a reasonable time for compliance, and if the party does not comply within such period, then a remedy deemed just by the arbitrators, including an award of default, may be imposed. The decision of the arbitrators shall be rendered no later than one hundred twenty (120) days after commencement of the arbitration period. The decision of the arbitrators with respect to any decision or action permitted or required to be made or taken with respect to the Product, which decision or action is not expressly reserved to one party or the other, shall be limited to a finding fully in favor of one party’s position, and no compromise or split decisions shall

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be allowed. The costs of arbitration shall be born by the party against whom the arbitral decision is made. Any judgment or decision rendered by the panel shall be binding upon the parties and shall be enforceable by any court of competent jurisdiction.

2. Determination of Damages/Arbitration of Material Breach. A party seeking recovery of damages and/or termination of this Agreement under Section XVII(B) must submit the matter to binding arbitration if such party’s allegation of material breach is disputed by the other party and if the matter cannot be resolved under the dispute resolution provisions of this Article XVI. In such arbitrations involving contested allegations of material breach, the arbitrators will decide if a breach occurred, and if so, if that breach is material. Notwithstanding the other provisions of this Section, if there is a finding of breach or of material breach, the arbitrators may make a damage award against the breaching party to compensate the non-breaching party for the breach. If there is a finding of material breach, then the provisions of Section XVII(B) of this Agreement shall apply. The provisions of Section XVI(B)(1) relating to arbitration of disputes shall apply to this Section XVI(B)(2) except that the arbitrators’ decision shall not be limited to a finding fully in favor of one party’s position, and the arbitrators shall be free to render any decision they deem just and appropriate.

ARTICLE XVII

TERM AND TERMINATION

A. Term of the Agreement.

1. General. This Agreement shall be effective as of the Original Agreement Effective Date and, unless sooner terminated as provided herein or extended by mutual agreement of the parties pursuant to Sections XVII(A)(2) or (3), shall remain in force until January 1, 2015. Notwithstanding any other provision herein or in any other Collaboration Agreement Document, in the event that API does not elect to extend the Term pursuant to Section XVII(A)(2) or (3), P&G will be entitled, during the two-year period prior to the end of the Term, to solicit third parties to enter into agreements to collaborate with P&G with respect to the Risedronate business following the expiration or termination of this Agreement and to enter into any such agreements following the expiration or termination of this Agreement, subject to reasonable and customary protections for API’s confidential information under this Agreement; provided, however, that (a) during the period between the date that is three years before the end of the Term and the date that is two years before the end of the Term, P&G will enter into good faith negotiations with API to extend the Term on mutually agreeable terms and (b) in the absence of such mutual agreement, in the event that P&G determines that it will auction or market during the final two years of the Term the Risedronate business or any interest therein for the period following the expiration or termination of this Agreement, P&G will permit API to participate in such auction or marketing process on an equal basis with all other participants.

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2. First Option to Extend Term. API may, at its option, extend the Term until December 31, 2019 as follows:

a. by providing P&G with thirty (30) days prior notice at any time prior to June 30, 2005 of its intention to extend the Term, which extension will be effective upon the payment by API to P&G of ***** on or before July 31, 2005;

b. by providing P&G with thirty (30) days prior notice at any time following the calculation of Net Outside Sales for the Product in the United States in Contract Year 2007 and prior to July 1, 2008 of its intention to extend the Term, which extension will be effective upon the payment by API to P&G no later than thirty (30) days following the date of such notice of an amount equal to ***** plus an amount in USD equal to ***** of Net Outside Sales for the Product in the United States in Contract Year 2007; or

c. by providing P&G with thirty (30) days prior notice at any time following the calculation of Net Outside Sales for the Product in the United States in Contract Year 2008 and prior to July 1, 2009 of its intention to extend the Term, which extension will be effective upon the payment by API to P&G no later than thirty (30) days following the date of such notice of an amount equal to ***** plus an amount in USD equal to ***** of Net Outside Sales for the Product in the United States in Contract Year 2008.

3. Second Option to Extend Term. Subject to the following sentence, in the event that API makes the First Option Extension Payment to P&G and extends the Term pursuant to Section XVII(A)(2) (the “First Extension Option”), API may, at any time between the 12^th month and 30^th month anniversary of the date of the First Extension Option (the “Second Option Period”), elect to further extend the Term with respect to all, but not less than all, of the countries in the Territory until the Patent Expiration Date for each such country by providing 30 days prior notice of its intention to further extend the Term, which extension will be effective upon the payment by API to P&G during the Second Option Period of an amount equal to the Patent Extension Payment with respect to such country. Notwithstanding the foregoing sentence, in no event will the Second Option Period extend beyond December 31, 2010. Any extension by API pursuant to this Section shall be in effect with respect to a particular country until the Patent Expiration Date in such country and the Term shall expire for such country after the Patent Expiration Date for such country. For purposes hereof, “Patent Extension Payment” with respect to a country shall mean, subject to Section XII(F), an amount equal to ***** as is determined in good faith by the agreement of the parties following the delivery of the notice described in this Section XVII(A)(3) (which amount shall be an amount that, on the basis of

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market and other conditions prevailing at such time could reasonably be expected to be paid for ***** by a third party in an arm’s-length transaction); provided, however, that in the event that the parties cannot in good faith agree upon the amount of the Patent Extension Payment within thirty (30) calendar days of the delivery of such notice, the amount of the Patent Extension Payment shall be the amount equal to the sum of each party’s proposed Patent Extension Payment divided by two (2), except that if there is more than a ***** difference between such amounts, the amount shall be conclusively determined by a mutually agreed internationally recognized investment banking firm. If the parties cannot so agree on one investment banking firm, each party will designate its own investment banking firm and such investment banking firms will jointly appoint a third investment banking firm. The cost of such third investment banking firm shall be borne one-half by each party. The investment banking firm appointed pursuant to this Section XVII(A)(3) will choose one of the parties’ positions with respect to the amount of the Patent Extension Payment within thirty (30) days of its appointment.

B. Termination for Material Breach.

1. Notwithstanding any other provision of this Agreement or any other Collaboration Agreement Document, and in addition to any and all other rights and remedies that may be available, if a party commits a material breach of this Agreement or any other Collaboration Agreement Document which: (i) in the case of a breach capable of a remedy, shall not have been remedied within sixty (60) days after the receipt by such other party of a notice identifying the breach and requiring its remedy, and (ii) continues to exist at the time of notice of termination, subject to a determination by the arbitrators pursuant to Section XVI(B)(2) of this Agreement, then the following provisions shall apply:

a. The non-breaching party may refer the breach to arbitration to be conducted pursuant to Section XVI(B)(2) of this Agreement.

b. If the arbitrators find a material breach of this Agreement or the Collaboration Agreement Documents and the amount of the damages awarded by the arbitrators is less than or equal to *****, then the breaching party shall pay to the non-breaching party ***** times the amount of the damages awarded by the arbitrators, such payment to be made pursuant to Section XVII(B)(1)(e) of this Agreement. After the decision of the arbitrators and the payment of damages, the provisions of this Agreement and the Collaboration Agreement Documents shall continue in full force and effect.

c. If the arbitrators find a material breach of this Agreement or the other Collaboration Agreement Documents and the amount of damages is greater than *****, but less than or equal to *****, then the breaching

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party shall pay to the non-breaching party an amount equal to ***** plus ***** times the difference between the amount of damages awarded by the arbitrators and *****, such payment to be made pursuant to Section XVII(B)(1)(e). After the decision of the arbitrators and the payment of damages, the provisions of this Agreement and the Collaboration Agreement Documents shall continue in full force and effect.

d. If the arbitrators find a material breach of this Agreement or the Collaboration Agreement Documents and the amount of the damages awarded by the arbitrators exceeds *****, then the breaching party may offer to pay to the non-breaching party, in consideration for the non-breaching party’s election not to terminate the Agreement, an amount equal to ***** plus ***** times the difference between the amount of damages awarded by the arbitrators and *****. If the non-breaching party accepts such offer, the provisions of this Agreement and the Collaboration Agreement Documents shall continue in full force and effect. If the breaching party does not make such offer, or if the non-breaching party rejects such offer, this Agreement shall terminate and the breaching party shall pay to the non-breaching party the amount of damages awarded by the arbitrators. All payments under this Section XVII(B)(1)(d) shall be made pursuant to Section XVII(B)(1)(e).

e. Any payment required under the terms of Section XVII(B)(1)(c) or Section XVII(B)(1)(d) shall be made in USD or other immediately available funds to the bank account designated by written notice hereunder by the party to be paid hereunder within thirty (30) days after the decision of the arbitrators.

2. If the Agreement is terminated in accordance with this Section XVII(B)(1)(d), the following provisions shall apply:

a. If API is the party terminating, P&G shall pay API a royalty of ***** on Total Net Outside Sales within the Territory until January 1, 2015; and

b. If P&G is the party terminating, no royalty or other payment shall be paid to API by P&G.

3. The arbitral award granted and payments provided for by this Section XVII(B) shall be P&G’s or API’s exclusive source of recovery against the other party with respect to a material breach of this Agreement.

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C. Termination for Bankruptcy.

1. Notwithstanding any other provision of this Agreement or any other Collaboration Agreement Document, and in addition to any and all other rights and remedies that may be available, a party (the “Terminating Party”) may terminate this Agreement and the other Collaboration Agreement Documents, upon written notice, at any time after the other party (the “Bankrupt Party”) is (1) dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefits of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditor’s rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all of its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within thirty (30) days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable law of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

2. Upon termination of this Agreement by the Terminating Party pursuant to Section XVII(C)(1), the Bankrupt Party shall:

a. Deliver to the Terminating Party all of the Terminating Party’s Confidential Information in the Bankrupt Party’s possession;

b. Grant to the Terminating Party a non-exclusive irrevocable, worldwide license to make, have made, use, import, offer to sell and sell Products under the Bankrupt Party’s patents (P&G Patents or API Patents, as applicable) and the Bankrupt Party’s know-how (P&G Know-how or API Know-how, as applicable) and jointly owned patents and jointly owned Know-how;

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c. Transfer to the Terminating Party or the Terminating Party’s designee title to all Health Registrations, approvals and rights with respect to the Product anywhere in the Territory, and if title to any such Health Registrations, approvals or rights is not transferable, then the Bankrupt Party shall use all commercially reasonable efforts to enable the Terminating Party or its designee to make use of such Health Registrations, approvals or rights;

d. Transfer to the Terminating Party all trademarks for the Product that are owned by the Bankrupt Party anywhere in the Territory;

e. Assign to the Terminating Party the Bankrupt Party’s rights in any contract in the White Space Territory associated with the Product; and

f. Take any other steps which can only be taken by the Bankrupt Party, necessary for the Terminating Party or its designee to be able to market, promote, distribute, sell and manufacture the Product in each country in the Territory without undue delay.

3. Upon termination of this Agreement by the Terminating Party pursuant to Section XVII(C)(1), the Terminating Party shall pay the Bankrupt Party a royalty of ***** on Total Net Outside Sales within the Territory until the earlier of January 1, 2015, or the date on which the total of all royalties paid pursuant to this Section XVIII(C)(3) equals *****.

D. Termination Prior to Third Milestone Payment. HMR may terminate this Agreement if an NDA or supplemental NDA for the Product with an indication for PMO has not been approved by the USFDA prior to January 1, 2003.

E. Termination for Arbitral Decision Against a Party’s Vital Interest. Notwithstanding any other provision of this Agreement or the other Collaboration Agreement Documents, and in addition to any and all other rights and remedies that may be available, a party may terminate this Agreement and the other Collaboration Agreement Documents, upon written notice, at any time after a decision is reached under the arbitration provisions of Article XVI(B)(1) of this Agreement if the party in good faith considers implementation of any arbitral decision, other than for the payment of monetary damages as a result of a breach of any obligation pursuant to the Collaboration Agreement Documents, to be against its vital interests, and provided that at least two years have passed since the first commercial sale of the Product in the Territory. If the Agreement is terminated in accordance with this Section XVII(E), the following provisions shall apply:

1. If API is the terminating party, P&G shall pay API a royalty of ***** on Total Net Outside Sales within the Territory until the earlier to occur of (a) January 1, 2015 or (b) a point in time when total royalties paid by P&G to API

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equal ***** of API’s milestone payments actually paid to P&G under Section II(A); and

2. If P&G is the terminating party, P&G shall pay API a royalty of ***** on Total Net Outside Sales within the Territory until the earlier to occur of (a) January 1, 2015 or (b) a point in time when total royalties paid by P&G to API equal ***** of API’s milestone payments actually paid to P&G under Section II(A).

F. Termination by Mutual Consent. This Agreement and the other Collaboration Agreement Documents may be terminated by mutual consent of the parties.

G. Other Rights. Except as specified in the Collaboration Agreement Documents, upon termination of this Agreement and the other Collaboration Agreement Documents other than pursuant to Sections XVII(C) or XVII(F) of this Agreement, API shall have no further rights whatsoever in the Product. Upon expiration or termination of this Agreement for any reason other than pursuant to Section XVII(C) or XVII(F), API shall:

1. Deliver to P&G all of P&G’s Confidential Information in API’s possession;

2. Grant to P&G a non-exclusive irrevocable, royalty-free, worldwide license to make, have made, use, import, offer to sell and sell Products under API’s Patents and API’s Know-how and jointly owned patents and jointly owned Know-how;

3. Transfer to P&G or P&G’s designee title to all Health Registrations, approvals and rights with respect to the Product anywhere in the Territory, and if title to any such Health Registrations, approvals or rights is not transferable, then API shall use all commercially reasonable efforts to enable P&G or its designee to make use of such Health Registrations, approvals or rights;

4. Transfer (to the extent transferable) to P&G all trademarks for the Product that are owned by API anywhere in the Territory;

5. Assign (to the extent assignable) to P&G API’s rights in any contract in the White Space Territory associated with the Product; and

6. Take any other steps which can only be taken by API, necessary for P&G or its designee to be able to market, promote, distribute, sell and manufacture the Product in each country in the Territory without undue delay.

H. Other Collaboration Agreement Documents. Termination of this Agreement or any other Collaboration Agreement Document shall result in termination of all Collaboration Agreement Documents unless otherwise specifically provided in such Collaboration Agreement Document.

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I. Survival of Liability. Termination of this Agreement and the other Collaboration Agreement Documents shall not relieve the parties hereto of any liability which arose hereunder or thereunder prior to the date of such termination nor preclude either party from pursuing all rights and remedies it may have hereunder or thereunder or at law or in equity with respect to any breach of this Agreement or the other Collaboration Agreement Documents, nor prejudice either party’s right to obtain performance of any obligation provided for in this Agreement or the other Collaboration Agreement Documents, which right expressly survives termination.

J. Change in Control Put/Call Rights.

1. If at any time during the Term, there shall occur a Change in Control of the P&G or API Affiliate responsible for the worldwide pharmaceutical business, as the case may be, in the case of (A) a third party acquiror that is not a Listed Entity, the party experiencing the Change in Control or its designee shall have the unilateral right to continue the Agreement or assign the Agreement to the third party that has acquired such control, and (B) a third party acquiror that is a Listed Entity, the party experiencing the Change in Control or its designee shall not have the unilateral right to continue the Agreement or assign the Agreement to the third party that has acquired such control unless otherwise permitted by this Section XVII(J). For purposes of this Section XVII(J), a “Listed Entity” shall mean any of the three entities whose names appear on Exhibit A hereto. Within the 45-day period prior to December 31, 2006, and every twenty-four months thereafter within the 45-day period prior to the end of such 24-month period, the parties will agree on which three entity names will be the Listed Entities for the next 24 month period, and will amend Exhibit A accordingly. If the parties are unable to agree to the Listed Entities by the expiration of the then-current twenty-four month period, the Listed Entities for the next twenty-four month period will be (1) the one company with the largest dollar share of the aggregate global market segment for the treatment of postmenopausal osteoporosis as determined by IMS audits, and (2) the two other companies projected by Thompson First Call consensus analyst estimates (or, if Thompson First Call does not publish such estimates, such estimates published by a similar industry publication or, if there are no such similar industry publications, the consensus of the pharmaceutical analysts from the top five investment banks having pharmaceutical analysts as ranked in Thompson First Call’s most recent league tables published prior to the date of determination or, if Thompson First Call does not publish league tables, in other industry league tables) to have, within the eighty-four months immediately following the relevant determination date, the two highest dollar shares within the global prescription postmenopausal osteoporosis treatment segment, such dollar shares to be determined by dividing the aggregate projected dollar sales of the relevant product during the relevant period by the aggregate projected dollar sales of the global prescription postmenopausal osteoporosis treatment segment for the relevant period, all such projections to be determined by the Thompson First Call consensus of analysts for the relevant period. If two or more companies are tied in either of the dollar shares rankings under clauses (1) and (2) above,

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then API may select which of the companies so tied will be the Listed Entities determined by the relevant clause.

2. In the case of a Change in Control not involving a Listed Entity, the party who did not experience the Change in Control or its designee (the “Requesting Party”) may by written notice (the “Change in Control Request”) delivered to the other party (the “Non-Requesting Party”), within forty five (45) days after the date of such Change in Control, elect to discontinue the collaboration, in which case a valuation of the Put Interest as hereinafter defined shall be determined under the provisions of Section XVII(J)(4). Within fifteen (15) days following such valuation, the Requesting Party will sell to the other party the Requesting Party’s entire interest under the Collaboration Agreement Documents, including a license to, or other transfer of, all rights necessary to enjoy the benefits thereof (the “Put Interest”) at a price (the “Put Price”) equal to the fair market value thereof as determined in accordance with Section XVII(J)(4).

3. In the case of a Change in Control involving a Listed Entity, the Non-Requesting Party will, within forty-five (45) days of such Change in Control (the “Divestiture Notice Deadline”), provide notice (the “Divestiture Notice”) to the Requesting Party indicating whether the third party Listed Entity that has acquired control of such Non-Requesting Party has agreed, in connection with the Change in Control, to divest, as promptly as practicable following such Change in Control, but in any event within fourteen (14) months thereafter, its interest (other than a passive economic interest that is not material in relation to the third party’s interest in the Product after the Change in Control) in products for the treatment of postmenopausal osteoporosis (other than the Product) (a “Divestiture”). In the event that such third party Listed Entity does not agree to a Divestiture, the Requesting Party may, within seventy five (75) days of the Change in Control (but not before the earlier to occur of the delivery of the Divestiture Notice and the Divestiture Notice Deadline), by a Change in Control Request delivered to the Non-Requesting Party elect to cause a valuation of the Put Interest and Call Interest as hereinafter defined (if applicable pursuant to this Section XVII(J)(3)) shall be determined under the provisions of Section XVII(J)(4). Within fifteen (15) days following such valuation, the Requesting Party may make (but is not required to make) a further election (i) to sell to the other party its Put Interest at the Put Price or (ii) to buy the Non-Requesting Party’s entire interest under the Collaboration Agreement Documents, including a license to, or other transfer of, all rights necessary to enjoy the benefits thereof (the “Call Interest”) at a price (the “Call Price”) equal to the fair market value thereof as determined in accordance with Section XVII(J)(4). Notwithstanding the foregoing, if the Divestiture Notice states that the third party Listed Entity has agreed to a Divestiture, the Requesting Party will not have an option to buy the Call Interest pursuant to this Section XVII(J)(3), and the Non-Requesting Party shall have the unilateral right to continue the Agreement or assign the Agreement to the third party, subject to the Requesting Party’s right to sell its Put Interest as provided in XVII(J)(2), and further, if the Listed Entity fails to close the Divestiture within

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the ***** months following the Change of Control, the Requesting Party is (i) entitled to liquidated damages equal to ***** of the Listed Entity’s profits during such ***** months from the products for the treatment of postmenopausal osteoporosis (other than the Product) and (ii) the Requesting Party may also elect to purchase the Call Interest a the Call Price, to sell the Put Interest at the Put Price or to continue the Agreement. In the event the Requesting Party does not send any notice following the Listed Party failure to close the Divestiture, the Requesting Party shall be deemed to have decided to continue the Agreement.

4. The price to be paid for the Put Interest or Call Interest (i.e. the Put Price or Call Price) shall be conclusively determined by two internationally recognized investment banking firms, one of which shall be retained and paid by the Requesting Party and one of which shall be retained and paid by the Non-Requesting Party; provided that if either such party fails to deliver notice to the other party of its selection of an investment banking firm within ten (10) days after notice by the other party that it has selected an investment banking firm (which notice shall identify such firm), the determination shall be rendered by the single investment banking firm so selected (whose fees, in such case, shall be borne equally by the parties). The Requesting Party and the Non-Requesting Party shall promptly notify each other of their respective selections. The investment banking firms selected in accordance with the foregoing procedure shall each determine the fair market value of the Put Interest and, if applicable, the Call Interest (which value(s) shall be an amount that, on the basis of market and other conditions prevailing at such time could reasonably be expected to be paid for such Put Interest or, if applicable, Call Interest, by a third party in an arm’s-length transaction, assuming that the buyer and seller are under no compulsion to buy or sell, but shall be determined without regard to any control premium or any minority or illiquidity discount) and submit their determinations of such value to the Requesting Party and the Non-Requesting Party within twenty (20) days following their selection. The Put Price or, if applicable, Call Interest shall be the amount equal to the sum of such fair market values for the Put Interest or, if applicable, Call Interest determined by each investment banking firm divided by two (2), except that if there is more than a ***** difference between such values, a third investment banking firm, selected by the first two investment banking firms within ten (10) days of the first round of valuations, shall determine such fair market value (which shall be one of the values determined by the first two investment banking firms). The cost of such third investment banking firm shall be borne one-half by the Requesting Party and one-half by the Non-Requesting Party, and such third investment banking firm will choose one of the first two investment banking firm’s positions within thirty (30) days of its appointment.

5. The purchase and sale of any Put Interest or Call Interest effected pursuant to this Section XVII(J)(5) shall be consummated at a closing at the offices of the Requesting Party on a business day within forty five (45) days following the

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determination of the Put Price or Call Price upon at least five (5) days’ notice by the Requesting Party to the other parties to the transaction; provided that such period shall be extended for ninety (90) additional days, or such shorter period of time, as shall be necessary in order to obtain requisite governmental or regulatory approvals with respect to such transaction; provided, further, that such closing may be held at such other time and place as the parties to the transaction may agree. At such closing, the buying party or its designee shall pay the selling party the Put Price or Call Price by certified check or wire transfer of funds.

6. Upon the closing of the transactions contemplated by this Section XVII(J), the parties shall execute such customary instruments of transfer, licenses and other agreements as are necessary to transfer all of the selling party’s Put Interest or Call Interest to the buying party or its designee and to assure that the buying party or its designee shall be able to enjoy the benefits thereof through the provision of any transitional services reasonably requested by the buying party, including, but not limited to the continued supply of Product.

ARTICLE XVIII

PRODUCT IMPROVEMENTS

A. Proposed Product Improvements. During the Term, either party may propose to the other in the Alliance Management Committee or in the Research & Development Committee the development of a Product Improvement. If such proposal occurs prior to the date of the exercise of the Product Improvement Trigger, then such Product Improvement shall be subject to the provisions of Section XVIII(B). If such proposal occurs after the date of the exercise of the Product Improvement Trigger, then such Product Improvement shall be subject to the provisions of Section XVIII(C).

B. Product Improvements Initiated Prior to Product Improvement Trigger.

1. Joint Product Improvement. If the Alliance Management Committee makes a decision to support the development and commercialization of a proposed Product Improvement (thereafter, a “Joint Product Improvement”), then the Alliance Management Committee and the Research & Development Committee shall agree to a development plan and budget for the development of such Joint Product Improvement. Such plan shall include appropriate decision points at each significant phase of product development. Upon approval of a development plan and budget, the costs of developing and commercializing that Joint Product Improvement, including all non-clinical and clinical studies, shall be split *****.

2. Termination of Joint Development Program. Upon agreement of the Research & Development Committee and the Alliance Management Committee, the parties may terminate all or part of any agreed development plan with respect to a Joint Product Improvement. API may, at the previously agreed to decision points, terminate its participation in any agreed development plan with respect to a Joint

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Product Improvement; upon any such termination, P&G may itself terminate any such development plan or may, after discussion of the matter in the Oversight Committee, continue the development of such Product Improvement as a P&G Product Improvement. P&G may, at the previously agreed to decision points, terminate any agreed development plan with respect to a Joint Product Improvement. In the event that a party elects to terminate its participation in the development and commercialization of a Joint Product Improvement, all costs of development and commercialization up to the date of such termination shall be shared *****. Notwithstanding the foregoing, if either party in good faith believes that a significant safety concern relating to a Joint Product Improvement exists and the other party does not consent to a termination of such Joint Product Improvement in connection therewith, then the parties will within five (5) Business Days agree upon and appoint an Industry Expert or, if the parties cannot so agree on one Industry Expert, each party will designate its own Industry Expert and such Industry Experts will jointly appoint a third Industry Expert. The Industry Expert appointed pursuant to the preceding sentence will resolve the dispute within five (5) Business Days of their appointment.

3. P&G Product Improvements. If the Alliance Management Committee or the Oversight Committee decide not to support the development and commercialization of a Product Improvement proposed by P&G, or if API terminates its participation in any agreed development plan with respect to a Joint Product Improvement, then P&G has the right to develop and commercialize such Product Improvement as a “P&G Product Improvement.” In such case, P&G shall bear the full cost of the development and commercialization of the P&G Product Improvement, including registration studies and marketing studies, and all revenues from the commercialization of that P&G Product Improvement shall accrue to P&G.

C. Product Improvements Initiated After Product Improvement Trigger.

1. Joint Product Improvement. If the Alliance Management Committee makes a decision to support the development and commercialization of a Joint Product Improvement, then the Alliance Management Committee and the Research & Development Committee shall agree to a development plan and budget for the development of such Joint Product Improvement. Such plan shall include appropriate decision points at each significant phase of product development. Upon approval of a development plan and budget, the costs of developing and commercializing that Joint Product Improvement, including all non-clinical and clinical studies, shall be split *****.

2. Termination of Joint Development Program. Upon agreement of the Research & Development Committee and the Alliance Management Committee, the parties may terminate all or part of any agreed development plan with respect to a Joint Product Improvement. Either party may, at the previously agreed to decision points, terminate its participation in any agreed development plan with respect to

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a Joint Product Improvement; upon any such termination, the other party may itself terminate such development plan or may, after discussion of the matter in the Oversight Committee, continue the development of such Product Improvement as a P&G Product Improvement (if such party is P&G) or as an “API Product Improvement” (if such party is API). In the event that a party elects to terminate its participation in the development and commercialization of a Joint Product Improvement, all costs of development and commercialization up to the date of such termination shall be shared *****. Notwithstanding the foregoing, if either party in good faith believes that a significant safety concern relating to a Joint Product Improvement exists and the other party does not consent to a termination of such Joint Product Improvement in connection therewith, then the parties will within five (5) Business Days agree upon and appoint an Industry Expert or, if the parties cannot so agree on one Industry Expert, each party will designate its own Industry Expert and such Industry Experts will jointly appoint a third Industry Expert. The Industry Expert appointed pursuant to the preceding sentence will resolve the dispute within five (5) Business Days of their appointment.

3. P&G Product Improvements and API Product Improvements. If the Alliance Management Committee and the Oversight Committee decide not to support the development and commercialization of a Product Improvement proposed by a party, or if a party desires to continue the development of a Product Improvement after the other party terminates its participation in any agreed development plan with respect to such Joint Product Improvement, then such party has the right to develop and commercialize such Product Improvement as a P&G Product Improvement (if such party is P&G) or as an API Product Improvement (if such party is API). In such case, and subject to the provisions of Section XVIII(C)(4), the developing party for such Product Improvement shall bear the full cost of the development and commercialization of such Product Improvement, including registration studies and marketing studies, and all revenues from the commercialization of such Product Improvement shall accrue to such party.

4. Opt-in Rights for Independent Product Improvements.

a. Establishment of Success Criteria. Promptly following the designation of a Product Improvement as either a P&G Product Improvement or an API Product Improvement, the parties will use their reasonable best efforts to agree to success criteria for each significant phase of product development for such Product Improvement, including market approval and final labeling. If the parties are unable to agree to such success criteria, the dispute will be resolved through arbitration pursuant to Section XVI(B). Once agreed to by the parties or established through arbitration, such success criteria shall be designated as the “Product Improvement Success Criteria” for such Product Improvement.

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b. Determination of Opt-In Consideration. Promptly following the determination of the Product Improvement Success Criteria, the parties will also use their reasonable best efforts to agree to the compensation that would be paid by the party that is not participating in the development of such Product Improvement in consideration for the right to rejoin in the development and consideration of such P&G Product Improvement or API Product Improvement (the “Pre-Agreed Opt-in Consideration”) upon achievement of each of the Product Improvement Success Criteria. Such Pre-Agreed Opt-in Consideration will be determined for each significant phase of product development for such Product Improvement.

c. Voluntary Opt-In Prior to Completion of Phase III. If the Product Improvement Success Criteria for a particular P&G Product Improvement or API Product Improvement are met at any phase of product development for such Product Improvement, except for such Product Improvement Success Criteria at or subsequent to the completion of Phase III clinical trials, then the party developing such Product Improvement may in its sole discretion offer the other party the right to rejoin in the development and commercialization of such Product Improvement, upon payment by the other party of the Pre-Agreed Opt-In Compensation for such Product Improvement or, if such compensation has not already been agreed to pursuant to Section XVIII(C)(4)(b), for other consideration agreed by the parties. If the other party rejoins the development and commercialization of such Product Improvement, such Product Improvement shall thereafter be designated a Joint Product Improvement.

d. Compulsory Opt-In After Completion of Phase III After Meeting Success Criteria. If the Product Improvement Success Criteria for a particular P&G Product Improvement or API Product Improvement are met upon completion of Phase III clinical trials for such Product Improvement, then the party not developing such Product Improvement shall rejoin in the development and commercialization of such Product Improvement. Thereafter, upon the receipt by the Product Improvement of market authorization and final labeling in any country in accordance with the Product Improvement Success Criteria, the party not developing such Product Improvement shall pay to the other party the Pre-Agreed Opt-In Compensation for such Product Improvement. If such compensation has not already been agreed to pursuant to Section XVIII(C)(4)(b), then the compensation to be paid shall be an amount equal to ***** of the amount of the development and pre-approval marketing costs paid by the party developing such Product Improvement, plus an amount (the “Commercial Value”) equal to ***** of the incremental commercial value of the Product Improvement to the non-developing party. If the parties cannot in good faith agree to the Commercial Value within thirty (30) calendar days, the Commercial Value shall be the amount equal to the sum of each party’s proposed Commercial Value

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divided by two (2), except that if there is more than a ***** difference between such amounts, the amount shall be conclusively determined by a mutually agreed internationally recognized investment banking firm. If the parties cannot so agree on one investment banking firm, each party will designate its own investment banking firm and such investment banking firms will jointly appoint a third investment banking firm. The cost of such third investment banking firm shall be borne one-half by each party. The investment banking firm appointed pursuant to this Section XVIII(C)(4)(d) will choose one of the parties’ positions with respect to the Commercial Value within thirty (30) days of its appointment. For the avoidance of doubt, this Section shall not be applicable if a party has already voluntarily opted-in pursuant to Section XVIII(C)(4)(c). After the non-developing party rejoins the development and commercialization of such Product Improvement, such Product Improvement shall thereafter be designated a Joint Product Improvement.

e. Compulsory Opt-In After Completion of Phase III Without Meeting Success Criteria. If the Product Improvement Success Criteria for a particular P&G Product Improvement or API Product Improvement are not met upon or after completion of Phase III clinical trials for such Product Improvement and such Product Improvement receives market authorization and final labeling in any country, then the party developing such Product Improvement may elect to continue development and commercialization of such Product Improvement and, if so, shall promptly notify the other party and such other party shall be obligated to rejoin in the development and commercialization of such Product Improvement, in consideration for the payment by the other party of an amount to be agreed upon by the parties in good faith or, if such compensation cannot be agreed in good faith in thirty (30) days, the amount of compensation shall be the amount equal to the sum of each party’s proposed compensation divided by two (2), except that if there is more than a ***** difference between such amounts, the amount shall be conclusively determined by a mutually agreed internationally recognized investment banking firm. If the parties cannot so agree on one investment banking firm, each party will designate its own investment banking firm and such investment banking firms will jointly appoint a third investment banking firm. The cost of such third investment banking firm shall be borne one-half by each party. The investment banking firm appointed pursuant to this Section XVIII(C)(4)(e) will choose one of the parties’ positions with respect to the compensation within thirty (30) days of its appointment. For the avoidance of doubt, this Section shall not be applicable if a party has already voluntarily opted-in pursuant to Section XVIII(C)(4)(c). After the non-developing party rejoins the development and commercialization of such Product Improvement, such Product Improvement shall thereafter be designated a Joint Product Improvement.

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D. Osteoarthritis Product Improvement. Section XVIII(A) notwithstanding, the parties agree that the development of Risedronate for the treatment of osteoarthritis shall be subject to this Section XVIII(D).

1. P&G Obligations. P&G agrees to use commercially reasonable efforts to implement a Phase II/III clinical trial program designed to obtain Health Registration approval of Risedronate for the treatment of osteoarthritis. P&G shall pay all costs and expenses associated with the execution of said Phase II/III clinical trial program. P&G shall also be responsible for its internal administration costs and expenses and all country-specific registration fees (including without limitation user fees) of obtaining Health Registration approval of Risedronate for the treatment of osteoarthritis within the Co-Promotion Territory.

2. OA Product Improvement Status. At all times prior to the payment by API to P&G of the OA Milestone Payment as hereinafter defined, the Product Improvement embodying the use of Risedronate for the treatment of osteoarthritis shall be deemed to be a P&G Product Improvement. Upon payment by API to P&G of the OA Milestone Payment as hereinafter defined, the Product Improvement embodying the use of Risedronate for the treatment of osteoarthritis shall cease to be a P&G Product Improvement and shall be deemed a Joint Product Improvement.

3. Milestone Payment. The approval of a Health Registration covering Risedronate for the treatment of osteoarthritis in either the US or in the Reference Member State for the Mutual Recognition Procedure in the European Union shall, for the purposes of this Section XVIII(D), be defined as the “OA Milestone Trigger.” Within seven (7) Business Days following the occurrence of the OA Milestone Trigger, API agrees to pay P&G either (i) ***** provided a once a week dosage is the approved dosage for the treatment of osteoarthritis, or (ii) ***** provided the approved dosage for the treatment of osteoarthritis is other than a once a week dosage. The aforementioned payment of ***** or ***** shall, for the purposes of this Section XVIII(D), be defined as the “OA Milestone Payment.” The OA Milestone Payment shall be adjusted by the percentage change in the US Consumer Price Index for Urban Consumers (all items) between May 20, 1999 and the date of the OA Milestone Payment, provided that said adjustment shall not exceed a total of *****.

4. Indemnification. Upon the occurrence of the OA Milestone Trigger, all Losses related in any way to the osteoarthritis Joint Product Improvement shall be subject to Article XV, regardless of whether any such Loss arose from or was associated with activities which occurred prior to the OA Milestone Trigger.

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ARTICLE XIX

ADVERSE EVENT REPORTING

A. The parties recognize that the holder of a Health Registration may be required to submit information regarding adverse events concerning the Product to various governmental agencies. Information usually must be submitted at the time of initial filing for investigational use in humans and at the time of a request for market approval. In addition, supplemental information may be required to be provided at periodic intervals and adverse events may be required to be reported at more frequent intervals depending on the severity of the event.

B. The parties agree to establish as soon as practicable after the Original Agreement Effective Date detailed procedures for reporting of adverse events including:

1. information regarding all adverse events concerning the Product;

2. reporting forms to be used;

3. information concerning all other Product complaints obtained by either party;

4. designation of and contact information for each party’s medical surveillance liaison;

5. information to be included in reports; and

6. timing and logistics of adverse event reporting.

Each party agrees to answer in a reasonably exhaustive manner all questions the other party might raise with regard to adverse events.

C. The party holding the Health Registration in a particular country in the Territory shall investigate adverse events and non-clinical complaints associated with the Product reported in that country and as required report such information to the appropriate regulatory authorities.

ARTICLE XX

COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

Each party shall comply with all applicable laws, regulations and the IFPMA code of practice in the development, manufacture, distribution, marketing, promotion and sale of the Product within the Territory.

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ARTICLE XXI

ACCOUNTING

A. Records. Both parties shall keep accurate and correct records of ADE and the calculation of Primary Detail Cost, Net Outside Sales, of any and all allowances and discounts and the like, and of Cost of Goods, in sufficient detail to enable the Auditor to verify such figures and to make the calculations required under the Collaboration Agreement Documents. Such records shall be retained for at least five (5) years following each Quarter to which they pertain. The calculation of payments in respect of each Quarter shall be binding and conclusive upon the parties upon the first to occur of:

1. the expiration of five (5) years following the end of such Quarter, unless an audit of a party’s records of such Quarter is then in progress; or

2. the final resolution of an audit of a party’s records for such Quarter.

B. Audit Procedure. At any time prior to the expiration of five (5) years following the end of any Quarter, either party may retain an independent certified public accountant reasonably acceptable to the other party (each, an “Auditor”) for the purpose of auditing the other party’s records of Net Outside Sales, Cost of Goods, ADE and the calculation of Primary Detail Cost (in terms of PDEs), and payments paid or payable under the Collaboration Agreement Documents. The purpose of such audit shall be to verify the calculation of Net Outside Sales for such Quarter(s), ADE and the calculation of Primary Detail Cost for such Quarter(s) and the payments paid or payable under the Collaboration Agreement Documents for such Quarter(s). A party shall provide to the other party at least twenty (20) days advance written notice before each such audit. An audited party shall cooperate in such audit by allowing the Auditor access, during normal business hours at the location(s) where such records are normally kept, to the party’s records of Net Outside Sales for such Quarter(s), ADE and the calculation of Primary Detail Cost for such Quarter(s) and the payments paid or payable under the Collaboration Agreement Documents for such Quarter(s). Upon request by a party, the Auditor may be required, as a condition of being granted access to that party’s records hereunder, to agree to maintain any information reviewed, including, but not limited to, reports submitted to the parties pursuant to this Article XXI hereof, in confidence under reasonable terms and conditions. Notwithstanding anything herein to the contrary, in any country a party may only cause an audit once in any Contract Year.

C. Audit Results. At the conclusion of the Auditor’s audit pursuant to Section XXI(B) hereof, the Auditor shall submit a written report to the parties setting forth the Auditor’s findings with respect to the correct Net Outside Sales, ADE and the calculation of Primary Detail Cost and the payments paid or payable under the Collaboration Agreement Documents for the Quarter in question. If the Auditor’s report results in findings as to Net Outside Sales, ADE and the calculation of Primary Detail Cost and the payments paid or payable under the Collaboration Agreement Documents which findings are different from those figures originally reported or paid by a party, then the report shall include a reconciliation of the original figures with those found to be correct by the

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Auditor and the source of such difference(s). The report shall not include copies of any books and records reviewed by the Auditor in conducting the audit or in responding to a challenge procedure pursuant to Section XXI(D) hereof. The details of such report shall be treated by each party as confidential pursuant to Article XIII of this Agreement. If there is no challenge to the Auditor’s report, then the audited party shall pay to the other party an amount sufficient to remedy the amount of any under or over reporting or under or overpayment found by the Auditor.

D. Challenge Procedure. The parties agree to work together with the Auditor in good faith to resolve any disputes arising out of or relating to the numbers verified and the results reported in an Auditor’s report in a timely, professional and non-adversarial manner. If the parties and the Auditor cannot so resolve a dispute, then disputes shall be resolved under the dispute resolution provisions of Article XVI of this Agreement.

E. Co-Marketing and Converted Co-Marketing Territories. The provisions of this Section XXI shall not apply to the Co-Marketing and Converted Co-Marketing Territories or to the country of Spain, except with respect to audits of payments made or payable under Section II(B). The Auditor’s reports shall be limited to those transactions necessary to verify the accuracy of those payments.

F. Merck License. Notwithstanding any other provision of this Agreement, in the event that the licensor under the Merck License requests to audit Net Outside Sales data from the Potential Co-Promotion Territory that has been provided to P&G by API, API agrees that such licensor will be permitted to audit API’s books and records no more than once per calendar year solely for this purpose upon reasonable advance notice to API; provided, however, that such licensor must use a mutually agreeable certified public accountant to audit such books and records. As of the A&R Agreement Effective Date, the Merck License is in full force and effect, and no party (including P&G as licensee and API as sublicensee) to the Merck License is in breach or default thereunder. P&G shall devote reasonable best efforts to maintain the Merck License in full force and effect and each party shall fully perform its obligations thereunder and keep the other party fully informed of any material developments pertaining thereto that would have an adverse effect on the other party’s rights under this Agreement. P&G shall not, without the prior written approval of API: (i) amend any provision of the Merck License that would have an adverse effect on API’s rights under this Agreement or (ii) make any election or exercise any right or option to terminate in whole or in part the Merck License.

ARTICLE XXII

COMMERCIALIZATION OF SECONDARY PRODUCTS

If, during the Term of the Collaboration Agreement Documents, either party intends to commercialize a Secondary Product or transfer any rights under this Agreement to a third party to allow that third party to commercialize a Secondary Product, then that party shall, prior to the commercialization of such Secondary Product or the transfer of rights under this Agreement to a third party to allow that third party to commercialize such Secondary Product, obtain the

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approval of the other party and offer to the other party the right to participate in the commercialization of such Secondary Product. Neither party shall commercialize a Secondary Product without the approval of the other party. If the other party opts not to participate in the commercialization of a Secondary Product, then the costs and benefits of the commercialization of such Secondary Product shall accrue to the commercializing party. If the other party elects to participate, the parties agree to negotiate in good faith the terms and conditions for the commercialization of any such Secondary Product, which shall be no less favorable to either party than the terms and conditions for the collaboration regarding the Product as contained in this Agreement and the other Collaboration Agreement Documents, including, but not limited to, payment of one-third of all development costs by the party opting to participate in the commercialization of the other party’s Secondary Product. Notwithstanding the foregoing, this Article XXII shall not be applicable to P&G’s actions with respect to etidronate, etidronate combinations (including kits), OTC Products or P&G Product Improvements, or to API’s actions with respect to an API Product Improvement.

ARTICLE XXIII

RISEDRONATE OTC RIGHT

A. P&G Exclusive Rights to OTC Products. The parties agree that nothing in the Collaboration Agreement Documents shall be interpreted to grant or allow to API any rights within the Territory to make, use, sell and import any OTC Product. In any country in the Territory where the Product and an OTC Product may be marketed concurrently P&G shall have the right to apply the Product trademark to such OTC Product. It is recognized that modification of the Product trademark may be legally required in some countries to further distinguish the Product from such OTC Product. In any country in which P&G elects to sell an OTC Product in which country API is the holder of the Health Registration for the Product, API shall provide to P&G a copy of said Health Registration, and/or grant to P&G a right of reference to such Health Registration as P&G may request. All external out-of-pocket costs incurred by API associated with providing a copy of a Health Registration and/or granting a right of reference to a Health Registration shall be borne by P&G.

B. Remuneration of API Upon Introduction of OTC Product. If, during the Term, P&G launches an OTC Product in any country in the Territory in which the Product is on the market, then, in compensation for monies and effort expended by API in developing the market for the Product in the Territory, P&G shall, for the portion of the Term during which such OTC Product is on the market in such country, pay to API an amount equal to: (i) ***** of the Net Outside Sales of the OTC Product in such country if there is no generic version of the Product on the market in such country (other than a generic version of the Product commercialized by or on behalf of P&G or its Affiliate), or (ii) ***** of the Net Outside Sales of the OTC Product in such country if there is a generic version of the Product on the market in such country (other than a generic version of the Product commercialized by or on behalf of P&G or its Affiliate).

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ARTICLE XXIV

[RESERVED]

ARTICLE XXV

MISCELLANEOUS

A. Use and Obligations of Affiliates. The parties acknowledge that each of them has very limited or no operations in many countries within the Territory. The parties also acknowledge that each of them has numerous Affiliates in many countries within the Territory, including, without limitation, in countries in which the parties themselves have very limited or no operations. Accordingly, any obligation of a party pursuant to the Collaboration Agreement Documents may be satisfied by an appropriate Affiliate of such party and shall be deemed to be an obligation of such party and such party’s appropriate Affiliates. Additionally, any right of a party pursuant to the Collaboration Agreement Documents may be exercised by any appropriate Affiliate of such party, including as against any Affiliate of the other party and shall be deemed to be a right of such party and such party’s appropriate Affiliates.

B. Setoff. From time to time during the performance of the Collaboration Agreement Documents the parties may have actual payment obligations to one another that must be satisfied on or near the same date, in the same country and currency. The parties agree that it is in their best interests to setoff these amounts against one another so that only one net amount shall be paid by the party owing the greater amount. Accordingly, the parties agree to cooperate with one another to identify opportunities to setoff payments to one another and to calculate and make net payments and make the appropriate accounting entries in their respective books and records.

C. Payment Method. All payments to be made under this Agreement shall be made by wire transfer, and the paying party agrees to provide two (2) Business Days prior notice to the Alliance General Manager or his designee to confirm the amount of such wire transfer and the wire transfer instructions. Any payments or portions thereof due hereunder which are not paid by the date such payments are due under this Agreement shall bear interest equal to the lesser of (i) the prime rate as reported by the Morgan Guaranty Bank and Trust, New York, New York on the date such payment is due, plus an additional three percent (3%), or (ii) the maximum rate permitted by law, calculated on the number of days such payment is delinquent. The parties agree that payments made under this Agreement will be in the currency and to the entity selected by the receiving party.

D. Currency Conversion. The parties acknowledge that the cash flows underlying monies owed under this Agreement may be in differing currencies that require conversion. Accordingly, the parties agree that all cash flows in a currency which for purposes of this Agreement need to be converted, shall be converted based on the average Spot Rates in effect for such conversion for the Quarter in which such underlying monies are owed under this Agreement. For purposes of this Section XXV(D), “Spot Rate” shall mean the relevant currency conversion rate in effect for P&G’s exchange rate provider and, if such

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currency conversion rate is not available from such source on the relevant date, then the “Spot Rate” shall mean the currency conversion rate agreed by the parties at that time. The parties agree that all currency conversion risk and costs associated with currency conversion will be shared equally by the parties. As of the A&R Agreement Effective Date, P&G’s exchange rate provider is Bloomberg and in the event that P&G changes its exchange rate provider, P&G shall give prompt written notice to API of such change, and if API is unable to obtain reasonable access to such new exchange rate provider, P&G shall provide a mechanism through which to provide such information to API in a timely and transparent matter.

E. Additional Agreements. P&G and API agree to work together and cooperate to develop planning which results in the maximum after-tax benefits to each company. To the extent any benefits result from this cooperation the companies agree to share equally the resulting benefits. Additionally, the parties agree that from time to time it may be prudent to enter into one or more additional agreements to implement this Agreement in various countries within the Territory. Each party agrees, upon the request of the other party to enter into good faith negotiations with respect to such additional agreements, which additional agreements shall not be inconsistent with the other Collaboration Agreement Documents.

F. Withholding Tax. To the extent a withholding tax is deducted with respect to any payment between the parties or with third parties, the amount of tax withheld shall be for the account of the party receiving the payment. The amount of withholding tax will be allocated, if applicable, in the ratio of the respective income to which the withholding tax is related. The paying party will provide copies of all receipts from the governmental or taxing authority evidencing payment of such taxes and will assist the receiving party in claiming relief from double taxation.

G. Non-Assignment. Except as otherwise provided herein or in the other Collaboration Agreement Documents, neither party may assign this Agreement, any other Collaboration Agreement Document or rights or obligations hereunder or thereunder, in whole or in part, without the written consent of the other party; provided, however, either party may assign its rights and obligations hereunder to an Affiliate, provided that the assigning party shall remain responsible for all obligations to the non-assigning party hereunder; provided, further, API may assign this Agreement to an Affiliate which API demonstrates to P&G holds the assets of its worldwide pharmaceutical business, and upon such assignment, subject to the written consent of P&G, such consent not to be unreasonably withheld, Hoechst AG shall be released from its obligations hereunder.

H. Force Majeure. Neither party shall be liable to the other for failure to perform any part of the Collaboration Agreement Documents if such failure results from an act of God, war conditions, revolt, revolution, sabotage, government, state or municipal regulations or actions, embargo, fire, strike, or other labor trouble, or any cause beyond a party’s control. Upon the occurrence of any such event which results in, or will result in, delay or failure to perform according to the terms of the Collaboration Agreement Documents, the party whose performance is delayed or prevented shall immediately give notice to the

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other party of such occurrence and the effect and/or anticipated effect of such occurrence on the performance of such party. The party whose performance is so affected shall use reasonable best efforts to minimize disruptions in its performance and, subject to the provisions in this Section XXV(H), to resume full performance of its obligations under the Collaboration Agreement Documents as soon as possible.

I. Governing Law. The construction, validity and performance of the Collaboration Agreement Documents shall be governed in all respects by the laws of the State of Ohio without reference to the choice of law provisions thereof, whether common law or statutory.

J. Entire Agreement. The Collaboration Agreement Documents, including the Exhibits and Schedules attached thereto, constitute the entire agreement between the parties hereto with respect to the subject matter thereof and supersede all previous negotiations, commitments, and writings with respect to such subject matter.

K. Severability. The illegality or partial illegality of the Collaboration Agreement Documents or any provision thereof shall not affect the validity of the remainder of the Collaboration Agreement Documents or any provision thereof. If at any time any provision of the Collaboration Agreement Documents is illegal or partially illegal, then the parties shall negotiate in good faith to modify such provision so that it is legal and acceptable to the parties. The illegality or partial illegality of any Collaboration Agreement Document shall not affect the validity of any Collaboration Agreement Document in any jurisdiction in which such determination of illegality of partial illegality has not been made.

L. Amendments. Neither party shall claim any modification or revision of any provision of any Collaboration Agreement Document unless such modification or revision is in writing, signed by the parties thereto and specifically states that it is an amendment to such document.

M. Notices. Any notices or communications provided for in the Collaboration Agreement Documents to be made by either party to the other shall be in writing, in English, and shall be made by prepaid air mail with return receipt addressed to the other at its address set forth above. Any such notice or communication may also be given by hand or facsimile to the appropriate designation with confirmation of receipt. Either party may by like notice specify an address to which notices and communications shall thereafter be sent. Notices sent by mail shall be effective upon receipt; notices given by hand and fax shall be effective when delivered and with confirmation of receipt.

Notices for API shall be sent to:

Aventis Pharmaceuticals Inc.

300 Somerset Boulevard

Bridgewater, New Jersey 08807

Attn: General Counsel

- 101 -

With copy to:

Morgan, Lewis & Bockius LLP

502 Carnegie Center

Princeton, New Jersey 08540

Attn: Randall B. Sunberg, Esq.

Notices for P&G shall be sent to:

Procter & Gamble Pharmaceuticals, Inc.

Attn: President

One Procter & Gamble Plaza

Cincinnati, Ohio 45202

With copy to:

Procter & Gamble Pharmaceuticals, Inc.

Attn: Associate General Counsel

Health Care Research Center

8700 Mason-Montgomery Road

Mason, Ohio 45040-9462

N. Waivers. Except as specifically provided for herein, the failure on the part of either party to exercise or enforce any rights conferred upon it under the Collaboration Agreement Documents shall not be deemed to be a waiver of any such rights nor operate to bar the exercise or enforcement thereof at any time or times thereafter.

O. Survival. The rights and obligations of the parties set forth in Articles XIII, XV, XVI, XVII and XXI and Sections XXV(B), (C), (G), (I), (K), (L), (M), (N), (O), (P), (R) and (S) of this Agreement shall survive termination of this Agreement and the other Collaboration Agreement Documents.

P. Captions. The captions appearing in this Agreement and the other Collaboration Agreement Documents are inserted only as a matter of convenience and as a reference and in no way define, limit or describe the scope or intent of this Agreement and the other Collaboration Agreement Documents or any of the provisions thereof.

Q. Counterparts. The Collaboration Agreement Documents may be executed in one or more counterparts, each of which shall be deemed to be an original.

R. Original Agreement. The Original Agreement is amended and restated in its entirety with this Agreement.

S. Cross Border Trade. Promptly after the A&R Agreement Effective Date, the parties will in good faith discuss and if possible agree to the implementation of legally viable

- 102 -

mechanisms for a financial payment to correct any distortions to the intended split in marginal income between the parties in any subterritory.

- 103 -

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Collaboration Agreement to be executed by their duly authorized representative(s) as of the A&R Agreement Effective Date.

The Procter & Gamble Company		Aventis Pharmaceuticals Inc.
By:	/s/ John P. Goodwin	By:
Name:	John P. Goodwin	Name:	Pascal Soriot
Title:	Treasurer	Title:	President
Procter & Gamble Pharmaceuticals, Inc.
By:	/s/ Mark A. Collar
Name:	Mark A. Collar
Title:	President

Form
Finance
Execution

SIGNATURE PAGE TO AMENDED AND RESTATED COLLABORATION AGREEMENT

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Collaboration Agreement to be executed by their duly authorized representative(s) as of the A&R Agreement Effective Date.

The Procter & Gamble Company		Aventis Pharmaceuticals Inc.
By:		By:	/s/ Pascal Soriot
Name:	John P. Goodwin	Name:	Pascal Soriot
Title:	Treasurer	Title:	President
Procter & Gamble Pharmaceuticals, Inc.
By:
Name:	Mark A. Collar
Title:	President

SIGNATURE PAGE TO AMENDED AND RESTATED COLLABORATION AGREEMENT

Schedule I-A - API Patents

None.

Schedule I-B - Cost of Goods

Cost of Goods Sold (CG)

This is the value of Product manufactured and other related costs necessary to deliver Product to the customer. In terms of this collaboration, it will include the standard cost of goods sold (expressed as units of Product sold times the unit standard costs), the cost of warehousing and distributing finished Product, plus period costs/manufacturing variances allocated per manufacturing standards. Variances versus the total standard cost for the current fiscal year (including those attributable to the impact of currency exchange rates) that are less than or equal to ***** will be paid by the manufacturer. Variances exceeding ***** of standard cost for the current fiscal year will be shared *****.

Unit Standard Cost

This represents the best estimate of costs to acquire and convert raw and package materials into a finished product available for sale. The unit standard cost will be determined annually and used for an entire fiscal year based on a full cost method using ABC (“Activity Based Cost”) as the primary methodology for assigning cost to Product. The manufacturer may choose to establish a standard each six (6) month period.

The cost of raw and package materials is the best average price that the purchasing department can negotiate to be paid over the twelve (12) month fiscal period of operation for the collaboration based on both P&G’s and API’s buying power, volumes of material being purchased, current market conditions and demand for the commodities being purchased. The material (commodity) standard cost should include related inbound freight, duties, taxes and demurrage. The material standard costs is expressed as a unit cost per measure (e.g. kilos, grams, bottles, caps, etc.) and applied to the Product based on the unit ratios and yields (incorporating “normal” expected loss, scrap, etc.) as defined in the bill of materials.

NOTE: Contract manufacturing costs are generally captured as material costs but may be treated as an outside service under manufacturing operating expense where no materials are involved.

Conversion Costs

These are the costs to convert materials into finished Product. This includes Manufacturing operating expenses incurred to acquire, receive and convert raw and package materials into finished Product. These costs will be divided into appropriate sub-categories of costs and assigned to Product based on an appropriate unit rate (i.e. cost per hour, batch, order, and for usage of the plant).

Examples of sub-categories (rates which would be included in standard cost):

Activities and costs directly related to the manufacture of Product include:

• Operator or direct labor costs

• Workcenter costs (e.g. supervisory and or support labor; depreciation/rental/lease, maintenance costs associated with and expendable activities associated with machinery and equipment; supplies; expendable dies, punches and molds; laundry, etc.)

• Contract manufacturing (See notes above under raw and package materials).

Product manufacturing support activities/costs included in standard cost:

• raw and package materials warehousing

• inventory receiving

• process and package engineering

• inventory purchasing

• production planning

• quality assurance

• regulatory fees (plant & product)

Overhead Costs

• Administrative overhead costs - for internal services such as mail, telephone, training, human resources, cafeteria, I.S./data processing, plant management, cost accounting.

• Facilities costs - depreciation/rent on buildings, insurance, taxes, maintenance utilities, janitorial service, security, grounds (lawn care, snow removal, parking lots, landscaping); industrial hygiene and general waste.

Administrative and facilities cost may be treated as a direct charge to product or distributed and assigned for inclusion in the rates of the direct and indirect activities/sub-categories listed above.

The cost items listed below will be treated either as part of the standard cost or as period costs, as indicated:

Project/Plant Startup (Pre-Production Expense)

Both the cost associated with initial startup of production required to gain approval of the Product for Co-Promotion, Secondary Co-Promotion and Co-Marketing Territories at the P&G manufacturing locations, currently Weiterstadt, Germany and Manati, Puerto Rico, and the costs associated will be paid by P&G. Costs associated with a decision by the parties to qualify or arrange for the sourcing of raw or other materials or active product ingredient to be manufactured and/or packaged at other third party sites (such as Norwich, New York current contract manufacturer) will be shared as agreed by the parties. In this case the cost will be treated as a period cost and not included in the standard cost.

Manufacturing Product/Process Improvements

Costs associated with product line extensions (new SKUs), process improvements (e.g. batch size, testing methods), etc. will be shared as a period cost consistent with the cost sharing agreed to for the Territory requesting/requiring the change.

Plant Shut Down

Costs arising from a plant or line shut down will be negotiated and approved by the Alliance Management Committee. This will be treated as a period cost.

FADO (Fixed Asset Disposal Order)

Costs associated with the disposal of a fixed asset will be shared consistent with that assets prior usage by the Product unless otherwise agreed by the Alliance Management Committee. This will be treated as a period cost.

Obsolescence

Obsolescence will be shared as a period cost by the collaboration consistent with the way the parties are sharing the Cost of Goods for the territory for which the Product was manufactured.

Finished Goods Logistics Costs

These are the costs incurred from entry of finished Product into the warehousing and distribution chain. Because of the nature of this Collaboration Agreement in which both parties will be warehousing and distributing product it becomes difficult to include these costs in the unit standard cost of the Product without becoming duplicative. Therefore, in general, these costs will be treated as period cost, with a few minor exceptions as noted below.

• Plant shipping costs to an initial warehouse may be included in the standard cost.

• Taxes, customs and duties including importer fees may be included in the standard cost only for each individual country where these costs are applicable.

• Repackaging cost incurred in those instances where the collaboration management decides to ship bulk or semi-finished Product for packaging regionally or locally will be included in those standard costs. This actually represents a continuation of the manufacturing process.

• Warehousing costs - The proportional share of warehousing costs associated with the receiving, handling, storage and management of finished Product awaiting shipment to the final customer or another warehouse will be included in Cost of Goods sold as a period cost.

• Due to the nature of the collaboration, customer service costs associated with the receipt, processing, invoicing and collections of a customer order will be included in the cost of goods as a period cost.

Minimum Order Quantities

Unit Standard Costs shall reflect finished Product orders at or above minimum order quantities (MOQ). Orders for Product below MOQs are subject to an upcharge of ***** per order or such other amount agreed to by the parties. The MOQ and the amount of the upcharge therefor will be discussed in good faith by the parties on an annual basis. This upcharge would not be applicable to the initial order for a country launching a new SKU or Product form if such order would be for the full quantity of Product needed for such country in such year. If an upcharge would apply to an order for Product in a particular country, then before producing Product to meet such order, P&G shall ask the API Affiliate in such country to confirm such order in light

of the upcharge. MOQs for new SKUs or Product forms will be established by P&G with API’s consent, such consent not to be unreasonably withheld. Changes in the upcharge or MOQ shall be documented in writing by the parties.

Schedule I-C - Net Outside Sales

Net Outside Sales is defined as Outside Sales less spending which “works” to reduce the cost of Product to the customer or consumer less UK PPRS Payments.

Net Outside Sales can be calculated as follows:

Outside Sales

- Cash Discount

- Returns and Adjustments

- Decline in Price

- Special Allowances

- Rebates and Discounts

- Temporary Price Reductions

- UK PPRS Payments

= Net Outside Sales

Each of these elements are defined below.

OUTSIDE SALES: Outside Sales are calculated by multiplying invoice cases times list price (before allowances).

CASH DISCOUNT: The cash discount is the incentive provided to customers to pay an invoice within a stipulated time period.

RETURNS AND ADJUSTMENTS: These are adjustment to outside sales for returns, refusals, shortages, near dated product, etc.

DECLINE IN PRICE: This refers to payments made following a list price reduction to compensate for warehouse stocks and stocks in transit purchased at a higher price, allowing for an immediate decline in price.

SPECIAL ALLOWANCES: This is a one time allowance prior to a price increase to prevent excessive stocking at the lower price that often occurs just prior to a price increase.

REBATES AND DISCOUNTS: The government prescribes discounts for certain distribution channels (VA, Medicaid, etc.). These are deducted from NOS. From time to time we authorize discounts to other customers including a discount at launch as an incentive to fill the pipeline. Managed Care and other organizations also receive certain discounts for our brands when sold individually and when sold as a package with other products. When sold as a package the package discount is allocated to the brands as a percent of NOS.

TEMPORARY PRICE REDUCTION (TPR) SALES DEDUCTIONS: This cost includes trade related promotions, direct-to-consumer price reductions, and any other brand support promotions that reduce the final selling price.

UK PPRS: Payments made to the UK Department of Health or other Government Departments under the UK Pharmaceutical Pricing Regulatory Scheme (PPRS) or its successors which are intended to control pricing in the UK.

Schedule I-D - P&G Patents

		3351 Chemical Entity Application			6726 Coating Application			7933 Process for Making
Country	Code	Filed	Expires	Appln/Patent	Filed	Expires	Appln/Patent	Filed	Expires	Appln/Patent
Austria	AT	10/11/2000	12/16/2010	SZ30/2000	6/8/1998	6/8/2018	989848	1/1/2001	2/1/2021	1252170
Argentina	AR				6/11/1998		App P980102774	1/31/2001		App P010100430
Australia	AU	12/20/1985	12/20/2010	587001	6/8/1998	6/8/2018	729912	2/1/2001		App 3473601
Bangladesh	BD							1/25/2001	2/1/2016	1003639
Belgium	BE	12/16/1985	12/16/2010	186405	6/8/1998	6/8/2018	989848	1/1/2001	2/1/2021	1252170
Brazil	BR				6/8/1998		App P19810027-0	2/1/2001		App PI01079212
Canada	CA	12/19/1985	7/27/2010	1320727	6/8/1998	6/8/2018	2293815	2/1/2001		App 2399976
Switzerland	CH	12/16/1985	12/15/2010	186405	6/8/1998	6/8/2018	989848	1/1/2001	2/1/2021	1252170
Chile	CL				6/10/1998		App 1298/98	2/1/2001		App 2502001
China	CN				6/8/1998		App 98806116.3	2/1/2001		App 018042996
Colombia	CO				6/11/1998		App 98033551	1/30/2001		App 01006628
Cyprus	CY							2/1/2001	2/1/2021	1252170
Czechoslavakia	CZ				6/8/1998		App PV4472/99	2/1/2001		App PV20022516
Germany	DE	12/16/1985	12/16/2010	186405	6/8/1998	6/8/2018	989848	1/1/2001	2/1/2021	1252170
Denmark	DK	12/20/1985	12/20/2005	168754	6/8/1998	6/8/2018	989848	1/1/2001	2/1/2021	1252170
Egypt	EG				6/11/1998		App 65798	1/31/2001		App 94/2001
**European PO	EP				6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Spain	ES	12/20/1985	3/9/2012	550302	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Spain	ES	12/20/1985	4/8/2008	557322
Spain	ES	10/15/2003	3/9/2012	C200000034
Finland	FI				6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
France	FR	12/16/1985	12/16/2010	186405	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Great Britain	GB	12/16/1985	12/15/2010	186405	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Greece	GR							2/1/2001	2/1/2021	1252170
Hong Kong	HK				9/26/2000		App 106110.2	3/13/2003		App 03101833.6
Hungary	HU				6/8/1998		App P0004625	2/1/2001		App P0204203
Indonesia	ID				6/8/1998		App W20000050	2/1/2001		App W200201745
Ireland	IE	12/20/1985	12/19/2010	58749	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Israel	IL	12/5/1985	12/5/2010	77243	6/8/1998		133405	2/1/2001		App 150511
India	IN				6/11/1998		App 1619DEL98	2/1/2001		App 200200694DEL
Italy	IT	12/16/1985	12/16/2010	91-48444-BE	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Japan	JP	9/28/1994	4/3/2010	2702419	6/8/1998		App 5019601999	2/1/2001		App 2001556833
Japan	JP	12/21/1985	12/21/2010	2568999
Korea	KR				6/8/1998	6/8/2018	400053	2/1/2001		App 20027009790
Luxembourg	LU	12/16/1985	12/16/2010	186405	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Morocco	MA							2/1/2001		App 26758
Monaco	MC							2/1/2001	2/1/2021	1252170
Mexico	MX				6/8/1998	6/8/2018	215921	2/1/2001		App PAA202007417
Malaysia	MY				6/11/1998		App PI9802615	1/30/2001		App PI20010386
Netherlands	NL	12/16/1985	12/16/2010	186405	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Norway	NO				6/8/1998		App 19996116	2/1/2001		App 2002/3645
New Zealand	NZ	12/20/1985	12/20/2005	214651	6/8/1998	6/8/2018	503946	2/1/2001	2/1/2021	519966
Peru	PE				6/10/1998	6/10/2018	2716	1/29/2001	1/29/2021	3374
Philippines	PH	12/17/1985	2/15/2010	33191	6/8/1998	Allowed	App 19996116	1/31/2001		App 1200100199
Pakistan	PK				6/11/1998		App 587/98	6/26/2001	2/1/2020	137650
Poland	PL				6/8/1998		App P337813	2/1/2001		App P357097
Portugal	PT				6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Russia	RU				6/8/1998	6/8/2018	2193880	2/1/2001	Granted	Waiting
Saudi Arabia	SA				3/21/1999		App 99191220	4/18/2001		App 01220066
Sweden	SE	12/16/1985	12/16/2010	186405	6/8/1998	6/8/2018	989848	2/1/2001	2/1/2021	1252170
Singapore	SG				6/8/19998	6/8/2018	69725	2/1/2001		App 200203872-7
Slovak Republic	SK				6/8/1998		App PV171899	2/1/2001		App PV2002-1100
Thailand	TH				6/10/1998		App 044326	1/29/2001		App 063277
Turkey	TR				6/8/1998		App 2000/00111	2/1/2001	2/1/2021	1252170
Taiwan	TW				7/2/1998	7/1/2018	NI 181698	2/5/2001		App 90102064
United States	US	12/6/1985	12/10/2013	5583122	3/28/2003	6/10/2018	6165513	1/29/2001	1/29/2021	6410520
United States	US				10/23/2000	6/10/2018	6569460
United States	US
United States	US
Venezuela	VE				6/11/1998		App 126798	2/1/2001		App 228/2001
Vietnam	VN				6/8/1998	6/8/2018	3085	2/1/2001		App 1-200200606
S. Africa	ZA	12/19/1985	12/19/2005	85-9694	6/10/1998	6/10/2018	985010	2/1/2001	2/1/2021	2002/5090

		7934 Process for Making			N-553 Dosage Form			9722 Methods of Use
Country	Code	Filed	Expires	Appln/Patent No.	Filed	Expires	Appln/Patent	Filed	Appln No.
Austria	AT	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	E195075
Argentina	AR
Australia	AU	2/1/2001		App 36613/01	11/2/1992	11/2/2012	613373
Bangladesh	BD	2/1/2001	2/1/2021	1252169
Belgium	BE
Brazil	BR	2/1/2001		App PI01079522
Canada	CA	2/1/2001		App 2399974	11/2/1992	11/2/2012	2122479
Switzerland	CH	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Chile	CL
China	CN	2/1/2001		App 01804301.1
Colombia	CO
Cyprus	CY	2/1/2001	2/1/2021	1252169
Czechoslavakia	CZ	2/1/2001		App PV20022515	11/2/1992	11/2/2012	282760
Germany	DE	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	69231313D
Denmark	DK	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Egypt	EG
**European PO	EP	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Spain	ES	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Spain	ES
Spain	ES
Finland	FI	2/1/2001	2/1/2021	1252169
France	FR	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Great Britain	GB	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Greece	GR	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Hong Kong	HK
Hungary	HU	2/1/2001		App P0300890
Indonesia	ID
Ireland	IE	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Israel	IL	2/1/2001		App 150512
India	IN	2/1/2001		App 2002/00662/DEL
Italy	IT	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Japan	JP	2/1/2001		App 2001557883
Japan	JP
Korea	KR	2/1/2001		App 20027009032	11/2/1992	11/2/2012	274734
Luxembourg	LU	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Morocco	MA
Monaco	MC	2/1/2001	2/1/2021	1252169
Mexico	MX	2/1/2001		App 2002007418	11/23/1992	11/23/2012	188306
Malaysia	MY
Netherlands	NL	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Norway	NO	2/1/2001		App 2002/3646
New Zealand	NZ	2/1/2001		App 519967	11/23/1992	11/23/2012	245214
Peru	PE
Philippines	PH
Pakistan	PK
Poland	PL	2/1/2001		App P357116
Portugal	PT	2/1/2001	2/1/2021	1252169	11/20/1992	8/24/2014	101085S
Russia	RU				11/2/1992	11/2/2012	2120798
Saudi Arabia	SA
Sweden	SE	2/1/2001	2/1/2021	1252169	11/2/1992	11/2/2012	613373
Singapore	SG	2/1/2001		App 2002041697
Slovak Republic	SK				11/2/1992	279589	11/2/2012
Thailand	TH
Turkey	TR	2/1/2001	2/1/2021	1252169
Taiwan	TW
United States	US	1/29/2001	2/13/2021	6562974	6/9/2000	11/22/2011	6596710	7/23/2004	60/590566
United States	US				4/30/1999	11/22/2011	6096342
United States	US				3/12/1997	11/22/2011	5935602
United States	US				9/14/1994	4/22/2014	5622721
Venezuela	VE
Vietnam	VN
S. Africa	ZA

		9192 Kit Application		8831 Methods of Use		3409 Pulsed Dosing
Country	Code	Filed	Appln No.	Filed	Appln No.	Filed	Expires	Patent No.
Austria	AT					6/4/1986	6/4/2006	210728
Argentina	AR			12/19/2002	P020104997
Australia	AU			12/16/2002	2002360619	6/5/1986	6/5/2006	603766
Bangladesh	BD
Belgium	BE					6/4/1986	6/4/2006	210728
Brazil	BR			12/16/2002	PI0215026-3
Canada	CA			12/16/2002	2469779	6/5/1986	4/9/2008	1282702
Switzerland	CH					6/4/1986	6/4/2006	210728
Chile	CL			12/20/2002	2940/2002
China	CN			12/16/2002	2825627.1
Colombia	CO	9/20/2004	2392/2004	12/16/2002	Waiting
Cyprus	CY
Czechoslavakia	CZ			12/16/2002	2004-690
Germany	DE					6/4/1986	6/4/2006	P3650403.3-08
Denmark	DK					6/6/1986	6/6/2006	DK174584
Egypt	EG			12/18/2002	1366/2002
**European PO	EP			12/16/2002	2795891.7
Spain	ES
Spain	ES
Spain	ES
Finland	FI
France	FR					6/4/1986	6/4/2006	210728
Great Britain	GB					6/4/1986	6/4/2006	2177001
Greece	GR
Hong Kong	HK					6/4/1986	6/4/2006	92-1042
Hungary	HU			12/16/2002	Waiting
Indonesia	ID			12/16/2002	Waiting
Ireland	IE					6/5/1986	6/5/2006	68145
Israel	IL			12/16/2002	Waiting
India	IN			12/16/2002	1454/DELNP/2004
Italy	IT					6/4/1986	6/4/2006	53367BR/95
Japan	JP					6/6/1986	6/6/2006	2509185
Japan	JP			12/16/2002	Waiting
Korea	KR			12/16/2002	Waiting
Luxembourg	LU					6/4/1986	6/4/2006	210728
Morocco	MA			12/16/2002	Waiting
Monaco	MC
Mexico	MX			12/16/2002	Waiting
Malaysia	MY			12/20/2002	PI20024837
Netherlands	NL					6/4/1986	6/4/2006	210728
Norway	NO			12/16/2002	2004-3113
New Zealand	NZ			12/16/2002	532994	6/4/1986	6/4/2006	216418
Peru	PE			1/6/2003	7-2003/OIN
Philippines	PH			12/16/2002	12004500896
Pakistan	PK			12/21/2002	1122/02
Poland	PL			12/16/2002	Waiting
Portugal	PT
Russia	RU			12/16/2002	200412433
Saudi Arabia	SA			2/25/2003	3230556
Sweden	SE					6/4/1986	6/4/2006	210728
Singapore	SG			12/16/2002	200403190-2
Slovak Republic	SK			12/16/2002	6/15/7387
Thailand	TH			12/19/2002	78918
Turkey	TR
Taiwan	TW			12/16/2002	91136276
United States	US	3/26/2003	60/457865	12/17/2002	10/321208	6/6/1985	8/2/2005	4761406
United States	US	2/27/2004	10/789525	7/23/2004	10/897897
United States	US
United States	US
Venezuela	VE			12/23/2002	2529/2002
Vietnam	VN			12/16/2002	Waiting
S. Africa	ZA			12/16/2002	2004/4007	6/4/1986	6/4/2006	86-4149

Patents Under Merck License Agreement

COUNTRY	APPLICATION NUMBER	PATENT NUMBER	DATE OF GRANT
United States*	09/812450	6,465,443	10/15/2002
United States*	09/134215	6,015,801	1/18/2000
United States*	09/388659	6,432,932	8/13/2002
United States	09/445837	pending
United States*	09/134214	5,994,329	11/30/1999
United States*	09/376314	6,333,316	12/25/2001
United States*	09/440577	6,225,294	5/1/2001
Albania	98935752	998292	11/21/2001
Argentina	P990104349	pending
Argentina	P010103455	pending
Australia	84936/98	pending
Australia	15677/02	pending
Australia*	64069/00	741818	3/28/2002
Australia	24511/02	pending
Barbados	81/616	81/616
Bosnia	BAP99526A	pending
Brazil	PI9810779-8	pending
Bulgaria	104093	pending
Canada*	2294595	2294595	8/21/2001
Canada	234974	pending
Chile	2378-98	pending
China	98807473.7	pending
Colombia	98-056.112	pending
Croatia	P20000107A	pending
Czech Republic	PV2000-250	pending
Ecuador	SP-98-2690	pending
EPC	98935752	998292	11/21/2001
EPC	1201911.3	pending
EPC	1201912.1	pending
EPC	1201913.9	pending
EPC	1201910.5	pending

Patents Under Merck License Agreement

COUNTRY	APPLICATION NUMBER	PATENT NUMBER	DATE OF GRANT
Estonia	P00000040	pending
Eurasia	200000151	pending
Hong Kong	102840.8	HK 1024166	3/15/2002
Hong Kong	2101656.1	pending
Hong Kong	2102042.2	pending
Hong Kong	2102043.1	pending
Hong Kong	2101869.4	pending
Hungary	P0004653	pending
Iceland	5315	pending
Indonesia	W20000114	Allowed
Israel	133535	pending
Israel	141218	pending
Israel	143264	pending
Japan	11-509914	3479780	10/10/2003
Korea	2000-7000680	10-391732	7/3/2003
Malaysia	PI9804243	pending
Mexico	789	211884	12/2/2002
Mongolia*	1698	1954	3/25/2002
New Zealand	501807	pending
New Zealand	508507	pending
Norway	20000323	pending
Pakistan*	951/98	136587	1/13/2001
Pakistan	0495/2000	pending
Peru	894	3231	11/18/2003
Philippines	1-1998-02515	pending
Poland	P338635	pending
Singapore*	200000060-4	70327	2/28/2003
Singapore	200107221-4	pending
Slovak Republic	PV2000-93	pending
South Africa*	98/6479	98/6479	3/31/1999
Taiwan	87116964	pending
Trinidad	TT/1/2000/0002	pending
Turkey	2000-00145	pending
Ukraine	2000020982	pending
Uruguay	25949	pending
Uzbekistan	IAP2000-119	pending
Venezuela	2133-98	pending
Vietnam	S19991123	pending
Yugoslavia	P-18/2000	pending

Schedule I(E) - Example of FTE Calculation

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Schedule I-F - Potential Co-Promotion Territory

Tier I

Europe	Latin America	Asia Pacific	Middle East/Africa
Czechia	Argentina	Australia*	South Africa
Denmark*	Brazil*	PR China
Finland*	Mexico*	India
Greece*		South Korea
Norway*		New Zealand
Poland
Portugal*
Russia
Spain
Sweden*
Switzerland*
Turkey
Austria*
Iceland

Potential Co-Promotion Countries are divided into Tier I and Tier II listed hereon. Applications with appropriate Ministries of Health in the Tier I countries will be filed within six (6) months of the applicable triggering event. Applications with appropriate Ministries of Health in the Tier II countries will be filed within twelve (12) months of the applicable triggering event. An applicable triggering event will be the event permitting the earliest filing in a country. Triggering events are:

1. Acceptance of filing of the US NDA, including required stability data.

2. Approval of Product in a required reference country or availability of EU dossier as needed.

3. Receipt of a required certificate of free sales.

* Each of these countries may become part of the Secondary Co-Promotion Territory pursuant to Section IVa(K), after which such countries shall no longer be considered to be included in this Schedule I-F.

Tier II

Europe	Latin America	Asia Pacific		Middle East/Africa
Hungary	Bolivia	Bangladesh		Egypt
Croatia	British Guyana	Hong Kong		French overseas territories
Serbia	Chile	Indonesia		Iran
Slovakia	Colombia	Indochina		Ivory Coast
Slovenia	Costa Rica	Malaysia		Kenya
Ukraine	Venezuela	Pakistan		Morocco
Czech Republic	Ecuador	Philippines		Senegal
Cyprus	El Salvador	Singapore		Tunisia
Estonia	Guatemala	Sri Lanka		United Arab Emirates
Latvia	Honduras	Taiwan		Zimbabwe
French Guinea	Nicaragua	Thailand		Algeria
Romania	Panama	(Vietnam, Cambodia, Laos)		South Africa
Bosnia-Herzegovina	Paraguay	Brunei		Lebanon
Macedonia	Peru			Reunion
Bulgaria	Surinam			Israel
	Uruguay			Botswana
				Mauritius
	Caribbean Island States
	Angulla	Grenadines	Cayman Islands
	Antigua	Haiti	Dutch Antilles
	Aruba	Jamaica	Dominican Republic
	Bahamas	Montserrat
	Barbados	Nevis
	Bermuda	St. Kitts
	Cuba	St. Lucia
	Curacao	St. Vincent
	Dominica	Trinidad & Tobago
	Grenada	Tortola

Schedule I-G Example of Threshold Amount Using CPIU (US $Million)

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Schedule I-H - Primary Detail Cost Determination

The parties shall establish the Primary Detail Cost for employee Representatives and Primary Detail Costs for Fully Dedicated Contract Representatives for each country in the Co-Promotion Territory, Secondary Co-Promotion Territory and Secondary Converted Co-Promotion Territory in each Contract Year in accordance with the following methods. For clarity, the cost of Details provided by Contract Representatives that are not Fully Dedicated Contract Representatives shall be charged based on the actual cost of a Detail provided by such other Contract Representative.

Primary Detail Cost For Employee Representatives

For each such country, the Primary Detail Cost for employee Representatives shall be the average of each party’s Primary Detail Cost as determined by the actual average cost per employee Representative in that country divided by the average number of Calls made by such Representatives in that country during the previous twelve (12) month period, which quotient shall be multiplied by a factor of ***** to reflect the weighting of a Primary Detail within a Call. Details performed by, and costs associated with Contract Representatives shall not be included in the calculation of Primary Detail Cost for employee Representatives.

Calculation of the actual average cost per Representative shall include the costs of salaries and benefits, bonuses and rewards, operating expenses (cars, office supplies, office space, equipment, depreciation, repairs, maintenance, telephones, computers, etc.), and normal travel and meeting expenses.

Calculation of the actual average cost per Representative shall not include the costs of the field sales management structure or administrative support, entertainment of Representatives or customers, unusual travel and meeting expenses, sales targeting or tracking data (e.g., IMS, Scriptrak, Walsh), personnel costs associated with provision of computer support, sample tracking, sales report creation, budget administration, sales program development or sales training.

Primary Detail Cost For Fully Dedicated Contract Representatives

For each such country, the Primary Detail Cost for Fully Dedicated Contract Representatives shall be the actual cost of such Fully Dedicated Contract Representative in that country divided by the average number of Calls made by such Fully Dedicated Contract Representatives in that country during the previous twelve (12) month period, which quotient shall be multiplied by a factor of ***** to reflect the weighting of a Primary Detail within a Call. The calculation of Primary Detail Cost for a Fully Dedicated Contract Representative shall not include any amounts for the unused capacity of such Fully Dedicated Contract Representative.

For purposes of this Schedule I-H, a “Call” is defined as a visit by a Sales Representative to a physician, licensed physician assistant, nurse practitioner, or other person legally permitted to prescribe prescription drugs during which such Representative promotes a prescription pharmaceutical product.

Schedule I-I - Detail Definitions

“Primary Detail” shall mean a Detail during which the presentation and discussion of the Product occupies more time than the presentation and discussion of any other product. In a Primary Detail, the Product will normally be discussed in the first position, and such discussion will consist, in general, of opening remarks relating to the physician/patient needs, followed by a fairly-balanced discussion of the way in which the Product’s benefits meet patient needs, and ending with a mention of the Product’s dosage schedule and, if appropriate, a request by the Representative for a commitment from the health practitioner to use the Product.

“Secondary Detail” shall mean a Detail during which the presentation and discussion of the Product occupies more time than the presentation and discussion of all but one other product. In a Secondary Detail, the Product will normally be discussed in the second position, and such discussion will consist, in general, of a brief, fairly-balanced description of the Product and its benefits, ending, if appropriate, with a request by the Representative for a commitment from the health practitioner to use the Product.

Schedule I-J - Detailing Effort Evaluation

Actual Detailing Effort will be calculated consistent with the expectations that (a) at least ***** of Details will be Primary Details (unless one party’s Detailing Efforts exceeds the other party’s Detailing Efforts, in which case the Details in excess of such other party’s Detailing Efforts may be Primary Details or Secondary Details) and (b) at least ***** of Details against office-based prescribers (i.e., excluding Details to hospital-based prescribers) will be with pre-agreed prescriber targets.

For each semi-annual period, Actual Detailing Effort for a party in a particular country will be calculated by aggregating the actual Details performed by such party in such country during such period as measured in Primary Detail Equivalents, provided that: (1) only Primary Details and Secondary Details will be included in such calculation; (2) any Details of office-based prescribers who are not on Detail Commitment prescriber target lists pre-agreed by the parties in excess of ***** of the total Primary Details and Secondary Details will not be included in such calculation; and (3) any Secondary Details in excess of ***** of the total Primary Details and Secondary Details performed by such party in such country during such semi-annual period will not be included in such calculation; provided that the foregoing limitation in clause (3) shall not apply: (a) to the measurement of Actual Detailing Effort for semi-annual periods prior to July 1, 2005 or (b) to any Details provided by such party as part of its Detail Commitment that are in excess of the number of Details performed by the other party as part of its Detail Commitment in such country during such semi-annual period.

Schedule I-K - Co-Promotion Initial Marketing Spend and Secondary Co-Promotion Initial

Marketing Spend (Local Currency Million)

Country	CY 2004 LC
US	*****
Canada	*****
France	*****
Germany	*****
Belgium	*****
Netherlands	*****
UK	*****
Ireland	*****
Portugal	*****
Austria	*****
Denmark	*****
Finland	*****
Norway	*****
Sweden	*****
Greece	*****
Switzerland	*****
Australia	*****
Brazil	*****
Mexico	*****

Schedule II(B) - Calculation of Reimbursement Payment

For each Quarter during the Term, the global reimbursement payment or RP shall be calculated pursuant to the following formula. If the amount of the RP for any Quarter is positive, then P&G shall pay such amount to API. If the amount of the RP for any Quarter is negative, then API shall pay the absolute value of such amount to P&G. Examples of the calculations detailed herein are set forth in the attachment hereto.

*****

Schedule III(A)(2)(a) - Oversight Committee

1. Function. Subject to the terms and conditions of the Collaboration Agreement Documents, the Oversight Committee shall have the following functions:

a. To provide a periodic, high-level executive review of the parties’ long-term strategies, business plans and resource commitments for the Product; and

b. To ensure and protect the vision and principles of the parties as set forth in the Collaboration Agreement Documents; and

c. To oversee and track the overall speed and efficiency of the alliance (in support of which, the Alliance General Managers shall provide periodic reports on resource utilization and duplication and annual recommendations for simplification).

Notwithstanding the foregoing, the parties: (i) anticipate that the Oversight Committee will not manage the day-to-day operations with respect to the Product nor the business decisions related thereto, and (ii) acknowledge and agree that the Oversight Committee shall not have the right to participate in any activities or decisions reserved to either API or P&G pursuant to the Collaboration Agreement Documents, including, but not limited to, any right to establish resale prices for Product in the Territory.

2. Composition. The Oversight Committee shall consist of no more than ten (10) members, composed of the parties’ respective executive managers, no more than five (5) of whom shall be appointed by each party, to perform the functions set forth in the preceding section of this Schedule III(A)(2)(a). The members of the Oversight Committee shall be senior executives of Sanofi-Aventis and P&GP representing:

a. Global Pharmaceutical Operations;

b. Global Research and Development;

c. Global Finance;

d. United States Commercial Operations; and

e. European Commercial Operations.

f. Ex-Officio Members: The Alliance General Managers will attend all meetings of the Oversight Committee and report to the Oversight Committee regarding the activities of the Alliance Management Committee, but will not be members of, and shall not vote in, the Oversight Committee.

g. Oversight Committee Leaders: Senior Executive Global Pharmaceutical Operations (Sanofi-Aventis) and the President of Procter & Gamble Pharmaceuticals, Inc., will serve as the Oversight Committee Leaders.

Either party shall have the right from time to time to substitute individuals, on a permanent or temporary basis for any of its previously designated members of the Oversight Committee, including its Oversight Committee Leader.

3. Meetings.

a. Unless the Oversight Committee otherwise agrees, regular meetings of the Oversight Committee shall be held at least once per Contract Year at such times as the Oversight Committee may determine. Regular meetings shall be held at each party’s offices on an alternating basis unless otherwise agreed by the Oversight Committee. Either Oversight Committee Leader may call a special meeting of the Oversight Committee by written or oral notice to the other members. Notices of the place, date and time of all meetings of the Oversight Committee shall be mailed to a member’s last known place of business at least ten (10) days before the meeting or given orally or by fax at least five (5) days before the meeting. Attendance at a meeting shall constitute waiver of notice. Prior to meetings, the Oversight Committee Leaders shall distribute an agenda to the members.

b. A duly constituted quorum of the Oversight Committee for purposes of making any decision or taking any action required or permitted to be made or taken pursuant to the Collaboration Agreement Documents shall be at least two (2) members present in person, via telephone or teleconference, of which at least one (1) member must have been appointed by each party. Any member unable to attend in person may attend via telephone or teleconference and shall have all rights to participate fully and vote.

c. Any meeting may be held by telephone or teleconference so long as all members participating in the meeting can hear one another at the same time. Telephone or Teleconference meetings shall be governed by the same rules as other meetings of the Oversight Committee except as to location.

4. Decision-Making Authority. The API members, collectively, and the P&G members, collectively, shall each be entitled to cast one (1) vote on any matter to be acted upon at such meeting. Any decision or action required or permitted to be made or taken by the Oversight Committee shall only be made or taken upon the unanimous agreement of API and P&G. If unanimous agreement does not exist with respect to any matter, then such matter shall be resolved pursuant to the mechanisms described in Article XVI of the Agreement. Any decision or action that might be made or taken at any meeting of the Oversight Committee may be made or taken, in lieu of a meeting, by an instrument in writing by the Oversight Committee Leaders. Such instruments may be executed in counterparts.

5. Records. The Oversight Committee shall keep accurate minutes of all meetings to reflect any and all decisions or actions made or taken. The Oversight Committee Leaders shall

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designate a member of the Oversight Committee, or any other suitable person, to prepare and circulate a draft of the minutes of each meeting. Drafts of such minutes shall be delivered to the Oversight Committee Leaders (or their respective designees) within twenty (20) days after each meeting, and shall be edited and issued in final form as soon as practical after the meeting, with the approval and agreement of the Oversight Committee Leaders, as evidenced by their (or their designee’s) signatures on the minutes. The Oversight Committee shall also keep such other records as it deems appropriate.

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Schedule III(A)(2)(b) - Alliance Management Committee

1. Function. Subject to the terms and conditions of the Collaboration Agreement Documents, the Alliance Management Committee shall have the following functions:

a. To establish and maintain the global vision, goals and business plan for Products within the Territory pursuant to the Collaboration Agreement Documents and to monitor progress against such vision, goals and business plans; and

b. To agree annually on global forecasts for sales volume, expenses and profit for the Product in the Territory pursuant to the Collaboration Agreement Documents and to agree quarterly on any changes to such forecasts; and

c. To identify global priority projects and issues and ensure that strategies and plans are developed to address identified global priority projects and issues; and

d. To review, approve and track the broad commercialization and development strategies, plans and priorities for the Product in the Territory (provided that the Alliance General Managers will be responsible for executional decisions, planning and resource allocation for global work); and

e. To oversee regional Sales and Marketing plan inputs that have global significance to ensure global consistency and overall quality of planning and execution; and

f. To approve all Product launches and launch timings.

The Research & Development Committee and any development teams formed to develop Product Improvements shall report to the Alliance Management Committee.

Notwithstanding the foregoing, the parties acknowledge and agree that the Alliance Management Committee shall not have the right to participate in any activities or decisions reserved to either API or P&G pursuant to the Collaboration Agreement Documents, including, but not limited to, any right to establish resale prices for Product in the Territory.

2. Composition. The Alliance Management Committee shall consist of no more than eighteen (18) members, composed of multi-functional and multi-national representatives of each party (who shall be officers, directors or employees of such party or an Affiliate of such party), no more than nine (9) of whom shall be appointed by each party, to perform the functions set forth in the preceding section of this Schedule III(A)(2)(b). The members of the Alliance Management Committee shall be as follows:

a. The Alliance General Managers, who shall serve as co-chairs;

b. Co-Chairs of the Global Commercial Steering Team;

c. Co-Chairs of the Research and Development Committee;

d. Global Development Project Leaders; and

e. Senior Managers from: (i) United States Commercial Operations; (ii) European Commercial Operations; (iii) Intercontinental Commercial Operations; (iv) Global Regulatory; and (v) Global Finance.

c. Alliance Management Committee Leaders: The API Alliance General Manager and the P&G Alliance General Manager shall serve as the Alliance Management Committee Leaders.

Either party shall have the right from time to time to substitute individuals, on a permanent or temporary basis for any of its previously designated members of the Alliance Management Committee, including its Alliance General Manager.

3. Meetings.

a. Unless the Alliance Management Committee otherwise agrees, regular meetings of the Alliance Management Committee shall be held at least once every: (i) twelve (12) months to establish goals and approve strategies and plans, and (ii) three (3) months to review progress versus goals and to discuss issues that cross functions or geographies. All meetings shall be held at such times as the Alliance Management Committee may determine. Regular meetings shall be held at each party’s offices on an alternating basis unless otherwise agreed by the Alliance Management Committee. Either Alliance General Manager may call a special meeting of the Alliance Management Committee by written or oral notice to the other members. Notice of the place, date and time of all meetings of the Alliance Management Committee shall be mailed to a member’s last known place of business at least ten (10) days before the meeting or given orally or by fax at least five (5) days before the meeting. Attendance at a meeting shall constitute waiver of notice. Prior to meetings the Alliance General Managers or their designees shall distribute an agenda to the members. The Alliance General Managers or their designees shall attend all meetings of the Alliance Management Committee.

b. A duly constituted quorum of the Alliance Management Committee for purposes of making any decision or taking any action required or permitted to be made or taken pursuant to the Collaboration Agreement Documents shall be at least ten (10) members present in person, via telephone or teleconference, of which at least five (5) members must have been appointed by each party. Any member unable to attend in person may attend via telephone or teleconference and shall have all rights to participate fully and vote.

c. Any meeting may be held by telephone or teleconference so long as all members participating in the meeting can hear one another at the same time. Telephone or Teleconference meetings shall be governed by the same rules as other meetings of the Alliance Management Committee except as to location.

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4. Decision-Making Authority. The API members, collectively, and the P&G members, collectively, shall each be entitled to cast one (1) vote on any matter to be acted upon at such meeting. Any decision or action required or permitted to be made or taken by the Alliance Management Committee shall only be made or taken upon the unanimous agreement of API and P&G. If unanimous agreement does not exist with respect to any matter, then such matter shall be resolved pursuant to the mechanisms described in Article XVI of the Agreement. Any decision or action that might be made or taken at any meeting of the Alliance Management Committee may be made or taken, in lieu of a meeting, by an instrument in writing executed by the Alliance General Managers. Such instruments may be executed in counterparts.

5. Delegation of Authority. The Alliance Management Committee may delegate any of the Alliance Management Committee’s responsibilities, as it deems appropriate, to the Alliance General Managers or any other persons agreed by the Alliance Management Committee or any sub-committee formed by the Alliance Management Committee. During the first meeting of the Alliance Management Committee, which meeting shall be conducted as soon as practicable after the Original Agreement Effective Date, the Alliance Management Committee shall begin to establish detailed procedures for performing its functions and making appropriate delegations.

6. Records. The Alliance Management Committee shall keep accurate minutes of all meetings to reflect any and all decisions or actions made or taken. The Alliance General Managers shall designate a member of the Alliance Management Committee or another person agreed by the Alliance Management Committee to prepare and circulate a draft of the minutes of each meeting. Drafts of such minutes shall be delivered to the Alliance General Managers (or their respective designees) within twenty (20) days after the meeting, and shall be edited and issued in final form as soon as practical after the meeting, with the approval and agreement of Alliance General Managers, as evidenced by their (or their designee’s) signatures on the minutes. The Alliance Management Committee shall also keep such other records as it deems appropriate.

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Schedule III(A)(2)(c) - Research & Development Committee

1. Function. Subject to the terms and conditions of the Collaboration Agreement Documents, the Research & Development Committee shall have the following functions:

a. To review and approve the initiation, modification or early termination of non-clinical and clinical research within the Territory involving Risedronate including, without limitation, API Studies, Joint Studies and P&G Studies; and

b. Subject to the approval of the Alliance Management Committee, to recommend filing for a Health Registration; and

c. Subject to the approval of the Alliance Management Committee, to review and approve variations in policy for manufacturing/production changes; and

d. To review and approve all Product Improvements pursuant to the Collaboration Agreement Documents; and

e. To participate in such other matters regarding research, development and commercialization of Products or Product Improvements as the Alliance Management Committee or the Alliance General Managers may determine, subject to the other terms and conditions of the Collaboration Agreement Documents; and

f. To have responsibility for determining all Product labeling, including specifically responsibility for maintaining consistency of Product labeling within the Territory.

Notwithstanding the foregoing, the parties acknowledge and agree that the Research & Development Committee shall not have the right to participate in any activities or decisions reserved to either API or P&G pursuant to the Collaboration Agreement Documents.

2. Composition. The parties shall establish and maintain a Research & Development Committee of representatives of each party (who shall be officers, directors or employees of such party or an Affiliate of such party) consisting of no more than eight (8) members, no more than four (4) of which shall be appointed by each party, to perform the functions set forth in the preceding section of this Schedule III(A)(2)(c). The members of the Research & Development Committee shall represent the following disciplines or the functional equivalent thereof: (i) Product Development; (ii) Regulatory Affairs; and (iii) Medical Affairs/Drug Surveillance. A member of the Research & Development Committee may also be a member of the Alliance Management Committee. Each party shall appoint one member to serve as its R&D Leader. Either party shall have the right from time to time to substitute individuals, on a permanent or temporary basis for any of its previously designated members of the Research & Development Committee, including its R&D Leader.

3. Meetings. The Research & Development Committee shall meet as often as needed to perform its functions.

4. Decision-Making Authority. No clinical or non-clinical research involving the Product shall be performed by or for either party in any country without the prior agreement of the Research & Development Committee. The Research & Development Committee will report to the Alliance Management Committee. If the Research & Development Committee cannot reach agreement with respect to any decision, then such matter shall be resolved pursuant to the mechanisms described in Article XVI of the Agreement.

5. Records. Within ninety (90) days after the Original Agreement Effective Date, the Research & Development Committee shall establish its own detailed procedures for interactions, meetings, quorums and notices, if any, record-keeping, decision-making authority and any other matters as the Research & Development Committee may deem prudent.

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Schedule III(A)(2)(d) - Global Commercial Steering Team

1. Function. Subject to the terms and conditions of the Collaboration Agreement Documents, the GCS Team will have the following functions:

a. To make recommendations to the Alliance Management Committee on key strategic decisions and investments;

b. Work with the R&D Committee to provide commercial input regarding life cycle management ideas and propose the Four Year R&D Plan to the Alliance Management Committee.

c. To implement the approved global medico-marketing strategy and to define the corresponding tactics;

d. To consolidate the global commercial input into the budget and forecasts;

e. To communicate vision and strategy for the product within the alliance; and

f. To share knowledge with other countries and functions.

2. Composition. The GCS Team will consist of no more than eighteen (18) members, composed of the parties’ key alliance commercial and research and development leaders from both the United States and Europe. The members of the GCS Team will be as follows:

a. Global Marketing Directors who will serve as co-chairs;

b. R&D Committee Chairs;

c. European Marketing Director;

d. United States Marketing Director;

e. Intercontinental Marketing Director;

f. Global Finance Manager;

g. Development Project Leader;

h. United States Medical Affairs; and

i European Medical Affairs.

Either party will have the right from time to time to substitute individuals, on a permanent or temporary basis, for any of its previously designated members of the GCS Team.

3. Meetings.

a. Unless the GCS Team otherwise agrees, regular meetings of the GCS Team will be held at least once every six weeks. All meetings will be held at such times as the GCS Team may determine. Regular meetings will be held at each party’s offices on an alternating basis unless otherwise agreed by the GCS Team. Either GCS Team chair may call a special meeting of the GCS Team by written or oral notice to the other members. Notice of the place, date and time of all meetings of the GCS Team will be mailed to a member’s last known place of business at least ten days before the meeting or given orally or by fax at least five days before the meeting. Attendance at a meeting will constitute waiver of notice. Prior to meetings the GCS Team or their designees will distribute an agenda to the members. The GCS Team chairs or their designees will attend all meetings of the Alliance Management Committee.

b. A duly constituted quorum of the GCS Team for purposes of making any decision or taking any action required or permitted to be made or taken pursuant to the Collaboration Agreement Documents will be at least ten (10) members present in person, via telephone or teleconference, of which at least five(5) members must have been appointed by each party. Any member unable to attend in person may attend via telephone or teleconference and will have all rights to participate fully and vote.

c. Any meeting may be held by telephone or teleconference so long as all members participating in the meeting can hear one another at the same time. Telephone or teleconference meetings will be governed by the same rules as other meetings of the GCS Team except as to location.

4. Decision-Making Authority. The API members, collectively, and the P&G members, collectively, will each be entitled to cast one vote on any matter to be acted upon at such meeting. Any decision or action required or permitted to be made or taken by the GCS Team will only be made or taken upon the unanimous agreement of API and P&G. The GCS Team will report to the Alliance Management Committee. If unanimous agreement does not exist with respect to any matter, then such matter will be referred to the Alliance Management Committee for resolution. The GCS Team may delegate any of the its responsibilities, as it deems appropriate, to any subgroup of the GCS Team. During the first meeting of the GCS Team, the GCS Team will begin to establish detailed procedures for performing its functions and making appropriate delegations.

5. Records. The GCS Team will establish its own detailed procedures for interactions, meetings, quorums and notices, if any, record-keeping, decision-making authority and any other matters as it may deem prudent.

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Schedule III(E) - Listed Studies

*****

Schedule III(G)(1) - Current Programs (USD 000’s)

Actonel PMO Alliance Project Portfolio

Development, Life Cycle Mgmt. Exploratory Projects

*****

Schedule IV(B)(4) - Base Detailing Efforts

(Co-Promotion Territory)

PDE (000’s)	Total
US	*****
Canada	*****
Germany	*****
France	*****
Netherlands	*****
Belgium	*****

Schedule IV(B)(7) - Calculation of Actual Detailing Effort and Detailing Efforts Service Mark Up

*****

Schedule IV(B)(8) - Under Performance of Detailing Efforts

*****

Schedule IV(E)(2) - Bundled Sales Calculation

*****

Schedule IVa(B)(4) - Base Detailing Efforts

(Secondary Co-Promotion Territory)

PDE (000’s)	Total
Austria	*****
Sweden	*****
Norway	*****
Denmark	*****
Finland	*****
Switzerland	*****
Portugal	*****
Greece	*****
Mexico	*****
Australia	*****
Brazil	*****
Total	*****

Schedule VII(A)(2) - Definition of Detailing Capacity for Conversion of Co-Promotion/Co-Marketing

*****

Schedule VII(C)(1) - Entry Payment

P&G shall pay to API the following:

1. if the Conversion Date is between the Original Agreement Effective Date and the date of launch of the Product (the “Launch Date” in such Converted Co-Promotion country, an amount equal to ***** of all of API’s Commercial Expenses and costs and expenses for Registration Studies, Marketing Studies, Health Registrations and Trademark Expenses;

2. if the Conversion date is less than or equal to forty eight (48) months after the Launch Date, an amount equal ***** of the Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

3. if the Conversion Date is more than forty eight (48) months after the Launch Date, but less than or equal to sixty (60) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion date;

4. if the Conversion Date is more than sixty (60) months after the Launch Date, but less than or equal to seventy two (72) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

5. if the Conversion Date is more than seventy two (72) months after the Launch Date, but less than or equal to eighty four (84) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

6. if the Conversion Date is more than eighty four (84) months after the Launch Date, but less than or equal to ninety six (96) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

7. if the Conversion Date is more than ninety six (96) months after the Launch Date, but less than or equal to one hundred eight (108) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

8. if the Conversion Date is more than one hundred eight (108) months after the Launch Date, but less than or equal to one hundred twenty (120) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

9. if the Conversion Date is more than one hundred twenty (120) months after the Launch Date, but less than or equal to one hundred thirty two (132) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

10. if the Conversion Date is more than one hundred thirty two (132) months after the Launch Date, but less than or equal to one hundred forty four (144) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date;

11. if the Conversion Date is more than one hundred forty four (144) months after the Launch Date, but less than or equal to one hundred fifty six (156) months after the Launch Date, an amount equal to ***** of Net Outside Sales derived from such Converted Co-Promotion country for the twelve (12) months immediately prior to the Conversion Date; or

12. if the Conversion Date is more than one hundred fifty six (156) months after the Launch Date, *****.

*****

Schedule X(F) Calculation of Payments in White Space Territory

*****

Schedule XIV(A)(1)(c) - Collaboration Agreement Documents by API

None

Schedule XIV(B)(1)(c) - Collaboration Agreement Documents by P&G

None

Schedule XIV(B)(2)(d) - Pending Litigation

1. Allegation by Boehringer Mannheim GmbH, in context of interference settlement discussions, that U.S. Patent 4,687,767 might be infringed through doctrine of equivalence by commercialization of risedronate.

Exhibit A - Listed Entities

To be agreed to by the parties by December 31, 2004.

EX-10.58

Exhibit 10.58

CONFIDENTIAL TREATMENT REQUESTED UNDER

17 C.F.R. SECTIONS 200.80(b)(4), 200.83 AND 240.24b-2.

[*****] INDICATES OMITTED MATERIAL THAT IS THE

SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST

FILED SEPARATELY WITH THE COMMISSION.

THE OMITTED MATERIAL HAS BEEN FILED

SEPARATELY WITH THE COMMISSION.

Amendment Agreement

This Amendment Agreement (“Agreement”) dated December 19, 2007 (the “Effective Date”) is by and between The Procter & Gamble Company, Procter & Gamble Pharmaceuticals, Inc. (collectively, “P&G”) and Sanofi-Aventis U.S. LLC (“S-A”), (individually P&G and S-A may also be referred to herein as “Party” and collectively as the “Parties”).

WHEREAS, P&G and S-A (as successor in interest to Aventis Pharmaceuticals Inc.) are parties to an Amended and Restated Collaboration Agreement dated October 8, 2004 (as subsequently amended, the “Collaboration Agreement”); and

WHEREAS, P&G and S-A desire to amend the Collaboration Agreement to establish a process by which the Parties might restructure the commercialization efforts for the Product in certain European countries, to establish appropriate investment incentives in the period immediately prior to the end of the Term, and to continue the development of ***** (as defined herein) as a Joint Product Improvement. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in the Collaboration Agreement.

NOW, THEREFORE, in consideration of the mutual promises, covenants, and agreements hereinafter set forth the Parties to this Agreement hereby agree to amend the terms and conditions of the Collaboration Agreement as follows:

1. European Simplification

The Parties agree that their respective rights and obligations with respect to the Product in the European countries of Belgium, Germany, Luxembourg, and The Netherlands shall be revised as set forth in Exhibit A, attached to and made a part of this Agreement. For purposes of this Agreement and consistent with the Collaboration Agreement, the Parties acknowledge and agree that any reference to “Belgium” in this Agreement shall include the same understanding for the country of Luxembourg.

2. Term Extension

If on or prior to August 1, 2011 the Parties do not agree to an extension of the Term beyond January 1, 2015, then the following provisions shall apply to all of the Territories under the Collaboration Agreement except the Potential Co-Promotion Territory which shall not be subject to the following and which shall continue to be subject to the terms of the Collaboration Agreement:

A. Decision-making and Cost Sharing with Respect to Promotion Efforts and Marketing Efforts. P&G shall have the right to make the final decision with respect to all matters regarding Promotion Efforts in the final three Contract Years of the Term (Contract Years 2012 to 2014); provided, that unless otherwise agreed by the Parties, S-A will not be obligated to provide Promotion Efforts, nor to pay for the cost of Promotion Efforts or Marketing Efforts in such Contract Years 2012-2014 that may exceed the cost of the Promotion Efforts or Marketing Efforts for Contract Year 2011.

B. Decision-making and Cost Sharing with Respect to R&D Efforts. P&G shall have the final decision-making authority with respect to all matters regarding R&D Efforts in the final three Contract Years of the Term (Contract Years from 2012 to 2014), including decisions regarding the allocation of FTEs in support of such R&D efforts; provided that, unless otherwise mutually agreed, S-A shall not be obligated under Section III(G) of the Collaboration Agreement to pay for Joint R&D Costs during such Contract Years 2012-2014, except for those Joint R&D Costs related to ongoing pharmacovigilance, regulatory, and medical support for Products already commercialized by the Parties that are solely necessary to satisfy regulatory obligations required to keep those Products on the market.

1

C. Change in the Marketplace for Product. In the event there is a Promotional Potential Loss of Exclusivity, Promotional Actual Loss of Exclusivity, or a significant reduction in Net Outside Sales of the Product in a country or countries prior to Contract Year 2011, then the Parties shall discuss in good faith the eighteen (18) month budget or other applicable budget for the cost of Promotion Efforts, Marketing Efforts, and Joint R&D Efforts in such country or countries for Contact Year 2011, consistent with the terms of Section III (G)(5) and III (J) of the Collaboration Agreement.

3. *****

A. R&D Cost Sharing. ***** as used in this Agreement shall mean the Product Improvement that as of the date hereof is being studied in the ***** clinical study conducted by P&G under protocol number ***** . The Parties shall share R&D Costs for ***** as set forth in this Section 3.A.

1. Upfront Payment. On or before December 21, 2007, in consideration for past development costs for *****, and as an inventor’s premium for P&G and in consideration for P&G contributing ***** to the Parties’ alliance for Actonel® under the Collaboration Agreement, S-A shall pay to P&G a non-refundable payment of *****.

2. Adjustment Payment Contingent on *****. If as a result of a decision or order from a U.S. federal court (whether a district or appellate court) pursuant to which any of *****, (collectively, the “Asserted Claims”) asserted at trial in the lawsuit captioned as ***** is upheld as valid, S-A shall pay to P&G ***** within five (5) Business Days of such decision of the applicable U.S. federal court; provided that, if ***** thereafter appeals such decision of such U.S. federal court, and if, as a result of a final and unappealable decision or order of a higher US federal court, all of the Asserted Claims are held not valid such that no valid, Asserted Claim covers a risedronate product that is the subject of *****, then P&G shall refund such payment to S-A within five (5) Business Days of the later of: (a) such final, unappealable decision; or (b) marketing by ***** of a product under *****, or marketing by another third party of a product under an ANDA or a 505(b)(2) application, in each case where such ANDA or 505(b)(2) application references *****. Any amount payable by a Party under this Section 3(A)(3) shall be included in the calculation of the global reimbursement payment, as described in Section II(B) of the Collaboration Agreement, for the Quarter in which such payment becomes due.

3. R&D Cost Sharing. Except as set forth in this Agreement, the rights and obligations of the Parties with respect to the research and development program for ***** shall be as set forth in the Collaboration Agreement, provided, however, the equal sharing of the actual Joint R&D costs for the program shall be applicable from and after January 1, 2008 only. Any R&D FTEs provided by S-A for R&D Efforts for ***** must be approved by the R&D Committee, and if so approved shall be shared and paid consistent with the terms of the Collaboration Agreement for R&D FTEs and Joint R&D Costs.

B. Designation as Joint Product Improvement. ***** is hereby designated a Joint Product Improvement, and subject to the provisions of Section 3 of this Agreement, its further development shall be subject to the provisions of Section XVIII(B) of the Collaboration Agreement.

2

C. Decision-making. Prior to the date that first year results at the primary statistical endpoint are available from the hard locked database for the Phase III clinical study for ***** conducted by ***** P&G shall use commercially reasonable efforts to consult with S-A on decisions regarding the development of such Joint Product Improvement; provided, that until such date P&G shall have the right in its sole discretion to make such decisions. On and after such date, decisions regarding the development of ***** shall be subject to the other provisions of the Collaboration Agreement that are applicable to Joint Product Improvements.

Except as specifically agreed by the Parties herein, the Collaboration Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment Agreement to the Collaboration Agreement to be executed by their duly authorized representative(s) as of the Effective Date hereof.

By:	/s/ Thomas M. Finn	By:	/s/ Jose Ferrer
	Thomas M. Finn		Jose Ferrer
	President, Global Health Care		Authorized Signatory
	The Procter & Gamble Company		Sanofi-Aventis U.S. LLC
By:	/s/ Thomas M. Finn	By:	/s/ Philippe Alaterre
	Thomas M. Finn		Philippe Alaterre
	Vice President,		Authorized Signatory
	Procter & Gamble Pharmaceuticals, Inc.		Sanofi-Aventis U.S. LLC

3

Exhibit A

Western Europe Simplification

P&G and S-A agree that their rights and obligations with respect to the Co-Promotion of Product in Belgium, Germany, Luxembourg, and the Netherlands, shall be revised as further described below. As noted previously in this Amendment Agreement, for purposes of this Agreement, any reference to Belgium shall be applicable and shall include the country of Luxembourg:

1. Establishment of P&G Promotion Territory. The Parties shall use reasonable efforts to enable P&G to assume full responsibility for management and execution of Promotional Efforts, Marketing Efforts and R&D Efforts in the following countries, on the dates indicated or as soon as reasonably possible thereafter as mutually agreed by the Parties, and such countries upon P&G’s assumption of full responsibility shall be considered part of the “P&G Promotion Territory”: Germany, Belgium and Luxembourg, on and after January 1, 2008; and The Netherlands, on and after April 1, 2008 or sooner if mutually agreed by the Parties. The Parties will in good faith continue discussions regarding the potential transfer of the United Kingdom (the “UK”) to the P&G Promotion Territory in a manner and by means of a separate agreement that is generally consistent with the terms and conditions of this Exhibit A. Furthermore, if and when the Parties mutually agree to include the UK in the P&G Promotion Territory, then (i) the provisions included in Section 4 of this Exhibit A with respect to expense sharing shall include the UK and the Investment Cap defined and further described in such Section 4 shall include and be applicable to the promotion of Product in the UK, and substantially similar provisions with respect to expense sharing shall be incorporated in the definitive agreement between the Parties to include the UK in the P&G Promotion Territory; and (ii) the provisions of Section 8 of this Exhibit shall apply to the UK and shall be incorporated in the definitive agreement between the Parties to include the UK in the P&G Promotion Territory. Unless and until the Parties agree to include the UK in the P&G Promotion Territory, the following investment levels for Promotion Efforts and Marketing Efforts have been agreed to for the UK: for Contract Year 2008,*****; for Contract Year 2009,*****; for Contract Year 2010,*****.

2. Management Structure. P&G shall maintain its own management and business operations and develop, maintain and execute its own marketing, promotion, sales, distribution and R&D plans with respect to the Product within the P&G Promotion Territory and such plans need not be submitted to, nor approved by, S-A; provided that, P&G shall provide to S-A the following for informational purposes: (a) a report which sets forth an indicative forecast of Net Outside Sales (“NOS”) for the P&G Promotion Territory, and such report will be provided three (3) months prior to each Calendar Year; (b) a Quarterly report of actual NOS in the P&G Promotion Territory; (c) a Quarterly report of operating expenses (defined as the cost of Promotional Efforts and Marketing Efforts); (d) a report of actual NOS for the previous Contract Year; (e) an annual osteoporosis market share report; and (f) three (3) months prior to the beginning of each Contract Year, a forecast budget for the cost of Promotion Efforts and Marketing Efforts to be undertaken by P&G in the P&G Promotion Territory in such Contract Year.

4

3. Contribution Sharing:

With respect to the calculation of the global reimbursement payment set forth in Section II(B) of the Collaboration Agreement, the countries in the P&G Promotion Territory shall be included in the Co-Promotion Territory, and the calculation and application of the Threshold Amount shall not change.

There shall be no restrictions on P&G’s ability to engage Contract Representatives to perform Detailing Efforts in the P&G Promotion Territory. P&G shall not be obligated to perform a minimum level of Detailing Efforts, and no penalty payment shall be applicable to Detailing Efforts in the P&G Promotion Territory.

4. Expense Sharing.

(a) General. With respect to the countries in the P&G Promotion Territory for each of Calendar Years 2008, 2009 and 2010, the Parties have agreed to a maximum annual threshold or cap for the Investment Costs (for purposes of this Agreement, “Investment Costs” shall mean the costs related to and included in Promotion Efforts and Marketing Efforts that are included in the Quarterly invoices and reimbursement calculated for the Co-Promotion Countries under the Collaboration Agreement as of the Effective Date of this Agreement) that may be incurred by P&G in the P&G Promotion Territory and shared equally by the Parties as follows: (i) ***** of the total actual NOS for all countries in the P&G Promotion Territory in 2008; (ii) ***** of the total actual NOS for all countries in the P&G Promotion Territory in 2009; and (iii) ***** of the total actual NOS for all countries in the P&G Promotion Territory in 2010 (the “Investment Cap”). Consistent with the terms of the Collaboration Agreement, the Parties shall share ***** the actual Investment Costs incurred by P&G in the P&G Promotion Territory as part of the global reimbursement calculated pursuant to Schedule II (B) of the Collaboration Agreement, subject to the Investment Cap as further described in Subsection (b) immediately below. No later than January 31, 2008, the Parties will in good faith discuss whether it is appropriate to include the cost of local R&D Efforts in the Investment Costs for countries in the P&G Promotion Territory, and whether it is appropriate to adjust the Investment Caps accordingly; provided that, until the Parties agree otherwise, the terms and conditions of the Collaboration Agreement will prevail.

(b) Application of the Investment Cap. The following shall apply with regard to the Investment Cap:

(i) For each of Calendar Years 2008, 2009, and 2010, the Parties shall share ***** the lower of either the total actual Investment Costs incurred by P&G in all countries of the P&G Promotion Territory in the applicable Calendar Year, or an amount equal to the corresponding Investment Cap for such Calendar Year. If the Investment Cap is applied in a given Calendar Year, then P&G shall be solely responsible for any of its Investment Costs that exceed the amount equal to the Investment Cap for such Calendar Year;

(ii) If an event occurs that is unusual and could not reasonably have been foreseen or anticipated by P&G, and where, in each instance, such event can reasonably be expected to substantially impact P&G’s ability to reasonably maintain its Investment Costs in the P&G Promotion Territory below the Investment Cap in a particular Contract Year (the “Unusual Event”), then (x) as soon as reasonably practical, the Parties shall discuss potential reasonable solutions to address the Unusual Event and P&G’s Investment Costs that exceed the Investment

5

Cap; (y) P&G shall take all reasonable actions to implement such mutually agreed solutions or to mitigate its Investment Costs in response to the Unusual Event, as applicable; and (z) the Parties shall share ***** the actual Investment Costs incurred by P&G as a result of the Unusual Event, including those that may exceed the Investment Cap, for such time as P&G incurs such additional Investment Costs, but in no event for longer than a period of three (3) consecutive months after the occurrence of the Unusual Event; and,

(iii) In the event the Investment Cap is applied in a given Calendar Year as described in Subsection 4 (b)(i) above, then the Parties shall in good faith discuss the Investment Costs and Investment Cap anticipated for the subsequent Calendar Years after the Calendar Year when the Investment Cap is applied, and may mutually agree to adjust the Investment Cap for the subsequent Calendar Years.

(c) Calculation Under the Collaboration Agreement. Subject to the application of the Investment Cap in Section 4(b) above, the calculation of the Investment Costs for the P&G Promotion Territory shall be made as part of the calculation for the global reimbursement consistent with Schedule II (B) of the Collaboration Agreement, and shall be included in such calculation under Schedule II (B) as if such Investment Costs were incurred in the Co-Promotion Territory.

(d) Contract Year 2011 and Thereafter. For each Contract Year after 2010, three (3) months prior to January 1 of the subsequent Calendar Year, the Parties will in good faith discuss and agree to an Investment Cap that reasonably reflects the market for the Product on a country by country basis for each country in the P&G Promotion Territory. Such discussion shall include the factors reasonably affecting the market for the Product in each such country, including such factors as the marketing of generic versions of the Product by third parties, pediatric market exclusivity, and the pricing environment.

(e) Investment Costs Incurred Prior to Inclusion of a Country in the P&G Promotion Territory. All expenses incurred in a particular country prior to the date it is included in the P&G Promotion Territory pursuant to Section 1 of this Exhibit A, should be included in the final Quarterly true-up process for the Quarter in which such transfer occurs. Accrual releases will be communicated by S-A to P&G, once final actual expenses are known and booked.

5. Modification of artwork, packaging, labels: As applicable, the Parties will in good faith agree to a reasonable plan for the modification of any artwork or other packaging related to the Product in countries in the P&G Promotion Territory, to include a reasonable phase-out of existing stock of such artwork and other packaging materials.

6. Global or Central activities (CMK, ER, Marketing, Other activities): With respect to any effort at the global level that is performed in support of any country in the P&G Promotion Territory, such efforts will continue to be performed in the same manner. However, if mutually agreed, the Parties may re-assign certain efforts and budgets included within the global effort against the efforts performed in certain countries of the P&G Promotion Territory; provided that, and any such reassigned efforts and/or budgets shall be included in the mutually agreed budgets and the applicable Investment Cap(s) shall not be revised.

6

7. Transition Services: S-A will provide the transition services reasonably necessary to enable the transition of countries into the P&G Promotion Territory, as generally described below, and as such services will be described more specifically in a definitive transition services agreement to be executed between the Parties on or before February 29, 2008, or such other date as mutually agreed by the Parties. The costs and expenses related to the transition services for the P&G Promotion Territory incurred by either Party shall be shared *****. For clarification, to the extent a Party incurs any costs related to the transition services in addition to the costs subject to the Investment Cap, such additional costs will not be shared and will be borne solely by the respective Party incurring such costs.

Generally, S-A will provide the following transition services to facilitate the inclusion of Germany, The Netherlands and Belgium in the Co-Promotion Territory, to countries in the P&G Promotion Territory:

(a) Germany:

• Share S-A’s key customer appointments and planned group selling events by December 31, 2007

• Share S-A’s information regarding the “High Potential Target Group” and key contact lists by December 31, 2007

• Clarify which promotional materials and samples stored by Sanofi-Aventis Deutschland GmbH are requested by P&G and determine a process for to make them available to P&G by December 31, 2007 (the transfer will take place on or before January 31, 2008)

• Other services reasonable, customary and necessary to facilitate the inclusion of Germany in the P&G Promotion Territory, including but not limited to, the sharing of documents, making available samples, sales and promotional materials, and training materials, and as appropriate transferring ongoing non-interventional studies and clinical studies, grants, etc. on or before January 31^st, 2008

(b) Belgium:

• S-A will continue its R&D Efforts related to management of ***** until March 31, 2008, and shall thereafter cooperate to transfer the management of the ***** to P&G or its designee as determined by P&G.

• S-A will continue to provide reduced Promotional Efforts and Marketing Efforts (reduced to a level agreed by the Parties), until March 31, 2008, and will facilitate the transfer of information related to its Promotional Efforts to P&G

• Other transition services reasonable, customary and necessary to facilitate the inclusion of Belgium into the P&G Promotion Territory including but not limited to, the sharing of documents, making available samples, sales and promotional materials, and training materials, and as appropriate transferring any ongoing clinical studies, grants, etc.

• Agree to a plan for the handling of adverse events reports and medical communication requests for events that occur prior to January 1, 2008 and after January 1, 2008

7

(c) Netherlands:

• S-A will reduce its Detailing in Efforts to ***** as of April 1, 2008

• Share S-A’s key customer appointments as of February 1, 2008

• S-A will continue to manage the ***** until March 31, 2008, and thereafter, shall cooperate to transfer the management of the ***** to P&G or its designee, as determined by P&G.

• Transfer all archives and databases related to the *****, and the Parties (or their Affiliates as applicable) shall agree to a communication plan with regard to the study investigators, and to finalize any abstracts and/or scientific journal articles related to the study.

• Transfer to P&G or its designee, all archives and databases related to the ***** and the *****, and the Parties (or their Affiliates as applicable) shall agree to a communication plan with regard to the study investigators, and to finalize any abstracts or scientific journal articles related to the study.

• Transfer to P&G or its designee, all archives and databases related to the ***** and the *****

• Other transition services reasonable, customary and necessary to facilitate the inclusion of The Netherlands in the P&G Promotion Territory, including but not limited to, the sharing of documents, making available samples, sales and promotional materials, and training materials, and as appropriate transferring any other ongoing clinical studies, grants, etc.

• Agree to a plan for the handling of adverse events reports and medical communication requests for events that occurred prior to and after January 1, 2008

8. Acquired Rights Directive. The Parties shall comply with their potential obligations under the Council Directive 2001/23/EC and corresponding local laws (collectively, the “Directive), and where applicable, shall provide the information to each other which may be required under the Directive to reasonably consult with their respective employees, and current or future suppliers of Services (as “Services” is defined immediately below). In a manner that is consistent with the foregoing obligation, S-A shall use its commercially reasonable efforts to treat its respective employees involved in the Promotion Efforts, Marketing Efforts or R&D Efforts for the Product in Belgium, The Netherlands, Luxembourg or Germany (respectively the “Affected Employees,” and the “Services”), in a manner that is commensurate with that used by S-A with respect to its other employees performing similar commercial or research and development services for other products with similar market potential or product life as Product, in S-A’s pharmaceutical business (for example with respect to employees’ opportunities to transition their services to different products, the administration of severance packages, etc.), in order to limit or to mitigate the need for any of such Affected Employees to avail themselves of their rights under the Directive.

In the event that after the Effective Date, any of the Affected Employees makes a successful claim that its employment rights are protected as a result of a transfer of undertaking in accordance with the Directive, whether against P&G or a third party hired by P&G to perform any of the Services, S-A will indemnify P&G for (i) the cost of salaries, benefits, and severance payments paid by P&G or such third parties to the Affected Employee that are substantially similar to and consistent with such amounts paid by S-A to such Affected Employee on the date the Affected Employee makes his/her claim (or the date such Employee was last employed by S-A,

8

as applicable); (ii) any settlement costs related to such claims that are based upon the salaries, benefits, and severance payments, etc., paid by S-A on the date such Affected Employee makes his/her claim; (iii) any costs found to be directly related to such claims by the Affected Employee and to other employees of P&G or such third parties, such as severance costs for employees displaced by Affected Employees; and (iv) all reasonable administrative and legal costs directly related to the foregoing; provided that, (1) S-A shall only be obligated to indemnify P&G to the extent such costs described in subsections (i)-(iv) in the aggregate exceed ***** and only for such amount in excess of *****; (2) the potential costs for the third party hired by P&G to perform the Services described herein will be included only to the extent P&G has a corresponding written contractual obligation to indemnify such third party for such costs related to the Affected Employee; and (3) S-A shall not be obligated to indemnify P&G for such costs described in subsections (i)-(iv) that are incurred by P&G more than twelve (12) months after the date the Affected Employee makes his/her claim under the Directive.

Prior to asserting any claim for indemnification under this provision, P&G shall in good faith discuss such claim with S-A. Any amount payable by S-A under this Section 8 shall be included in the calculation of the global reimbursement payment, as described in Section II(B) of the Collaboration Agreement, for the Quarter in which such costs are actually incurred by P&G. Furthermore, any potential amounts payable by S-A under this Section 8 of Exhibit A shall be subject to the provisions of Sections XXI (B)-(D) of the Collaboration Agreement with respect to audit procedures.

9

EX-10.59

Exhibit 10.59

CONFIDENTIAL TREATMENT REQUESTED UNDER

17 C.F.R. SECTIONS 200.80(b)(4), 200.83 AND 240.24b-2.

[*****] INDICATES OMITTED MATERIAL THAT IS THE

SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST

FILED SEPARATELY WITH THE COMMISSION.

THE OMITTED MATERIAL HAS BEEN FILED

SEPARATELY WITH THE COMMISSION.

Thomas M. Finn

President, Global Healthcare

The Procter & Gamble Company

8700 Mason Montgomery Road

Mason, OH 45040

October 9, 2008

Re: Amendment Agreement between The Procter & Gamble Company, Procter & Gamble Pharmaceuticals, Inc. (collectively, “P&G”), and Sanofi-Aventis U.S. LLC (“Sanofi-Aventis”), (individually P&G and Sanofi-Aventis may also be referred to in this letter as “Party” and collectively as the “Parties”), dated December 19, 2007 (the “Amendment Agreement”). Capitalized terms used and not otherwise defined in this letter shall have the meanings set forth in the Amendment Agreement or in the Amended and Restated Collaboration Agreement by and between The Procter & Gamble Company, Procter & Gamble Pharmaceuticals, Inc. and Sanofi-Aventis U.S. LLC, dated October 8, 2004 (the “Collaboration Agreement”).

Dear Mr. Finn:

After execution of the Amendment Agreement (attached to this letter as Attachment A) on December 19, 2007, P&G and Sanofi-Aventis reached further agreement with respect to certain issues related to the definition of Investment Costs, application of the Investment Cap, the Actonel® collaboration in the United Kingdom (the “UK”) during Contract Year 2008, and the addition of the UK to the P&G Promotion Territory as on January 1, 2009, and the Parties wish to amend and supplement the Amendment Agreement related thereto as follows:

Section 1 of the Amendment Agreement shall be deleted and replaced in its entirety with the following:

1. European Simplification:

The Parties agree that their respective rights and obligations with respect to the Product in the European countries of Belgium, Germany, Luxembourg, The Netherlands, and the United Kingdom shall be revised as set forth in Exhibit A, attached to and made a part of this Agreement. For purposes of this Agreement and consistent with the Collaboration Agreement, the Parties acknowledge and agree that any reference to “Belgium” in this Agreement shall include the same understanding for the country of Luxembourg.

1

2. Section 1 of Exhibit A to the Amendment Agreement shall be deleted and replaced in its entirety with the following:

Establishment of P&G Promotion Territory.

(a) General. The Parties shall use reasonable efforts to enable P&G to assume full responsibility for management and execution of Promotional Efforts, Marketing Efforts and R&D Efforts in the following countries, on the dates indicated or as soon as reasonably possible thereafter as mutually agreed by the Parties, and such countries upon P&G’s assumption of full responsibility shall be considered part of the “P&G Promotion Territory”: Germany, Belgium and Luxembourg, on and after January 1, 2008; and The Netherlands, on and after April 1, 2008 or sooner if mutually agreed by the Parties.

(b) United Kingdom.

(i) The Parties shall use reasonable efforts to enable P&G to assume full responsibility for management and execution of Promotional Efforts, Marketing Efforts and R&D Efforts in the UK, on January 1, 2009, and upon such date, the UK shall be considered part of the P&G Promotion Territory. Subject to Sections 4(a), 4(b)(i) and 4(b)(ii) below, from and after January 1, 2009 (1) the provisions included in Section 4 of this Exhibit A with respect to expense sharing shall include the UK and the Investment Cap defined and further described in such Section 4 below shall include and be applicable to the promotion of Product in the UK; and (2) the provisions of Section 8 of this Exhibit A shall apply to the UK.

3. Sections 4(a) and 4(b) of Exhibit A to the Amendment Agreement shall be deleted and replaced in their entirety with the following:

4. Expense Sharing.

(a) General. The Parties have agreed to a maximum annual threshold or cap for the Investment Costs that may be incurred by P&G in the P&G Promotion Territory in each of Contract Years 2008, 2009 and 2010, and that may be incurred by both Parties in the UK in Contract Year 2008, as follows: (i) ***** of the sum of (1) the total actual NOS for all countries in the P&G Promotion Territory plus (2) the actual NOS for the UK, for Contract Year 2008; (ii) ***** of the total actual NOS for all countries in the P&G Promotion Territory for Contract Year 2009; and (iii) ***** of the total actual NOS for all countries in the P&G Promotion Territory for Contract Year 2010 (the “Investment Cap”). Consistent with the terms of the Collaboration Agreement, the Parties shall share ***** the actual Investment Costs incurred by P&G in the P&G Promotion Territory, and shall also share ***** the actual Investment Costs incurred by both Parties in the UK for Contract Year 2008, as part of the global reimbursement calculated pursuant to Schedule II (B) of the Collaboration Agreement, subject to the Investment Cap as further described in Subsection 4(b) immediately below. For purposes of this Agreement, “Investment Costs” shall mean the costs related to and included in the Promotion Efforts, Marketing Efforts and R&D Efforts that are included in the Quarterly invoices and reimbursement calculated for the Co-Promotion Countries under the Collaboration Agreement as of the Effective Date of this Agreement.

2

(b) Application of the Investment Cap. The following shall apply with regard to the Investment Cap:

(i) Contract Year 2008. With regard to Contract Year 2008, the Parties shall share ***** the lower of either (1) the sum of the total actual Investment Costs incurred by P&G in all countries of the P&G Promotion Territory plus the total actual Investment Costs incurred by both Parties in the UK or (2) the Investment Cap for 2008;

(ii) Contract Years 2009 and 2010. With regard to Contract Years 2009 and 2010, the Parties shall share ***** the lower of either (1) the total actual Investment Costs incurred by P&G in all countries of the P&G Promotion Territory in the applicable Contract Year, or (2) an amount equal to the corresponding Investment Cap for such Contract Year. If the Investment Cap is applied in a given Contract Year, then P&G shall be solely responsible for any of its Investment Costs that exceed the amount equal to the Investment Cap for such Contract Year;

(iii) Unusual Event. If an event occurs that is unusual and could not reasonably have been foreseen or anticipated by P&G, and where, in each instance, such event can reasonably be expected to substantially impact P&G’s ability to reasonably maintain its Investment Costs in the P&G Promotion Territory below the Investment Cap in a particular Contract Year (the “Unusual Event”), then (x) as soon as reasonably practical, the Parties shall discuss potential reasonable solutions to address the Unusual Event and P&G’s Investment Costs that exceed the Investment Cap; (y) P&G shall take all reasonable actions to implement such mutually agreed solutions or to mitigate its Investment Costs in response to the Unusual Event, as applicable; and (z) the Parties shall share ***** the actual Investment Costs incurred by P&G as a result of the Unusual Event, including those that may exceed the Investment Cap, for such time as P&G incurs such additional Investment Costs, but in no event for longer than a period of three (3) consecutive months after the occurrence of the Unusual Event;

(iv) Level of Investment Cap. In the event the Investment Cap is applied in a given Contract Year as described in Subsections 4 (b)(i)-(ii) above, then the Parties shall in good faith discuss the Investment Costs and Investment Cap anticipated for the subsequent Contract Years after the Contract Year when the Investment Cap is applied, and may mutually agree to adjust the Investment Cap for the subsequent Contract Years; and,

(v) Level of Investment Costs. In October of Contract Year 2008 as part of the budget and forecast planning process for Contract Year 2009 under the Collaboration Agreement, the Parties agree to conduct a good faith discussion regarding the level of Investment Costs that may be commercially reasonable and necessary in order for P&G to promote Product in the P&G Promotion Territory in Contract Years 2009 and 2010; provided that, if the parties do not agree to revise the level of such Investment Costs then the Investment Caps for such Contract Years shall remain as set forth in Section 4(a) of this Exhibit A.

4. The following subparagraph (d) shall be appended to the end of Section 7 of Exhibit A to the Amendment Agreement:

(d) United Kingdom

• S-A will ***** Detailing Efforts on May 1, 2008.

• S-A will communicate to P&G by May 30, 2008 important sales information such as pending actions or meeting dates agreed at territory level by S-A Representatives or other commitments towards third parties which have not been closed out by S-A sales forces or others at S-A providing sales support services.

3

• S-A will stop clinical promotion through its Dispensing Doctor channel team as of May 1, 2008. S-A will stop taking commercial orders through such team on December 31, 2008.

• S-A’s Actonel Hospital Contract Team will continue to manage contracts with applicable hospital customers until P&G assumes responsibility for this effort, no later than December 31, 2008.

• S-A will continue to provide Marketing Efforts until June 15, 2008, and will provide P&G with all reasonably necessary information relating to such Marketing Efforts, including pending projects, deadlines, agency contracts, and work that is ongoing under purchase orders, prior to that date.

• S-A will continue to provide market research efforts until June 30, 2008, and will specifically deliver the ***** for May and June 2008 and will transition ad hoc research (e.g., ***** to P&G in a timely fashion.

• S-A will review with P&G the costs associated with S-A’s Promotion Efforts, Marketing Efforts, and R&D Efforts, by June 15, 2008. Such costs will be shared as part of the Global Payment made for the second Quarter of Contract Year 2008, to cover all investments on the ledger as of June 30, 2008.

• Both parties will refrain from proactive external communications regarding the transfer of responsibilities between S-A and P&G, unless any such communications are mutually agreed in writing.

• S-A will discontinue order, shipping, and billing services for the Product on December 31, 2008, and prior to that date S-A will provide to P&G a summary of any issues regarding such services.

• S-A will transfer to P&G those documents relevant to the approval of promotional material for the Product by May 1, 2008, as more specifically agreed by the Parties’ respective medical teams.

• S-A will transfer files related to any present and past advertising challenges related to the Product or its promotion by May 1, 2008, as needed by P&G, as P&G is in possession of all such materials as the holder of all Health Registrations in the UK.

• S-A and P&G will agree to a plan, on an as-needed basis, for the handling of adverse events reports and medical communication requests for events that occur after June 30, 2008, as P&G currently handles all such inquiries and communications as the holder of all Health Registrations in the UK pursuant to the local Marketing Services Agreement.

• S-A will provide P&G with a written summary of, and will transfer responsibility to P&G for, the ***** by June 30, 2008.

• S-A will make the final payments related to the *****, including payment of the final invoice for £10,000 from agreed budgets. P&G will work with ***** to obtain the final results of such study.

• S-A will work with ***** to finalise the ***** and make all related payments, by June 30,2008.

• Other transition services reasonable, customary and necessary to facilitate the inclusion of the UK in the P&G Promotion Territory, including but not limited to, the sharing of documents, making available samples, sales and promotional materials, and training materials, and as appropriate transferring any other ongoing clinical studies, grants, etc.

4

5. For clarification purposes and to correct a drafting error in the text, Section 3(A)(2) of the Amendment Agreement shall be amended as follows: (a) to delete the phrase “within five (5) Business Days of such decision of the applicable U.S. federal court,” and to replace it with “pursuant to the payment terms described in the last sentence of this Section 3(A)(2);” and (b) the reference to “Section 3(A)(3)” in the last sentence of this Section 3(A)(2) shall be deleted and replaced by the correct reference of “Section 3(A)(2)”.

6. Except as specifically agreed by the Parties in this letter, the terms and conditions of the Amendment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, P&G and Sanofi-Aventis have caused this letter amendment to the Amendment Agreement to be executed by their duly authorized representatives as of the date of this letter first written above.

The Procter & Gamble Company		Sanofi-Aventis U.S. LLC
By:	/s/ Thomas M. Finn	By:	/s/ Gregory Irace
Name:	Thomas M. Finn	Name:	Gregory Irace
Title:	President, Global Health	Title:	President & CEO
Procter & Gamble Pharmaceuticals, Inc
By:	/s/ Thomas M. Finn
Name:	Thomas M. Finn
Title:	President

5

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Name	Jurisdiction of Incorporation
Warner Chilcott plc	Republic of Ireland
Warner Chilcott Limited	Bermuda
Warner Chilcott Holdings Company II, Limited	Bermuda
Warner Chilcott Holdings Company III, Limited	Bermuda
Chilcott Bermuda Limited	Bermuda
Warner Chilcott Intermediate (Luxembourg) S.à.r.l.	Luxembourg
WC Luxco S.à.r.l.	Luxembourg
Warner Chilcott Acquisition Limited	United Kingdom
Chilcott UK Limited	United Kingdom
Millbrook Limited	United Kingdom
Warner Chilcott Research Laboratories Limited	United Kingdom
Warner Chilcott UK Limited	United Kingdom
Warner Chilcott Deutschland GmbH	Germany
Warner Chilcott Pharmaceuticals UK Limited	United Kingdom
Warner Chilcott Intermediate (Ireland) Limited	Republic of Ireland
Galen (Chemicals) Limited	Republic of Ireland
WC Pharmaceuticals I Limited	Gibraltar
WC Pharmaceuticals II Limited	Gibraltar
Warner Chilcott Company, LLC	Puerto Rico
Warner Chilcott Corporation	Delaware
Warner Chilcott (US), LLC	Delaware
Warner Chilcott Pharmaceuticals Inc.	Ohio
Warner Chilcott Sales (US), LLC	Delaware
WC Luxco Holdings S.à.r.l.	Luxembourg
Warner Chilcott Canada Co.	Canada
WC Netherlands Holdings B.V.	Netherlands
Warner Chilcott Pharmaceuticals S.à.r.l.	Switzerland
Warner Chilcott Puerto Rico LLC	Puerto Rico
Procter & Gamble Iberia S.L.	Spain
Warner Chilcott Italy S.r.l.	Italy
Procter & Gamble Pharmaceuticals N.V.	Belgium
Warner Chilcott Nederland B.V.	Netherlands
Warner Chilcott France S.A.	France
Warner Chilcott Australia Pty Ltd.	Australia

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-163079) and on Form S-8 (No. 333-161476) of Warner Chilcott plc of our report dated March 1, 2010 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Florham Park, NJ

March 1, 2010

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Roger M. Boissonneault, certify that:

1. I have reviewed this Annual Report on Form 10-K of Warner Chilcott plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2010

/s/ Roger M. Boissonneault

Name: Roger M. Boissonneault

Title: President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Paul Herendeen, certify that:

1. I have reviewed this Annual Report on Form 10-K of Warner Chilcott plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2010

/s/ Paul Herendeen

Name: Paul Herendeen

Title: Executive Vice President and Chief

Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT

The certification set forth below is being submitted in connection with Warner Chilcott plc’s Annual Report on Form 10-K for the year ended December 31, 2009 (the “Annual Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Roger M. Boissonneault, the Chief Executive Officer and Paul Herendeen, the Chief Financial Officer of Warner Chilcott plc, each certifies that, to the best of his knowledge:

1. the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of Warner Chilcott plc.

Date: March 1, 2010

/s/ Roger M. Boissonneault

Name: Roger M. Boissonneault

Title: President and Chief Executive Officer

/s/ Paul Herendeen

Name: Paul Herendeen

Title: Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Warner Chilcott plc and will be retained by Warner Chilcott plc and furnished to the Securities and Exchange Commission or its staff upon request.