Good morning. My name is Tabitha. I'll be your conference operator today. At this time, I would like to welcome everyone to the Actavis Second Quarter 2014 Earnings Conference Call. [Operator Instructions] Thank you. Ms. Defrancesco, please go ahead.

Thank you, Tabitha, and good morning, everyone. I'd like to welcome you to the Actavis Second Quarter 2014 Earnings Conference Call. Earlier this morning, we issued a press release reporting Actavis' earnings for the second quarter ended June 30, 2014. The press release, together with additional materials, including slides in reconciling GAAP and non-GAAP financial results and forecasts, are available on our website at www.actavis.com. We are conducting a live webcast of this call, a replay of which will also be available on our website after its conclusion. Please note that today's call is copyrighted material of Actavis and it cannot be rebroadcast without the company's expressed written consent. Turning to Slide 2, I'd like to remind you that during the course of this call, management will make projections or other forward-looking remarks regarding future events or the future financial performance of the company. It's important to note that such statements about estimated or anticipated Actavis results, prospects or other nonhistorical facts are forward-looking statements and reflect our current perspective of existing trends and information as of today's date. Actual results may differ materially from current expectations and projections depending on a number of factors affecting the Actavis business. These factors are detailed in our periodic public filings with the Securities and Exchange Commission, including, but not limited to, our -- the Actavis plc Form 10-K for the period ended December 31, 2013 as amended by 8-K. Actavis disclaims any intent or obligation to update these forward-looking statements except as expressly required by law. Turning to Slide 3, with us on today's call, are Paul Bisaro, our Executive Chairman, who will provide an overview of the -- second quarter business highlights for Actavis; Todd Joyce, our Chief Financial Officer, will then discuss Actavis' second quarter results in more detail. Following Todd, Brent Saunders, our new CEO and President, will give highlights, of course, calendar year second quarter performance, detail our outlook for the remainder of 2014 and provide an overview of our full year 2015 expectations. Brent will also detail our roadmap for accelerated growth of our newly combined company. Also on the call and available during the Q&A are Bob Stewart, our Chief Operating Officer; Bill Meury, Executive Vice President of Commercial Operations for North American Brands; David Buchen, Executive Vice President of Commercial Operations for North American Generics and International; and Bob Bailey, our Chief Legal Officer. If you are not in the webcast, we have slides accompanying our presentation available at ir.actavis.com. With that, I'll turn the call over to Paul.

Thank you, Lisa. And good morning, everyone, and thanks for joining the call. Turning to Slide 5, we are pleased to report another exceptionally strong quarter for Actavis. Second quarter net revenues increased 34% to approximately $2.7 billion. Non-GAAP earnings per diluted share increased 70% to $3.42 in the second quarter and adjusted EBITDA increased 82% to $862 million. Turning to Slide 6, our Actavis North American Brands business reported revenues of $587 million. Certain key products, including the Asacol, Delzicol franchise and Minastrin and Doryx underperformed relative to expectations as a result of the continued impact from the sales force transition, which occurred earlier this year. Now, with the addition of the Forest team, we are optimistic we can continue growth for Lo Loestrin, ESTRACE Cream and Rapaflo, while stabilizing the Asacol, Delzicol, Minastrin and Doryx franchises. In our oral contraceptive franchise, Lo Loestrin has become a key promotional focus with its unique low-dose profile and the durability of the IP portfolio surrounding the product. Moving to our North American Generics business on Slide 7. Our limited competition products in the U.S. market, including generic versions of Lidoderm, Concerta, ADDERALL XR and others continue to drive exceptional performance during the second quarter. Our over-performance resulted from lower-than-anticipated competition on generic versions of Lidoderm and Cymbalta. A key highlight was our announcement of the extension of our exclusive authorized generic agreement with Janssen Pharmaceuticals covering Concerta now continuing through the end of 2017. In Canada, we became the fifth largest generic company and the fastest grower amongst the top 5 in the Canadian generic market. We have 7 additional product launches planned in Canada this year. Moving to our International business on Slide 8. Following the divestiture of our Western European commercial businesses earlier this year, our remaining businesses in…

Thanks, Paul. I will now review our second quarter results on a divisional and consolidated basis. Turning to Slide 13, consolidated net revenue for the second quarter was $2,667,000,000, an increase of 34% over the prior year period, reflecting strong growth in both our Actavis Pharma and ANDA distribution segments. GAAP R&D investment for the quarter was $158 million compared to $136 million in the prior year period, an increase of 16%. Non-GAAP R&D investment was $185 million. On a non-GAAP basis, our effective tax rate was 17.1% in the second quarter, down from 26.9% in the prior year period, as a result of the acquisition of Warner Chilcott. On a non-GAAP basis, which excludes amortization, impairment charges, acquisition-related expenses and other items detailed on Table 4 of our earnings press release and detailed further in the non-GAAP reconciliations available on our website, earnings for the second quarter were $3.42 per diluted share, up 70% year-over-year. Adjusted EBITDA for the second quarter was $862 million compared to $475 million in the prior year. Cash flow from operations for the second quarter was strong at $470 million. Turning to Slide 12, net revenue in our Actavis Pharma segment was $2,240,000,000, up 31% year-over-year due to the acquisition of Warner Chilcott, better-than-expected performance from our U.S. Generics business and strong International performance. North American brand revenue was $587 million, up from $145 million in the prior year period due to the acquisition of Warner Chilcott. Within North American Brands, net revenue in our Women's Health portfolio was $231 million, up from $21 million in the prior year. Revenue from our Urology and GI portfolio was $215 million, up from $56 million in the prior year. And revenue from our Dermatology and Established Brands portfolio was $142 million, up from $68 million in…

Thanks, Todd. Turning to Slide 16. Forest had strong performance in the calendar second quarter with over $1.1 billion in net revenue. Revenue growth of 41% was powered by the Aptalis acquisition, new launches and continued strong product performance from NAMENDA, Linzess, our antidepressant line and BYSTOLIC. NAMENDA XR accounted for approximately 42% of total NAMENDA volume at the end of the quarter and is approximately 46% of the total volume today. We continue to focus on transitioning the franchise to the XR version by yearend. Patient and caregiver response to the NAMENDA XR product has been exceptionally positive, and we have -- and as we have previously stated, the successful conversion of NAMENDA XR is based on 3 things: patient, caregiver and health care provider responding favorably to the benefits of the once-daily dosing of the NAMENDA XR product, ensuring that we achieve appropriate levels of managed care coverage and formulary planning and ensuring that we optimize the efficiency of our manufacturing capabilities to ensure adequate supply to support the ultimate conversion to the XR product. Conversion rates are demonstrating patient and payor acceptance of the benefits of the single daily dose. Managed care coverage rates remain high. In fact, 9 out of the 10 Part D plans cover XR. We continue to make progress in improving manufacturing yield and efficiency. Our decision to defer final conversion to the NAMENDA XR product until later this year will not affect our ability to meet the financial objectives we have set for this product line. The Linzess TTC campaign, which started early in the calendar second quarter, continues to raise awareness about IBS-C and demand is significantly increasing for the product with both primary care physicians and gastroenterologists. Approximately 2 out of 3 new patients are coming from the OTC market.…

Okay. Tabitha, I think we're ready to take questions.

[Operator Instructions] Your first question will come from the line of Jami Rubin with Goldman Sachs.

So you gave guidance for '14 and '15 and long-term aspirational guidance of $20 in EPS by 2017. Brent, would you be willing to provide top line guidance beyond 2015? I don't anticipate you're going to give specific numbers, but if you can sort of qualitatively share with us your aspirations for top line growth. And how do you marry the 2 businesses with brands being all about the focus on growth and generics about profitability, maybe you can comment on that. And then secondly, just based on the second half R&D guidance of $700 million in your guidance for 2015, that assumes 8% of sales. Is that the level of investment that we should anticipate going forward?

Jami, let me see if I can address all of those questions. If I forget one, just ask me again, I'm sorry. So I think as we think about top line, as you look at the generics business, I am not sure that top line is a good performance indicator for that business because it's really about bottom line. On the other hand, on the branded side of the business, top line is a very important performance indicator. And so we are looking at ways to think about balancing those 2 and look at guidance. So I think where we're headed towards is really providing thoughts around product franchises. And so I think as we think about where the organic growth is coming from on the branded side, we feel we have a very strong story for organic growth, and perhaps I'll ask Bill to chime in on his views of the top line growth on the branded side.

Yes, Jami, this is Bill. There are, I'd say 5 product lines that you'd want to focus on over the next several years and that would be CNS, GI, cardiorespiratory, Women's Health and anti-infectives, and we're looking at double-digit growth rates. In the case of CNS, you'd have to exclude NAMENDA, of course, but double-digit growth rates over the next several years. And then at least 4 out of those 5 categories, there's an anchor or a flagship product. Eluxadoline from Furiex has got a lot of promise. Septazine may be back in the anti-infective space. And then, of course, you know cariprazine. And then another product called Esmya, which is a Women's Health product, that's a progesterone receptor modulator for uterine fibroids. And so those 5 product lines and a flagship in each one of them is probably going to tell the top line story for the next several years.

I think the second question you ask about R&D as a percentage of sales, I think we just hired a new head of branded R&D. He started yesterday, David Nicholson. We are in the midst of doing a portfolio review, and we'll complete that now that -- once he gets grounded and we give him more than a day to be here, and so we'll have a better thought there. And in terms of the generics side of R&D, we have a team here that has led the way in First-to-Files and ANDAs for a few years now, and we expect to ultimately be the beneficiaries of all that great work as the FDA starts to ultimately approve some of these filings. And so we're committed to maintaining our leadership position in the generics industry by investing in generic R&D. So that being said, I think a percent of sales is not a good way to think about R&D. I think you have to look at the opportunities and how you feel about them, and then the success rate of that group. And I would say our generic group has proven to be best-in-class and our branded group has got a new leader that's doing a portfolio review, and we'll have a better thought around that probably at the next call or the next time I see you.

[Operator Instructions] Your next question comes from the line of Gregg Gilbert with Deutsche Bank.

So Brent, obviously you have a lot to do from an integration standpoint. But in a market that seems to be addicted to M&A growth -- M&A-driven growth, how would you like to set expectations around your desire to do deals with some color around the size and the flavor of deals, the pace of deals? Set the bar however you like. And my follow-up is in light of the changes in the distribution industry, is Anda still an asset that belongs with Actavis?

Yes, thanks, Gregg. I was going to joke with you and say we did close 1 deal in July. Furiex closed on July 2. So we're now into August and the team's looking at me wondering what we're going to do in the month of August. But I don't want to give them heart attacks. I think when you think of both Actavis under Paul and Forest for the year, I was there. Although slightly less than a year, I was there. Both our companies that are willing to -- and leadership teams that were willing to go out and do what was necessary to strategically build the business for the long term. And I don't think anything has changed with respect to that. So I think as we look at opportunities, we're currently focused on building out our therapeutic areas in North American Brands. We're also equally looking at building out our geographic footprint around the world, places like Latin America, Russia, Southeast Asia are great geographies where we are evaluating lots of opportunities. And then, third, we're looking at late-stage pipeline opportunities. I think that then, kind of overhang of all those are do you do other transformational deals? And I think those you've got to think about more opportunistically, but I think if we saw an opportunity that we believe would be strategically sound and drive continued long-term performance of our organization with strong durable assets, we would avail ourselves of that opportunity if we thought it was right. So this isn't a gun-shy team, this is a very proven M&A group that knows how to act on deals and integrate. And we're very comfortable, we know what we're doing and we've got the best team in the business. And so we'd very comfortable making those moves if we thought it was right for our shareholders. I think with respect to Anda, as I've always said, there are no sacred cows in the company. We like Anda. We actually have been surprised in 1 month and -- albeit it's been 1 month since we've been operating as a combined company, some of the strategic soundness of having Anda and a branded business. Bill Meury and his team had been meeting with the folks at Anda, and we're looking for ways to use Anda to launch new products, as well as service lower-promoted products with details and other things. So Anda has only become more strategic for us in a very short 4 weeks.

Your next question comes from the line of Liav Abraham from Citi.

A couple of questions. Firstly -- and for Brent or Bill, regarding pricing on the branded side of the business, do you have any incremental concerns regarding pricing pushback from payors on some of the Forest products where generic alternatives are available? I'm thinking of 2 of your largest franchises, BYSTOLIC at the moment and NAMENDA XR going forward. Perhaps you can be a little bit more clear on your assumptions going forward for both of those franchises? And then my second question is on your respiratory portfolio. In light of the additional trial required for the Forest LABA/LAMA, any thoughts on the potential divestiture of this portfolio of assets, especially taking into account the agreement reached last week between Almirall and AstraZeneca? And given AstraZeneca's strength and expertise in the respiratory space, would it not be perhaps the best allocation of resources for the large sales force promoting your respiratory products in primary position to be reallocated to areas of high-growth or perhaps to inorganic growth opportunities?

Yes, let me take -- Liav, let me take the second question first, then we'll back to NAMENDA, BYSTOLIC pricing with Bill. I think with respect to respiratory, as I said in my opening remarks, we do face some challenges in the respiratory market. It is still a bit of an arms race therapeutic area with lots of new product entries with lots of sales reps and lots of promotion. That being said, we have a very strong product in TEFLARO and DALIRESP. And the combined franchises is doing well. Perhaps not as well as we had hoped, but doing well. And we are still engaged in getting better managed care coverage, which has been improving over time, as well as hand-to-hand combat in the doctors' offices, and there's a place for that therapy. As we think about the LABA/LAMA, we've been working with Almirall and now we have AstraZeneca in the mix. And that's only a week-old development, but we're going to sit down with them and talk about how we can continue to advance that program in a smart, right way. We'll get David Nicholson involved in that discussion and absolutely committed to it. That being said, just like I said about Anda, there are no sacred cows. So somebody believes they're a better owner for our products, then we'd like to hear from them. But as long as we own it, we're going to do everything we possibly can to maximize it and be as competitive as possible. With respect to pricing on NAMENDA and BYSTOLIC, I think, clearly, very different situations. NAMENDA XR, this is a -- the strategy about bringing the best medicine to patients in 1 daily dose and making sure that we drive the conversion in an appropriate way. And I think, as you look at NAMENDA, the discounts that we have to offer on NAMENDA and the price increases don't truly net out. And that will become a declining franchises, as I've always said. The question is can we slow the rate of decline and manage the rate of decline? And I think we're confident we will be able to execute that. On BYSTOLIC, the same type of situation. We can continue to take price increases, but rebate levels also continue to climb. So we don't actually feel the full effect of those price increases, and I'll ask Bill to add any color -- commentary to that statement.

Liav, it's a good question. I mean, we're very aware that the downward pressure on price. I think all the companies are experiencing it. The good thing about NAMENDA and BYSTOLIC right now is both products are in a very strong position when you think about 2014 and 2015 in terms of formulary coverage. We don't expect any surprises. As it relates to price appreciation, I think usually, you're getting something in the mid-single-digits, maybe a little bit better, which is basically a composite of your actual price increase in any incremental rebates. I think Brent makes a good point that with XR, it's a little bit different because we did make it economical for health plans to put XR in formulary. And so volume was our aim with that product. But I think, as we look forward to the next several quarters and the next several years, mid-single-digits is a pretty good bet.

Your next question comes from the line of Ken Cacciatore with Cowen and Company.

I just wanted to know if you guys can give a sense of your risk profile versus large pharmaceuticals. Is it different as you approach some of these late-stage development assets? Is there any way you can give us a sense your willingness to be aggressive kind of why they sometimes are on the sidelines and you will kind of get a product or -- sorry, a company like Furiex. Can you expand on that?

Yes, I don't know, Ken, if it's necessarily a risk profile. I would point out, the one point I made in the prepared remarks was that this combined business is highly diversified, both geographically and from a product line and therapeutic perspective. And so with the exception of NAMENDA, which I think we have a very sound strategy, there really aren't any one product or area that we have any real risk associated with. There are long durability assets, where we have lots of diversity within the lines. So I think we have a very good, positive risk profile vis-à-vis our competitors and others, but that's just my opinion. I think the reason we can do a Furiex, or we find some of these gems is because we're a bit contrarian sometimes. We like therapeutic areas where other people have walked away. And so when you think about GI, there really are no big companies in GI anymore. We are the big company in GI, is perhaps the better way to say it. And so Furiex was just a -- eluxadoline was an opportunity that I followed from my very first week at Forest, developing a relationship with the management team at Furiex, following the data and staying close to them, so that when the time came, we could move incredibly quickly without bureaucracy and get a deal done, which made it very favorable for their team and their shareholders. So I think it's about staying close to your therapeutic areas. It's about staying focused. It's about being ready to strike when the opportunities are hot. So I think what you see in other companies is they just move kind of slow and cumbersome and they have to go through committee after committee after committee. And each committee is looking for reasons why not to do something. Where, here, it's a very flat organization. The folks in this room and on this call make the decision, we do the appropriate diligence and we move. And that's just the big difference between us and everybody else, I think.

Your next question comes from the line of Jason Gerberry with Leerink Partners.

First question just on U.S. Generic pricing outlook for '14 and '15. Just kind of curious if there's an opportunity for upside relative to your guidance of mid-single-digit erosion, just in the context of a lot of smaller generic players can be taking very aggressive pricing increases. And I'm wondering if you factored any aggressive pricing increases of your own into numbers? And then just as my follow-up question, just kind of curious on your thoughts in terms of excluding Lidoderm competitors in the second half of '14, if there's anything new that you've learned there?

Yes, I'll ask David to weigh in here. But I think as you think about aggressive price increase, we certainly didn't do that in our models. I think we tried to stay consistent with '14. Clearly, we think there are more opportunities to take price, particularly as we leverage our strong supply chain and the reliability of high-quality supply that we can offer customers that perhaps you're seeing with some of our competitors not to be as true, and so that always creates opportunity. But, David, do you want to add some thoughts?

Sure. I mean, I think it's a dynamic environment. We have a very broad portfolio and we take pricing opportunities where we can. Some of those come along due to competitive problems with supply, things like that, but then you also have situations where pricing will decline rapidly. Things like duloxetine, where we have opportunities in the short-term but then they drop off. So we look for ways to offset those. And that's one of the advantages of having a very diverse portfolio is we can -- with our supply chain, the way it is, we can react very quickly when there are pricing opportunities and the ability to take more share. On lidocaine, we don't really know anything new. We think that based on what we know today and where the slowdowns have been at the FDA. We've taken into account the competitive intelligence that we have. We know there are at least 3 other filers, 2 of whom have settled for dates in 2015. And just based on our current best estimates, we think that the right approach for looking at the second half of 2014 is that it's just going to be us and the authorized generic by Qualitest in the marketplace.

Yes. And Jason, as you know, one of our competitors was talking a lot about it and then went completely radio silent. So that also seems to give us a better feeling about 2014.

Your next question comes from the line of Randall Stanicky with RBC Capital Markets.

Brent, when you and Paul were putting these 2 businesses together, you talked about the revenue synergy opportunity. So I guess when can you see that, how meaningful could it be? And then how do you convince investors that there is a synergy opportunity on the top line for these 2 businesses? And then I have one follow-up.

Yes, I mean, I think we always said there that revenue synergies are very hard to measure. I can tell you that we do think about it quite often at, particularly 4 weeks in as we're really starting to integrate. I think in fairness, though, you're not going to start to see the benefits of some of that till we get through a lot of the restructuring that will happen in this quarter and the heavy lifting that will happen in the fourth quarter of this calendar year. But I do think there are opportunities. I think as we look at driving some of the antidepressants into the Women's Health line, perhaps Linzess into GY -- gynecologists and OBs and other areas like that, they're clearly upsides. As I mentioned, Anda looks more strategic to us as well. And I'll ask Bill, would you offer...?

No, I think that's right. I think antidepressant line could benefit from OB/GYN coverage, which we were not able to provide at Forest. Clearly the Actavis GI product line is going to benefit from our sales force capacity. We even look at a product like Rapaflo, which is going to benefit from coverage in the long-term care segment. And so conceptually, there are several steps that we're taking right now. But it's going to take a little time to actually realize sales synergies.

Yes, and I think -- yes, we'd view those all as potential upsides. I mean, we're not baking in a lot of -- because they're so hard to measure. We're not baking those in, but we're going to certainly look to exploit them everywhere we can. I think that's kind of our DNA because we're a scrappy kind of organization. So if we see an opportunity, even a small one to do better, we're going to avail ourselves of that opportunity.

Got it. And should we continue to view Actavis as a double-digit organic growth, EPS story? And so should we think about the $20 EPS number in 2017 as an organic number with the $4 billion-plus and the free cash flow annually as a source of possible upside to that number?

Yes, I think that's a fair way to think about it. I think we're absolutely committed to our double-digit EPS growth. And as I mentioned, if we reach our organic -- I mean, our initial '15 forecast on a pro forma basis, that's strong double-digit growth, 25% to 35% EPS growth. So we're clearly looking at doing that. I think the $20 aspirational target is -- could be impacted, forward or backward, depending on how we deploy our cash and other strategic actions we decide to take. And I would, again, go out on a limb here but I don't think this is a group of management team or an organization that will sit still for 3 years.

Your next question comes from Douglas Tsao with Barclays.

Brent, maybe you could clarify things a little bit. I think in your prepared remarks, you initially sort of referred to your respiratory is one in which you're sort of underscaled. And then you sort of highlighted it again as sort of one of the opportunities in terms of blockbuster franchises and/or -- but -- and so does your attempt to go after franchises that are perhaps ignored by major pharma, and that's certainly not the case with Respiratory where there are several large competitors. Just provide some perspective in terms of how you see that franchise proceeding? I mean, is it something you can do with the products you have in-house or is that going to be a target for M&A and business development to bring in more products into the portfolio?

Yes, I think it's a good question. As we sit here today, right, with DALIRESP and TEFLARO, we have 2 good products. But clearly, to create the line-call strategy, we need more product flow there. We do have a LABA/LAMA that we're working through with Almirall, and now we have to add AZ into the mix to figure out how to best advance. And so clearly, we need more product for our reps to carry to create that line call atmosphere or the economies of scale that you get from having a line call in Respiratory. The reason I said it's my least favorite of our therapeutic areas is exactly what you said. It's a highly competitive area with lots of new products coming in. We can see some of our competitors not doing as well as they had hoped in the space. And so it's not just a challenge for us, it's a challenge for even the really big guys. We still kind of think of ourselves as a small company, even though we're getting bigger, but we kind of have that internal, as I said, scrappy way of thinking about ourselves. And so, look, at the end of the day, we have to figure out a way to get scale in that category. We want to be highly competitive in an area that we compete. We are in the cusp of getting there, but we're not there yet. And so that means we have some work to do. I don't know, Bill, if you'd add anything else on Respiratory?

Yes, I think right now, TUDORZA and DALIRESP are steady climbers. But as Brent said, it's subscale. It's a highly competitive category. We've cleared the first hurdle, which is to get into Respiratory. Incumbents clearly have an advantage. If you just take a look at the performance of Breo, Anoro -- Breo and Anoro, you can see it's not easy to enter the category. And so once you're there, if you can capitalize on it, it's a real benefit. But right now, we need more products for it to make a lot of sense.

Yes, and I would just add a last thought. Staying in Respiratory also has a strategic link to our generics business. And we are very focused on some very key generic Respiratory programs. Clearly, the goal is to get an AB-rated version of some of these program -- products. But if we have to go the 505(b)(2) route, having a sales force gives us a lot of flexibility to do things. And that -- going back to the earlier question on revenue synergies, that would be perfect example of revenue synergy, if we had to go there. We just don't have any of that baked into these models because clearly, the AB-rated is the goal. But it gives us a backstop in Respiratory as well. So Respiratory is a little bit more strategic in the combined Actavis world, but it was for a standalone. But again, I think if there were -- if there was something better to do with our focus, we'd certainly be willing to think about it. If it's not a slam dunk, that we'd just sell it or anything like that, but I think we're very committed to being competitive.

Okay, great. And then just, Brent, maybe if you could touch on -- obviously, you gave an initial forecast for 2015 and highlighted that you'll provide -- be providing sort of requirement as we approach sort of the beginning of next year, which is typically when you would have given guidance. Perhaps just provide some of the moving parts and uncertainties or variables, if you will, that you think you'll sort of be refining over the course of the year or sort of the things that you're most focused on in terms of updating that -- the guidance for next year?

Yes, I think there are some big things that we'll be looking. One is on the generics business. It really relates to competition as well as the ability to approve our products. And clearly, that cuts both ways because if the FDA decides to continue to have -- not move their backlog along and get product approved, that bodes well for our existing products. But ultimately, we'd like to see the FDA start approving things because we have a best-in-class pipeline sitting at the FDA. So net-net, it would be better for us for those things to start moving through. And so that's something we're watching very carefully. I think we also are going to watch how Linzess continues to respond to DTC. We've got to watch the NAMENDA conversion and any potential disruption in NAMENDA as a big, key factor for 2015. And then we've got about 6 product launches on the branded side in '16 -- '15, I mean. And we want to be able to invest behind those. We only get a chance to launch each product once, and so you want to make sure you get those off to a strong start. And then I think from there, it really is about all moving as quickly as we can to get to a strong run rate on synergies in '15 and trying to pull forward as many actions as we can without disrupting our ability to launch and drive our pipeline in the business.

Your next question comes from that line of Ronny Gal with Bernstein.

I've got 2 questions. First, just to -- can you remind us on Respiratory, is your agreement with Almirall include access to MABA, CS [ph] and triple therapies or is this still something that you have to negotiate? Do you have access to the Genuair device or anything other than the 2 products that apparently the LAMA, CS [ph] -- LABA/LAMA and obviously the one that you currently have, LAMA standalone? And then for Bill, Bill, can you let us know if your current guidance reflects kind of like where you actually completed your negotiations for 2015 with formularies? And how does that influence [indiscernible] that was kind of a slow point for a little bit. And do you expect to be able to change the trajectory of that franchise based on existing contract in 2015?

Ronny, I was going to joke with you, which deal are you congratulating us, the closing of the Forest or Actavis Furiex?

Actually Allergan, but that's probably on next call.

That was a good comeback. The -- that made me forget the question. On our deal with Almirall, we only have rights to the device for the single agent and the LABA/LAMA combination. We have had some discussions with them about the MABA and the triple therapy, the standalone Forest, and clearly, have an incredibly strong relationship with them -- with the guys in Spain in Barcelona. We know a lot about what's going on there and we're excited to have AstraZeneca as a part of the partnership. As you know, we have AstraZeneca as our partner in anti-infectives. We have a very good relationship with the team over at AstraZeneca. And so in fairness, if they had to pick a new partner for their Respiratory assets, we are favorably inclined to it being AstraZeneca because of our experience working with them. Bill, do you want to talk about the formulary?

Yes, our assumptions for pricing and formulary coverage rates are based on roughly completing all of our negotiations with CMS and Part D plans rather for 2015. There shouldn't be any surprises, especially as it relates to our largest Part D product and, of course, NAMENDA and NAMENDA XR are top of that list. I'd throw TUDORZA in there and BYSTOLIC, and I think we're in a pretty good position as it relates to 2015. And then as it relates to Asacol HD and Delzicol, our focus right now is on Delzicol, which has a longer runway and on maintaining Asacol HD, which has a high volume of sales. The promotional levels in 2015 on that product line, again with emphasis on Delzicol, will be significantly higher than what they were in 2014. And keep in mind, in the first part of 2014, there was a great deal of disruption from a promotional standpoint and from a formulary coverage perspective. We can fix the promotional situation -- or we already have. Regaining a formulary position, as you know, Ronny, takes a bit more time. I think that if you look at the performance of Delzicol, it's best right now to look at it in terms of quarter-over-quarter as opposed to versus prior year. And I think that picture will continue to improve. Delzicol is the only mesalamine that has both an acute and a maintenance indication, and it's also got a pediatric indication. And it gives [ph] a really nice portfolio play with the other mesalamine that we picked up when we acquired Aptalis. And so single-digit volume gains would be something nice to see over time with price appreciation that would reflect the mature products.

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

Can you talk about the key drivers, the key issues that will get you to that $20 a share in 2017? And how do you factor in NAMENDA? Because obviously, if we're switching everything to NAMENDA XR, do you assume XR is exclusive through '17 or do you assume there could be generic competition? Second question is Delzicol HD, can you tell us what the timing is on that product? And what are the 6 launches in 2015 planned in the brand space?

Yes, I think as you think about the aspirational $20, I think that the best way to think about that or the drivers that affect that is clearly use of cash and strategic use of cash, which in my mind really thinks to that M&A and product opportunities. And so that would be a big driver one way or the other. I think the other big factors are around the product profile launches of some of the late-stage products like eluxadoline, CAZ-AVI and cariprazine. And so we're working very hard to advance those and get them through the pipeline. Another big factor that could swing is, as I've mentioned earlier, is the FDA really tackling the backlog of ANDAs. We've invested a lot of money over time in building an industry-leading pipeline of ANDAs and First-to-Files. And we'd like to see that pay dividends in the out years of the FDA, can clear some of their backlog and start approving some of these products in a timely way. And so I think a lot of those are big factors. As you think about NAMENDA XR, we clearly believe our patents go into the 20 -- late 2020s. We will vigorously defend our patents. I think we have a good alter ego to understand patent strategy inside the new Actavis. And we've already started meeting and discussing on the best ways to defend our intellectual property. And so we believe we have some runway with XR, and that's what we have modeled. That being said, I do think you've got to think about the NAMENDA franchise as a declining franchise, not a growth franchise. I think the other leg of that stool will be the fixed-dose combination of NAMENDA, which should launch and give us a real possibility depending on formulary coverage to go after new starts. And so the combination of having a product to go out and try to get new starts, as well as managing XR in the appropriate way, I think gives us a lot of opportunity to keep NAMENDA as a slowly declining asset versus a patent cliff. Now I'll turn it over to Bill for the other thoughts [ph] .

Yes, the only thing I would add on XR and FTC is over the next several quarters, we're going to be able to move a market that was 3 tablets twice a day to 1 tablet once a day. And even with pressure on price and formulary coverage rates, we should have success in preserving some of that business. In terms of the 6 product launches, 2 of the 6 are line extensions on our 2 largest products. Of course, we have the BYSTOLIC fixed-dose combination, which is a combination of BYSTOLIC and valsartan. So we've have taken 2 very popular anti-hypertensives and combined it. Then we have the NAMENDA fixed-dose combination. Just as a reminder, 70% of our sales for NAMENDA are with -- or NAMENDA XR are with ARICEPT. We have Levosert, which is an IUD. There's only 2 other IUDs on the market. This product has utility in women, who have and have not had a child, and we do expect to have long-term efficacy data, which we think is an important, marketable point. Neuveta [ph] is a high dose current [ph] version of Estrace, which is for vaginal atrophy. We also have a progestin patch, which is an oral contraceptive for a special high-risk group of women. And then in 2016, we're looking at eluxadoline, cariprazine and Esmya, which is another asset in our Women's Health product line. As it relates to Delzicol HD, we have a number of projects ongoing with Asacol and Delzicol.

The final question will come from the line of David Maris with BMO Capital Markets.

The debate of inversion certainly is heated up. What's your current take on debate? I'm sure you're happy having done it in a while ago versus contemplating that now. But what do you think the eventual outcome will be, the timing of the outcome, how do you view that as a risk factor, as a competitive advantage? And then separately, can you update us in the status of the key programs in the biosimilar program?

Sure. So on the inversion debate, I think you wanted me to stand on a soap box. In fact, Paul, may even want to weigh in. He's chomping at the bit here. Look, I think, David, it's kind of a sad situation right? I think that ultimately, this is about an overhaul of the U.S. tax system. And I think a lot of people get distracted by making this a debate about rates when it's really around the global tax system or a territorial tax system. As I best understand, the United States and North Korea are the only people -- countries with a global tax system. And I'm not sure that's the company we should the keeping as a country. So net-net, what's going to happen here? What should happen is corporate tax reform, I think what likely is going to happen is either nothing or they're going to try to do something to stop future inversions. I think doing something retroactively becomes more difficult and doing something that would impact us is almost impossible. Remember, Forest and Actavis was not an inversion. The inversion occurred in 2013 with Warner Chilcott. So we are on rock-solid ground, we believe. And we have a very good structure and like our Irish heritage. And so that's a long-winded way of saying I don't think that this Congress and what we see of our government right now is actually going to do what they should do, which is corporate -- or complete overhaul, but likely will try to do something piecemeal to change the requirements to future inversions. That's my belief. And it will then, of course, embed a competitive disadvantage for those companies that are already inverted, which is good for Actavis, but doesn't seem like the right thing for the country. Your second question was -- David, I forget now.

Biosimilars.

Biosimilars. We have a very strong partnership with Amgen. I think it's -- as I've said earlier, now that I've had some chance to -- a few weeks to look at it, is absolutely the right partner to be doing these programs with. If we continue to look at additional opportunities to look at biosimilars, perhaps even on our own or do more with Amgen, but I'll turn it over maybe to Bob Stewart to add any other comments on that relationship or the programs.

Sure. David, it's Bob. With respect to the Amgen relationship, as Brent mentioned, it's going incredibly well. Two of our products, Avastin as well as Herceptin are advancing well through the timelines that we had laid out. We do expect us to complete Phase III of those programs within -- by 2016 or in 2016. And our internal development around our FSH program, we continue to enroll patients in our Phase III. The uptake in our Phase III study has been a little slower than anticipated, which we somewhat expected to pace, but we're certainly [ph] going to do that, and that program continues to go successfully at this point.

So I think that wraps up our call today. I would just like to conclude again, by trying to convey my excitement for our combination. Four weeks in, we have only come together as a stronger team. Our team is motivated, we're excited about our future, we see lots of optionality for future growth and we're absolutely focused on executing both our synergies, as well as our opportunities to drive revenue growth. We look forward to keeping you updated as we continue to progress along our journey and our roadmap for accelerated growth and look forward to those discussions. Thank you.

Thank you, ladies and gentlemen. That does conclude the call for today. You may now disconnect.