AGN » Topics » Stockholder Proposal

This excerpt taken from the AGN DEF 14A filed Mar 19, 2009.

Stockholder Proposal

The Humane Society of the United States, 2100 L Street, NW, Washington, DC 20037, which represents that it owns 121 shares of our common stock, has notified us that it intends to submit the following proposal at the annual meeting. Calvert Asset Management Company, Inc., 4550 Montgomery Avenue, Bethesda, MD 20814, which represents that its funds are beneficial owners of at least $4,000 in market value of our common stock, is acting as a co-sponsor of the following proposal.

RESOLVED: Shareholders request that Allergan issue a statement, updated annually and omitting proprietary information, describing the Company’s recent activities and future plans in pursuit of its stated goal of eliminating the animal-based LD50 test from the manufacturing process of Botox and Botox Cosmetic. This statement should be prepared at a reasonable cost and posted on the Company’s website.

SUPPORTING STATEMENT:

As Allergan shareholders, The Humane Society of the United States and the Calvert Asset Management Company, Inc. support efforts to reduce the use and suffering of animals in safety testing. Allergan has publicly affirmed its commitment to humane testing practices. That commitment is under public scrutiny following a front-page, Washington Post article on April 12, 2008, which disclosed that Allergan uses the widely criticized LD50 test in manufacturing its flagship products, Botox and Botox Cosmetic.

The LD50 (or Lethal Dose 50%) is the amount of a substance that kills 50% of a test group of animals. In this test, botulinum toxin, the active ingredient of Botox and Botox Cosmetic, causes prolonged suffering and death from suffocation after 3 to 4 days.

During a 2006 meeting on testing botulinum toxin products, regulators signaled their willingness to accept alternative methods of assessing the potency of these products once new methods are validated. At this and a subsequent meeting, Allergan representatives have presented detailed, technical updates on the company’s efforts to replace the LD50 test with a non-animal alternative.

In addition to the Company’s occasional technical updates at scientific meetings, providing periodic updates to shareholders and other interested parties would demonstrate Allergan’s commitment to progress and transparency in achieving its stated goal of eliminating the LD50 test. Such openness, coupled with sustained progress, would prevent conflicts with the animal protection community.

 

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Allergan’s use of the LD50 test warrants attention from management and shareholders for several reasons:

 

   

Causing animals to suffer for the sake of testing a cosmetic product (i.e. Botox Cosmetic) is widely perceived as unethical.

 

   

Allergan is relying on a test that was developed in 1927, is considered outdated and crude, and has been all but abandoned by the safety testing community.

 

 

 

Although the LD50 test is the standard for the narrow application of assessing the potency of botulinum toxin products, Allergan is particularly vulnerable to public criticism because it is the only company currently licensed to sell such products for cosmetic purposes in the U.S.

 

   

The testing controversy concerns Botox and Botox Cosmetic, which accounted for over 31% of Allergan’s net sales in 2007.

 

   

A Botox-like competitive product manufactured with a non-animal alternative test would have a strong marketing advantage in the U.S. and the European Union.

Given the seriousness of the issue, Allergan should protect the Company and its shareholders by providing updates on its efforts to replace the LD50 test. The National Research Council forecasts that, within a generation, new methods will greatly reduce, if not eliminate, all animal testing. Eliminating LD50 testing should be a priority in this process.

This excerpt taken from the AGN DEF 14A filed Mar 20, 2008.
Stockholder Proposal No. 2
 
The Humane Society of the United States, 2100 L Street, NW, Washington, DC 20037, which represents that it owns 72 shares of our common stock, has notified us that it intends to submit the following proposal at the annual meeting. Calvert Asset Management Company, Inc., 4550 Montgomery Avenue, Bethesda, MD 20814, which represents that its funds own an aggregate of 210,692 shares of our common stock, is acting as a co-sponsor of the following proposal.
 
RESOLVED:  Shareholders request that Allergan issue a report, updated annually and omitting proprietary information, disclosing the Corporation’s recent activities and future plans to eliminate the animal-based LD50 test from the manufacturing process of Botox and Botox Cosmetic. This report should be prepared at a reasonable cost and posted on the Corporation’s website.
 
SUPPORTING STATEMENT:
 
As an Allergan shareholder, The Humane Society of the United States (HSUS) supports efforts to reduce the use and suffering of animals in safety testing. Allergan has publicly affirmed its commitment to humane testing practices. That commitment was challenged in 2003, with the revelation that Allergan uses the widely criticized LD50 test in manufacturing is flagship products, Botox and Botox Cosmetic.
 
The LD50 (or Lethal Dose 50%) is the amount of a substance that will kill 50% of a test group of animals. In this test, botulinum toxin, the active ingredient of Botox and Botox Cosmetic, causes prolonged suffering and death from suffocation after 3 to 4 days.
 
At a 2006 meeting on testing botulinum toxin products convened at the request of HSUS, regulators signaled their willingness to accept alternative methods of assessing the potency of these products once new methods are validated. At the meeting, Allergan reported its progress in replacing the LD50 test with more modern and humane alternatives.
 
In addition to the Corporation’s current technical updates at occasional scientific meetings, providing periodic reports to shareholders and other interested parties would demonstrate Allergan’s commitment to progress and transparency in achieving its stated goal of eliminating the LD50 test. Such openness, coupled with sustained progress, would prevent conflicts with the animal protection community.
 
Allergan’s use of the LD50 test warrants attention from management and shareholders for several reasons:
 
  •  Causing animals to suffer for the sake of a product with a cosmetic application (Botox Cosmetic) is widely perceived as unethical.
 
  •  Allergan is relying on a test that was developed in 1927, is considered outdated and crude, and has been all but abandoned by the safety testing community.
 
  •  Although the LD50 test is the industry standard for assessing the potency of botulinum toxin products, Allergan is particularly vulnerable to public criticism because it is the only company currently licensed to sell such products for cosmetic purposes in the U.S.
 
  •  The testing controversy concerns Botox and Botox Cosmetic, which accounted for nearly 33% of Allergan’s net sales in 2006.
 
  •  A Botox-like product manufactured with a non-animal alternative test would have a strong marketing advantage in the U.S.
 
  •  If a competitor devised an LD50 test alternative that became the industry standard, Allergan could be compelled to use a new method better suited to a competitor’s manufacturing process.
 
Given the seriousness of the issue, Allergan should protect the Corporation and its shareholders by providing updates on its efforts to replace the LD50 test. The National Research Council forecasts that, within a generation, new methods will greatly reduce, if not eliminate, animal testing. Eliminating LD50 testing should be a priority in the process.


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"Stockholder Proposal" elsewhere:

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