Based on the knowledge we have gained from extensive research into the mechanism of action of botulinum toxins, we are identifying next-generation therapeutics to support our leadership in the area of neuromodulation. DERMATOLOGY.  Allergan’s internationally renowned retinoid technology continued to drive our opportunities in the thera- peutic skin care arena in 2003. Most notably, we completed Phase III trials of an oral formulation of tazarotene, a highly selective retinoid agonist, for the treatment of moderate to severe psoriasis. In November, Allergan filed a new drug application (NDA), which included a one-year, open-label safety trial and two placebo-controlled Phase III trials. Given the commitments we have made to advance numerous other R&D pipeline projects, we will rely on external resources to help bring other oral tazarotene indications to market. With promising Phase II data in North America for the agent in the treatment of severe acne, we are seeking a global development partner for Phase III clinical trials. In addition, we intend to out-license the tazarotene molecule for the treatment of psoriasis outside North America. In other dermatological categories, Allergan continues its research collaboration with Peplin Biotech Ltd. to develop and commercialize PEP005 for the topical treatment of non-melanoma skin cancer and actinic keratosis. In preclini- cal studies and a small open-label human proof-of-principle clinical study, this novel small molecule has shown early promise in the treatment of a wide range of human cancers, including non-melanoma skin cancer. NEW TECHNOLOGIES. Allergan’s research and development strategy has long been to leverage its technology platforms into new, underserved specialty therapeutic areas. Through internal organic growth coupled with targeted collaborations, Allergan has full access to such discovery tools as genomics, high-throughput screening and compound libraries. We have consciously augmented our fully integrated research and development capabilities to further our development programs in alpha adrenergics, neuromodulators, lipids and tyrosine kinase inhibitors. In one such program, Allergan and Acadia Pharmaceuticals scientists are expanding their collaboration on novel receptor- selective alpha agonists to include chemical-genomics. We believe alpha agonists have significant therapeutic potential beyond treating glaucoma and are currently exploring their activity in neuropathic pain models. Preclinical work has suggested that alpha agonists can improve pain relief without the central nervous system side effects of current treatments. Phase I clinical trials to evaluate several distinct pharmaco- logical profiles will begin in 2004. In another collaboration, with the Centre for Applied Microbiology & Research (CAMR), Allergan is focused on engineering neuromodulators to treat severe pain. Lastly, advances in our small-molecule discovery platform indicate that tyrosine kinase inhibitors may hold promise in treating retinal disease and cancer. Allergan remains focused on the ophthalmology, neuromod- ulator and dermatology specialty markets and is looking to develop gastroenterology as a new specialty therapeutic area. Research and discovery projects that reveal promising avenues beyond our specialty areas into general practice could also provide us with attractive out-licensing and  partnering opportunities. As an example, we are currently in preclinical research evaluations of pro-drugs for proton pump inhibitors (PPIs). Pro-drugs have the potential to prolong the half-life of the PPI to provide patients with extended relief from the symptoms of gastro- and non-esophageal reflux disease. We currently plan to submit an IND in the second quarter of 2004 for this program. research and development