Valeant Pharmaceuticals
`International, Inc.
`
`First Quarter 2016 Conference Call
`June 7, 2016
`
`Page 1 of 49
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1571
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

`

`Forward-looking Statements
`
`Forward-looking Statements
`Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements
`regarding expected future performance of Valeant Pharmaceuticals International, Inc. (“Valeant” or the “Company”), including
`guidance with respect to total revenue, Adjusted EPS and Adjusted EBITDA and the assumptions used in connection with such
`guidance, revenue expectations and expected revenue growth, debt reduction, expected investments in key functions, future
`acquisitions and divestitures, anticipated restructuring of certain businesses, SG&A cost reductions, expectations with respe ct to
`compliance with certain financial maintenance covenants under our Credit Agreement, planned improvements to U.S. market access,
`business strategy, and stabilization, action and acceleration plans. Forward-looking statements may generally be identified by the use
`of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,”
`“target,” or “continue” and variations or similar expressions. These statements are based upon the current expectations and b eliefs of
`management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described
`in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the
`Company's most recent annual or quarterly report and detailed from time to time in Valeant’s other filings with the Securitie s and
`Exchange Commission and the Canadian Securities Administrators, which factors are incorporated herein by reference. Readers a re
`cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of
`the date hereof. Valeant undertakes no obligation to update any of these forward-looking statements to reflect events or
`circumstances after the date of this presentation or to reflect actual outcomes, except as required by law.
`
`
`
`Note 1: The guidance in this presentation is only effective as of the date given,
`June 7, 2016, and will not be updated or affirmed unless and until the Company
`publicly announces updated or affirmed guidance.
`
`1
`
`Page 2 of 49
`
`

`

`Non-GAAP Information
`
`
`To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP),
`the Company uses certain non-GAAP financial measures including (i) Adjusted earnings per share (“EPS”), (ii) Adjusted
`EBITDA, (iii) Cash flow available for debt repayment and other purposes (non-GAAP), (v) Adjusted cost of goods sold
`(non-GAAP), (vi) Adjusted selling, general and administrative expenses (non-GAAP), (vii) Adjusted total revenue, (viii)
`Adjusted gross margin, (ix) Adjusted operating income and (x) EBITA.
`
`The reconciliations of these historic non-GAAP measures to the most directly comparable financial measures calculated
`and presented in accordance with GAAP can be found in this presentation and/or the tables to the Company’s press
`release dated June 7, 2016 (the “press release”), a copy of which can be found on the Company’s website at
`www.valeant.com, and as a result, this presentation should be read in conjunction with the press release. Other than with
`respect to total revenue, the Company only provides guidance on a non-GAAP basis and does not provide reconciliations
`of such forward-looking non-GAAP measures to GAAP, due to the inherent difficulty in forecasting and quantifying certain
`amounts that are necessary for such reconciliations, including adjustments that could be made for restructuring, integration
`and acquisition-related expenses, share-based compensation amounts, adjustments to inventory and other charges
`reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
`
`Management uses these non-GAAP measures as key metrics in the evaluation of Company performance and the
`consolidated financial results and, in part, in the determination of cash bonuses for its executive officers. The Company
`believes these non-GAAP measures are useful to investors in their assessment of our operating performance and the
`valuation of our Company. In addition, these non-GAAP measures address questions the Company routinely receives from
`analysts and investors and, in order to assure that all investors have access to similar data, the Company has determined
`that it is appropriate to make this data available to all investors. However, non-GAAP financial measures are not prepared
`in accordance with GAAP, as they exclude certain items as described herein. Therefore, the information is not necessarily
`comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the
`corresponding measures calculated in accordance with GAAP. GAAP net income and earnings per share are significantly
`less than Adjusted net income (non-GAAP) and Adjusted EPS (non-GAAP).
`
`Please see the Appendix to this presentation for a more detailed description of each non-GAAP financial measure used by
`the Company herein, including the adjustments reflected in each non-GAAP measure.
`
`
`2
`
`Page 3 of 49
`
`

`

`Today’s Topics
`
` Q1 2016 Financial Results
`
` Stabilizing Valeant in 2016
` State of the Business
` 2016 Guidance Update
` Liquidity, Capital Structure and Cash Flow
`Update
`
`
` Areas of Improvement and Opportunity
` Dermatology
` Salix
`
`
` Valeant has a Strong Future
` Diversified Portfolio with Strong Global Brands
` U.S. Market Access
` Investment in R&D
`
`
`3
`
`Page 4 of 49
`
`

`

`Q1 2016 Summary
`
`Q1 2016
`Results
`
`Q1 2016
`Guidance
`
`Total GAAP Revenue
`
`$2.37B
`
`$2.3 - $2.4B
`
`GAAP EPS (diluted)
`
`$(1.08)
`
`N/A
`
`Adjusted EPS
`(non-GAAP)1
`
`GAAP Cash Flow
`from Operations
`
`Adjusted EBITDA
`(non-GAAP)2
`
`$1.27
`
`$1.18 – $1.43
`
`$558M
`
`N/A
`
`$1.0B
`
`N/A
`
`1 See slide 2 for note on non-GAAP information and the press release for reconciliations.
`2 See slide 2 for note on non-GAAP information and the Appendix and the press release for reconciliations.
`
`4
`
`Page 5 of 49
`
`

`

`Financial Summary – GAAP Presentation
`
`
`
`
`Total Revenue
`
`Cost of Goods Sold (% of product
`sales)
`
`SG&A (% of total revenue)
`
`R&D Investment
`
`GAAP EPS (diluted)
`
`GAAP Cash Flow from Operations
`
`
`
`
`
`
`
`Q1 2015
`(restated)
`$2,170M
`
`Q2 2015
`$2,732M
`
`Q3 2015
` $2,787M
`
`Q4 2015
` $2,757M
`
`Q1 2016
` $2,372M
`
`24%
`
`26%
`
`25%
`
`25%
`
`23%
`
`25%
`
`26%
`
`27%
`
`27%
`
`34%
`
`$56M
`
`$81M
`
`$102M
`
`$96M
`
`$103M
`
`$0.28
`
`($0.15)
`
`$0.14
`
`($1.12)
`
`($1.08)
`
`$491M
`
`$411M
`
`$737M
`
`$562M
`
`$558M
`
`Diluted Share Count
`
`
`
`343M
`
`344M
`
`351M
`
`345M
`
`345M
`
`5
`
`Page 6 of 49
`
`

`

`Financial Summary – Adjusted (non-GAAP)
`Presentation1
`
`
`
`Total Revenue
`
`Adjusted Cost of Goods Sold (% of
`product sales)
`
`Adjusted SG&A (% of total revenue)
`
`Q1 2015
`(restated)
`
`Q2 2015
`
`Q3 2015
`
`Q4 2015
`
`Q1 2016
`
`$2,170M
`
`$2,732M
`
` $2,787M
`
` $2,753M2
`
` $2,370M2
`
`
`
`
`
`22%
`
`26%
`
`23%
`
`25%
`
`22%
`
`24%
`
`24%
`
`25%
`
`25%
`
`31%
`
`R&D Investment (GAAP)
`
`
`
`$56M
`
`$81M
`
`$102M
`
`$96M
`
`$103M
`
`Adjusted Operating Margin (% of total
`revenue) (excluding amortization)
`
`49%
`
`49%
`
`50%
`
`47%
`
`39%
`
`Adjusted EPS (Non-GAAP)
`
`
`
`$2.05
`
`$2.14
`
`$2.41
`
`$1.55
`
`$1.27
`
`Diluted Share Count
`
`
`
`343M
`
`351M
`
`351M
`
`350M
`
`350M
`
`1 See slide 2 for note on non-GAAP information and the Appendix and the press release for reconciliations.
`2 Excludes product sales of Philidor Rx Services, LLC through the wind-down period as of November 1, 2015 through January 31, 2016.
`
`6
`
`Page 7 of 49
`
`

`

`Developed Markets Segment (non-GAAP)1
`Segment Highlights
`Q1 2015
`(restated) % change
` Same store organic growth decline
`primarily driven by US dermatology
` Price (5%); Volume (13%)
` U.S.
` Dermatology: Channel
`disruption impacted TRx volume
`and ASP
` Salix: Continued growth - Xifaxan
`TRx’s2 increased ~32% Y/Y
` Vision Care: up 9% vs. 1%
`market Y/Y
`
`Q1 2016
`
`$1,928
`
`$1,744
`
`11%
`
`$1,531
`
`$1,420
`
`8%
`
`…
`
`Adjusted total revenue
`($M)
`Adjusted gross
`margin ($M)
`
`Adjusted operating
`income ($M) (Excluding
`amortization)
`Adjusted operating
`margin (%)
`
`Adjusted gross margin (%)
`
`79%
`
`81%
`
`$912
`
`$991
`
`(8%)
`
`47%
`
`57%
`
`…
`
`Adjusted gross margin
`
`Adjusted operating margin
`
`79%
`
`81%
`
`47%
`
`57%
`
`Q1 2016 Q1 2015
`(restated)
`
`Q1 2016 Q1 2015
`(restated)
`
` Ultra up 58% Y/Y
` Surgical: Exclusive agreement to
`distribute Hoya IOL line in US
` Consumer: Walmart Supplier of
`the Year award
` Rest of World Developed
` Western Europe: Strong organic
`growth in France and UK
` Canada: Jublia achieving 60%
`market share
`
`1 See slide 2 for note on non-GAAP information and the Appendix and the press release for reconciliations.
`7
`2 Symphony IDV: Retail TRx.
`
`Page 8 of 49
`
`

`

`Emerging Markets Segment (non-GAAP)1
`Q1 2015
`(restated) % change
`
`Q1 2016
`
`Segment Highlights
`
`Total GAAP revenue
` ($M)
`Adjusted gross
`margin ($M)
`
`$442
`
`$427
`
`4%
`
`$243
`
`$262
`
`(7%)
`
`55%
`
`61%
`
`…
`
`$105
`
`$132
`
`(20%)
`
`24%
`
`31%
`
`…
`
`Adjusted gross margin (%)
`Adjusted operating
`income ($M) (Excluding
`amortization)
`Adjusted operating
`margin (%)
`
` When normalized for inventory
`reduction, same store sales
`grew ~10%
`
` Wholesaler inventory 3.5
`months in Russia and Poland
`combined (down from 4-5
`months in 2015)
`
` Increase in revenues from base
`business performance and
`Amoun acquisition offset by
`negative F/X impact of $44 M
`
` Strong same store organic
`growth driven by Mexico 8%
`and China 19%
`
` Middle East business continues
`to grow
`
`
`1 See slide 2 for note on non-GAAP information and the Appendix and the press release for reconciliations.
`
`
`
`Adjusted gross margin
`
`Adjusted operating margin
`
`55%
`
`61%
`
`24%
`
`31%
`
`Q1 2016 Q1 2015
`(restated)
`
`Q1 2016 Q1 2015
`(restated)
`
`8
`
`Page 9 of 49
`
`

`

`Current State of the Business
`
` We have the leading portfolio of dermatology brands and the strongest
`new product pipeline
`
` Great global platforms (Bausch + Lomb)
`
` Highly diversified product portfolio
`
` Durable consumer, ophthalmic, and branded generic businesses
`
` Strong cash flow generation
`
`But…….
`
` Distracted organization
`
` Significant challenges in Dermatology, primarily related to profitability
`
` Speed bumps in Walgreens program start-up
`
` Salix below original expectations despite strong Y/Y growth and unmet
`medical need
`
` Negative publicity that has impacted reputation with patients,
`physicians, payors and shareholders
`
`9
`
`Page 10 of 49
`
`

`

`Business Unit 2016 Performance to Date
`
`Dermatology
`
`Consumer
`
`Ophthalmology Rx
`
`Contact Lens
`
`Within our
`expectations
`
`
` P
`
` P
`
` P
`
` Below our
` expectations
` P
`(new channel
`dynamics)
`
`
`
`
` P
`
`Surgical
`Neuro & Other / Generics P
` P
`
`Dental
`
`Oncology / Urology
`
` P
`
`GI
`
`
` P
`
`ROW Developed
`Emerging Markets – EMEA P
`Emerging Markets – Latam P
`Emerging Markets - Asia P
`
`10
`
`
`
`
`
`
`
` P
`
`(additional
`opportunity)
`
`Page 11 of 49
`
`

`

`Full Year 2016 Revised Guidance
`
`Guidance as of
`June 7, 2016
`
`Guidance as of
`March 15, 2016
`
`$9.9 - $10.1B
`
`$11.0 - $11.2B
`
`$6.60 - $7.00
`
`$8.50 - $9.50
`
`$4.80 - $4.95B
`
`$5.60 - 5.80B
`
`Total GAAP
`Revenue
`
`Adjusted EPS
`(non-GAAP)1
`
`Adjusted EBITDA
`(non-GAAP)1
`
`1 See slide 2 for note on non-GAAP information.
`
`11
`
`Page 12 of 49
`
`

`

`Revenue Bridge to June 7, 2016 Guidance
`
`
`$11.0B – 11.2B
`
`~$410 M
`
`~$390 M
`
`~$300 M
`
`$9.9B – 10.1B
`
`March 15, 2016
`guidance
`
`Dermatology
`
`Xifaxan
`
`Other Units/
`Products/
`Pricing
`
`June 7, 2016
`guidance
`
`12
`
`Page 13 of 49
`
`

`

`What Drives the Ramp to Mid-Point Guidance
`
`
`Q1 2016 Adjusted EPS (non-GAAP)1
`
`Assumed Q1 run-rate performance in Q2, Q3, Q4
`
`
`Historical Seasonality / 2H ramp
`
`
`Fix Dermatology / 2H growth acceleration in Salix
`
`Other Markets Growth (e.g., Emerging Markets)
`
`Generic Erosion/Other (e.g., pricing)
`
`$1.27
`
`$3.81
`
`
`~$1.25
`
`
`~$0.50
`
`~$0.17
`
`~($0.20)
`
`2016 Adjusted EPS (non-GAAP) Mid-Point Guidance1
`
`~$6.80
`
`1 See slide 2 for note on non-GAAP information and the press release for reconciliations.
`
`13
`
`Page 14 of 49
`
`

`

`Liquidity and Capital Structure Update
` Solid current and forecasted liquidity position
` $1.3B cash as of March 31, 2016
` $730M permanent debt repayment year-to-date
` Repaid in Q1
`
` $145M scheduled amortization
`
` $260M term loan maturities
`
` Repaid in Q2
`
` $125M for excess cash flow payment
`
` $137M scheduled amortization
`
` $62M from asset sale proceeds
` Remaining 2016 scheduled payments $273M (~$137M in Q3 and Q4)
` Minimal amortization in 2017 - $620M term loans
`
`
`
`Based on guidance, we expect to remain in compliance with our Credit
`Agreement financial maintenance covenants throughout 2016
`
`14
`
`Page 15 of 49
`
`

`

`Cash Flow Available for Debt Repayment and Other
`Purposes (non-GAAP)1
`
`$M
`
`2016 Adjusted EBITDA (non-GAAP)1 (midpoint of guidance)
`
`Less:
`
`Cash Interest Expense
`
`Taxes (net of NOL benefit)2
`
`Change in Working Capital
`
`Cash Restructuring
`
`Contingent Consideration/Milestones
`
`Sprout Payment (January 2016)
`
`Capital Expenditures
`
`Plus:
`
`Net Asset Sale Proceeds (year-to-date)
`
`~$4,875
`
`~$1,700
`
`~$180
`
`~$0
`
`~$150
`
`~$400
`
`~$500
`
`~$275
`
`~$60
`
`Cash flow available for debt repayment and other purposes1,3
`
`~$1,730
`
`1 See slide 2 for note on non-GAAP information and the Appendix and the press release for reconciliations.
`2 Taxes represents current taxes payable, which includes the effect of tax attributes and timing differences.
`3 Excludes future net asset sale proceeds.
`15
`
`Page 16 of 49
`
`

`

`Valeant’s Stabilization Plan
`
`1. Drive Engagement
` Re-recruit Valeant employees
` Add new outside talent
` Invest in relationships with patients, prescribers, payors and investors
`2. Reallocate Strategic Resources
` Fix Dermatology business
` Accelerate Salix growth
` Focus R&D investment in growth/core businesses
` Ophthalmic, Dermatology, GI, Consumer
` Manage Neuro & Other for cash generation to repay debt
`3. Execute on Priorities
` Improve patient access and address pricing issues
` Execute on non-core asset sales to reduce complexity
` Focus on debt reduction
` Cooperate with all on-going government inquiries and seek expedited resolution
`
`16
`
`Page 17 of 49
`
`

`

`Dermatology: Action Plan
`
`1. Repair corporate reputation and trust
` CEO actions:
` Prescriber/KOL engagement
` Overall Valeant pricing and access strategy
` Engage frontline sales management
` R&D/Corporate investment in Dermatology and Podiatry specialties
`
`2. Enhance access and profitability with Walgreens and beyond
` Continue working with Walgreens to improve patient and prescriber
`experience
` Launch coupon for independent pharmacies (June)
` Implement prior authorization (PA) support via qualified third parties
`(June)
` Fix unintended ASP consequences of dermatology access program
`
`3. Continue to advance the new product pipeline
` Prepare for brodalumab Advisory Committee (July)
`
`17
`
`Page 18 of 49
`
`

`

`Dermatology: Early Indications of Recovery
`
`Derm Weekly TRx Performance
`
`2016-05-27
`
`2016-05-20
`
`2016-05-13
`
`2016-05-06
`
`2016-04-29
`
`2016-04-22
`
`2016-04-15
`
`Walgreens Commercial Redemptions
`
`376,000
`Program to
`Date
`
`05/22/16
`
`05/15/16
`
`05/08/16
`
`05/01/16
`
`04/24/16
`
`04/17/16
`
`04/10/16
`
`75,000
`
`70,000
`
`65,000
`
`60,000
`
`TRx
`
`26,000
`
`24,000
`
`22,000
`
`20,000
`
`18,000
`
`16,000
`
`14,000
`
`18
`
`TRx
`
` Weekly TRx levels improving
`
` Access program
`enhancements planned for
`June:
` Inclusion of independent
`pharmacies
` Implementing PA
`reimbursement solution
`
`Source: Symphony IDV; Derm portfolio includes all
`promoted products through Walgreens.
`
`Page 19 of 49
`
`

`

`Salix Acceleration Plan
`
`1. Sales/Leadership engagement
`
`
`
`Appointed new leader to stabilize the organization and
`accelerate growth (April)
`
` New sales force team promoting Xifaxan fully deployed (April),
`plus 106 professionals = 67% incremental for HE
`
`2. Focus on Xifaxan unmet medical need
`
` Launched education program covering 12 major teaching
`institutions (April)
`
` Launched new HE education and sales materials to doctors and
`patients (May)
`
` Strong presence at Digestive Disease Week (May)
`
`3.
`
`Improve market/patient access
`
`
`
`Streamlining patient access and adherence through the
`optimization of reimbursement hub and other patient support
`programs
`
`19
`
`Page 20 of 49
`
`

`

`Focus on Xifaxan Unmet Medical Need
` Significant unmet need remains with hepatic encephalopathy
`(HE) & IBS-D patients
`HE Opportunity (>$5B)
`IBS-D Opportunity
`
` Experts estimate that 5.5 million people in
`the US have cirrhosis1
`
` 10-15% of the U.S. adult population suffers
`from IBS, many of which are undiagnosed4-6
`
`
` One of the primary complications of cirrhosis
`is hepatic encephalopathy (HE)1
`
`
`
` ~65% of IBS Patients Have a Diarrheal
`Component to Their Symptoms7
`
` Estimated 1.7M- 2.2M patients at risk to
`develop Overt HE2
`
` As of 2013, there were ~600K patients
`discharged from the hospital with HE3
`
` Only ~5 million of IBS patients are currently
`treated with prescription medicines8
`
`
`
`
`
`
`
`
`1.
`2.
`3.
`
`4.
`
`
`
`Liu. A Advances in Cirrhosis. World Journal of Hepatology, Dec 2015.
`AASLD 2014 Practice Guideline
`All listed diagnoses at discharge included ICD-9 codes 291.2 , 348.30 , and 572.2.
`http://hcupnet.ahrq.gov/HCUPnet.jsp
`Saito YA. Am J Gastroenterol. 2002;97(8):1910-1915.
`
`
`5. Hungin AP, et al. Aliment Pharmacol Ther. 2005;21(11):1365-1375.
`6. United States Census Bureau. Countries and Areas Ranked by Population: 2016.
`https://www.census.gov/population/international/data/countryrank/rank.php. Accessed April 4, 2016.
`7. Lovell RM, et al. Clin Gastroenterol Hepatol. 2012;(10):712-721.
`8. Symphony Patient Transactional Data (April 2015-March 2016). www.symphonyhealth.com
`
`
`
`20
`
`Page 21 of 49
`
`

`

`Salix: Growth Well Under Way
`
`Xifaxan Retail TRx Performance2
`
`2014
`2015
`2016
`
`Dec
`
`Nov
`
`Oct
`
`Sep
`
`Aug
`
`Jul
`
`Jun
`
`May
`
`Apr
`
`Mar
`
`Feb
`
`Jan
`
` Continued growth in Xifaxan monthly
`TRx
`
` Managed care access for Xifaxan is
`very strong across both the
`Commercial and Medicare Part-D
`segments with a total number of
`covered lives greater than 98% and
`94%, respectively
`
`
` Performance of new sales team
`continues to strengthen (e.g., reach
`and frequency metrics)
`
`
` Other major brands continue to show
`growth1 Y/Y (Uceris +9%, Apriso +4%,
`Relistor +14%)
`
` Continuing to invest in pipeline
`opportunities to sustain longer-term
`growth (e.g., Oral Relistor)
`
`1 Symphony IDV: Unit adjusted TRx.
`2 Symphony IDV: Retail TRx.
`
`65,000
`
`60,000
`
`55,000
`
`50,000
`
`45,000
`
`40,000
`
`35,000
`
`30,000
`
`21
`
`Page 22 of 49
`
`

`

`Valeant Has a Strong Future
`
` Strong global portfolio of brands
`
` Durable emerging markets business/branded
`generics/OTC
`
` Durable consumer business (OTC, Contact lens,
`Vitamins, Ophthalmic solutions)
`
` Improved U.S. market access (managed care)
`
` Plan to fix dermatology TRx profitability and drive
`momentum in Salix
`
` Attractive R&D new product pipeline
`
` Strong cash flow generation
`
`22
`
`Page 23 of 49
`
`

`

`Strong Global Brands
`U.S. Gastrointestinal
`U.S. Dermatology (1) U.S. Ophthalmology
`and Eye Care (B+L)
`
`
`U.S. Consumer
`
`Emerging markets (2)
`
`Ex-U.S. developed markets (2)
`
`U.S. Oncology, Dentistry,
`Women’s Health,
`Neuro/Other
`
`(1)
`(2)
`
`Including Solta and Obagi.
`Including Ophthalmology, Dermatology, and GI sales.
`
`23
`
`Page 24 of 49
`
`

`

`Valeant’s Global ~$3.5B1 Consumer-Oriented Business
`(includes Bausch+Lomb2, Skin Care, Other OTC)
`
`
`W. Europe
`19% of Global
`Consumer
`
`North Asia
`11% of Global
`Consumer
`
`Japan
`5% of Global
`Consumer
`
`Southeast Asia
`3% of Global
`Consumer
`
`Australia/NZ
`1% of Global
`Consumer
`
`Canada
`4% of Global
`Consumer
`
`U.S.
`45% of Global
`Consumer
`
`Mexico
`2% of Global
`Consumer
`
`Brazil/Argentina
`2% of Global
`Consumer
`
`EMEA
`8% of Global
`Consumer
`
` EBITA Margin ~37%
` LTM growth 4% (constant currency)
`
`1 LTM through March 31, 2016.
`2 Bausch + Lomb includes contact lens, opth Rx and surgical devices.
`
`
`24
`
`Page 25 of 49
`
`

`

`Dendreon, Targeting Cancer, Transforming Lives
`Q1 2015
`proforma* % change
`
`Q1 2016
`
`Segment Highlights
`
`Revenue ($M)
`
`$72
`
`$65
`
`10%
`
`Gross margin ($M)
`
`$46
`
`-- **
`
`Gross margin (%)
`
`64%
`
`--**
`
`* Q1 15 proforma period (Jan – Feb 21st) under Dendreon ownership
`**Proforma Gross Margin is not available for Q1 15
`
`25
`
`Enrollments grew 10% Y/Y &
`infusions grew 7%
`
`
`
`Strategic shift to focus on
`urologists is working
`
`~49% of business today
`
`~grew 22% Y/Y with
`enrollments
`
`
`
`Building stronger support in
`the Prostate Cancer KOL
`community for Provenge
`
`
`
`Achieved Synergy savings
`ahead of schedule and
`increased gross margin from
`the low 50% range
`
`
`
`
`
`
`
`
`
`
`
`
`
`Page 26 of 49
`
`

`

`Improved U.S. Market Access for Promoted
`Pharmaceutical Portfolio in 2016
` Improved our Commercial Access for key brands in 1st half 2016
` Jublia >89% covered lives
` Xifaxan >98% covered lives
` Ophthalmology brands unrestricted access in >82% commercial lives
`
` Expanded our Medicare Part D Access for 2nd half 2016
` Jublia covered without PA on AARP formulary June 1st
` Lotemax family moved to Preferred Brand on Aetna Medicare Saver Rx June
`1st
` Xifaxan PA criteria updates to include both HE & IBS-D indication across
`several formularies
`
`
`
` Productive discussions underway to expand product access
` Prepare for launch products
` Improve Jublia & Xifaxan 2017 access in Part D
`
`
`
`
`
`Well positioned for 2017 and beyond
`
`26
`
`Page 27 of 49
`
`

`

`R&D Highlights for 2016
`
`Early
`Stage1
`
`Late
`Stage2
`
`Significant active U.S. programs as of May 31, 2016
`
`31
`
`19
`
`18
`
`Over 20 new
`product launches in 2016
`
`Surgical
`
`Consumer
`
`Dermatology3
`
`Contact Lenses
`
`Generics
`
`Ophthalmology
`
`GI
`
`9
`
`6
`
`4
`
`3
`
`Inflammation
`Total
`
`1
`
`30
`
`61
`
`1 Prior to Phase III for Pharma, 2018+ expected launch date for others.
`2 Includes Phase III and FDA submitted products.
`3 Includes aesthetics (Solta/Obagi).
`
`27
`
`28
`
`10
`
`8
`
`9
`
`10
`
`6
`
`4
`
`3
`
`3
`
`2
`
`1
`
`3
`
`21
`
`1
`
`Page 28 of 49
`
`

`

`Our Productivity is Higher Than Peers
`R&D Productivity for 15 PharmaCos with most approvals - 2009-’14
`# of NMEs/BLAs1 per $B R&D spend
`
`3.02
`
`“
`
`Innovation has nothing to
`do with how many R&D
`dollars you have. When
`Apple came up with the
`Mac, IBM was spending at
`least 100 times more on
`R&D. It's not about money.
`It's about the people you
`have, how you're led, and
`how much you get it.
`
`
`
` - Steve Jobs
`
`Top 15 average
`
`1 Refers to New Molecular Entity and Biologic License Application.
`2 Does not include Contact lenses and surgical devices. Does not include B+L and Salix approved products (Fulyzaq, Bepreve and Besivance) that were not
`developed under the Valeant model; all other companies include acquired brands, which overstates their productivity.
`
`Source: Evaluate Pharma, FDA, Capital IQ, Annual reports, Press search.
`
`28
`
`”
`
`2.1
`
`1.2
`
`0.5
`0.3
`0.3
`0.3
`0.3
`0.2
`0.2
`0.2
`0.2
`0.2
`0.2
`0.1
`
`Page 29 of 49
`
`

`

`We Believe We are Significantly More Successful at
`Developing Products Than the Industry
`
` Success rates in dermatology
`
`Valeant’s success rate in dermatology2
`
`Industry1
`
`Valeant2
`
`Ph. I
`
`Ph. II
`
`Ph. III
`
`1 Average of all competitors from 2010-2014.
`2 2011-2015.
`
`Source: Pharmaprojects 2014, Management Estimates.
`
`29
`
`100%
`
`69%
`
`55%
`
`56%
`
`18%
`
`20%
`
`Page 30 of 49
`
`

`

`Programs Currently at the FDA
`
`Program
`
`Indication
`
`Submission
`
`PDUFA Date
`
`Relistor Oral
`
`Latanoprostene
`bunod
`
`Brodalumab
`
`Proposed: “For the treatment of opioid-
`induced constipation in adult patients
`with chronic non-cancer pain and for the
`treatment of opioid-induced constipation
`in adult patients with advanced illness
`who are receiving palliative care, when
`response to laxative therapy has not
`been sufficient”
`
`Proposed: “For the reduction of elevated
`intraocular pressure in patients with
`open-angle glaucoma or ocular
`hypertension”
`
`Proposed: “For the treatment of
`moderate to severe plaque psoriasis for
`patients who are candidates for systemic
`therapy or phototherapy”
`
`NDA
`
`July 19, 2016
`
`NDA
`
`July 21, 2016
`
`BLA
`
`November 16,
`2016
`
`30
`
`Page 31 of 49
`
`

`

`What To Expect In Next 60 Days
`
` Execute on Stabilization Plan
` Drive engagement, strategic resource allocation, and
`execute on priorities
` Add additional talent
` Prepare for important FDA milestones/catalysts
` Add new capacity for BioTrue and Ultra contact lens
` Improve dermatology access program for growth and
`profitability
` Generate strong cash flow
` Meet with shareholders and debtholders
`
`31
`
`Page 32 of 49
`
`

`

`Valeant Pharmaceuticals
`International, Inc.
`
`First Quarter 2016 Conference Call
`June 7, 2016
`
`Page 33 of 49
`
`

`

`Appendix
`Appendix
`
`Page 34 of 49
`33
`
`'VALEANT
`
`Page 34 of 49
`
`

`

`Q1 2016 Top 30 Brands ($M)
`Primary
`Patent
`Rank
`Business Unit
`Durability
`
`Product
`
`% Sold
`outside US
`
`Q1
`2016
`
`Q1
`2015
`(restated)
`
`1) Xifaxan
`
`GI
`
` 2019-2029
`
`2) Provenge
`
`Oncology/Urology
`
` 2018
`
`0%
`
`0%
`
`3) SofLens
`
`Lens
`
` NM
`
`85%
`
`4) Wellbutrin
`
`Neuro & Other
`
`Expired
`
`5)
`
`Isuprel
`
`Neuro & Other
`
`Expired
`
`6) Nitropress
`
`Neuro & Other
`
`None
`
`4%
`
`0%
`
`0%
`
`Ocuvite /
`Preservision
`
`7)
`
`Consumer
`
`OTC
`
`29%
`
`8) Xenazine
`
`Neuro & Other
`
`Expired
`
`7%
`
`Y/Y%
`
`NM
`
`140%
`
`(14%)
`
`3%
`
`(8%)
`
`(7%)
`
`(7%)
`
`(12%)
`
`(8%)
`
`NM
`
`208
`
`72
`
`70
`
`70
`
`66
`
`58
`
`56
`
`50
`
`49
`
`48
`
`-
`
`30
`
`81
`
`68
`
`72
`
`62
`
`60
`
`57
`
`53
`
`-
`
`9) ReNu
`
`Consumer
`
`10) Zegerid AG
`(Omeprazole)
`
`
`Generics
`
` OTC
`
`AG
`
`78%
`
`0%
`
`Top 30 Brands Represent 54% of Total Company First Quarter Revenue
`Products with sales outside the U.S. impacted by F/X changes
`
`34
`
`Page 35 of 49
`
`

`

`Q1 2016 Top 30 Brands ($M)
`
`Patent
`Primary Business
`Durability
`Unit
`
`Product
`
` Rank
`
`% Sold
`outside
`US
`
`Q1
`2016
`
`Q1
`2015
`(restated)
`
`11) PureVision
`
`Lens
`
`NM
`
`67%
`
`12) Jublia
`
`Dermatology
`
`2030
`
`21%
`
`13) CeraVe
`
`Consumer
`
`14) Uceris Tablets
`
`GI
`
`15) Arestin
`
`Dental
`
`16) Apriso
`
`GI
`
` OTC
`
`2031
`
`2022
`
`2030
`
`6%
`
`0%
`
`0%
`
`0%
`
`17) Lotemax
`
`Ophthalmology
`
`2017
`
`11%
`
`18) Cuprimine
`
`Neuro & Other
`
` None
`
`0%
`
`19) Biotrue MPS
`
`Consumer
`
` OTC
`
`37%
`
`20) Syprine
`
`Neuro & Other
`
` None
`
`1%
`
`39
`
`38
`
`38
`
`35
`
`34
`
`33
`
`32
`
`27
`
`27
`
`23
`
`44
`
`60
`
`30
`
`-
`
`32
`
`-
`
`43
`
`8
`
`28
`
`18
`
`Top 30 Brands Represent 54% of Total Company First Quarter Revenue
`Products with sales outside the U.S. impacted by F/X changes
`
`35
`
`Y/Y%
`
`
`(11%)
`
`(37%)
`
`27%
`
`NM
`
`6%
`
`NM
`
`(26%)
`
`238%
`
`(4%)
`
`28%
`
`Page 36 of 49
`
`

`

`Q1 2016 Top 30 Brands ($M)
`
`Patent
`Primary Business
`Durability
`Unit
`
`Product
`
`Rank
`
`% Sold
`outside
`US
`
`Q1
`2016
`
`Q1
`2015
`(restated)
`
`Y/Y%
`
`(53%)
`
`29%
`
`(16%)
`
`(39%)
`
`-
`
`5%
`
`(5%)
`
`-
`
`NM
`
`49
`
`17
`
`25
`
`33
`
`20
`
`19
`
`20
`
`18
`
`-
`
`14
`
`14%
`
`21) Solodyn
`
`Dermatology
`
` 2018
`
`0%
`
`22) BioTrue (OneDay) Consumer
`
`OTC
`
`58%
`
`23) Elidel
`
`Dermatology
`
` 2018
`
`24) Virazole
`
`25)
`
`Anterior
`Disposables
`
`Neuro & Other
`
`2017
`
`Surgical
`
` NM
`
`78%
`
`8%
`
`1%
`
`26) Artelac
`
`Ophthalmology
`
` 2026
`
`100%
`
`27) Akreos
`
`Surgical
`
`2031
`
`83%
`
`28) Boston Solutions Consumer
`
` OTC
`
`58%
`
`29) Relistor
`
`GI
`
` 2031
`
`30) Mephyton
`
`Neuro & Other
`
` None
`
`5%
`
`0%
`
`23
`
`22
`
`21
`
`20
`
`20
`
`20
`
`19
`
`18
`
`17
`
`16
`
`Top 30 Brands Represent 54% of Total Company First Quarter Revenue
`Products with sales outside the U.S. impacted by F/X changes
`
`36
`
`Page 37 of 49
`
`

`

`Q1 2016 Organic Growth1
`
`Same Store Sales – Y/Y growth rates for businesses
`that have been owned for one year or more
`Q1 2016
`
`
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`
`
`
`
`(22%)
`
`(18%)
`
`2%
`
`(14%)
`
`Pro Forma – Y/Y growth rates for entire business,
`including businesses that have been acquired within
`the last year
`
`
`Q1 2016
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`13%
`
`10%
`
`3%
`
`8%
`
`1 See slide 2 for note on non-GAAP information and the press release for reconciliations.
`
`37
`
`Page 38 of 49
`
`

`

`Key Assumptions for June 7, 2016 Guidance1
`
` Exchange rates based on June 1st spot rates
`
` No further acquisitions or divestitures
`
` Adjusted COGS1: ~25%
`
` Adjusted SG&A1: ~26%, including ~$100M2 in retention expenses
`
` R&D spend: ~$400 M
`
` Cash Interest expense: ~$1.7 B
`
` Depreciation: ~$200 M
`
` Capital expenditure: ~$275M
`
` Share-based compensation: ~$165 M
`
` Non-GAAP effective tax rate1: ~15%
`
`1. See slide 2 for note on non-GAAP information.
`2. SG&A includes share-based compensation.
`
`
`38
`
`Page 39 of 49
`
`

`

`2016 R&D Events
`
`Congress
`
`Posters
`
`Date
`
`American Optometric Association
`
`3 accepted
`
`June 2016
`
`American Society of Clinical Oncology
`
`6 accepted
`
`June 2016
`
`National Association of Nurse Practitioners in Woman’s Health
`
`1 accepted
`
`September 2016
`
`North American Menopause Society
`
`1 planned
`
`October 2016
`
`Fall Clinical Dermatology
`
`15 planned
`
`October 2016
`
`American College of Gastroenterology
`
`6 planned
`
`October 2016
`
`American Association for the Study of Liver Diseases
`
`6 planned
`
`November 2016
`
`American Academy of Ophthalmology
`
`16 planned
`
`November 2016
`
`Therapy Area
`
`Journal
`
`Vision Care/Surgical
`
`Clinical Ophthalmology
`
`Publication
`Date
`June 2016
`
`Dermatology
`
`Journal of Drugs in Dermatology
`
`June 2016
`
`Dermatology
`
`Clinics in Podiatric Medicine and Surgery
`
`July 2016
`
`Gastrointestinal
`
`Journal American Association Nurse Practitioners
`
`June 2016
`
`Ophthalmology
`
`American Journal of Ophthalmology
`
`June 2016
`
`Over 80 submissions
`to peer reviewed
`journals are planned
`for 2016
`
`39
`
`Page 40 of 49
`
`

`

`Financial Summary – Adjusted (non-GAAP)
`Presentation Reconciliation
`
`
`
`40
`
`Qtr 2 2015 GAAP Presentation
`Amortization of inventory step-up
`Integration related techonology transfers
`Depreciation expense from PP&E Step up
`SBC reversal of unvested equity awards
`Post-combination expense related to the acceleration
`of unvested restricted stock for Salix employees
`Loss on sale of divested assets
`Restructuring, Integration, acquisition and other costs
`Acquisition-related contingent consideration
`Other smaller non-GAAP addbacks
`In-process research and development impairments
`and other charges
`Amortization and impairments of finite-lived intangibles
`Non-cash interest expense
`Foreign currency gain/loss on intercompany financing
`Tax effect on non-GAAP adjustments
`Qtr 2 2015 Non-GAAP Presentation
`
`Total
`Revenue
`
`2,732.4$
`
`Cost of
`Goods Sold
` $ 669.9
`
`(46.0)
`
`(2.9)
`
`Dollars
`
`SG&A
`
`685.5$
`
`R&D Expense
`
`81.1$
`
`(2.5)
`
`
`6.9
`
`
`
`(5.8)
`
`
`
`(0.4)
`
`
`
`2,732.4$
`
`
`
`615.2$
`
`
`
`689.9$
`
`
`
`80.7$
`
`Operating
`Margin (excl
`Amortization) Net Income
`926.9$
`
`(53.0)$
`
`
`46.0
`
`46.0
`
`2.9
`
`2.9
`
`2.5
`
`2.5
`
`(6.9)
`
`(6.9)
`
`168.4
`
`
`3.8
`
`152.9
`
`11.7
`
`10.9
`
`168.4
`
`
`3.8
`
`152.9
`
`11.7
`
`10.9
`
`
`
`12.3
`
`-
`
`1,331.4$
`
`
`12.3
`
`585.4
`
`
`20.7
`
`(10.4)
`
`(196.4)
`
`750.8$
`
`Total
`Revenue
`NA
`
`Cost of
`Goods Sold
`24.9%
`-2.2%
`-0.1%
`0.0%
`
`%
`
`SG&A
`25.1%
`
`R&D
`Expense
`NA
`
`0.3%
`
`Operating
`Margin (excl
`Amortization)
`33.9%
`1.7%
`0.1%
`0.1%
`-0.3%
`
`6.2%
`0.1%
`5.6%
`0.4%
`0.4%
`
`0.5%
`
`NA
`
`22.8%
`
`25.2%
`
`NA
`
`48.7%
`
`EPS
`
`(0.15)$
`
`0.13
`
`0.01
`
`0.01
`
`(0.02)
`
`0.48
`
`
`0.01
`
`0.44
`
`0.03
`
`0.03
`
`0.04
`
`
`1.67