1Q 2017 Financial Results
`Conference Call
`
`May 9, 2017
`
`Page 1 of 46
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1573
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

`

`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 Revenues and Adjusted EBITDA (non-GAAP) (as discussed and defined below) and the assumptions used in connection with such
`guidance, the closing of the Company’s pending divestitures and other transactions and the anticipated timing of such closings, the
`anticipated impact on the Company’s financial condition of completed, pending and future divestitures, the anticipated timing of the loss of
`exclusivity of certain of our products, and the expected impact of such loss of exclusivity on our financial condition, the anticipated
`submission, approval and launch dates for certain of our pipeline products and R&D programs, the number of expected product launches in
`2017 and the anticipated revenues from such products, the anticipated timing of receipt of clinical and pre-clinical results or data for certain
`of our pipeline products and R&D programs, anticipated Fx impact, anticipated debt reduction and repayment (including our ability to pay
`down debt, the availability of divestiture proceeds and operating cash flow for such purpose and the amount and timing of such debt
`paydown), the ability of the Company to remain in compliance with the financial maintenance covenants under its credit facilities and
`indentures, the manageability of our debt pay-down schedule, the anticipated growth and volume of prescriptions for certain of our
`products, and the Company’s mission and the plans, goals and strategies related thereto. 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 beliefs 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 and quarterly reports and detailed from time to time in Valeant’s other filings with the
`Securities and Exchange Commission and the Canadian Securities Administrators, which factors are incorporated herein by reference. In
`addition, certain material factors and assumptions have been applied in making these forward-looking statements, including the Company’s
`2017 full year guidance, and information regarding certain of these material factors and assumptions may also be found in such filings.
`Readers are 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.
`
`
`The guidance in this presentation is only effective as of the date given, May 9, 2017, and will not be updated
`or affirmed unless and until the Company publicly announces updated or affirmed guidance.
`
`1
`
`Page 2 of 46
`
`

`

`Non-GAAP Information
`
`Recent Assessment of Financial Performance Measures
`Recently, the Company’s new management team undertook an evaluation of how it would measure the financial performance of the Company going forward. In evaluating
`its financial performance measures, the Company considered its recent changes to its strategy (which included a transition away from growth by acquisition with a greater
`focus on R&D activity, strengthening of the balance sheet through the pay down of debt and rationalization of the product portfolio through divestitures of non-core assets)
`and sought to identify performance measures that best reflect the Company’s current business operations, strategy and goals. As a result of that evaluation, new
`management identified the following primary financial performance measures for the Company: GAAP Revenues (measure for both guidance and actual results), GAAP Net
`Income (measure for actual results), Adjusted EBITDA (non-GAAP) (measure for both guidance and actual results) and GAAP Cash Flow from Operations (measure for actual
`results). These measures were selected as the Company believes that these measures most appropriately reflect how the Company measures the business internally and
`sets operational goals and incentives. For example, the Company believes that Adjusted EBITDA (non-GAAP) focuses management on the Company’s underlying operational
`results and business performance, while GAAP revenue focuses management on the overall growth of the business. In addition, in connection with this evaluation of
`financial performance measures, the Company assessed the methodology with which it was calculating these non-GAAP measures and made updates where it deemed
`appropriate to better reflect the underlying business. These new non-GAAP measures, and the new methodologies used to calculate these non-GAAP measures, are being
`used on a going forward basis, commencing with 2017 guidance and actual results for the first quarter of 2017. For the purposes of the Company’s actual results for the first
`quarter of 2016 and other historic periods presented, the Company has calculated and presented the non-GAAP measures using the historic methodologies in place as of
`the applicable historic dates; however, the Company has also provided a reconciliation that calculates the non-GAAP measures using the new methodologies, to allow
`investors and readers to evaluate the non-GAAP measures (such as Adjusted EBITDA) on the same basis for the periods presented.
`
`Use of Non-GAAP Generally
`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 EBITDA, (ii) Adjusted EBITA/Adjusted EBITA Margin/Adjusted Operating Income/Segment Adjusted Operating Income, (iii) Adjusted Gross
`Profit, (iv) Adjusted Gross Margin/Segment Adjusted Gross Margin, (v) Adjusted Selling, A&P, (vi) Adjusted G&A, (vii) Segment Adjusted SG&A, (viii) Adjusted R&D/Segment
`Adjusted R&D, (ix) Total Adjusted Operating Expense and (x) Adjusted Net Income (Loss). 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.
`
`The reconciliations of these historic non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown
`in the tables in the appendix hereto. However, for guidance purposes, the Company does not provide reconciliations of projected Adjusted EBITDA (non-GAAP) to
`projected GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. In periods where
`significant acquisitions or divestitures are not expected, the Company believes it might have a basis for forecasting the GAAP equivalent for certain costs, such as
`amortization, that would otherwise be treated as a non-GAAP adjustment to calculate projected GAAP net income (loss). However, because other deductions (e.g.,
`restructuring, gain or loss on extinguishment of debt and litigation and other matters) used to calculate projected net income (loss) may vary significantly based on actual
`events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income
`(loss) at this time. The amounts of these deductions may be material and, therefore, could result in GAAP net income (loss) being materially different from (including
`materially less than) projected Adjusted EBITDA (non-GAAP).
`
`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.
`2
`
`Page 3 of 46
`
`

`

`Today’s Topics
`
`1
`
`Opening Remarks & 1Q17 Progress Highlights
`
`2
`
`1Q Financial Results
`
`3
`
`FY 2017 Guidance
`
`4
`
`Segment Highlights & 2017 Catalysts
`
`3
`
`Page 4 of 46
`
`

`

`Performance Since Last Quarter’s Call
`
`B+L/Int’l and Branded Rx Segments Adj. EBITA (non-GAAP)1,2 increased 8% and 12% respectively 1Q17/1Q16
`
`Positives
`
`Challenges
`
`Divestitures / Debt Reduction
`Reduced debt by $1.3B in 1Q and $220M since then
`•
`$3.6B debt reduction from 1Q16 to date
`Closed skincare transaction with L’Oreal March 3
`Closed Brazilian facility sale
`Announced ~$2.7B in total asset sales since 1Q16
`Refinancing extended maturity profile and shifted to
`~75% fixed vs floating rate debt
`
`•
`
`•
`
`•
`
`•
`
`•
`
`People
`
`•
`
`•
`
`Overcoming GI sales force turnover to new market
`entrant with more than 200 additional representatives in
`primary care
`
`Right-sized Dermatology field force
`
`
`•
`
`Products
`Xifaxan® underperformed in 1Q17, but NRx share
`increase of 200 bps since March reflects recent PCP focus,
`and plan remains on track for the year
`Continue to expect ramp to be higher in 2H due to full
`PCP sales force deployment and offsetting 1H high-
`deductible plans
`
`•
`
`•
`
`Process
`Shutting down Commonwealth business to simplify
`portfolio
`Resolving legacy matters
`
`•
`
`1. See Slide 2 and Appendix for further non-GAAP information.
`2. The non-GAAP measures for historic periods are calculated using the former methodologies used
`as of that date. See Appendix for a presentation of the non-GAAP measures on the same basis for all
`periods presented and further information on the changes to the methodologies.
`
`Execution
`Raised Adjusted EBITDA (non-GAAP)1 guidance
`•
`Stabilized dermatology average selling price (ASP)
`Strong Asia growth led by China +11% in volumes
`Xifaxan® PCP sales team gaining NRx share
`Cash from ops of $954M in 1Q17
`•
`Pipeline
`Reported our confirmatory PIII study of IDP-118, topical
`•
`treatment for psoriasis
`Launched ULTRA contact lens addition in US and Asia
`510(k) clearance for Stellaris Elite™
`510(k) clearance for Vitesse™
`Luminesse™* FDA filed with PDUFA Dec 27, 2017
`Vyzulta™* FDA re-submission with PDUFA Aug 24, 2017
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`4
`
`* Provisional name pending FDA approval
`
`Page 5 of 46
`
`

`

`1Q17 Financial Results
`
`Three Months Ended
`
`Favorable (Unfavorable)
`
`March 31, 2017
`
`March 31, 2016
`
`Reported
`
`Constant Currency3
`
`Revenues
`
`GAAP NI
`
`GAAP EPS
`
`GAAP CF from Operations
`
`$2,109M
`
`$628M
`
`$1.80
`
`$954M
`
`Adj. Gross Profit (non-GAAP)1,2
`
`$1,513M
`
` Adj. Gross Margin (non-
`GAAP)1,2
`
`Adj. Selling, A&P (non-GAAP)1
`
`Adj. G&A (non-GAAP)1,2
`
`Adj. R&D (non-GAAP)1
`
`Total Adj. Operating Expense
`(non-GAAP)1,2
`
`Adj. EBITA (non-GAAP)1,2
`
`Adj. EBITDA (non-GAAP)1,2
`
`72%
`
`$466M
`
`$185M
`
`$96M
`
`$747M
`
`$766M
`
`$861M
`
`$2,372M
`
`($374M)
`
`($1.08)
`
`$557M
`
`$1,774M
`
`75%
`
`$574M
`
`$163M
`
`$103M
`
`$840M
`
`$934M
`
`$1,008M
`
`(11%)
`
`268%
`
`267%
`
`71%
`
`(15%)
`
`19%
`
`(13%)
`
`7%
`
`11%
`
`(18%)
`
`(15%)
`
`(9%)
`
`269%
`
`266%
`
`(14%)
`
`17%
`
`(14%)
`
`7%
`
`10%
`
`(17%)
`
`(14%)
`
`1.
`2.
`
`3.
`
`See Slide 2 and Appendix for further non-GAAP information.
`The non-GAAP measures for historic periods are calculated using the former methodologies used as of that date. See Appendix for a presentation of the non-GAAP
`measures on the same basis for all periods presented and further information on the changes to the methodologies.
`See Appendix for further information on the use and calculation of constant currency.
`
`
`
`
`
`
`5
`
`Page 6 of 46
`
`

`

`1Q17 Segment Results – Bausch + Lomb / International
`
`Segment Revenue +4% (constant currency) 3; Adj. EBITA (non-GAAP)1,2 +8% (constant currency)3
`
`Three Months Ended
`
`Favorable (Unfavorable)
`
`March 31, 2017
`
`March 31, 2016
`
`Reported
`
`Constant Currency3
`
`Global Vision Care
`
`Global Surgical
`
`Global Consumer
`
`Global Ophtho Rx
`
`International
`
` Total Segment Revenue
`
`Adj. Gross Profit (non-GAAP)1,2
`
` Adj. Gross Margin (non-GAAP)1,2
`
`Adj. Selling, A&P (non-GAAP)1
`
`Adj. G&A (non-GAAP)1,2
`
`Adj. R&D (non-GAAP)1
`
` Total Adj. Operating Expense (non-GAAP)1,2
`
`Adj. EBITA (non-GAAP)1,2
`
` Adj. EBITA Margin (non-GAAP)1,2
`
`Revenue % of total
`
`Adj. EBITA (non-GAAP)1,2 % of total
`
`$170M
`
`$157M
`
`$375M
`
`$143M
`
`$305M
`
`$172M
`
`$168M
`
`$368M
`
`$141M
`
`$297M
`
`$1,150M
`
`$1,146M
`
`$703M
`
`61%
`
`$302M
`
`$47M
`
`$21M
`
`$370M
`
`$333M
`
`29%
`
`55%
`
`43%
`
`$706M
`
`62%
`
`$318M
`
`$53M
`
`$18M
`
`$389M
`
`$317M
`
`28%
`
`48%
`
`34%
`
`(1%)
`
`(7%)
`
`2%
`
`1%
`
`3%
`
`0%
`
`0%
`
`5%
`
`11%
`
`(17%)
`
`5%
`
`5%
`
`(1%)
`
`(5%)
`
`1%
`
`3%
`
`15%
`
`4%
`
`3%
`
`2%
`
`9%
`
`(17%)
`
`2%
`
`8%
`
`6
`
`1.
`2.
`
`3.
`
`
`
`See Slide 2 and Appendix for further non-GAAP information.
`The non-GAAP measures for historic periods are calculated using the former methodologies used as of that date. See Appendix for a presentation of the non-GAAP measures on the
`same basis for all periods presented and further information on the changes to the methodologies.
`See Appendix for further information on the use and calculation of constant currency.
`
`
`Page 7 of 46
`
`

`

`1Q17 Segment Results – Branded Rx
`
`Adjusted EBITA (non-GAAP)1,2 improvement of 12%
`
`Three Months Ended
`
`Favorable (Unfavorable)
`
`March 31, 2017
`
`March 31, 2016
`
`Reported
`
`Constant Currency3
`
` Salix Revenue
`
` Dermatology Revenue
`
` Dendreon Revenue
`
` Dentistry Revenue
`
` All Other Revenue
`
` Total Segment Revenue
`
`Adj. Gross Profit (non-GAAP)1,2
`
` Adj. Gross Margin (non-GAAP)1,2
`
`Adj. Selling, A&P (non-GAAP)1
`
`Adj. G&A (non-GAAP)1,2
`
`Adj. R&D (non-GAAP)1
`
` Total Adj. Operating Expense (non-GAAP)1,2
`
`Adj. EBITA (non-GAAP)1,2
`
` Adj. EBITA Margin (non-GAAP)1,2
`
`Revenue % of total
`
`Adj. EBITA (non-GAAP)1,2% of total
`
`$302M
`
`$192M
`
`$81M
`
`$28M
`
`$1M
`
`$604M
`
`$507M
`
`84%
`
`$139M
`
`$28M
`
`$14M
`
`$181M
`
`$326M
`
`54%
`
`29%
`
`43%
`
`$340M
`
`$215M
`
`$72M
`
`$38M
`
`$0M
`
`$665M
`
`$562M
`
`84%
`
`$226M
`
`$19M
`
`$25M
`
`$270M
`
`$292M
`
`44%
`
`28%
`
`31%
`
`(11%)
`
`(11%)
`
`13%
`
`(26%)
`
`(9%)
`
`(10%)
`
`38%
`
`(47%)
`
`44%
`
`33%
`
`12%
`
`(11%)
`
`(11%)
`
`13%
`
`(26%)
`
`(9%)
`
`(10%)
`
`38%
`
`(47%)
`
`44%
`
`33%
`
`12%
`
`7
`
`1.
`2.
`
`3.
`
`See Slide 2 and Appendix for further non-GAAP information.
`The non-GAAP measures for historic periods are calculated using the former methodologies used as of that date. See Appendix for a presentation of the non-GAAP measures on the
`same basis for all periods presented and further information on the changes to the methodologies.
`See Appendix for further information on the use and calculation of constant currency.
`
`
`Page 8 of 46
`
`

`

`1Q17 Segment Results – Diversified
`
`As previously conveyed, LOEs drove declines in segment Adj. EBITA (non-GAAP )1,2
`
`Three Months Ended
`
`Favorable (Unfavorable)
`
`March 31, 2017
`
`March 31, 2016
`
`Reported
`
`Constant Currency3
`
` Neuro & Other Revenue
`
` Generics Revenue
`
` Solta Revenue
`
` Obagi Revenue
`
` Other Revenue
`
` Total Segment Revenue
`
`Adj. Gross Profit (non-GAAP)1,2
`
` Adj. Gross Margin (non-GAAP)1,2
`
`Adj. Selling, A&P (non-GAAP)1
`
`Adj. G&A (non-GAAP)1,2
`
`Adj. R&D (non-GAAP)1
`
` Total Adj. Operating Expense (non-GAAP)1,2
`
`Adj. EBITA (non-GAAP)1,2
`
` Adj. EBITA Margin (non-GAAP)1,2
`
`Revenue % of total
`
`Adj. EBITA (non-GAAP)1,2 % of total
`
`$243M
`
`$85M
`
`$8M
`
`$17M
`
`$2M
`
`$355M
`
`$303M
`
`85%
`
`$25M
`
`$12M
`
`$2M
`
`$39M
`
`$264M
`
`74%
`
`17%
`
`35%
`
`$422M
`
`$120M
`
`$6M
`
`$10M
`
`$3M
`
`$561M
`
`$506M
`
`90%
`
`$29M
`
`$10M
`
`$2M
`
`$41M
`
`(42%)
`
`(29%)
`
`33%
`
`70%
`
`(33%)
`
`(37%)
`
`(40%)
`
`14%
`
`(20%)
`
`0%
`
`5%
`
`$465M
`
`(43%)
`
`83%
`
`24%
`
`50%
`
`(42%)
`
`(29%)
`
`33%
`
`70%
`
`(33%)
`
`(37%)
`
`(40%)
`
`14%
`
`(20%)
`
`0%
`
`5%
`
`(43%)
`
`1.
`2.
`
`3.
`
`8
`
`See Slide 2 and Appendix for further non-GAAP information.
`The non-GAAP measures for historic periods are calculated using the former methodologies used as of that date. See Appendix for a presentation of the non-GAAP measures on the
`same basis for all periods presented and further information on the changes to the methodologies.
`See Appendix for further information on the use and calculation of constant currency.
`
`
`
`Page 9 of 46
`
`

`

`1Q17 Balance Sheet Summary
`
`From Q1 2016 through Q1 2017, we have reduced debt by approximately $3.4 billion and have $1.2B
`of cash on the balance sheet at the end of the quarter.
`
`We paid down an additional $220 million on May 1, 2017 for a total reduction of $3.6 billion since 1Q16.
`
`Cash and Equivalents
`
`Revolving credit drawn
`
`Senior Secured Debt2
`
`Senior Unsecured Debt2
`
`Total Debt2
`
`TTM3 Adj. EBITDA (non-GAAP)1,4
`
`As of March 31, 2017
`
`As of December 31, 2016
`
`As of March 31, 2016
`
`$1,210M
`
`$525M
`
`$10,605M
`
`$18,275M
`
`$28,880M
`
`$4,158M
`
`$542M
`
`$875M
`
`$10, 814M
`
`$19,355M
`
`$30,169M
`
`$4,304M
`
`$1,310M
`
`$1,450M
`
`$12,824M
`
`$19,484M
`
`$32,309M
`
`$5,247M
`
`See Slide 2 and Appendix for further non-GAAP information.
`Debt balances shown at principal value
`Trailing Twelve Months
`The non-GAAP measures for historic periods are calculated using the former methodologies used as of that date. See Appendix for a
`presentation of the non-GAAP measures on the same basis for all periods presented and further information on the changes to the
`methodologies.
`
`
`
`1.
`2.
`3.
`4.
`
`
`
`9
`
`Page 10 of 46
`
`

`

` Debt Maturity Profile
`
`Refinancing has provided a more comfortable maturity schedule through 2019
`and shifted to ~75% to fixed vs floating rate debt
`
`Maturity Profile as of March 31, 2017
`
`Remainder
`of 2017
`
`2018
`
`2019
`
`2020
`
`2021
`
`2022
`
`2023
`
`2024
`and beyond
`
`Maturities
`
`-
`
`$500M
`
`-
`
`$5,465M
`
`$3,175M
`
`$6,901M
`
`$5,848M
`
`$5,261M
`
`Mandatory
`Amortization1
`
`TOTAL
`
`$260M
`
`$346M
`
`$346M
`
`$346M
`
`$346M
`
`$86M
`
`-
`
`-
`
`$260M
`
`$846M
`
`$346M
`
`$5,811M
`
`$3,521M
`
`$6,987M
`
`$5,848M
`
`$5,261M
`
`1. Mandatory amortization is for Series F Tranche B Term Loan Facility subsequent to our March 2017 refinancing transactions. Does not reflect impact of ~$220M
`announced May 1, 2017 which lowers 2017 mandatory amortization to ~$40M.
`
`10
`
`Page 11 of 46
`
`

`

`1Q17 Cash Flow Summary
`
`Strong cash flow from operations driven by reduction in working capital
`
`Three Months Ended
`March 31, 2017
`
`Three Months Ended
`March 31, 2016
`
`Net (loss) income
`
` Net cash provided by operating activities
`
` Net cash (used in) provided by investing activities
`
` Net cash (used in) provided by financing activities
`
`Net increase in cash and cash equivalents
`
`Cash and cash equivalents end of period
`
`$628M
`
`$954M
`
`$1,148M
`
`($1,442M)
`
`$668M
`
`$1,210M
`
`($374M)
`
`$557M
`
`($112M)
`
`$260M
`
`$713M
`
`$1,310M
`
`11
`
`Page 12 of 46
`
`

`

`Full Year 2017 Guidance
`
`Increasing Adjusted EBITDA (non-GAAP)1 Guidance, while absorbing impact of skincare divestitures
`
`Prior Guidance (Feb. 2017)
`
`Current Guidance (May 2017)2
`
`Total Revenues
`
`Adjusted EBITDA (non-GAAP) 1
`
`$8.90B - $9.10B
`
`$3.55B - $3.70B
`
`$8.90B - $9.10B
`
`$3.60B - $3.75B
`
`Key Assumptions
`
`Prior Guidance (Feb. 2017)
`
`Current Guidance (May 2017) 2
`
`Adj. SG&A Expense (non-GAAP)1
`
`Adj. R&D Expense (non-GAAP)1
`
`Interest Expense3
`
`Adj. Tax Rate (non-GAAP)1
`
`Avg. Fully Diluted Share Count (M)
`
`NON-CASH ADJUSTMENTS INCLUDED ABOVE
`
` Depreciation
`
` Stock-Based Compensation
`
`ADDITIONAL CASH ITEM ASSUMPTIONS
`
` Capital Expenditures
`
` Contingent Consideration / Milestones
`
` Restructuring and Other
`
`$2.6-2.7B
`
`$420-435M
`
`~$1.85B
`
`16-18%
`
`~350
`
`~$170M
`
`~100M
`
`~$250M
`
`~$230M
`
`$290-330M
`
`12
`
`1.
`2.
`3.
`
`See Slide 2 and Appendix for further non-GAAP information.
`Current guidance does not assume sale of Dendreon.
`Includes ~$100M in non-cash amortization of deferred financing costs
`
`$2.6-2.7B
`
`$420-435M
`
`~$1.85B
`
`16-18%
`
`~350
`
`~$170M
`
`~100M
`
`~$250M
`
`~$230M
`
`$290-330M
`
`Page 13 of 46
`
`

`

`Full Year 2017 Adj. EBITDA (non-GAAP)1 Guidance Bridge
`
`2017
`Guidance
`as of
`February
`
`Impact of
`Skincare
`Divestiture
`
`LOE
`Upside
`
`Balance of
`Business
`
`Adj. EBITDA
`(non-GAAP)1
`$3.55 - $3.70B
`
`(~$70M)
`
`+~$110M
`
`+~$10M
`
`2017
`Guidance
`as of May
`
`Adj. EBITDA
`(non-GAAP)1
`$3.60 - $3.75B
`
`13
`
`1.
`
`See Slide 2 and Appendix for further non-GAAP information.
`
`
`Page 14 of 46
`
`

`

`Delivering on Commitment to Simplify Operating Model & Reduce Debt
`
`After announced transactions are completed, we will have generated asset sale proceeds of
`~$2.4B (upfront) and potential future milestones of $0.31B, or total potential proceeds of $2.7B
`
`Divestiture
`
`Date Closed
`
`Skincare Brands
`(CeraVe, AcneFree & AMBI)
`
`March 3, 2017
`
`Dendreon
`
`Continue to Expect Mid-Year
`
`Armoxindo (Indonesia)
`
`Expect 2Q
`
`Euvipharm (Vietnam)
`
`January 25, 2017
`
`Delta (Brazil)
`
`Synergetics OEM
`
`Ruconest
`
`April 20, 2017
`
`April 1, 2016
`
`December 7, 2016
`
`Brodalumab EU Rights
`
`June 30, 2016
`
`Paragon
`
`November 9, 2016
`
`Cosmederme (Canada)
`
`January 22, 2016
`
`We reiterate our August 2016 expectation to pay down $5B of debt from divestiture
` proceeds and free cash flow within 18 months of that statement (February 2018)
`
`14
`
`Page 15 of 46
`
`

`

`Bausch + Lomb/International Update
`
`Business Unit
`
`B+L/International
`
`1Q 2017
`Revenues
`
`$1,150M
`
`4Q 2016
`Revenues
`
`$1,260M
`
`3Q 2016
`Revenues
`
`$1,243M
`
`2Q 2016
`Revenues
`
`$1,278M
`
`1Q 2016
`Revenues
`
`$1,146M
`
`1Q17 Highlights
`
`• Adj. EBITDA (non-GAAP)1,2 growth +8% (constant
`currency)3
`
`• Contact lens leadership positions
`
`• China – 30% market share
`
`•
`
`India – 60% market share
`
`• Continued strength in China (30th anniversary)
`
`• PreserVision® and Ocuvite® are #1 leading ocular
`vitamin brands globally4
`
`Consumer Products
`
`• Biotrue® is #1 multi-purpose solution brand with
`highest loyalty metrics4
`
`• PreserVision® AREDS 2 Formula 120ct is #1 selling
`vitamin item in the U.S.4
`
`New Product
`Development
`
`• Vyzulta™* PDUFA Date – August 2017
`
`•
`
`Luminesse™* filed with PDUFA Date December
`2017
`
`1.
`2.
`
`3.
`4.
`
`See Slide 2 and Appendix for further non-GAAP information.
`The non-GAAP measures for historic periods are calculated using the former methodologies used as of that date. See Appendix for a presentation of the non-GAAP measures on the same
`basis for all periods presented and further information on the changes to the methodologies.
`See Appendix for further information on the use and calculation of constant currency.
`Source: IRI data
`
`* Provisional name pending FDA approval
`
`15
`
`Page 16 of 46
`
`

`

`GI Update
`
`Business Unit
`
`Salix
`
`1Q 2017
`Revenues
`
`$302M
`
`4Q 2016
`Revenues
`
`$414M
`
`3Q 2016
`Revenues
`
`$436M
`
`2Q 2016
`Revenues
`
`$341M
`
`1Q 2016
`Revenues
`
`$340M
`
`• Xifaxan® NRx Growth approximately flat Y/Y
`but growing ~10% January to March 2017
`
`1Q17 Prescription
`Highlights
`
`• Apriso® +9% TRx Growth Y/Y
`
`• Relistor® +12% TRx Growth Y/Y
`
`Xifaxan NRx 1Q17
`
`~10%
`
`PCP NRx Share Gains
`Trailing 8 wks
`
`+440bps
`
`31%
`30%
`29%
`28%
`27%
`26%
`25%
`24%
`23%
`
`33,000
`
`31,000
`
`29,000
`
`27,000
`
`25,000
`
`• Grew market share +200 bps since March 2017
`- recovering from field force disruption and
`impact from higher deductibles
`
`Pre-Expansion 8
`wks 2/17/17
`
`Post-Expansion 8
`wks 2/17/17
`
`Jan-17
`
`Feb-17 Mar-17
`
`Relistor 1Q17 TRx Performance
`
`Oral Relistor
`Launch
`
`Mar-17
`
`Feb-17
`
`Jan-17
`
`Dec-16
`
`Nov-16
`
`Oct-16
`
`Sep-16
`
`Aug-16
`
`Jul-16
`
`Jun-16
`
`May-16
`
`Apr-16
`
`Mar-16
`
`Feb-16
`
`Jan-16
`
`Relistor TRx
`
`Relistor NRx
`
`4,000
`
`3,000
`
`2,000
`
`Rx
`
`1,000
`
`0
`
`Xifaxan®
`
`• PCP market share has increased +440 bps since
`February 2017. Continue to expect ramp in
`2H17 due to salesforce expansion and progress
`
`•
`
`FDA draft guidance raises important questions
`about generic formulations
`
`• New writer growth of 26% since launch
`
`Relistor® Launch
`
`• PCP sales force also benefitting Relistor share
`
`• Covered lives over 80%
`
`16
`
`Source: Symphony IDV
`
`Page 17 of 46
`
`

`

`Delivering on Commitments in Dermatology: New Team & New Products
`
` Former CEO of Merz North America
`
` President of Stiefel, global leader in dermatology and skin
`health
`
` Led the global integration of Stiefel into GlaxoSmithKline
`
` Held multiple senior executive roles within Allergan, Inc.
`including VP of U.S. Skincare business.
`
`William D. Humphries
`EVP, Dermatology
`
`17
`
`Page 18 of 46
`
`

`

`Dermatology Update
`
`Business Unit
`
`Dermatology
`
`1Q 2017
`Revenues
`
`$192M
`
`4Q 2016
`Revenues
`
`$214M
`
`3Q 2016
`Revenues
`
`$223M
`
`2Q 2016
`Revenues
`
`$188M
`
`1Q 2016
`Revenues
`
`$215M
`
`Stabilized dermatology business
`
`• Recruited experienced team
`
`• Right-sized field force to ~150 territories
`
`• Undergoing a 9 city management tour to rebuild relationships
`
`1Q17 Highlights
`
`•
`
`Strong presence at 1Q17 dermatology and podiatry events to convey new company messages
`
`Focusing on Profitability
`
`•
`
`Stabilized ASPs and adjusted copay caps
`
`Reinvigorating Portfolio and Preparing for New Growth Driver
`
`• Preparing for launch of SILIQ™ and then IDP-118
`
`•
`
`SILIQ™ (brodalumab) approved Feb. 15, 2017; anticipated launch mid-year
`
`• Most competitively priced injectable biologic for the treatment of
`moderate-to-severe plaque psoriasis
`
`• Differentiated as an IL-17 blocker vs inhibitor and we are excited
`about efficacy profile
`
`• REMS program preparations ongoing
`
`SILIQTM Launch Update
`
`
`
`
`
`
`18
`
`Page 19 of 46
`
`

`

`Launching Products in 2017 to Drive Growth
`
`~ +50 Product Launches Expected Worldwide in 2017
`~ $100M in Expected Annualized Revenues
`
`VitesseTM
`
`19
`
`Page 20 of 46
`
`

`

`Innovating for Our Future
`
`LATE PHASE
`
`SUBMISSIONS
`
`LAUNCHES
`
`SAN-300 (Rheumatoid Arthritis) Phase II data read out H1
`enVista® Trifocal (Intraocular Lens) Initiate IDE study in H1
`•
`• New Material (Ophthalmic Viscosurgical Device); Initiate IDE in H1
`Loteprednol Gel 0.38% (Ocular Inflammation) Complete Phase III enrollment
`•
`IDP-120 (Acne) Initiate Phase III in H2
`IDP-123 (Psoriasis) Initiate Phase III in H2
`•
`• New Xifaxan® Formulation (New Indication) Initiate study in H2
`IDP-126 (Acne Combination) Initiate Phase I in H2
`•
`Teneo (Excimer laser); Initiate IDE study isn H2
`
`•
`
`•
`
`•
`
`
`
`
`
`•
`
`•
`
`•
`
`
`• Bausch + Lomb ULTRA® Extended Wear Indication – H1
`Luminesse* (Ocular redness) – H1, PDUFA December 27, 2017
`IDP-118 (Psoriasis) – H2
`IDP-121 (Acne Lotion) – H2
`IDP-122 (Psoriasis) – H2
`•
`• Next Generation Thermage – H1
`
`• Stellaris Elite™ – H1
`• Bausch + Lomb ULTRA® for Astigmatism lenses – H1
`• SILIQ™ (brodalumab) – Q3
`• VitesseTM – H2
`• Latanoprostene bunod (Vyzulta™*) – H2, PDUFA August 24, 2017
`
`20
`
`* Provisionally approved name
`
`Dates above are anticipated only, based on the Company’s current best estimate, and actual dates may occur earlier or later.
`
`Page 21 of 46
`
`

`

`Tangible Progress Toward Turnaround
`
`OUR MISSION
`Improve People’s Lives with our Healthcare Products
`
`STABILIZE
`2016
`
`TURNAROUND
`2017-2018
`
`TRANSFORM
`2018+
`
`Hired New Management Team
`
`Fixing Derm
`
`Growing Salix
`
`Paying down debt
`
`Stabilizing Salesforce
`
`2016-2017 Action Plan
`
`Added New Segment
`Transparency
`
`21
`
`Strengthen balance
`sheet
`
`Focus on specialty
`driven markets
`
`Focus on markets with
`above average growth
`rates
`
`Focus on leadership
`position and pipeline
`
`Efficient resource
`allocation
`
`Lead in our categories
`
`Launch new
`products
`
`Balance organic and
`inorganic growth
`
`Page 22 of 46
`
`

`

`Appendix
`Appendix
`
`‘ Pharmaceuticals International, Inc. Page 23 of 46
`
`22
`
`Page 23 of 46
`
`

`

`Key Product LOE / Divestiture Impact
`
`Business
`Unit
`
`Product Line with Actual or
`Anticipated LOE/Divestiture Date1
`
`2017 LOE/Divested Impact
`February Guidance
`
`2017 LOE/Divested Impact
`May Guidance
`
`February Guidance vs. May
`Guidance
`Favorable/(Unfavorable)
`
`Ophtha Rx
`
`•
`•
`
`Lotemax® LOE 3Q17 (anticipated)
`Istalol® LOE 4Q17 (anticipated)
`
`Int’l (2)
`
`• Divestitures Euvipharma 1Q17 and
`Armoxindo 2Q17 (anticipated)
`• Glumetza® LOE 1Q17
`• Wellbutrin® XL add’t Gx 3Q16
`Sublinox® add’t Gx Jan 2017
`•
`
`Revenue
`
`Profit
`
`Revenue
`
`Profit
`
`Revenue
`
`Profit
`
`~($54M)
`
`~($54M)
`
`~($61M)
`
`~($59M)
`
`~($7M)
`
`~($5M)
`
`($17M)
`
`~($10M)
`
`($20M)
`
`~($10M)
`
`~($3M)
`
`$ -
`
`BAUSCH + LOMB / INTERNATIONAL
`
`~($71M)
`
`($64M)
`
`~($81M)
`
`($69M)
`
`~($10M)
`
`($5M)
`
`Salix
`
`BRAND Rx
`
`Neuro &
`Other
`
`•
`•
`
`Ruconest® Divested Dec. 2016
`Zegerid® LOE July 2016
`
`~($60M)
`
`~($45M)
`
`~($58M)
`
`~($45M)
`
`~($60M)
`
`($45M)
`
`~($58M)
`
`($45M)
`
`~$2M
`
`~$2M
`
`$ -
`
`$ -
`
`• Nitropress® LOE Dec 2016
`• Ammonul® LOE 1Q16
`Edecrin® LOE 3Q16
`•
`Bupap® LOE 1Q17
`•
`Xenazine® Gx and brand
`•
`competition 2Q17 (anticipated)
`Virazole® LOE Dec 2016
`Syprine® & Mephyton LOE 2Q17
`(anticipated)
`Isuprel® LOE Q417 (anticipated)
`
`•
`•
`
`•
`
`~($565M)
`
`~($520M)
`
`~($443M)
`
`~($403M)
`
`~$122M
`
`~$117M
`
`Generics
`
`•
`
`Zegerid AG® LOE July 2016
`
`~($90M)
`
`~($85M)
`
`~($93M)
`
`~($89M)
`
`~($3M)
`
`~($4M)
`
`$113M
`
`DIVERSIFIED
`
`OVERALL COMPANY
`
`~($655M)
`
`($605M)
`
`~($536M)
`
`($492M)
`
`~$119M
`
`~($785M)
`
`~($715M)
`
`~($675M)
`
`~($606M)
`
`~$110M
`
`~$109M
`
`23
`
`1.
`2.
`
`
`
`Anticipated date of loss of exclusivity or divestiture is based on the Company’s current best estimate and actual date of LOE or divestiture, as the case may be, may occur earlier or later.
`Canada is presented as part of the B&L/International segment. Previously Canada was presented as part of the Branded Rx segment.
`
`Page 24 of 46
`
`

`

`1Q17 Other Financial Information1
`
`Three Months Ended
`
`Favorable (Unfavorable)
`
`March 31, 2017
`
`March 31, 2016
`
`Reported
`
`Constant Currency3
`
`Cash Interest Expense
`
`Net Interest Expense1,2
`
`Non-cash adjustments
`
`Depreciation1,2
`
`Non-cash share-based Comp1,2
`
`Additional cash items
`
`Contingent Consideration /
`Milestones
`
`Restructuring and Other
`
`Capital Expenditures
`
`Tax rate on Adj. EBT
`& Other Revenue
`
`$431M
`
`$471M
`
`$39M
`
`$28M
`
`$8M
`
`$29M
`
`$38M
`
`15.5%
`
`$406M
`
`$405M
`
`$45M
`
`$39M
`
`$26M
`
`$39M
`
`$62M
`
`15.0%
`
`(6%)
`
`(16%)
`
`13%
`
`28%
`
`(6%)
`
`(16%)
`
`11%
`
`28%
`
`1.
`2.
`
`3.
`
`See Slide 2 and Appendix for further non-GAAP information.
`Presentation reflects non-GAAP adjustments included in the three months ended March 31, 2016. The adjustments recorded for interest expense,
`depreciation, and non-cash share-based compensation were $21M, $3M and ($1M), respectively. These non-GAAP adjustments are no longer recorded in 2017.
`See Appendix for further information on the use and calculation of constant currency.
`
`
`24
`
`Page 25 of 46
`
`

`

`Non-GAAP Adjustments EPS Impact (Quarter-to-Date)
`
`(a) This subtotal reflects the Adjusted Net income(loss) (non-GAAP) reported by the Company for the period ended March 31, 2016 using the methodology for calculating
`Adjusted Net Income(loss) (non-GAAP) as of that date.
`
`(b) As of the third quarter of 2016, Adjusted net income(loss) (non-GAAP) no longer includes adjustments for the following items: Depreciation resulting from a PP&E step-up
`resulting from acquisitions and Previously accelerated vesting of certain share-based equity adjustments. Depreciation resulting from a PP&E step-up resulting from acquisitions
`was a component of Acquisition-related adjustments excluding amortization of intangible assets. Previously accelerated vesting of certain share-based equity adjustments was a
`component of Other non-GAAP charges. As of the first quarter of 2017, Adjusted net income(loss) (non-GAAP) al