2Q
`
`17
`
`Page 1 of 68
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1574
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

`

`Forward-Looking Statements
`
`This presentation contains forward-looking information and statements,
`
`that could cause actual results and events to differ materially from those
`
`within the meaning of applicable securities laws (collectively, “forward -
`
`described in these forward-looking statements. These risks and
`
`looking statements”), including, but not limited to, statements regarding
`
`uncertainties include, but are not limited to, the risks and uncertainties
`
`Valeant's future prospects and performance (including the Company’s
`
`discussed in the Company's most recent annual and quarterly reports and
`
`updated 2017 full-year guidance), the expected date for the completion of
`
`detailed from time to time in the Company's other filings with the Securities
`
`the redemption of certain of the Company’s senior notes and the
`
`and Exchange Commission and the Canadian Securities Administrators,
`
`anticipated impact of such redemption, the Company’s expectations with
`
`which risks and uncertainties are incorporated herein by reference. In
`
`respect to debt reduction and paydown (including the Company’s ability to
`
`addition, certain material factors and assumptions have been applied in
`
`exceed its commitment to pay down $5 billion in debt from divestitures
`
`making these forward-looking statements (including the Company’s 2017
`
`proceeds and free cash flow by February 2018), the anticipated timing of
`
`full-year guidance), including that the risks and uncertainties outlined above
`
`the closing of the divestitures of the iNova Pharmaceuticals and Obagi
`
`will not cause actual results or events to differ materially from those
`
`Medical Products businesses, the timing and number of expected product
`
`described in these forward-looking statements, and additional information
`
`launches and the anticipated revenues from new and recent product
`
`regarding certain of these material factors and assumptions may also be
`
`launches, the anticipated submission, approval and launch dates for certain
`
`found in the Company’s filings described above. The Company believes
`
`of our pipeline products and R&D programs, the anticipated timing of
`
`that the material factors and assumptions reflected in these forward -looking
`
`receipt of clinical and pre-clinical results or data for certain of our pipeline
`
`statements are reasonable, but readers are cautioned not to place undue
`
`products and R&D programs, the anticipated timing of the loss of exclusivity
`
`reliance on any of these forward-looking statements. These forward-looking
`
`of certain of our products and the expected impact of such loss of
`
`statements speak only as of the date hereof. Valeant undertakes no
`
`exclusivity on our financial condition, and the Company’s mission (and the
`
`obligation to update any of these forward-looking statements to reflect
`
`elements thereof) and the Company’s plans, commitments and
`
`expectations for 2017. 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 forward-looking statements, including the Company’s updated full-
`
`year guidance, are based upon the current expectations and beliefs of
`
`management and are provided for the purpose of providing additional
`
`information about such expectations and beliefs and readers are cautioned
`
`events or circumstances after the date of this presentation or to reflect
`actual outcomes, unless required by law.
`
`The guidance in this presentation is only
`effective as of the date given, August 8, 2017,
`and will not be updated or affirmed unless and
`until the Company publicly announces updated
`or affirmed guidance.
`
`that these statements may not be appropriate for other purposes. These
`
`
`
`forward-looking statements are subject to certain risks and uncertainties
`
`1
`
`Page 2 of 68
`
`

`

`Non-GAAP Information
`
`Recent Assessment of Financial Performance Measures
`
`Use of Non-GAAP Generally
`
`Recently, the Company’s new management team undertook an evaluation
`
`appropriate to better reflect the underlying business. For example,
`
`of how it would measure the financial performance of the Company going
`
`commencing with the first quarter of 2017, Adjusted EBITDA (non -GAAP)
`
`forward. In evaluating its financial performance measures, the Company
`
`no longer includes adjustments for Foreign exchange gain/loss arising from
`
`considered its recent changes to its strategy (which included a transition
`
`intercompany transactions.
`
`away from growth by acquisition with a greater focus on R&D activity,
`
`
`
`strengthening of the balance sheet through the paydown of debt and
`
`The Company began to use these new non-GAAP measures, and the new
`
`rationalization of the product portfolio through divestitures of non -core
`
`methodologies used to calculate these non-GAAP measures, commencing
`
`assets) and sought to identify performance measures that best reflect the
`
`with the first quarter of 2017. For the purposes of the Company’s actual
`
`Company’s current business operations, strategy and goals. As a result of
`
`results for the first half and second quarter of 2016, the Company has
`
`that evaluation, new management identified the following primary financial
`
`calculated and presented the non-GAAP measures using the historic
`
`performance measures for the Company: GAAP Revenues (measure for
`
`methodologies in place as of the applicable historic dates; however, the
`
`both guidance and actual results), GAAP Net Income (measure for actual
`
`Company has also provided a reconciliation that calculates the non -GAAP
`
`results), Adjusted EBITDA (non-GAAP) (measure for both guidance and
`
`measures using the new methodologies, to allow investors and readers to
`
`actual results) and GAAP Cash Flow from Operations (measure for actual
`
`evaluate the non-GAAP measures (such as Adjusted EBITDA) on the same
`
`results). These measures were selected as the Company believes that
`
`basis for the periods presented.
`
`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 non-GAAP measures and made updates where it deemed
`
`2
`
`Page 3 of 68
`
`

`

`Non-GAAP Information
`
`Recent Assessment of Financial Performance Measures
`
`Use of Non-GAAP Generally
`
`To supplement the financial measures prepared in accordance with U.S.
`
`the GAAP equivalent for certain costs, such as amortization, that would
`
`generally accepted accounting principles (GAAP), the Company uses certain
`
`otherwise be treated as a non-GAAP adjustment to calculate projected GAAP
`
`non-GAAP financial measures including (i) Adjusted EBITDA, (ii) Adjusted
`
`net income (loss). However, because other deductions (e.g., restructuring,
`
`EBITA, (iii) Adjusted EBITA Margin, (iv) Adjusted Operating Income, (v)
`
`gain or loss on extinguishment of debt and litigation and other matters) used
`
`Adjusted Gross Profit, (vi) Adjusted Gross Margin, (vii) Adjusted Selling A&P,
`
`to calculate projected net income (loss) may vary significantly based on actual
`
`(viii) Adjusted G&A, (ix) Adjusted SG&A, (x) Adjusted R&D, (xi) Total Adjusted
`
`events, the Company is not able to forecast on a GAAP basis with reasonable
`
`Operating Expense, (xii) Adjusted Net Income, (xiii) Organic Growth and (xiv)
`
`certainty all deductions needed in order to provide a GAAP calculation of
`
`Organic Change. These measures do not have any standardized meaning
`
`projected net income (loss) at this time. The amounts of these deductions
`
`under GAAP and other companies may use similarly titled non-GAAP financial
`
`may be material and, therefore, could result in GAAP net income (loss) being
`
`measures that are calculated differently from the way we calculate such
`
`materially different from (including materially less than) projected Adjusted
`
`measures. Accordingly, our non-GAAP financial measures may not be
`
`EBITDA (non-GAAP).
`
`comparable to similar non-GAAP measures. We caution investors not to place
`
`
`
`undue reliance on such non-GAAP measures, but instead to consider them
`
`Management uses these non-GAAP measures as key metrics in the
`
`with the most directly comparable GAAP measures. Non-GAAP financial
`
`evaluation of Company performance and the consolidated financial results
`
`measures have limitations as analytical tools and should not be considered in
`
`and, in part, in the determination of cash bonuses for its executive officers.
`
`isolation. They should be considered as a supplement to, not a substitute for,
`
`The Company believes these non-GAAP measures are useful to investors in
`
`or superior to, the corresponding measures calculated in accordance with
`
`their assessment of our operating performance and the valuation of our
`
`GAAP.
`
`
`
`Company. In addition, these non-GAAP measures address questions the
`
`Company routinely receives from analysts and investors and, in order to
`
`The reconciliations of these historic non-GAAP measures to the most directly
`
`assure that all investors have access to similar data, the Company has
`
`comparable financial measures calculated and presented in accordance with
`
`determined that it is appropriate to make this data available to all investors.
`
`GAAP are shown in the appendix hereto. However, for guidance purposes,
`
`However, non-GAAP financial measures are not prepared in accordance with
`
`the Company does not provide reconciliations of projected Adjusted EBITDA
`
`GAAP, as they exclude certain items as described herein. Therefore, the
`
`(non-GAAP) to projected GAAP net income (loss), due to the inherent
`
`information is not necessarily comparable to other companies and should be
`
`difficulty in forecasting and quantifying certain amounts that are necessary for
`
`considered as a supplement to, not a substitute for, or superior to, the
`
`such reconciliations. In periods where significant acquisitions or divestitures
`
`corresponding measures calculated in accordance with GAAP.
`
`are not expected, the Company believes it might have a basis for forecasting
`
`3
`
`Page 4 of 68
`
`

`

`1.
`
`Opening Remarks &
`2Q17 Progress Highlights
`
`2.
`
`2Q17 Financial Results
`
`3.
`
`FY2017 Guidance
`
`4.
`
`Segment Highlights &
`2017 Catalysts
`
`4
`
`Page 5 of 68
`
`

`

`Tangible Progress Toward Turnaround
`
`O U R M I S S I O N :
`
`Improve people’s lives with our health care 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
`
`Strengthen balance sheet
`
`Focus on specialty driven
`markets
`
`Focus on markets with above
`average growth rates
`
`Focus on leadership position
`and pipeline
`
`Allocate resources efficiently
`
`Become category leader
`
`Launch new products
`
`Balance organic and inorganic
`growth
`
`5
`
`Page 6 of 68
`
`

`

`Performance Since Last Quarter’s Call
`
`P O S I T I V E S
`
`Execution
`• Bausch + Lomb / International, representing 56% of
`Valeant’s revenue, generated organic revenue growth1,2 of
`6%
`• Strong Asia growth in Bausch + Lomb / International led
`by China organic revenue growth1,2 of 9%
`
`Pipeline and Launches
`• Successful product launches, including SILIQ™
`(brodalumab) and AQUALOX® bi-weekly contact
`lenses
`
`•
`
`Introduced Bausch + Lomb renu® Advanced Formula
`multi-purpose contact lens solution
`
`• Salix, the largest portion of the Branded Rx segment,
`generated organic revenue growth1,2 of 16%, driven by
`new sales team and better execution
`• XIFAXAN® (rifaximin) revenues grew 16% compared to
`the second quarter of 2016
`
`• Received filing acceptance from the U.S. Food and
`Drug Administration (FDA) for the new drug
`application for PLENVU® * (NER1006) and
`Luminesse™* (brimonidine tartrate ophthalmic
`solution, 0.025%)
`
`• Adjusted EBITDA (non-GAAP)1 sequential increase of 10%
`to $951 Million
`
`•
`
`Investing in the core business
`• $100M in expected annualized revenues from new
`products in 2017
`
`• Launched Vitesse™ vitreous cutter
`
`• Launched Stellaris Elite™ vision enhancement
`system
`
`• Preparing for additional dermatology submissions to
`the FDA in 2H
`
`6
`
`1. See Slides 2 and 3 and Appendix for further non-GAAP information.
`2. Organic growth, a non-GAAP metric, is defined as an increase on a year-over-
`year basis in revenues on a constant currency basis (if applicable) excluding the
`impact of divestitures and discontinuations.
`* Provisional name pending FDA approval
`
`Page 7 of 68
`
`

`

`Performance Since Last Quarter’s Call
`
`P O S I T I V E S
`
`Divestitures / Debt Reduction
`• Expect to exceed commitment to pay down $5 billion in
`debt from divestiture proceeds and free cash flow
`before February 2018
`
`• Completed sale of Dendreon to Sanpower Group and
`used net proceeds to pay down $811 million of senior
`secured term loans
`
`• Announced agreements to sell iNova Pharmaceuticals
`and Obagi Medical Products businesses for $930
`million and $190 million in cash, respectively
`
`• Announced ~$3.8 billion1 in total asset sales since
`beginning of 2016
`
`• Will redeem the remaining $500 million aggregate
`principal amount of our outstanding 6.75% Senior
`Notes due 2018, using cash on hand, on August 15,
`2017
`
`
`
`
`
`
`
`7
`
`
`
`• Upon redemption of $500 million aggregate principal
`amount of our outstanding 6.75% Senior Notes due
`2018, the Company expects to:
`
`• Have reduced total debt by more than $4.8 billion
`since the end of the first quarter of 2016
`
`• Have no debt maturities and no mandatory
`amortization requirements until 2020
`
`1. Includes future expected milestones.
`
`* Provisional name pending FDA approval
`
`Page 8 of 68
`
`

`

`Performance Since Last Quarter’s Call
`
`C H A L L E N G E S
`
`Dermatology
`• Continuing to focus on stabilizing dermatology business
`• Launched SILIQ™ injection in the United States as
`the lowest-priced injectable biologic for moderate-to-
`severe plaque psoriasis
`• Rebranded the business unit as Ortho
`Dermatologics®
`• Continuing to build out new management team,
`including new sales and marketing leadership
`
`
`
`Resolving Legacy Issues
`• Improved inventory management to better meet
`customer needs
`• Working to resolve manufacturing quality issues at
`Tampa
`
`Resolving Legal Legacy Issues
`• Achieving positive outcomes in resolving and managing
`litigation, investigations and inquiries, including:
`• Settling the Salix securities class action litigation 1
`• Closing of the investigation by the State of New
`Jersey Department of Law and Public Safety,
`Division of Consumer Affairs, Bureau of Securities
`relating to Philidor matters
`• Dismissal of the Salix shareholder class actions
`relating to the merger with Salix
`• Closure of the voluntary request letter from the U.S.
`Federal Trade Commission relating to Paragon
`• Completing and satisfying all inquiries from the U.S.
`Senate Special Committee on Aging and U.S. House
`Committee on Oversight and Government Reform
`relating to pricing
`• Successfully obtaining dismissals in some of the
`Shower to Shower cases
`
`
`
`8
`
`1. On Feb. 8, 2017, the Company agreed to settle the Salix securities class action litigation for
`$210M. The settlement has been approved by the court. Reflective of insurance refunds
`received as of June 30, 2017, the Company made $190M in net payments during the second
`quarter of 2017. In total, the Company expects to receive a total of $60M of insurance refund
`proceeds related to this matter.
`
`Page 9 of 68
`
`

`

`Key Financial Highlights
`
`Q2 Revenue
`(% Organic Growth Y/Y)1
`
`Q2 Adj. EBITA
`(EBITA %)
`(non-GAAP)2,3
`
`Bausch +
`Lomb/International
`
`$1,241M
`6%
`
`Branded Rx
`
`U.S. Diversified
`Products
`
`Total
`
`$636M
`0%
`
`$356M
`(27%)
`
`$2,233M
`(3%)
`
`$377M
`30%
`
`$341M
`54%
`
`$255M
`72%
`
`$847M
`38%
`
`Strong topline and Adjusted EBITA (non-GAAP)2
`performance from Bausch + Lomb/International
`and Salix; Stabilizing Dermatology
`
`9
`
`1. Organic growth, a non-GAAP metric, is defined as an increase on a year-over-year basis in
`revenues on a constant currency basis (if applicable) excluding the impact of divestitures and
`discontinuations.
`2. See Slides 2 and 3 and Appendix for further non-GAAP information.
`3. Total Adjusted EBITA does not include corporate charges.
`
`+6%
`
`B+L / International
`Organic Segment
`Revenue Growth1,2
`versus Q2 2016
`
`+16%
`
`Salix Organic
`Revenue Growth1,2
`versus Q2 2016
`
`Page 10 of 68
`
`

`

`2Q
`
`17
`
`Financial Results
`
`Revenues
`
`GAAP NI
`
`Three Months Ended
`
`6.30.17
`
`6.30.16
`
`Reported
`
`$2,233M
`
`$2,420M
`
`(8%)
`
`($38M)
`
`($302M)
`
`87%
`
`Constant
`Currency3
`
`(5%)
`
`83%
`
`Adj. NI (non-GAAP)1,2
`~350 Million Shares Outstanding
`
`$362M
`
`$487M
`
`(26%)
`
`(29%)
`
`GAAP EPS
`
`($0.11)
`
`($0.88)
`
`88%
`
`80%
`
`GAAP CF from Operations
`
`$268M
`
`$448M
`
`(40%)
`
`Adj. Gross Profit (non-GAAP) 1,2
`
`$1,587M
`
`$1,779M
`
`(11%)
`
`(9%)
`
`Adj. Gross Margin (non-GAAP) 1,2
`
`71%
`
`74%
`
`Adj. Selling, A&P (non-GAAP) 1
`
`$490M
`
`$509M
`
`4%
`
`Adj. G&A (non-GAAP)1,2
`
`$156M
`
`$154M
`
`(1%)
`
`Adj. R&D (non-GAAP)1
`
`$94M
`
`$107M
`
`12%
`
`2%
`
`(2%)
`
`11%
`
`Total Adj. Operating Expense (non-
`GAAP)1,2
`
`$740M
`
`$770M
`
`4%
`
`2%
`
`Adj. EBITA (non-GAAP)1,2
`
`$847M
`
`$1,009M
`
`(16%)
`
`(14%)
`
`Adj. EBITDA (non-GAAP) 1,2
`
`$951M
`
`$1,087M
`
`(13%)
`
`(14%)
`
`10
`
`1. See Slides 2 and 3 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.
`3. See Appendix for further information on the
`use and calculation of constant currency.
`
`Page 11 of 68
`
`

`

`2Q
`
`17
`
`Segment Results
`
`Bausch + Lomb / International
`
`Three Months Ended
`
`6.30.17
`
`6.30.16
`
`Reported
`
`Constant
`Currency3
`
`Organic
`Change1,4
`
`Global Vision Care
`
`$187M
`
`$196M
`
`Global Surgical
`
`$178M
`
`$180M
`
`Global Consumer
`
`$379M
`
`$410M
`
`Global Ophtho Rx
`
`$167M
`
`$162M
`
`International
`
`$330M
`
`$329M
`
`(5%)
`
`(1%)
`
`(8%)
`
`3%
`
`0%
`
`$1,241M
`
`$1,277M
`
`(3%)
`
`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
`
`11
`
`(3%)
`
`1%
`
`(7%)
`
`4%
`
`14%
`
`1%
`
`(2%)
`
`1%
`
`3%
`
`4%
`
`17%
`
`6%
`
`+6%
`
`B+L / International
`Organic Segment
`Revenue Growth1,4
`
`1. See Slides 2 and 3 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.
`3. See Appendix for further information on the use and
`calculation of constant currency.
`4. Organic growth, a non-GAAP metric, is defined as an
`increase on a year-over-year basis in revenues on a
`constant currency basis (if applicable) excluding the
`impact of divestitures and discontinuations.
`
`$768M
`
`$808M
`
`(5%)
`
`(1%)
`
`62%
`
`63%
`
`$319M
`
`$343M
`
`$51M
`
`$21M
`
`$56M
`
`$23M
`
`$391M
`
`$422M
`
`7%
`
`9%
`
`9%
`
`7%
`
`$377M
`
`$386M
`
`(2%)
`
`4%
`
`7%
`
`9%
`
`5%
`
`3%
`
`30%
`
`56%
`
`45%
`
`30%
`
`53%
`
`38%
`
`Page 12 of 68
`
`

`

`2Q
`
`17
`
`Segment Results
`
`Branded Rx
`
`Three Months Ended
`
`6.30.17
`
`6.30.16
`
`Reported
`
`Constant
`Currency3
`
`Organic
`Change1,4
`
`16%
`
`(31%)
`
`15%
`
`(20%)
`
`(50%)
`
`0%
`
`Salix Revenue
`
`$387M
`
`$341M
`
`13%
`
`13%
`
`Dermatology Revenue
`
`$130M
`
`$188M
`
`(31%)
`
`(31%)
`
`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
`
`$83M
`
`$35M
`
`$1M
`
`$77M
`
`$45M
`
`$2M
`
`8%
`
`8%
`
`(22%)
`
`(22%)
`
`(50%)
`
`(50%)
`
`$636M
`
`$653M
`
`(3%)
`
`(3%)
`
`$526M
`
`$548M
`
`(4%)
`
`(4%)
`
`83%
`
`84%
`
`$144M
`
`$139M
`
`(4%)
`
`(4%)
`
`$26M
`
`$15M
`
`$19M
`
`$25M
`
`(37%)
`
`(37%)
`
`40%
`
`40%
`
`$185M
`
`$183M
`
`(1%)
`
`(1%)
`
`$341M
`
`$365M
`
`(7%)
`
`(7%)
`
`54%
`
`28%
`
`40%
`
`56%
`
`27%
`
`36%
`
`12
`
`+16%
`
`Salix Organic
`Revenue Growth1,4
`
`1. See Slides 2 and 3 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.
`3. See Appendix for further information on the use
`and calculation of constant currency.
`4. Organic growth, a non-GAAP metric, is defined as
`an increase on a year-over-year basis in revenues
`on a constant currency basis (if applicable)
`excluding the impact of divestitures and
`discontinuations.
`
`Page 13 of 68
`
`

`

`2Q
`
`17
`
`Segment Results
`
`U.S. Diversified Products
`
`Three Months Ended
`
`6.30.17
`
`6.30.16
`
`Reported
`
`Constant
`Currency3
`
`Organic
`Change1,4
`
`(28%)
`
`(33%)
`
`50%
`
`14%
`
`100%
`
`(27%)
`
`Neuro & Other Revenue
`
`$248M
`
`$344M
`
`(28%)
`
`(28%)
`
`Generics Revenue
`
`$82M
`
`$122M
`
`(33%)
`
`(33%)
`
`Solta Revenue6
`
`Obagi Revenue6
`
`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
`
`$9M
`
`$6M
`
`$16M
`
`$14M
`
`50%
`
`14%
`
`50%
`
`14%
`
`$1M
`
`$4M
`
`(75%)
`
`(75%)
`
`$356M
`
`$490M
`
`(27%)
`
`(27%)
`
`$292M
`
`$422M
`
`(31%)
`
`(31%)
`
`83%
`
`86%
`
`$27M
`
`$27M
`
`$9M
`
`$1M
`
`$10M
`
`$2M
`
`$37M
`
`$39M
`
`0%
`
`10%
`
`50%
`
`5%
`
`0%
`
`10%
`
`50%
`
`5%
`
`$255M
`
`$383M
`
`(33%)
`
`(33%)
`
`72%
`
`16%
`
`30%
`
`78%
`
`20%
`
`38%
`
`As expected, LOEs5
`for a basket of
`products drove more
`than two thirds of the
`decline in segment
`revenue and
`Adjusted EBITA
`(non-GAAP)1,2
`
`Continue to generate
`significant cash flow
`
`1. See Slides 2 and 3 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.
`3. See Appendix for further information on the use and
`calculation of constant currency.
`4. Organic growth, a non-GAAP metric, is defined as an
`increase on a year-over-year basis in revenues on a
`constant currency basis (if applicable) excluding the
`impact of divestitures and discontinuations.
`5. Loss of exclusivity
`6. Revenue represents the U.S. portion only of these
`businesses. International contributions are included
`in the B+L/International segment.
`
`13
`
`Page 14 of 68
`
`

`

`2Q
`
`17
`
`Balance Sheet Summary
`
`As of
`6.30.17
`
`As of
`3.31.17
`
`As of
`12.31.16
`
`As of
`9.30.16
`
`As of
`6.30.16
`
`Cash, cash
`equivalents,
`and restricted
`cash
`
`Revolving
`credit drawn
`
`Senior Secured
`Debt2
`
`Senior
`Unsecured
`Debt2
`
`Total Debt2
`
`TTM3 Adj.
`EBITDA
`(non-GAAP)1,4
`
`$2,025M
`
`$1,210M
`
`$542M
`
`$659M
`
`$852M
`
`$525M
`
`$525M
`
`$875M
`
`$1,100M
`
`$1,350M
`
`$10,385M
`
`$10,605M
`
`$10,814M
`
`$11,333M
`
`$11,977M
`
`$18,393M
`
`$18,275M
`
`$19,355M
`
`$19,462M
`
`$19,443M
`
`$28,778M
`
`$28,880M
`
`$30,169M
`
`$30,795M
`
`$31,420M
`
`$4,023M
`
`$4,158M
`
`$4,304M
`
`$4,628M
`
`$4,936M
`
`14
`
`1. See Slides 2 and 3 and Appendix for further non-GAAP information.
`2. Debt balances shown at principal value.
`3. Trailing Twelve Months
`4. 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.
`
`Upon redemption of
`the remaining $500
`million aggregate
`principal amount of
`our outstanding
`6.75% Senior Notes
`due 2018, the
`Company expects to
`have reduced total
`debt by more than
`$4.8 billion since
`the end of the first
`quarter of 2016
`
`Used net proceeds
`from sale of
`Dendreon to pay
`down $811 million
`of senior secured
`term loans on July 3
`
`Page 15 of 68
`
`

`

`Proforma Long-Term Debt Maturity
`Profile as of August 15, 20171
`
`Remainder
`of 2017
`
`2018
`
`2019
`
`2020
`
`2021
`
`2022
`
`2023
`
`2024
`and beyond
`
`Debt Maturities
`
`$0
`
`Mandatory
`Amortization2
`
`TOTAL
`
`$0
`
`$0
`
`$0
`
`$0
`
`$0
`
`$0
`
`$5,465M
`
`$3,175M
`
`$6,901M
`
`$5,964M
`
`$5,261M
`
`$0
`
`$267M
`
`$346M
`
`$86M
`
`$0
`
`$0
`
`$0
`
`$5,732M
`
`$3,521M
`
`$6,987M
`
`$5,964M
`
`$5,261M
`
`Used net proceeds from sale of Dendreon to pay down $811 million of senior secured
`term loans on July 3
`
`Upon redemption of the remaining $500 million aggregate principal amount of our
`outstanding 6.75% Senior Notes due 2018, the Company will have no debt maturities
`and no mandatory amortization requirements until 2020, which provides greater
`financial flexibility
`
`As of June 30, 2017, ~75% of our debt is now fixed rate debt which provides protection
`against rising rates
`
`15
`
`1. Reflects the payment of $811M in term loans from sale of Dendreon and the 500
`million redemption of the 2018 bonds.
`2. Repayment using Dendreon proceeds applied to all remaining mandatory
`amortization in 2017 through 2019 and $79M of mandatory amortization in 2020.
`
`Page 16 of 68
`
`

`

`2Q
`
`17
`
`Cash Flow Summary
`
`Three Months
`Ended 6.30.17
`
`Three Months
`Ended 6.30.16
`
`Six Months
`Ended 6.30.17
`
`Six Months
`Ended 6.30.16
`
`Net (loss) income1
`
`($37M)
`
`($304M)
`
`$592M
`
`($677M)
`
`Net cash provided by
`operating activities
`
`Net cash provided by
`(used in) investing
`activities
`
`Net cash (used in)
`provided by financing
`activities
`
`Net increase in cash,
`cash equivalents and
`restricted cash
`
`Cash, cash
`equivalents, and
`restricted cash at end
`of period
`
`$268M
`
`$448M
`
`$1,222M
`
`$1,005M
`
`$780M
`
`$50M
`
`$1,928M
`
`($62M)
`
`($249M)
`
`($951M)
`
`($1,691M)
`
`($691M)
`
`$815M
`
`($458M)
`
`$1,483M
`
`$255M
`
`$2,025M
`
`$852M
`
`$2,025M
`
`$852M
`
`Generated $1.222
`billion in cash
`flow from
`operations for the
`six months ending
`June 30, 2017. In
`the second quarter,
`generated
`normalized cash
`flow from
`operations of $458
`million, excluding
`the impact of $190
`million of net
`payments made in
`resolution of the
`Salix securities
`class action
`litigation.2
`
`16
`
`1. Net (loss) income before net income (loss) of non-controlling interests.
`2. On Feb. 8, 2017, the Company agreed to settle the Salix securities class action
`litigation for $210M. The settlement has been approved by the court. Reflective of
`insurance refunds received as of June 30, 2017, the Company made $190M in net
`payments during the second quarter of 2017. In total, the Company expects to receive
`a total of $60M of insurance refund proceeds related to this matter.
`
`Page 17 of 68
`
`

`

`Updates Full-Year 2017 Revenue Guidance,
`Maintains Adjusted EBITDA (non-GAAP)1 Guidance
`
`Prior Guidance
`(Feb. 2017)
`
`Prior Guidance
`(May 2017)
`
`Current Guidance
`(Aug. 2017)2
`
`Total Revenues
`
`$8.90B - $9.10B
`
`$8.90B - $9.10B
`
`$8.70B - $8.90B
`
`Adjusted EBITDA (non-GAAP)1
`
`$3.55B - $3.70B
`
`$3.60B - $3.75B
`
`$3.60B - $3.75B
`
`Key Assumptions
`
`Prior Guidance
`(Feb. 2017)
`
`Prior Guidance
`(May 2017)
`
`Current Guidance
`(Aug. 2017)2
`
`Adj. SG&A Expense (non-GAAP)1
`
`$2.6-2.7B
`
`$2.6-2.7B
`
`Adj. R&D Expense (non-GAAP)1
`
`$420-435M
`
`$420-435M
`
`Interest Expense
`
`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
`
`~$1.85B
`
`16-18%
`
`~350
`
`~$170M
`
`~$100M
`
`~$1.85B
`
`16-18%
`
`~350
`
`~$170M
`
`~$100M
`
` Capital Expenditures
`
`~$250M
`
`~$250M
`
` Contingent Consideration /
` Milestones
`
`~$230M
`
`~$230M
`
`$2.5-2.6B
`$420-435M
`~$1.82B
`15-17%
`~350
`
`~$170M
`~$100M
`
`~$175M
`
`~$270M
`
` Restructuring and Other
`
`$290-330M
`
`$290-330M
`
`$240-280M
`
`17
`
`1. See Slides 2 and 3 and Appendix for further non-GAAP information.
`2. Current guidance does not assume sale of iNova Pharmaceuticals and Obagi Medical
`Products businesses, but does include the impact of the sale of the CeraVe®,
`AcneFree™ and AMBI® skincare brands and the sale of Dendreon Pharmaceuticals
`LLC.
`
`Maintains 2017
`Full-Year
`Adjusted EBITDA
`guidance range
`despite the impact
`of divestitures
`made in 2017.
`
`Page 18 of 68
`
`

`

`Full-Year 2017 Revenue and Adj. EBITDA
`(non-GAAP)1 Guidance Bridge
`
`2017 Guidance
`as of May
`
`Impact of
`Dendreon Divestiture
`
`LOE Upside
`
`Balance
`of Business
`
`2017 Guidance
`as of August
`
`Revenue
`
`$8.90B to
`$9.10B
`
`Revenue
`
`Approx.
`
`($170M)
`
`Approx.
`
`+$120M
`
`Approx.
`
`($150M)
`
`$8.70B to
`$8.90B
`
`2017 Guidance
`as of May
`
`Impact of
`Dendreon Divestiture
`
`LOE Upside
`
`Transactional F/X Gain
`
`Balance
`of Business
`
`2017 Guidance
`as of August
`
`Adj. EBITDA
`(non-GAAP)1
`
`$3.60B to
`$3.75B
`
`Approx.
`
`($65M)
`
`Approx.
`
`+$105M
`
`+$38M
`
`Approx.
`
`($78M)
`
`Adj. EBITDA
`(non-GAAP)1
`
`$3.60B to
`$3.75B
`
`18
`
`1.
`
`See Slides 2 and 3 and Appendix for further non-GAAP information.
`
`Page 19 of 68
`
`

`

`Delivering on Commitment to Simplify
`Operating Model and Reduce Debt
`
`Divestiture
`Obagi
`
`iNova
`
`Dendreon
`
`Armoxindo
`(Indonesia)
`
`Date Closed
`Expect 2H 2017
`
`Expect 2H 2017
`
`June 28, 2017
`
`May 17, 2017
`
`Delta (Brazil)
`
`April 20, 2017
`
`Divestiture
`
`Date Closed
`
`Euvipharm (Vietnam)
`
`January 25, 2017
`
`Ruconest
`
`Paragon
`
`Brodalumab EU
`Rights
`
`December 7, 2016
`
`November 9, 2016
`
`June 30, 2016
`
`$3.8B
`
`in total asset sales
`announced since
`beginning of 20161
`
`Synergetics OEM
`
` April 1, 2016
`
`Skincare Brands
`(CeraVe, AcneFree
`and AMBI)
`
`March 3, 2017
`
`Cosmederme
`(Canada)
`
`January 22, 2016
`
`Expect to exceed commitment to pay down $5 billion in
`debt from divestiture proceeds and free cash flow by
`February 2018
`
`19
`
`1. Includes future expected milestones.
`
`Page 20 of 68
`
`

`

`Bausch + Lomb/International Update
`
`2Q17 Revenues
`
`1Q17 Revenues
`
`4Q16 Revenues
`
`3Q16 Revenues
`
`2Q16 Revenues
`
`$1,241M
`
`$1,150M
`
`$1,260M
`
`$1,243M
`
`$1,277M
`
`2Q17 Highlights
`
`+6%
`
`Organic Revenue
`Growth1,2
`
`Represents over
`50% of Valeant’s Q2
`revenue
`
`Other
`44%
`
`B+L/
`International
` 56%
`
`International, non-B+L organic
`revenue growth1,2 up 17% Y/Y
`
`Continued strength in China,
`celebrating B+L 30th
`anniversary; organic revenue
`growth1,2 of 9% Y/Y
`
`Europe and Africa / Middle
`East up 11% Y/Y in organic
`revenue growth1,2
`
`Global Ophthalmology Rx
`organic revenue growth1,2 of
`4% Y/Y
`
`Product Launches
`Launched AQUALOX®
`contact lenses, the first new
`innovation in the bi-weekly
`contact lens category in half
`a decade, to the Japanese
`market in June 2017
`
`First Vitesse™ case
`occurred on July 18
`
`Experienced continued
`success of Stellaris
`Elite™ rollout following
`clearance received in
`March 2017
`
`
`New Product Development
`Luminesse™*
`PDUFA Date – December
`2017
`
`Surgical
`Committed to investing in
`Surgical, including:
`• Cataract equipment team
`• Retina equipment team
`•
`Institutional sales
`representatives
`• New international business
`unit
`
`
`
`20
`
`1. See Slides 2 and 3 and Appendix for further non-GAAP information.
`2. Organic growth, a non-GAAP metric, is defined as an increase on a year-over-year
`basis in revenues on a constant currency basis (if applicable) excluding the impact
`of divestitures and discontinuations.
`
`* Prov