Valeant Pharmaceutical
`International, Inc.
`
`Jefferies Autumn 2015 Global
`Healthcare Conference
`
`
`Laurie W. Little
`SVP, Investor Relations
`
`November 18, 2015
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1579
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`Page 1 of 26
`
`

`

`Forward-looking Statements
`
`Forward-looking Statements
`Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements
`regarding projected, estimated and forecasted revenue and sales, anticipated patent exclusivity and projected impact of generic entry
`following loss of such patent exclusivity, expected business development activities and deal pipeline, expectations respecting target
`levels of inventory of certain Salix products (including timing of reaching such target levels), anticipated product approvals and
`product launches (including anticipated timing of and expected impact of such launches and approvals), planned marketing
`campaigns (including expected investments in such campaigns) and anticipated impact of such campaigns, anticipated uses of free
`cash flow and expected debt paydown and share buybacks. Forward-looking statements may be identified by the use of the words
`“anticipates,” “expects,” “intends,” “plans,” “could,” “should,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” 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 or quarterly report filed with the Securities and Exchange Commission ("SEC") and other risks and uncertainties
`detailed from time to time in the Company's filings with the SEC and the Canadian Securities Administrators ("CSA"), which factors
`are incorporated herein by reference. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
`Valeant Pharmaceuticals International, Inc. (“Valeant” or the “Company”) 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.
`
`
`Non-GAAP Information
`To supplement the financial measures prepared in accordance with generally accepted accounting principles (GAAP), the Company
`uses non-GAAP financial measures that exclude certain items. Management uses non-GAAP financial measures internally for
`strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures,
`management intends to provide investors with a meaningful, consistent comparison of the Company‟s core operating results and
`trends for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP; 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. The Company has provided results with respect to
`cash earnings per share, adjusted cash flows from operations and organic product growth rates, which are non-GAAP financial
`measures. The Company has not provided a reconciliation of these non-GAAP financial measures due to the difficulty in forecasting
`and quantifying the exact amount of the items excluded from the non-GAAP financial measures that will be included in the
`comparable GAAP financial measures. Reconciliations of historical non-GAAP financials can be found at www.valeant.com.
`
`
`2
`
`Page 2 of 26
`
`

`

`Who is Valeant?
` Focused, multinational specialty pharmaceutical company
` Headquartered in Laval, Quebec, Canada (NYSE/TSX: VRX)
` Unconventional Business Model
` Decentralized operating model
`
` Geographical and product diversity
`
` Focus on faster-growing geographies and therapeutic categories
`
` Durable product portfolio with limited patent risk
`
` Significant cash pay component / low exposure to government reimbursement
`
` Financially disciplined M&A
` Ownership Culture
` Shareholder friendly executive compensation and corporate governance
` Commitment to Innovation
` Emphasis on bringing new products to the market (output), through internal R&D,
`acquisitions and licensing (input)
`
` Focus on late-stage and lower-risk development projects
`
`
`
`3
`
`
`
`
`Page 3 of 26
`
`

`

`Strong Growth Platforms(3)
`
`Eye Health (U.S.)
`
`Dermatology Rx (U.S.)
`
`Consumer (U.S.)
`
`~$1.0B
`
`Ex- US(1)
`
`~$1.5B
`
`~$0.6B
`
`
`
`Neurology/Dental/Other (2) Neurology/Dental/Other (2)
`
`
`
`Salix(4) Salix(3)
`
`
`
`Dendreon Dendreon(4)
`
`~$3.9B
`
`~$2.2B
`
`~$0.8B
`
`~$0.2B
`
`(1)
`(2)
`
`Includes Japan, Canada, Australia, Western Europe and Emerging Markets
`Includes Neuro & Other, Oral Health, Aesthetics, Generics. Growth rate excludes
`facial injectable sales from 1H 14
`(3) Q2 2015 and Q3 2015, excluding pre acquisition sales
`(4) Post Acquisition sales, including part of Q1 2015, full Q2 2015 and Q3 2014
`
`4
`
`Valeant LTM rev
`
`Page 4 of 26
`
`

`

`Highly Diversified Business Portfolio
`
`Based on projected 2015 revenues
`
`
`
`By Geography
`
`By Business
`Gx/BGx
`
`11%
`
`Devices 1
`
`14%
`
`16%
`
`OTC /
`Solutions
`
`58%
`
`Rx
`
`Asia
`
`7%
`
`Latin
`America
`
`Canada /
`Australia
`
`Central &
`Eastern
`Europe/
`Middle East/
`Africa
`
`4%
`5%
`
`9%
`
`7%
`
`Western
`Europe
`
`68%
`
`United
`States
`
`Emerging Markets = ~18%
`
`1 Includes contact lens, and surgical devices
`
`
`5
`
`Page 5 of 26
`
`

`

`Highly Diversified Product Revenue
`
`Based on projected 2015 revenues
`
`By Number of Products
`
`By Gov‟t Reimbursement
`
`28%
`
`43%
`
`50%
`
`50%
`
`Government
`Pay
`
`23%
`
`Public Pay
`77%
`25%
`75
`
`Cash/Private
` Pay
`
`Top 10
`
`Top 20
`
`No product greater than 10% of revenue
`
`6
`
`42%
`
`Page 6 of 26
`
`

`

`Limited Patent Risk
`
`2015
`
`2016
`
`2017
`
`2018
`
`2019
`
`Products
`
`1) Xenazine
`Targretin
`2)
`
`Annual
`2014
`Sales
`
`
`~$335 million
`
`Ziana
`1)
`Zirgan
`2)
`3) Visudyne
`4) Glumetza
`Zegerid
`5)
`
`~$190 million
`
`1)
`
`Lotemax
`Gel
`2) Macugen
`
`1) Acanya
`2) Solodyn
`Istalol
`3)
`4) Elidel
`
`1)
`
`Zyclara
`
`
`~$115 million
`
`
`~$400 million
`
`
`~$30 million
`
`7
`
`Page 7 of 26
`
`

`

`Ownership Culture
`
` Relentless focus on organic growth
` Business units leaders are evaluated on organic growth and cash flows
` Each employee has a duty to speak up
` Best idea in the room wins
` Executive compensation tied to long-term shareholder returns
` Front-loaded performance units tied to shareholder returns with
`minimum 10% CAGR over 3 years
` Shareholder friendly corporate governance
` ValueAct (major shareholder since 2007) has representation on the
`Board of Directors
`
` Annual executive sessions with top shareholders and Board of Directors
`
`
`
`8
`
`Page 8 of 26
`
`

`

`
`
`
`
`Valeant’s Approach to Innovation
` Innovation critical to the industry and to Valeant
` We source innovation through our internal R&D, acquisitions, in-
`licensing
` We have acquired terrific set of capabilities and technologies over time
` Dow (dermatology)
` B+L (e.g., Ultra, Victus, Stellaris)
` Additional external collaborations (e.g., Cirle navigatino, brodalumab)
` We run a lean R&D model focused on productivity – outputs measured
`against inputs
` Leverage industry overcapacity
` Outsource commodity services
` Focus on critical skills and capabilities needed to bring new technologies
`to market
` Spend according to promise of programs - for short and long term
` Results of this approach: 20 launches in the U.S. in 2014; rich pipeline
`of products for the future sourced from inside, acquisitions and in-
`licensing
`
`
`
`
`
`
`
`
`
`
`9
`
`Page 9 of 26
`
`

`

`Comprehensive JUBLIA Launch Campaign
`
` Extensive professional education and outreach to
`Dermatologists and Podiatrists
` Extensive print, digital and TV advertising to reach consumers
` Over 150 reps supporting launch
`
`Physician Campaign
`
`Medical Education
`Speaker Programs
` Ad Boards
`
`Physician Website
`
`Consumer Campaign
`
`
`
`Physician
`eBlast/Banners
`
`Physician
`Journal Ads
`
`asd
`
`TV
`
`DIGITAL
`10
`
`Print
`
`Page 10 of 26
`
`

`

`Launched Early January
`
` Extensive professional education and outreach: product theaters,
`webinars, advisory boards, journal and digital advertising
`
` Integrated digital, print and TV consumer campaign beginning Q2
`
` Over 100 sales reps supporting launch
`
`
`
`OnextonGel.com
`
`11
`
`Page 11 of 26
`
`

`

`Salix Update
`
` Xifaxan TRx‟s up 15% Q3‟15 vs Q2‟15, 25% Q3‟15 vs Q3‟14
` Uceris TRx‟s up 20% Q3‟15 vs Q3‟14, Relistor TRx‟s up 36% Q3‟15 vs Q3‟14,
`Apriso TRx‟s up 7% Q3‟15 vs Q3‟14, Ruconest TRx‟s up 29% sequentially Q2 to
`Q3
`
` Inventories reduced to 8-10 weeks; expect to reach our target of 4-6 weeks by end
`of year
`
` Xifaxan Integrated Professional and Consumer Campaign Launched October 5th
`
`TV
`
`PRINT
`
`DIGITAL
`
`12
`
`Page 12 of 26
`
`

`

`$ Share FRP Category
`
`Bausch + Lomb ULTRA® Launch Highlights
` Revenue: Forecasted to double from
`~$45MM in 2015 to $100MM in 2016
`
` Share: #1 Brand in industry that patients
`switched to in Q3 2015
`
` Distribution: Gained +13k doorways in
`„15 resulting in 22k total ECP‟s with
`diagnostic fitting sets
`
` Pipeline: Launching two new products
`(multi-focal and toric) to complete the
`ULTRA family in „16
`
`
`9.0
`
`8.0
`
`7.0
`
`6.0
`
`5.0
`
`4.0
`
`Aug 15
`Jul 15
`Jun 15
`May 15
`Apr 15
`Mar 15
`Feb 15
`Jan 15
`Dec 14
`Nov 14
`Oct 14
`Sep 14
`Aug 14
`Jul 14
`Jun 14
`May 14
`Apr 14
`Mar 14
`
`3.0
`
`2.0
`
`1.0
`
`0.0
`
`
`
`2015 DTC Campaign: Delivered over 1B impressions via Digital, Social, and Paid
`Search campaign to drive patients to ECP office to request trial
`
` Doctor Engagement: Large scale ECP educational events to >6k ECP‟s
`
` Customer partnerships: Secured several strategic partnerships to strengthen
`distribution and new product launch uptake
`
`13
`
`Page 13 of 26
`
`

`

`Bausch + Lomb ULTRA® 2016 Launch Activities
`
` Launching Bausch + Lomb ULTRA® for
`Presbyopia and Astigmatism in 2016
` Expand Bausch + Lomb ULTRA® reach
`by 35% of the Market
`
` Halo effect on Spherical business
`
`
`
`
`
`
` Investing $25MM in DTC campaign
` TV, Digital, Social Media, Search
`
` In-office Digital Displays to create 360
`campaign
`
`
`
`
`
` Aggressive Professional Outreach
` Largest Eye Care Professional Share of Voice
`within contact lens industry
`
` High impact launch events to generate
`awareness and request of new products
`
`
`
`14
`
`Page 14 of 26
`
`

`

`Sprout Update
`
` Addyi launched in U.S. on 10/17
`
` 145 reps in the field
`
` 6 Medical Science Liaisons (MSLs) hired
`
` Launching with prescribing information,
`submitting marketing materials to the
`Office of Prescription Drug Promotion
`(OPDP)
`
` No plans for direct to consumer (DTC)
`advertising at this time
`
`15
`
`Page 15 of 26
`
`

`

`Valeant Late Stage R&D Portfolio
`
`Product
`
`EnVista Toric
`
`Luminesse
`
`Vesneo
`
`Category
`
`Eye Health
`
`Eye Health
`
`Eye Health
`
`Toric IOL
`
`Red Eye Relief
`
`Glaucoma
`
`Lotemax Gel Next Gen
`
`Eye Health
`
`Post-operative pain and inflammation
`
`Description
`
`Expected launch year
`
`2016/2017
`
`2016/2017
`
`2016
`
`2018
`
`2016
`
`2016
`
`2019
`
`2017
`
`2017
`
`2016
`
`2016
`
`2018
`
`2016
`
`Ultra Plus Powers
`
`BioTrue Toric
`
`IDP-118
`
`IDP-120
`
`IDP-121
`
`IDP-122
`
`Relistor Oral
`
`Vitesse
`
`Eye Health
`
`Eye Health
`
`Contact lens
`
`Contact lens
`
`Dermatology
`
`Moderate to severe plaque psoriasis
`
`2017/2018
`
`Dermatology
`
`Novel acne combination
`
`Dermatology
`
`Dermatology
`
`Acne
`
`Psoriasis
`
`Gastrointestinal
`
`Opioid Induced Constipation
`
`Eye Health
`
`Ultrasonic Vitrectomy
`
`Next Generation Stellaris
`
`Eye Health
`
`Phaco/ Vitrectomy
`
`Next Generation Thermage
`
`Dermatology
`
`Skin Tightening
`
`16
`
`Page 16 of 26
`
`

`

`Q3 2015 Highlights
`
` Exceeded top line and bottom line Q3 guidance; 5th consecutive quarter of >10%
`organic growth
` Includes negative FX impact of $172M revenues and $0.13 Cash EPS
`
` Continued outperformance of U.S. businesses, particularly dermatology and
`contact lens
`
` Strong organic growth in China (23%), South Korea (15%), and Mexico (10%)
` Continued strong Salix performance
` IBS-D indication for Xifaxan (including DTC campaign)
` Salix inventories reduced to 8-10 weeks
` Addyi launched 10/17
`
` Four deals closed in October
` Brodalumab
`
` Sprout
`
` Synergetics
`
` Amoun (expected to close today)
` Strong cash flow from operations
` GAAP cash flow from operations $737M
`
` 90% cash conversion
`
`17
`
`Page 17 of 26
`
`

`

`Q3 2015 Financial Results
`
`
`
`
`
`
`Q3 2015
`
`
`
`
`Q3 2014
`
`
`
`
`Y/Y%
`
`
`
`Adjusted
`Y/Y% (a)
`
`Total Revenue
`
` $2.8 B
`(guidance $2.6 – 2.8B)
`
` $2.1 B
`
`36%
`
`44%
`
`Cash EPS
`
`$2.74
`(guidance $2.60 – 2.70)
`
`$2.11
`
`30%
`
`36%
`
`GAAP Cash Flow
`from Operations
`
`Adjusted Cash Flow
`from Operations
`
`$737M
`
`$619M
`
`19%
`
`26%
`
`$865M
`
`$771M
`
`12%
`
`18%
`
`a) Negative FX Y/Y Impact: Revenue $172M, Cash EPS $0.13
`
`18
`
`Page 18 of 26
`
`

`

`Q3 2015 Organic Growth
`
`Same Store Sales – Y/Y growth rates for businesses that have
`been owned for one year or more
`
`
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`
`
`
`
`Q3 2015
`
`YTD 2015
`
`22%
`
`16%
`
`3%
`
`13%
`
`27%
`
`19%
`
`5%
`
`15%
`
`Pro Forma – Y/Y growth rates for entire business, including
`businesses that have been acquired within the last year
`
`
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`Q3 2015
`
`YTD 2015
`
`27%
`
`21%
`
`5%
`
`17%
`
`26%
`
`21%
`
`4%
`
`17%
`
`19
`
`Page 19 of 26
`
`

`

`Q3 2015 Top 10 Brands
`
`($M)
`
`
`
`Product
`
`Q3
`2014
`
`Q4
`2014
`
`Q1
`2015
`
`1) Xifaxan
`
`2) Jublia
`
`3) Wellbutrin XL*
`
`4) SofLens*
`
`5) Xenazine
`
`6) Provenge
`
`7) Solodyn
`
`8) Ocuvite / Preservision*
`
`9) ReNu*
`
`10) Glumetza
`
`-
`
`13
`
`80
`
`95
`
`56
`
`-
`
`54
`
`62
`
`59
`
`-
`
`53
`
`82
`
`89
`
`52
`
`-
`
`61
`
`62
`
`60
`
`-
`
`62
`
`68
`
`81
`
`57
`
`30
`
`57
`
`60
`
`53
`
`-
`-
`-
`Top 30 represent 54% of total company revenue
`
`* Sales depressed on 12 of top 30 products due to FX impact
`
`20
`
`Q2
`2015
`
`148
`
`102
`
`67
`
`84
`
`66
`
`74
`
`65
`
`59
`
`59
`
`26
`
`Q3
`2015
`
`220
`
`106
`
`92
`
`84
`
`73
`
`69
`
`66
`
`57
`
`54
`
`53
`
`Page 20 of 26
`
`

`

`Financial Summary
`
`Total Revenue
`
`Cost of Goods Sold (% of product sales)
`
`SG&A (% of total revenue)
`R&D Expense
`
`Operating Margin (% of total revenue)
`(excluding amortization)
`Cash EPS (Reported)
`
`GAAP Cash Flow from Operations
`Adjusted Cash Flow from Operations
`
`Fully Diluted Share Count
`
`
`
` Q3 2014
`$2,056M
`
`
`Q4 2014
`$2,280M
`
`Q1 2015
` $2,191M
`
`Q2 2015
` $2,732M
`
`Q3 2015
` $2,787
`
`
`
`
`
`
`
`26%
`
`24%
`$59M
`
`47%
`$2.11
`
`$619M
`$771M
`
`341M
`
`24%
`
`23%
`$59M
`
`
`
`
`
`50%
`$2.58
`
`$816M
`$624M
`
`342M
`
`25%
`
`26%
`$56M
`
`47%
`$2.36
`
`$491M
`$708M
`
`343M
`
`23%
`
`25%
`$81M
`
`49%
`$2.56
`
`$411M
`$773M
`
`351M
`
`22%
`
`24%
`$102M
`
`50%
`$2.74
`
`$737M
`$865M
`
`351M
`
`21
`
`Page 21 of 26
`
`

`

`Cash Flow (Q1 2014 to Q3 2015)
`
`2015
`2014
`Q1 Q2 Q3 Q4 Q1 Q2 Q3
`GAAP cash flow from
`484 376 619 816* 491 411 737
`operations
`
`Adjusted cash flow
`from operations
`
`636 500 771 624 708 773 865
`
`Adjusted earnings
`
`600 651 719 881 809 897 961
`
`Cash conversion
`
`106%
`
`77%
`
`107%
`
`71% 88% 86% 90%
`
`*Q4 2014 included a one-time $287M gain from the sale of Allergan shares
`
`22
`
`Page 22 of 26
`
`

`

`Salix Inventory and Drawdown
`
`Net Sales (including IBS-D)
`
`Inventory Reduction
`
`Net Sales Adj. for Inventory
`Reduction
`
`Actual
`Q2
`$313M
`
`$141M
`
`$454M
`
`Actual
`Q3
`$461M
`
`Estimated
`Q4
`~$600M
`
`$98M
`
`~$100M
`
`$559M
`
`~$700M
`
`Beginning Months on Hand
`
`Ending Months on Hand
`
`4 - 5
`
`3 - 3.5
`
`3 - 3.5
`
`2 - 2.5
`
`2 - 2.5
`
`1 - 1.5
`
` Expect to reach ~4-6 weeks target by year end
` Increasing full year Salix net sales estimate from
`$1.20B to ~$1.35B
`
`23
`
`Page 23 of 26
`
`

`

`Balance Sheet Update
`
` Liquidity position at end of Q3
` $1.5B undrawn revolver
`
` $1.4B of cash
` Cash and revolver used to fund transactions closed in
`October
` Free cash flow will be used for a combination of debt
`paydown and general corporate purposes
` Committed to debt paydown beyond the mandatory
`amortizations required by term loans
` We remain committed to getting net leverage to <4.0x
`adjusted pro forma EBITDA by the end of 2016
`
`
`24
`
`Page 24 of 26
`
`

`

`Summary of Valeant’s Business Model
` Robust organic growth profile
` Geographical and product diversification creates lower-risk profile
`
` Durable product portfolio limits patent expiry exposure
` Rich pipeline of low-risk R&D programs
` Internal development – e.g. IDP-118, IDP-120, Onexton
`
` Acquisitions – e.g. Vesneo, Brimonidine, Ultra
`
` Product acquisitions/licenses – e.g. Emerade, Croma, brodalumab
` Strong cash flows and balance sheet
` Absent large transactions, restructuring charges trending to zero
`
` Convergence of GAAP to non-GAAP cash flows
`
` Enhanced capacity to continue acquisition activity as well as
`opportunistically paydown debt and/or buy back shares
` Disciplined approach to business development
` Continue to be disciplined with capital deployment to generate above
`average returns for shareholders
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`25
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`Page 25 of 26
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`Valeant Pharmaceutical
`International, Inc.
`
`Jefferies Autumn 2015 Global
`Healthcare Conference
`
`
`Laurie W. Little
`SVP, Investor Relations
`
`November 18, 2015
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`Page 26 of 26
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