Client Id: 43
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`THOMSON REUTERS STREETEVENTS
`EDITED TRANSCRIPT
`VRX.TO - Q1 2017 Valeant Pharmaceuticals International Inc Earnings
`Call
`
`EVENT DATE/TIME: MAY 09, 2017 / 12:00PM GMT
`
`OVERVIEW:
`Co. reported 1Q17 YoverY reported revenue decline of 11%.
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`ACRUX DDS PTY LTD. et al.
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`EXHIBIT 1585
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`IPR Petition for
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`U.S. Patent No. 7,214,506
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`Client Id: 43
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`MAY 09, 2017 / 12:00PM, VRX.TO - Q1 2017 Valeant Pharmaceuticals International Inc Earnings Call
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`C O R P O R A T E P A R T I C I P A N T S
`Elif McDonald Valeant Pharmaceuticals International, Inc. - Director of IR
`
`Joseph C. Papa Valeant Pharmaceuticals International, Inc. - Chairman of the Board and CEO
`
`Paul S. Herendeen Valeant Pharmaceuticals International, Inc. - CFO and EVP of Finance
`
`William D. Humphries Valeant Pharmaceuticals International, Inc. - EVP and Company Group Chairman of Dermatology
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`C O N F E R E N C E C A L L P A R T I C I P A N T S
`Andrew Jay Finkelstein Susquehanna Financial Group, LLLP, Research Division - Research Analyst
`
`Annabel Eva Samimy Stifel, Nicolaus & Company, Incorporated, Research Division - MD
`
`Christopher Z. Neyor JP Morgan Chase & Co, Research Division - Analyst
`
`David A. Amsellem Piper Jaffray Companies, Research Division - MD and Senior Research Analyst
`
`David William Maris Wells Fargo Securities, LLC, Research Division - Senior Analyst
`
`Gary Jay Nachman BMO Capital Markets Equity Research - Analyst
`
`Gregory B. Gilbert Deutsche Bank AG, Research Division - MD and Senior Analyst
`
`Onusa Chantanapongwanij Morgan Stanley, Research Division - Research Associate
`
`Timothy Chiang BTIG, LLC, Research Division - Analyst
`
`Umer Raffat Evercore ISI, Research Division - Senior MD and Fundamental Research Analyst
`
`P R E S E N T A T I O N
`Operator
`
`Good morning. My name is Melissa, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter
`2017 financial results conference call. (Operator Instructions)
`
`Ms. Elif McDonald, Director of Investor Relations, you may begin your conference.
`
`Elif McDonald - Valeant Pharmaceuticals International, Inc. - Director of IR
`
`Thank you, Melissa. Good morning, everyone, and welcome to Valeant Pharmaceuticals First Quarter 2017 Financial Results Conference Call.
`Participating on today's call are Chairman and Chief Executive Officer, Mr. Joe Papa; Chief Financial Officer, Mr. Paul Herendeen; and Executive Vice
`President Dermatology, Mr. Bill Humphries.
`
`In addition to the slide webcast, a copy of today's slide presentation and a replay of the conference call will be available on our website under the
`Investor Relations section.
`
`Before we begin, we would like to remind you that our presentation today contains forward-looking information. We would ask that you take a
`moment to read the forward-looking statement legend at the beginning of our presentation as it contains important information. In addition, this
`presentation contains non-GAAP financial measures. For more information about these measures, please refer to Slide 2 of the presentation.
`Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website.
`
`Finally, the financial guidance in this presentation is effective as of today only. It is our policy generally -- to generally not update guidance until
`the following quarter and only update or affirm guidance through broadly disseminated public disclosure.
`
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`MAY 09, 2017 / 12:00PM, VRX.TO - Q1 2017 Valeant Pharmaceuticals International Inc Earnings Call
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`With that, it is my pleasure to turn the call over to Joe.
`
`Joseph C. Papa - Valeant Pharmaceuticals International, Inc. - Chairman of the Board and CEO
`
`Thank you, Elif. Good morning, everyone, and thanks for joining us today. Let me start with the topics we'll cover this morning. I'm going to begin
`with a high-level overview of the progress we've made so far in 2017, particularly since our last earnings call on February 28. I'll then turn the call
`over to CFO, Paul Herendeen, to review our first quarter financial results. He will also cover the update we have made to our 2017 guidance. I'll
`then comment on the performance and outlook for our Bausch & Lomb business, our GI business, before turning it over to Bill Humphries to talk
`about our Dermatology business. He'll wrap up with an update on our new product pipeline before taking your questions.
`
`So let's begin. On Slide 4, I want to start with some of the positive developments since our last earnings call, beginning with the strong performance
`of our 2 largest segments: the B + L/International segment, which represents over half our business, and our Branded Rx segment increased adjusted
`EBITA by 8% and 12% respectively, year-over-year.
`
`Debt reduction continues to be a priority. And I'm pleased to report that to date, we reduced the principal amount of our debt by $3.6 billion since
`quarter 1 2016. This includes $1.3 billion of debt retired in the first quarter of 2017 with proceeds from the noncore asset sales, including the sale
`of 3 skincare franchises to L'Oréal, which closed on March 3. And with the successful debt refinancing we completed in March, we extended our
`maturity profile. Paul Herendeen and Linda LaGorga and our finance team did a great job with the refinancing.
`
`In terms of execution, we're raising adjusted EBITDA guidance, which is good news that Paul will cover in more detail later.
`
`In Dermatology, we have stabilized our average selling price or ASPs. Importantly, we saw strong growth in Asia led by China, which was up 11%
`in volume.
`
`Our Xifaxan Primary Care sales team is gaining new Rx shares since the launch of the sales team in February 2017, and cash flow from operations
`was great at $954 million for the quarter.
`
`Moving on to our new product pipeline. We have many positive developments this year, and I'll talk about some of these in more detail later. But
`briefly, in January, we reported the result of a confirmatory Phase III study of IDP-118, a topical treatment for psoriasis. We are optimistic about
`these results which demonstrate that the novel formulation IDP-118 could, if approved, be a promising treatment for patients who use a
`corticosteroid/retinoid combination to treat psoriasis.
`
`We also received 2 510(k) clearances last month. The first was for the Stellaris Elite vision enhancement system, a next-generation cataract platform
`that offers many cutting-edge innovations. The second 510(k) clearance was for Vitesse, the first and only hypersonic device for vitreous removal.
`
`We also have filed Luminesse, our novel treatment for ocular redness, with the FDA, and we have received a PDUFA date of December 27, 2017.
`And finally, we've resubmitted Vyzulta with a PDUFA date of August 24, 2017.
`
`Turning now to some of the challenges. Notwithstanding the progress we've made in stabilizing our sales force over the last 3 quarters of 2016,
`we have been working through some recent challenges. While we recently added more than 250 sales professionals to our GI sales force, those
`additions were offset by the loss of a number of reps to a new market entrant. We recently took steps to rightsize the Dermatology field force,
`following a review by our new management.
`
`Moving now to products. While Xifaxan underperformed our expectations in the first quarter, recent TRx market share was up by 200 basis points,
`and we remain on plan for the year, largely due to the addition of the Primary Care sales force.
`
`Finally, we're in the process of winding down the Commonwealth business, which will further simplify our portfolio and reduce complexity.
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`Also, we continue to make progress in resolving the company's legacy legal matters. As you know, we settled the Salix class action litigation last
`quarter, and separately, we've increased our legal reserve by $76 million this quarter.
`
`In addition, with respect to the SHOWER to SHOWER lawsuits, it is our belief that J&J has obligations to pay for our legal defense and to indemnify
`Valeant. We have provided Johnson & Johnson with notice that the various lawsuits filed against Valeant relating to SHOWER to SHOWER.
`
`On that note, I'll turn the call over to Paul to go through our first quarter financial results in details.
`
`Paul S. Herendeen - Valeant Pharmaceuticals International, Inc. - CFO and EVP of Finance
`
`Thank you, Joe. On a reported basis, revenue was down 11% compared with Q1 of '16. Unfavorable movements in FX rates accounted for roughly
`200 basis points of the decline. As expected, the lion's share of the decline came from our Diversified segment, where revenue was down $206
`million.
`
`From a revenue perspective, B + L/International posted a solid quarter. It was flat on a reported basis but up 4% on a constant currency basis.
`
`Branded Rx was down 9% or $61 million versus the year-ago quarter. Our adjusted gross margin was down roughly 310 basis points compared
`with Q1 of '16, and most of that decline in overall gross margin was due to mix, as the revenue declines were in our higher gross margin business
`units.
`
`In operating expenses, selling, advertising and promotional expenses were down $108 million compared with last year, almost entirely due to
`lesser A&P spending. Adjusted G&A costs were up $22 million as we incurred costs in Q1 of 2017, but outside legal services in connection with
`ongoing actions and for consulting services in connection with our continuing efforts to streamline our global operations.
`
`Our investment in R&D was down $7 million from the prior year quarter. However, this was due to the timing of costs on our various R&D projects
`and does not portend a reduction in our R&D activity. We continue to expect our investment in R&D for the full year of 2017 to be an increase over
`2016.
`
`Our adjusted EBITDA declined $147 million or 15% compared with Q1 of '16. If you wanted to pick 1 factor that most contributed to the decline in
`adjusted EBITDA, it would be the impact of LOEs on our Diversified segment. Together, the neuro and Generics units saw a revenue decline by
`$214 million, and those are high-margin revenues.
`
`Let me cover some of the major themes in our 3 segments, starting with the B + L/International segment. On a reported basis, the segment was
`flat compared with the first quarter of '16. However, as I said, on a constant currency basis, it grew 4% with roughly 140 basis points of that growth
`coming from realized net price increases across the segment. The international portion of the segment delivered 3% reported revenue growth but
`15% growth on a constant currency basis. A portion of that increase was due to the steps we took in early 2016 to destock the pipeline inventories
`of several of our Eastern European units. Regardless, our international units delivered a strong first quarter.
`
`Global Ophtho Rx revenue was up 1% on a reported basis and 3% on a constant currency basis, with our international units more than offsetting
`a slight decline in the U.S. The Global Consumer business showed modest revenue growth while Global Surgical and Vision Care declined.
`
`Yes, we're in the process of reorganizing and reconfiguring the B&L and International businesses to ensure efficiency in our operations and to
`provide the support for future growth. In Q1 of 2017, you can see a bit of improved operating expense efficiency within SG&A, as SG&A declined
`compared with 2016. We believe the improved revenue growth will follow. Adjusted EBITA for the segment on a constant currency basis grew
`faster than revenue, up 8%, a solid performance.
`
`On to Slide 7 and the Branded Rx segment, where revenue was down 9% with both our GI and Derm businesses off 11% compared with Q1 of '16.
`Before I start, the change in wholesale pipeline inventories was not particularly notable in the quarter. We've included a schedule in the appendix
`
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`on Slide 32 that you can use to gain additional perspective into the sales growth or declines in our Rx units, including Derm, GI, Ophtho, Neuro
`and Generics.
`
`So Derm. Yes, the transition of the Derm business away from the specialty pharmacy-driven models continues. As a result, Derm revenues are down
`on lesser volumes, but that's not the entire story. In the quarter, we enjoyed higher ASPs and higher gross profit margins, and those revenues and
`profits were driven by leaner, more focused sales force. 2017 is a transitional year for Derm. But importantly, we expect the Derm unit to contribute
`a similar amount of profit in 2017 as in 2016. Also of note in Q1 '17 versus '16, we realized 530 basis points of increased net pricing across the Derm
`unit, with roughly 1/3 of that increase coming from improved management of gross-to-net items.
`
`On to GI. GI is all about Xifaxan. The story here is that we lost some momentum over the fourth quarter of last year and into the first quarter of '17.
`That was due, in part, to the rumored sale of Salix last year and then early this year when we lost a number of sales reps to a new competitor all at
`one time.
`
`Over the last 9 weeks, however, our sales forces have regained their footing, and we have seen Xifaxan 550 gain roughly 200 basis points of TRx
`share in its segment. In the quarter, we realized about 310 basis points of increased net selling price in the Salix unit.
`
`Below the sales line in Branded Rx, our gross margin was essentially flat. Selling, advertising and promotional expenses were down $87 million. In
`Q1 of 2016, we spent heavily on direct-to-consumer advertising in support of several brands, particularly Jublia and Xifaxan. We're not repeating
`those activities in 2017.
`
`Within SA&P, our selling expenses were essentially flat compared with the prior year quarter, a fact that highlights our efforts to allocate capital
`responsibly within our businesses. Selling expense in Q1 of '17 includes the cost of the new Primary Care sales force to promote Xifaxan and other
`products in the Primary Care setting and the expansion of our patient access and sales operations teams. But a good portion of those increased
`costs were offset by the rightsizing of our Derm sales force. G&A costs in the segment were up $9 million mainly due to increased legal expenses.
`Segment EBITA was up 12%, with the year-over-year decrease in A&P spending in the quarter a major driver of that growth.
`
`On to Slide 8, the Diversified segment. The diversified segment is comprised -- mainly comprised of product assets and businesses that are noncore.
`We manage these assets for cash generation. And while you may not see it because of the overwhelming impact of LOEs on this portfolio, our
`diversified team has done a very good job of actively managing these assets. The story in Q1 is the impact of the LOEs in the Neuro and Generics
`units. In conjunction with our guidance back in February, we provided a look at our expectations for the impact of the LOE products on 2017. We've
`updated that exhibit on Slide 23 in the appendix.
`
`LOE products drove the decline in the Diversified segment in Q1. Revenues were down 37%, and adjusted EBITDA down 43%. There's a lot of
`material in our slides, so that's all I'll cover for now with respect to our operating results, but I do want to take a few minutes to talk about our
`liquidity and the series of debt transactions that we completed during the quarter.
`
`Just a few things to point out on our balance sheet summary on Slide 9. We ended the quarter with $1.2 billion of cash on hand and reduced our
`debt by almost $1.3 billion in the quarter. Compared with March 31, 2016, our quarter-end debt balance was down $3.4 billion, and you did see
`that we paid down an additional $220 million of debt just last week. We believe strongly that we have clear pathways to get our capital structure
`in order by: one, reducing our leverage throughout the sales; two, through cash generation; and three, the best way, through growth our operating
`earnings. That said, as we entered 2017, we were facing a wall of maturities in 2018, '19 and '20, and we're operating the financial covenants that
`left us with only a modest margin of error and restricted our ability to take actions to improve our prospects.
`
`So what do we do about it? Turn to Slide 10. Slide 10 shows our upcoming debt maturities after using of the proceeds from the sale of the skincare
`assets to reduce debt and then the completion of our debt transactions back in March. We think that completing the debt transaction was a
`significant event that, in my opinion, was underappreciated by the markets. By refinancing the debt, we now have a very manageable debt pay
`down schedule for the next several years. We shifted about -- to about 75% fixed versus floating rate debt. And finally, we substantially improved
`our covenant position.
`
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`So what do we get? Yes, we gain the time and the flexibility to continue the work that started last year to put the company on a path to sustainable,
`profitable growth. We provided ourselves with a runway to continue our efforts to divest noncore assets without the time pressures that could
`lead to suboptimal transactions. We got peace of mind.
`
`Now I've heard chatter in the markets that Valeant doesn't have the ability to repay all of its debt. Let me respond. We can meet all of our financial
`obligations through a combination of cash generation for our business, asset sales and, importantly, refinancings. There's a permanent role for
`debt in our capital structure. The goal is not to repay all of our debt and operate debt-free. The goal is to maintain a credit profile that will enable
`us to access the capital markets when necessary to fund our future capital requirements, including to refinance maturing debt. I've been a debt
`guy for the vast majority of my career. I've been the CFO of several highly leveraged companies. With these debt transactions in our rearview mirror,
`I'm comfortable with our position here.
`
`To be clear, we still have a lot of work to do, and I promise each and every one of you that the team here will focus every day to chart and execute
`the steps needed to get our capital structure right side up. I say all the time, if we take care of our debt, and we will, our equity will take care of
`itself.
`
`Let's turn to the cash flow in the quarter. On Slide 11, you see that we generated $954 million of cash from ops in the quarter. Looking backward
`over the last 5 quarters, a more normal level of cash generation from ops might be in the range of $500 million to $550 million. So cash flow from
`ops in Q1 was likely higher than you might have expected. Roughly $200 million of that was due to the timing of cash we received under our
`agreement with Walgreens. We also generated a fair amount of cash from the reduction of working capital due to the sequential decline of revenue
`from Q4.
`
`It's worth pointing out that compared with the end of Q1 of last year, we made substantial progress in the management of our working capital. A
`lot of work remains to be done, but we're focused on unlocking cash from our balance sheet for sure.
`
`Away from operations, we realized $1.3 billion upon the closing of the sale of the skincare assets to L'Oréal, and we used $1.1 billion of those
`proceeds to prepay debt. In the aggregate, we did reduce debt in the quarter by $1.3 billion.
`
`Onto the guidance on Slides 12 and 13. In a nutshell, we're maintaining our guidance range for revenue and raising our guidance range for adjusted
`EBITDA by $50 million despite the impact of the skincare asset sales. When we originally gave guidance back in February, it did not reflect anticipated
`asset sales. The change from our prior guidance comes mainly from the impact of the divested skincare assets, which, as we previously disclosed,
`decreased our 2017 revenue expectations by $160 million and our adjusted EBITDA expectations by $70 million and our revised estimates of the
`impact of the LOE products on 2017, where we increased our revenue expectations by $110 million, and adjusted EBITDA by approximately the
`same amount. See Slide 13 for the bridge.
`
`I want to point out that our guidance does not assume closing of the sale of Dendreon to Sanpower. We expect to close that transaction around
`midyear, and we'll adjust our guidance when the timing impact on 2017 results are more clear.
`
`One last quick note for modelers. We've included additional financial information that you may find helpful in the appendix at Slide 24.
`
`With that, let me turn it back to Joe.
`
`Joseph C. Papa - Valeant Pharmaceuticals International, Inc. - Chairman of the Board and CEO
`
`Thank you, Paul. As I mentioned briefly in my opening remarks, we have made a number of noncore divestitures that have enabled us to simplify
`our operating model and reduce our debt.
`
`The chart on Slide 14 shows the progress we have made in closing these transactions. As you can see, we have now closed 8 of the 10 asset sales
`we announced, and we continue to expect Dendreon to close midyear. Upon completion of the divestiture in this chart, we will generated total
`
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`potential proceeds of $2.7 billion. We reiterate our expectation to pay down $5 billion of debt from divestiture proceeds and free cash flow by
`February 2018, and we are well on our way to delivering on this goal.
`
`First quarter revenues for Bausch + Lomb/International segment on Slide 15 were $1.15 billion, and adjusted EBITA growth was up 8% in constant
`currency. Internationally, we have a solid market leadership position in contact lenses. To call out a few highlights, we have a 30% share of the
`contact lens market in China and a 60% market share in India, 2 fast growing markets. Asia is a significant growth driver for the business, particularly
`in China, where Bausch & Lomb is celebrating its 30th anniversary. And that milestone is generating opportunities to create excitement about the
`brand.
`
`Our consumer products business also remains strong. To call a few highlights, PreserVision and Ocuvite are now the #1 ocular vitamin brands
`globally; Biotrue is the #1 multipurpose solution brand with the highest loyalty metrics; and PreserVision AREDS 2 formula, the 120 count, is the
`#1 selling vitamin item in the United States.
`
`Finally, we are advancing new products through our pipeline. In addition to receiving 510(k) clearances in April for Stellaris and Elite and Vitesse,
`we have a PDUFA date for Vyzulta in August 2017 and Luminesse in December 2017.
`
`Moving on now to our GI business on Slide 16. We are seeing some promising script trends as we exit first quarter that we expect to continue in
`the back half of the year. Apriso TRx growth was up 9% year-over-year. Relistor was up 12%. And although Xifaxan new Rx were reasonably flat
`year-over-year, a new Rx as a leading indicator grew approximately 10% from January to March.
`
`In addition, Xifaxan Primary Care target market share has increased by 440 basis points since February, and we continue to expect to ramp in the
`second half due to our sales force expansion.
`
`Finally, the draft for [Xifaxan] guidance that the FDA issued in March raises important questions about generic formulations and may impact the
`approval of Generics. We believe the new generic requirements are a step in the right direction to confirm product effectiveness. We continue to
`be confident in our legal position in the existing Xifaxan ANDA litigation.
`
`On Relistor, we are seeing new Rx writer growth of 26% since launch in September 2016, and we now have more than 80% of covered lives. The
`PCP sales force is benefiting from Relistor also, with TRx market share up 150 basis points from January to March.
`
`In Dermatology, we have recruited an experienced team, and we are preparing to launch new products on Slide #17. Bill Humphries, who's here
`with us today, joined Valeant this past January to lead our Dermatology business. Before joining Valeant, Bill was the CEO of Merz North America
`from 2012 to 2016. Before that, he was President of Stiefel, a global leader in Dermatology and skin health. He also had multiple senior roles at
`Allergan, including Vice President of U.S. Skincare business. And we're going to ask Bill to take us through the next slide and share his perspective
`on the outlook of Dermatology business. Bill?
`
`William D. Humphries - Valeant Pharmaceuticals International, Inc. - EVP and Company Group Chairman of Dermatology
`
`Thank you, Joe. As Joe mentioned, I joined Valeant at the beginning of the year, and I'm very excited to be here. I'd like to start by running through
`some of the first quarter highlights for the Dermatology business and sharing my perspective on our goals and priorities for the remainder of the
`year.
`
`First and foremost, we've taken a series of actions to further stabilize the business. This includes recruiting a new and experienced team. Valeant
`has a long track record in the Dermatology space, and we continue to attract and retain excellent talent.
`
`In terms of our sales force, we rightsized the number of representatives in the field and organized them around roughly 150 territories. Our team
`is in the midst of a 9-city management tour to rebuild relationships with the doctors and other healthcare providers who prescribe and recommend
`our products. This is a useful exercise for our team that is yielding important insights into our business.
`
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`We've coupled these efforts with a very strong presence at first quarter dermatology and podiatry conferences to talk about the changes we are
`making and to rebuild relationships with those stakeholders. As we undertake these actions, we remain focused on profitability. ASPs have stabilized,
`and we have adjusted copay caps.
`
`I'm most excited about our efforts to reinvigorate our portfolio and prepare for a new growth driver. Our team is working hard to prepare for the
`upcoming launch of SILIQ, which was approved in February and is expected to launch midyear. When it's launched, SILIQ will be the most
`competitively priced injectable biologic for the treatment of moderate-to-severe plaque psoriasis. As an IL-17 blocker, it will be a differentiated
`product, and we are very excited about its efficacy profile.
`
`Finally, as Joe mentioned in his opening remarks, we also have IDP-118 in the pipeline, which we believe has the potential to be a very promising
`topical product for the treatment of psoriasis.
`
`So with those comments, I'll turn it back over to you, Joe.
`
`Joseph C. Papa - Valeant Pharmaceuticals International, Inc. - Chairman of the Board and CEO
`
`Thank you, Bill. Moving to Slide 19, new product launches. This is an area where I am particularly excited about, because these new product launches
`are the drivers of our future growth. Year-to-date, we have launched 20 new products. And this year, we expect to launch more than 50 new
`products globally, which we anticipate to generate approximately $100 million of sales.
`
`Moving on to Slide 20. As you can see from this list, our R&D organization is robust and productive, and we have the strength in our late-stage
`pipeline. A special thanks to -- goes out to all of the 1,000-plus Valeant employees who are working on our R&D organization globally for their
`continued progress. These innovations will be the foundation of our future growth, and we look forward to bringing new products to the market
`that will improve peoples' lives.
`
`To conclude, on Slide 21, our first quarter results confirm these steps we have taken to stabilize the business and deliver on our commitments are
`resulting in steady, measurable progress that will lead us through the turnaround phase in the 2017 to 2018 time frame.
`
`As a recap, we continue to strengthen our balance sheet. We are encouraged by the strong performance of our B&L/International and Branded Rx
`segments, which grew adjusted EBITA by 8% and 12%, respectively. We continue to manage our Diversified Products business for cash generation,
`and our business produced strong cash flow from operations of $954 million this quarter.
`
`We remain focused on specialty-driven markets with above-average growth rates, like Dermatology and GI. We are encouraged that our Primary
`Care sales team performance and the increased market share gains they've seen, just -- and how they exited the quarter. Our pipeline continues
`to produce innovative new products as we prepare to launch more than 50 new products globally this year. And finally, we've raised our adjusted
`EBITDA guidance.
`
`With that, operator, let's open up the line for questions.
`
`Q U E S T I O N S A N D A N S W E R S
`Operator
`
`(Operator Instructions) Your first question comes from the line of Gregg Gilbert from Deutsche Bank.
`
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`Client Id: 43
`
`MAY 09, 2017 / 12:00PM, VRX.TO - Q1 2017 Valeant Pharmaceuticals International Inc Earnings Call
`
`Gregory B. Gilbert - Deutsche Bank AG, Research Division - MD and Senior Analyst
`
`I'll ask 1, few-part question. First on Xifaxan, I think you said inventory in the