Second Quarter 2014
`Financial Results
`Conference Call
`
`July 31, 2014
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1592
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`Page 1 of 47
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`

`

`Forward-looking Statements
`
`This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities
`laws. These forward-looking statements include, but are not limited to, statements regarding Valeant Pharmaceuticals International, Inc.’s (“Valeant”) business
`development activities, including the timing of closing of pending transactions and timing of expected cash payback on completed transactions, plans for
`commercial investment, clinical results and timing of development products, timing of expected product launches and Valeant’s expected future performance
`(including expected results of operations, revenue expectations, outlook and financial guidance), and Valeant’s offer to acquire Allergan, Inc. (“Allergan”) and
`the combined company’s future financial condition, operating results, strategy and plans. Forward-looking statements may be identified by the use of the
`words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,” “opportunity,”
`“tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “seek,” “ongoing,” “upside,” “increases” or “continue” and variations or similar
`expressions. These statements are based upon the current expectations and beliefs of management and are subject to numerous assumptions, risks and
`uncertainties that change over time and could cause actual results to differ materially from those described in the forward-looking statements. These
`assumptions, risks and uncertainties include, but are not limited to, assumptions, risks and uncertainties discussed in Valeant’s most recent annual and
`quarterly report filed with the Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”) and assumptions, risks
`and uncertainties relating to the proposed merger, as detailed from time to time in Valeant’s filings with the SEC and the CSA, which factors are incorporated
`herein by reference. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this communication
`are set forth in other reports or documents that we file from time to time with the SEC and the CSA, and include, but are not limited to:
`the ultimate outcome of any possible transaction between Valeant and Allergan including the possibilities that Valeant will not continue to pursue a
`transaction with Allergan and that Allergan will reject a transaction with Valeant;
`if a transaction between Valeant and Allergan were to occur, the ultimate outcome and results of integrating the operations of Valeant and Allergan, the
`ultimate outcome of Valeant’s pricing and operating strategy applied to Allergan and the ultimate ability to realize synergies;
`the effects of the business combination of Valeant and Allergan, including the combined company’s future financial condition, operating results, strategy
`and plans;
`the effects of governmental regulation on our business or potential business combination transaction;
`ability to obtain regulatory approvals and meet other closing conditions to the transaction, including all necessary stockholder approvals, on a timely
`basis;
`our ability to sustain and grow revenues and cash flow from operations in our markets and to maintain and grow our customer base, the need for
`innovation and the related capital expenditures and the unpredictable economic conditions in the United States and other markets;
`the impact of competition from other market participants;
`the development and commercialization of new products;
`the availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary
`capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets;
`our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a
`default of our other obligations under cross-default provisions; and
`the risks and uncertainties detailed by Allergan with respect to its business as described in its reports and documents filed with the SEC.
`All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement.
`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
`communication or to reflect actual outcomes, expected as required by applicable law.
`
`
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`
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`1
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`Page 2 of 47
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`More Information
`
`ADDITIONAL INFORMATION
`This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates, in part, to the
`exchange offer which Valeant has made to Allergan stockholders. The exchange offer is being made pursuant to a tender offer statement on Schedule TO
`(including the offer to exchange, the letter of election and transmittal and other related offer materials) and a registration statement on Form S-4 filed by
`Valeant with the SEC on June 18, 2014 and with the CSA, as each may be amended from time to time. These materials, as they may be further amended
`from time to time, contain important information, including the terms and conditions of the offer. In addition, Valeant has filed a preliminary proxy
`statement with the SEC on June 24, 2014, as may be amended from time to time, Pershing Square Capital Management, L.P. (“Pershing Square”) has filed
`a definitive solicitation statement with the SEC on July 11, 2014, and a preliminary proxy statement on July 23, 2014, and Valeant and Pershing Square
`(and, if a negotiated transaction is agreed, Allergan) may file one or more additional proxy statements or other documents with the SEC. This
`communication is not a substitute for any proxy statement, registration statement, prospectus or other document Valeant, Pershing Square and/or
`Allergan may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF VALEANT AND ALLERGAN ARE
`URGED TO READ THE TENDER OFFER STATEMENT, REGISTRATION STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN
`THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
`TRANSACTION. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of Allergan and/or Valeant, as applicable.
`Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by
`Valeant and/or Pershing Square through the web site maintained by the SEC at http://www.sec.gov.
`Information regarding the names and interests in Allergan and Valeant of Valeant and persons related to Valeant who may be deemed participants in any
`solicitation of Allergan or Valeant shareholders in respect of a Valeant proposal for a business combination with Allergan is available in the additional
`definitive proxy soliciting material in respect of Allergan filed with the SEC by Valeant on April 21, 2014 and May 28, 2014. Information regarding the
`names and interests in Allergan and Valeant of Pershing Square and persons related to Pershing Square who may be deemed participants in any
`solicitation of Allergan or Valeant shareholders in respect of a Valeant proposal for a business combination with Allergan is available in additional
`definitive proxy soliciting material in respect of Allergan filed with the SEC by Pershing Square. The additional definitive proxy soliciting material referred
`to in this paragraph can be obtained free of charge from the sources indicated above.
`Non-GAAP Information
`To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), Valeant uses non-GAAP
`financial measures that exclude certain items, such as amortization of inventory step-up, amortization of alliance product assets & property, plant and
`equipment step up, stock-based compensation step-up, contingent consideration fair value adjustments, restructuring, acquisition-related and other
`costs, In-process research and development, impairments and other charges, ("IPR&D"), legal settlements outside the ordinary course of business, the
`impact of currency fluctuations, amortization including intangible asset impairments and other non-cash charges, amortization and write-down of deferred
`financing costs, debt discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of debt, (gain) loss on assets sold/held for
`sale/impairment, net, (gain) loss on investments, net, and adjusts tax expense to cash taxes. 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 Valeant’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. Non-
`GAAP reconciliations can be found in our press tables under the Investor Relations tab on www.valeant.com.
`
`
`
`
`Note 1: The guidance in this presentation is only effective as of the date given, July 31, 2014, and will not be
`updated or affirmed unless and until the Company publicly announces updated or affirmed guidance.
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`Agenda
`
`1. Second Quarter 2014 Results
`
`2. Outlook for Remainder of 2014
`
`3. Outlook for 2015 and 2016
`
`4. Allergan Update
`
`3
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`Page 4 of 47
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`Q2 2014 Highlights
`
` Q2 2014 continues to demonstrate the fundamental strength of our base business
`
` Organic growth is accelerating - significantly improved from the first quarter, as
`expected
`
` Bausch + Lomb has continued its double-digit organic growth trend
`
` 17 new products launched in the U.S. year to date
`
` Completed sale of facial injectable assets to Galderma S.A. for $1.4B; recognized a gain
`of $300M+ in Q3
`
` Capital will be used for Allergan and/or other future business development
`
` Received FDA approval for Jublia earlier than expected; stronger than anticipated label
`
` Extremely high physician and patient interest since launch
`
` Signed three small but critical business development deals in Indonesia, the Middle East
`and Northern Africa, and colored contact lenses in Asia
`
` Reached agreement with Irish Government and Unions to successfully restructure the
`Bausch + Lomb contact lens plant in Ireland – much earlier than expected
`
` Waterford cost structure now in line with Rochester
`
`4
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`Page 5 of 47
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`Q2 2014 Results
`
`Q2 2014
`
`Q/Q%
`
`Total Revenue
`
`Cash EPS
`
`$2.041 B
`
`$1.91
`
`Adjusted Cash Flow from Operations
`
`$500 M
`
`86%
`
`43%
`
`18%
`
`5
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`Page 6 of 47
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`

`

`Q2 2014 Organic Growth
`
`Same Store Sales – Growth rates for businesses that have been owned for one
`year or more
`
`Q1 2014 Q2 2014(a)
`
`Q2 2014 Ex Generics(a)(b)
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
` 2%
`
` 1%
`
` 3%
`
` 1%
`
`5%
`
`2%
`
`8%
`
`4%
`
`15%
`
`11%
`
`8%
`
`10%
`
`Pro Forma – YoY growth rates for entire business, including those that have
`been acquired within the last year
`Total U.S.
`3%
`
`15%
`
`9%
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`3%
`
`4%
`
`4%
`
`7%
`
`10%
`
`8%
`
`12%
`
`10%
`
`11%
`
`(a) Excludes assets held for sale (facial injectables, which declined by $33.7M in Q2).
`(b) Generics excluded are Retin-A Micro® franchise, Vanos® franchise and Wellbutrin® XL (Canada). Although
`Zovirax® franchise continues to decline, no longer excluded.
`
`6
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`Page 7 of 47
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`

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`Medicis Overview
` Acquired Medicis for ~$2.6B in December 2012
`Two main businesses, Medical Dermatology and Aesthetics
` Aesthetics
` Owned for 1.5 years and sold business for $1.4B1; recognized a gain of $300M+ in Q3
`
`
`
` Accelerated growth performance through Q1 2014 versus prior owners
`
` Sales in Q2 2014 dropped, as expected, due to:
`
` Publically disclosed business was to be sold, leading to significant uncertainty
`among physician community (e.g., MVP program) and lower productivity from
`reps and aesthetics management team
`
` Competitors took aggressive pricing actions against business
`
` Medical Dermatology
`
` Weak performance in 2013 due to: sales force disruption from integration and
`significant channel inventories (i.e., 6 months of Solodyn in channel)
`
` Business has stabilized in 2014 with new management team, with branded market
`shares increasing across key products:
`Jan 1, 2014 July 18, 2014
` Solodyn 49% 55%
`
`
`
` Ziana 60% 62%
`
` Zyclara 37% 45%
`
` In addition to existing brands, launched Luzu in 2014; Metronidazole 1.3%, expected to
`be launched in 2H 2014, combined peak sales of these products are $100M+
` Despite early challenges, we expect significant return to shareholders and payback in less
`than 6 years
`
`
`1 includes Sculptra
`
`7
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`Page 8 of 47
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`

`

`Q2 2014 Top 20 Global Brands (1/3)
`($ in M)
`
` Top 20 products YTD revenue of $1.2B, representing 31% of total
`revenue
`
` Top 20 products grew 22% Q2 year over year and 14% YTD
`
` >45% of Q2 growth from volume for top 20 products, excluding
`declining products
`
`
`8
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`Page 9 of 47
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`Q2 2014 Top 20 Global Brands (2/3)
`($ in M)
`
`Product (a)
`
`1)
`
`Ocuvite®/PreserVision®
`
`2) Wellbutrin®
`
`3)
`
`4)
`
`5)
`
`6)
`
`7)
`
`8)
`
`9)
`
`Xenazine® US
`
`ReNu Multiplus®
`
`Lotemax® Franchise
`
`Solodyn®
`
`Arestin®
`
`Targretin® Capsules
`
`BioTrue® Solution
`
`10) ArtelacTM
`
`Q2 2014
`Revenue
`$65
`
` Primary Growth
`Driver
`Volume
`
`Q2 2014 YTD
`Revenue
`$125
`
`$64
`
`$54
`
`$49
`
`$45
`
`$43
`
`$30
`
`$29
`
`$27
`
`$27
`
`Price
`
`Price + Volume
`
`Flat
`
`Volume
`
`Declined
`
`Price
`
`Price + Volume
`
`Volume
`
`Volume
`
`$124
`
`$104
`
`$104
`
`$71
`
`$95
`
`$45
`
`$44
`
`$51
`
`$51
`
`(a) Excludes products held for sale (e.g., facial injectables)
`
`9
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`Page 10 of 47
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`

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`Q2 2014 Top 20 Global Brands (3/3)
`($ in M)
`
`Product(a)
`
`11) CeraVe®
`
`12) Elidel®
`
`13) Thermage® Tips
`
`14) Boston Solutions
`
`15) Zovirax Franchise
`
`16) Syprine®
`
`17) Acanya®
`
`18) Duromine®
`
`19) Excimer
`
`20) Prolensa®
`
`Q2 2014
`Revenue
`$26
`
` Primary Growth
`Driver
`Price + Volume
`
`Q2 2014 YTD
`Revenue
`$48
`
`$25
`
`$21
`
`$20
`
`$19
`
`$18
`
`$18
`
`$15
`
`$15
`
`$13
`
`Price
`
`Volume
`
`Flat
`
`Declined
`
`Price
`
`Price
`
`Flat
`
`Volume
`
`Volume
`
`$51
`
`$30
`
`$39
`
`$59
`
`$37
`
`$35
`
`$28
`
`$25
`
`$30
`
`(a) Excludes products held for sale (e.g., facial injectables)
`
`10
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`Page 11 of 47
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`

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`Q2 Business Highlights – Developed Markets
`Excluding Bausch + Lomb
`
` U.S. Dermatology +7% growth
` YTD market share gains for Acanya, Elidel, Solodyn, Ziana, Zyclara
`
` Continued growth of Acanya, Elidel, Targretin
`
` Launch of Luzu
`
` After four months, Luzu has over 12% share of branded market
`
` Includes impact of generics
` U.S. VRX Consumer +6% growth
` Driven by an exceptionally strong quarter for CeraVe, greater than 20% growth
` Dental +15% growth
` Growth driven by expanded sales force and new launches
` U.S. Neuro and Other +24% growth
` Growth supported by promoted brands – Xenazine, Wellbutrin XL® and Syprine
`
` Both price and volume
` Canada / Australia (13)% growth
` Decline in Canada mainly attributable to Wellbutrin XL generic
`
` Australia growth affected by loss of exclusivity for Tambocor ® and Aldara ®
`
`11
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`Page 12 of 47
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`Q2 Business Highlights – Emerging Markets
`Excluding Bausch + Lomb
`
` EMENA +12% growth
`
` Rebound in Russia and Poland
`
` Ukraine continues to be challenged – YTD decline in revenues of 22%
` Southeast Asia / South Africa +17% growth
`
` Strong growth in all Southeast Asian countries
`
` Flat growth in South Africa, expected to rebound to historical mid teens growth in second
`half of year
`Latin America (3%) growth
`
`
`
` Brazil impacted by economic slowdown and increased competition for nutritionals
`business
`
` Temporary decline in Mexico, expected to rebound in second half
`
` Delayed regulatory approvals of Atlantis products, which have been moved to
`Valeant plant
`
` Lower sales in Venezuela due to government-imposed currency restrictions
`
`
`
`
`
`12
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`Page 13 of 47
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`Bausch + Lomb Q2 – 90% of Growth from Volume
`
`Q/Q% Growth Drivers
`
`County/Region
`
`United States
`Consumer
`
`
`
`Q2 2014
`Product
`Sales
`
`
`
` $120M
`
`14%
`
`12%
`
`Rx Pharma
`
` $105M
`
`16% (a)
`
`
`
`
`
`
`
`Surgical
`Contact Lens
`
` Generics
`Other Developed
`Markets
`Emerging Markets
`
` $56M
`
`12%
`
` $42M
`
`37%(a)
`
` $46M
`
` $294M
`
` 3%
`
` 8%
`
` $228M
`
`13%(a)
`
`Total
`
` $891M
`
`12%
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Continued growth in vitamins, and ~35% growth in
`BioTrue Multipurpose Solution
`
`Continued growth in launch products: ~90% Prolensa,
`~30% Lotemax
`
`Strong sales of premium IOLs; new management team
`
`Ultra selling to capacity, strong sales in Biotrue
`ONEday (99% growth); new management team
`
`Decentralized model: Japan / Western Europe
`
`Decentralized model: China and Middle East
`Leveraging VRX large commercial infrastructure:
`Russia and Brazil
`
`(a) These growth rates are slightly lower than the preliminary rates presented in the July 18th ISS presentation due to the
`recording of final gross to net entries.
`
`13
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`Page 14 of 47
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`Business Development Update
` Completed PreCision acquisition in early July
` Approximately $100M run-rate sales at time of acquisition
` Lost revenue ~ $15M in expected 2014 Sales - due to regulatory process, deal closed two
`months later than anticipated
` Lost revenue ~ $10M in expected 2H 2014 Sales - required to divest Tretin-X® and Generic
`Tretinoin products
` Expanding emerging market platform – small but important
` South Africa – Protea – closed in July
` OTC products, primarily women’s health
` Indonesia – Satu – expected to close Q3
` Branded generics
` Establishes direct presence in Indonesia, including manufacturing
` Asia – Bescon – expected to close Q3
` Contact lenses, full range of modalities for both clear and color
` Immediate opportunities in Japan, Korea, China and Southeast Asia
` Potential to sell colored lenses on global basis
` Longer term potential in developed markets, including U.S., for silicone hydrogel daily
` Middle East – MedPharma – expected to close Q3
` Branded generics
` Expands country coverage, including Saudi Arabia, Egypt, and Jordan
` Establishes direct presence, including manufacturing
`
`
`
`14
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`Page 15 of 47
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`2014 Product Launch Update (1/3)
`
` Launched 17 products year to date
`
`Dermatology/Aesthetics
`
`
` Launched
`
` Bensal HP®(Q1)
`
` Luzu (Q1)
`
` Neotensil® (Q1)
`
` Obagi 360™ System (Q1)
`
` Jublia (Q3)
`
` Retin-A Micro® .08% (Q3)
`
` Planned Launches
`
` Ideal Implant® (Q4)
`
` Onexton ® (Q4)
`
`Highlights
` Strong reception to Jublia; plan to
`substantially increase launch spend
`given significant market opportunity
`
` 1,325 TRx in third week of launch
`(ending July 18th)
`
` Only package insert being
`promoted at this time
`
` Sales forces in process of being
`trained
`
` Awaiting approval for marketing
`materials by the FDA
`
` After four months, Luzu has over 12%
`share of branded market
`
`15
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`Page 16 of 47
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`2014 Product Launch Update (2/3)
`
` Eye Health
`
`
` Launched
`
` enVista® BLIS™ lens inserter(Q1)
`
` PureVision ® 2 for Presbyopia (Q1)
`
` Bausch + Lomb Ultra (Q2)
`
` Biotrue® ONEday for Presbyopia(Q3)
`
` Trulign™ expanded ranges (lens) (Q3)
`
` Victus Lens Fragmentation (Q3)
`
` Planned Launches
`
` Additional Victus enhancements (Q3/Q4)
`
`Highlights
` Successful start for Ultra
`
` Selling to capacity
`
` Accelerating delivery and
`installation of additional lines
`
` Biotrue ONEday
`
` Strong response to
`commercial pilots
`
` Growth is accelerating
`
` Trulign growing premium lens
`platform
`
` Recently launched expanded
`ranges
`
` Strong physician reception to
`Victus™ Lens Fragmentation
`
`16
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`Page 17 of 47
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`

`2014 Product Launch Update (3/3)
`
`
`Consumer/Oral Health
`
` Launched
`
` CeraVe Baby line (Q1)
`
` Peroxiclear (Q2)
`
` Soothe XP (Q3)
`
` Ossix Plus® (Q1)
`
` Onset® (Q1)
`
`Highlights
` After 3 months, Peroxiclear has 9%
`market share in the peroxide
`segment
`
` Strong acceptance of Onset
`lidocaine pen; over 400 new
`accounts in last three months
`
` Relaunched Soothe XP (OTC)
`
` New and improved formulation
`for dry eye
`
` Eye care professionals excited
`to recommend product again
`
` Will be on all major retailer
`shelves by August
`
` Continue to expand CeraVe brand:
`CeraVe Baby
`
`17
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`Page 18 of 47
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`

`

`Investing for Growth: ~$80M in 2H 2014
`Jublia opportunity – larger than expected
` Sooner than expected launch with stronger than anticipated label
`
`
`
` FDA approval received earlier than expected
`
` Partnered with Kaken on manufacturing: greater capacity and better bottle/delivery than original
`partner
`
` Accelerating spend given pending competitor launch
`
` Significant opportunity to achieve greater market share and expand market size
`
` Stronger than expected interest from physicians and patients
`
` Significant opportunity to attract untreated patients
`
`
`
` Early uptake on Jublia and Luzu well above forecasts
`Jublia and Luzu growth investments
` Expanding sales forces covering Jublia and Luzu for greater reach and frequency
`
` Building ~60 person podiatry salesforce and ~100 person primary care salesforce, with an additional
`~60 dermatology reps selling Jublia and Luzu
`
` Major DTC campaign for Jublia, including digital, print and TV
`
` Additional DTC support for Luzu
`
` Early uptake on Jublia and Luzu well above forecasts
`
` Significant increase in professional education, advisory boards, presence at major professional meetings
`coupled with expansion of medical affairs capabilities
` Ultra investments for growth
` Addition of ~60 sales reps covering Ultra and BioTrue ONEday
`
` Significant increase in professional education, advisory boards, presence at major professional meetings
`coupled with expansion of medical affairs capabilities
`
`18
`
`Page 19 of 47
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`

`

`Near-Term Pipeline Update (1/2)
`
`Product
`
`Description
`
`Expected
`Launch Date
`
`Update
`
`3D Surgical Navigation
`System
`
`Cataract and Refractive
`Surgery
`
`2015
`
`Working prototype presented at American
`Society of Cataract and Refractive Surgery in
`April
`
`CeraVe
`
`CeraVe
`
`Hydrating Cleansing Bar
`
`2015
`
`Begins production in November
`
`Anti-Itch Cream
`
`2015
`
`All testing completed, ready for production
`scale-up
`
`Neotensil Extra Strength
`
`Living Proof Professional
`Hair Care
`
`Under eye bag topical, extra
`strength version of existing
`Neotensil
`Hair care system including
`shampoo, conditioner,
`overnight treatment and
`mousse
`
`2015
`
`New Formulation
`
`2015
`
`New formulation with Living Proof
`
`Ultra MultiFocal and Ultra for
`Astigmatism
`
`Contact Lens
`
`2015 / 2016
`
`FDA clearance received; on schedule to meet
`expected launch dates
`
`EnVista® Toric
`
`Intraocular Lens
`
`2015 / 2016
`
`Premarket and Approval study enrolling
`
`Brimonidine
`
`Eye Whitening
`
`2016
`
`Recent completion of Phase 3 studies,
`planned NDA submission Q1 2015
`
`19
`
`Page 20 of 47
`
`

`

`Near-Term Pipeline Update (2/2)
`
`Product
`
`Description
`
`Expected
`Launch Date
`
`Update
`
`Lotemax Next Gen
`
`Post-Operative Inflammation
`and Pain
`
`Latanaprostene bunod
`
`Glaucoma
`
`Emerade®
`
`Anaphylaxis
`
`Vitrectomy System
`
`Vitrectomy Surgery
`
`New Multi-Purpose Solution
`
`Contact Lens Solution
`
`IDP-118
`
`Psoriasis
`
`2016
`
`2016
`
`2016
`
`2016
`
`2016
`
`2017
`
`Recent completion of positive Phase 3 study;
`2nd Phase 3 study on track to start in 2014
`
`Phase 3 enrollment complete; expected data
`by late Q3 / early Q4
`
`North American development program
`underway; launched in UK, Sweden and
`Germany
`Prototype design work ongoing, planning proof
`of concept for Q4
`New formulation under development; clinical
`study to be initiated in 2015
`
`Phase 2b trial currently enrolling; completed
`enrollment expected Q4 2014
`
`20
`
`Page 21 of 47
`
`

`

`Early Thoughts on Allergan Integration
`
` Apply the Bausch + Lomb Blueprint for the Allergan integration
` Learning from our experiences in Medicis and Bausch + Lomb integrations, we
`will focus on maintaining customer relationships
`
` Global Aesthetics team will be largely retained
`
` Dry eye and Glaucoma commercial team will be largely retained
`
` Neurology & Urology team will be largely retained; will merge Valeant’s
`neurology business into Allergan’s as we largely use 3rd parties for
`promotion
`
` Dermatology team will be thoughtfully integrated to minimize disturbances to
`customers
`
` Key R&D people (e.g., Botox, Glaucoma) will be retained for high-value R&D
`programs
`
` Synergies will focus on expense reduction and non-customer facing personnel,
`specifically targeting:
`
` Corporate
`
` Global functions
`
` Regional functions
`
` Outside the US, organization will be integrated into our decentralized model
`
`
`
`21
`
`Page 22 of 47
`
`

`

`Financial Outlook
`
`Howard Schiller
`
`Page 23 of 47
`
`

`

`Financial Summary
`
`
`
`Product Sales
`Ongoing Service/Alliance Revenue
`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)
`Adjusted Cash Flow from
`Operations
`Fully Diluted Share Count
`
`
`
`
`
`
`
`
`
`
`
`Q2 2013
`$1,064M
`$32M
`$1,096M
`23%
`22%
`$24M
`
`52%
`$1.34
`
`$423M
`314 M
`
`Q3 2013
`$1,506M
`$35M
`$1,542M
`27%
`23%
`$49M
`
`47%
`$1.43
`
`$408M
`340 M
`
`Q4 2013
`$2,032M
`$32M
`$2,064M
`26%
`22%
`$60M
`
`49%
`$2.15
`
`$607M
`341 M
`
`Q1 2014
`$1,851M
`$35M
`$1,886M
`26%
`26%
`$61M
`
`45%
`$1.76
`
`$636M
`342 M
`
`Q2 2014
`$1,994M
`$47M
`$2,041M
`28%
`25%
`$66M
`
`44%
`$1.91
`
`$500
`341M
`
`23
`
`Page 24 of 47
`
`

`

`Restructuring and Integration Update
`
` Excluding the restructuring of the Waterford, Ireland plant, restructuring and
`integration costs of $87M for Q2, 36% lower than Q1
` $53M for Bausch + Lomb plus $34M of other transactions
` Successful completion of labor union contract restructuring at Bausch + Lomb
`Waterford, Ireland contact lens facility, at end of June, sooner than anticipated
` An additional $56M included in Q2 for Waterford
`
` Achieved savings of $29M off total cost base of $132M
`
` Waterford cost structure now in line with Rochester
` Restructuring costs are expected to continue to decline sequentially in Q3 and
`Q4, absent any large transactions
`
`
`Restructuring /
`Integration
`
`Expense
`
` There will continue to be timing differences between P&L charges and cash
`payments, mainly due to timing of severance payments
`
`Q3
`< $70M
`
`Q4
`< $50M
`
`Q3
`$304M
`
`Q4
`$128M
`
`Q2
`
`Q1
`$135M $143M
` $87M Pre-Waterford
` $56M Waterford
`
`
`
`
`24
`
`Page 25 of 47
`
`

`

`Cash Flow from Operations
`
` On a YTD basis, cash conversion is in line with guidance of ~90%
`
` Cash conversion in Q1 favorably impacted by increase in accounts payable and accrued
`liabilities of ~$53M
`
` Cash conversion in Q2 unfavorably impacted by decrease in accounts payable and
`accrued liabilities of ~$125M
`
` This change was driven by the timing of payments, including the prepayment of
`~$50M for a managed care rebate that will reverse in Q3
`
` A/R increase of $55M reflects sales growth from Q1
`
` Days sales outstanding decreased to 66 days from 72 days using quarterly sales
`and decreased to 60 days from 66 days using monthly sales
`
`
`
`Investment in inventory decreased to $12M from $69M in Q1, reflecting working capital
`rationalization efforts at manufacturing and distribution facilities
`
`
`25
`
`$M
`
`Q1
`
`Q2
`
`1H
`
`Adjusted Net Income
`Adjusted Cash Flow from Operations
`Cash Conversion
`
`600
`
`
`636
`
`1.1
`
`651
`
`
`500
`
`0.8
`
`1,250
`
`
`1,137
`
`0.9
`
`Working Capital Change
`
`
`
`(43)
`
`
`
`(166)
`
`
`
`(208)
`
`Page 26 of 47
`
`

`

`Revenue Expectations for Second Half 2014
`
` High single-digit organic growth in second half, including impact of all
`generics
`
` Total company same store organic growth:
`
` Second half of year high single-digit
`
` Full year same store growth > 6%
`
` Bausch + Lomb organic growth:
`
` Second half of year and full year double-digit growth
` Total company same store organic growth, excluding generics, for the
`2nd half of the year and full year >10%
`
`26
`
`Page 27 of 47
`
`

`

`Second Half 2014 Guidance Assumptions
`
` Sold injectables on July 10th , expected $230M in revenues and $.50
`Cash EPS in 2H 2014
`
` Closed PreCision two months later than expected and divested two
`products; combined the delay and divestitures represented a loss of
`$25M in revenues and $.05 Cash EPS
`
` Early launch of Jublia and other products, ~$80M incremental cost or
`$.25 Cash EPS in 2H 2014
`
` Exchange rates are based on current spot rates
`
` Gross margins in the 73% range
`
` SG&A ~ mid 20% of net revenues
`
` R&D less than $125M
`
` Tax rate < 5%
`
`27
`
`Page 28 of 47
`
`

`

`2014 Guidance Adjusted for Recent Events
`
`Q3 and Q4
`
`Revenue
`
`Cash EPS
`
`Adjusted Cash Flow
`from Operations
`
`Current Guidance (4/22/14)
`
`$8.3B – $8.7B
`
`$8.55 – $8.80
`
`$2.7B – $2.8B
`
`Less: Facial Injectables
`
`($230M)
`
`($0.50)
`
`Less: PreCision Delay /
`Divested Products
`
`Less: Incremental
`Investment in New Products
`
`($25M)
`
`($0.05)
`
`--
`
`($0.25)
`
`--
`
`--
`
`--
`
`Adjusted 2014 Guidance
`
`$8.0B – $8.3B
`
`$7.90 – $8.10
`
`$2.3B – $2.6B
`
`Q3 Guidance
`
`$1.9B – $2.1B
`
`$1.90 – $2.00
`
`Q4 Guidance
`
`$2.1B – $2.3B
`
`$2.35 – $2.45
`
`--
`
`--
`
`28
`
`Page 29 of 47
`
`

`

`Outlook for 2015 and 2016 (1/4)
`Projected
`Projected Organic Growth
`2015 / 2016 Assumptions
`Revenue
`2015 (%) 2016 (%)
`2014 ($M)
`
`United States
`Dermatology
`
`~ $940
`
`~ 25-30%
`
`~ 15-20%
`
`Base business ~5% growth
`•
`• New/recent product launches:
`•
`Jublia: 2015 ($150M), 2016 ($300M)
`•
`Luzu: 2015 ($50M), 2016 ($70M)
`• Onexton, RAM .08%: 2015 ($35M),
`2016 ($75M)
`• Generic impacts:
`•
`Targretin generic enters mid 2015
`• Carac generic enters Q4 2015
`•
`Ziana generic enters mid 2016
`• Not included in 2016 forecast:
`•
`IDP-118 (up to ~$100M) for psoriasis
`
`Consumer
`
`~ $600
`
`Opthalmology Rx
`
`~ $450
`
`~ 10%
`
`~ 10%
`
`~ 10%
`
`• Consistent with 2014 growth
`
`~ 20%
`
`•
`
`•
`
`2015 and 2016 base business consistent
`with 2014 growth
`2016 incremental growth reflects launch of
`Brimonidine ($50-75M)
`• Not included in 2016 forecast:
`•
`Latanoprostene bunod (up to~$100M)
`
`Includes impact of expected generics; assumes no acquisitions
`
`29
`
`Page 30 of 47
`
`

`

`Outlook for 2015 and 2016 (2/4)
`
`Projected
`Revenue
`2014 ($M)
`
`Projected Organic Growth
`2015 (%) 2016 (%)
`
`2015 / 2016 Assumptions
`
`United States
`Contact Lenses
`
`~ $175
`
`~ 15%
`
`~ 20%
`
`•
`
`Benefit of additional Ultra lines in 2015
`and 2016 accelerates organic growth
`
`Surgical
`
`~ $225
`
`~ 10%
`
`~ 10%
`
`Neuro & Other /
`Generics
`
`~ $1,485
`
`~ 5%
`
`~ 5%
`
`Dental
`
`~ $135
`
`~ 15%
`
`~ 10%
`
`• Growth consistent with 2014
`• Continued growth of premium IOLs
`
`• Growth reflects genericization of
`Xenazine
`
`•
`
`•
`
`Above trend line growth in 2015 due to
`recent sales force expansion
`Trend line growth in 2016
`
`Aesthetics
`
`~ $160
`
`~ 5-10%
`
`~ 5-10%
`
`• Market growth
`
`Includes impact of expected generics; assumes no acquisitions
`
`30
`
`Page 31 of 47
`
`

`

`Outlook for 2015 and 2016 (3/4)
`Projected
`Projected Organic
`Revenue
`Growth
`2014 ($M)
`2015 (%) 2016 (%)
`
`2015 / 2016 Assumptions
`
`Other Developed
`
`Western Europe
`
`Japan
`
`Australia
`
`Canada
`
`Emerging Markets
`
`~$1,780
`
`~3-5%
`
`~3-5%
`
`
`Western Europe/Japan
`• Current growth trends
`
`
`Australia/Canada
`• Return to his