Valeant
`Pharmaceuticals
`International, Inc.
`
`February 23, 2015
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1593
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`Page 1 of 41
`
`

`

`Forward-looking Statements
`
`Forward-looking Statements
`Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements regarding guidance
`with respect to expected revenues, non-GAAP cash earnings per share, adjusted cash flows from operations and organic
`product sales growth, future disclosures, patent exclusivity, launches and approvals of products, business development activities, share buybacks,
`and the 2015 strategic initiatives of Valeant Pharmaceuticals International, Inc. (the “Company”), as well as the proposed acquisition by the
`Company of Salix Pharmaceuticals, Ltd. (“Salix”), expected timing and benefits of the transaction, as well as the impact of the transaction on the
`Company’s future cash earnings per share. 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, the risk that the acquisition will not close when expected or at all; the risk that Valeant’s business and/or Salix’s business will be adversely
`impacted during the pendency of the acquisition; the risk that the operations of the two companies will not be integrated successfully; and 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.
`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.
`
`
`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 preliminary results and guidance 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 preliminary and
`forward-looking 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.
`
`
`Note 1: The guidance in this presentation is only effective as of the date given,
`February 23, 2015, and will not be updated or affirmed unless and until the
`Company publicly announces updated or affirmed guidance.
`
`1
`
`Page 2 of 41
`
`

`

`Additional Information
`
`Additional Information
`The tender offer described in this presentation has not yet commenced and this presentation is not a recommendation or an offer to purchase or a
`solicitation of an offer to sell shares of Salix. At the time the tender offer is commenced Sun Merger Sub, Inc. and the Company will file a Tender
`Offer Statement on Schedule TO, containing an offer to purchase, form of letter of transmittal and related tender offer documents, with the SEC, and
`Salix will file a Solicitation/Recommendation Statement on Schedule 14D-9 relating to the tender offer with the SEC. The Company and Salix intend
`to mail these documents to the stockholders of Salix. These documents, as they may be amended from time to time, will contain important
`information about the tender offer and stockholders of Salix are urged to read them carefully when they become available. Stockholders of Salix will
`be able to obtain a free copy of these documents, when they become available, at the website maintained by the SEC at www.sec.gov. In addition,
`the Tender Offer Statement and other documents that the Company files with the SEC will be made available to all stockholders of Salix free of
`charge at www.valeant.com. The Solicitation/Recommendation Statement and the other documents filed by Salix with the SEC will be made
`available to all stockholders of Salix free of charge at www.salix.com.
`
`
`2
`
`Page 3 of 41
`
`

`

`Agenda
`
`1. Fourth Quarter and Full Year 2014 Results
`
`2. Q1 2015 Guidance
`
`3. Dendreon and Salix Update
`
`3
`
`Page 4 of 41
`
`

`

`Q4 2014 Financial Results
`
`
`
`Q4 2014
`
`Q4 2013
`
`Y/Y %
`
`Total Revenue
`
` $2.3B
`
` $2.1B
`
`10%
`
`Cash EPS(a)
`
`$2.58
`
`$2.15
`
`20%
`
`GAAP Cash Flow from Operations
`
`$816M
`
`$280M
`
`191%
`
`Adjusted Cash Flow from
`Operations(a)
`
` $624M
`
`$607M
`
`3%
`
`At constant currency rates:
`1) Revenue would be $2.4B, or an increase of 16% Y/Y
`2) Cash EPS would be $2.73, or an increase of 27% Y/Y
`
`(a) Excludes $287 million net gain from Allergan transaction, net of fees and out-of-pocket expenses
`4
`
`Page 5 of 41
`
`

`

`Q4 2014 Results
`Total revenue and Cash EPS above October guidance, despite FX impact
`to revenue of $(42M) and Cash EPS impact of $(0.09)
`
`Organic Growth –
`Total Company
`Same Store Sales
`
`Organic Growth –
`Bausch +Lomb
`
`Total Revenue
`
`Cash EPS
`
`Adjusted Cash Flow from
`Operations
`
`Restructuring & Integration
`Costs
`
`Guidance
`Q4 2014
`
`Results
`Q4 2014
`
`>12%
`
`16%
`
`>10% full year 2014
`
`Q4 8%
`Full Year 11%
`
`~$2.2B
`
`$2.55+
`
`$2.3B
`
`$2.58
`
`~$600M
`
`$624M
`
`~$50M
`
`$47M
`
`5
`
`Page 6 of 41
`
`

`

`2014 Organic Growth Including All Generic Impact
`
`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
`
`
`
`
`
`Q1 2014(a)
`
`Q2 2014(a)
`
`Q3 2014
`
`Q4 2014
`
`2014(b)
`
`2%
`
`1%
`
`3%
`
`1%
`
`5%
`
`2%
`
`8%
`
`4%
`
`29%
`
`22%
`
`12%
`
`19%
`
`28%
`
`20%
`
`6%
`
`16%
`
`19%
`
`14%
`
`8%
`
`13%
`
`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
`
`Q1 2014(a)
`
`Q2 2014 (a)
`
`Q3 2014
`
`Q4 2014
`
`2014(b)
`
`3%
`
`3%
`
`4%
`
`4%
`
`9%
`
`7%
`
`10%
`
`8%
`
`24%
`
`18%
`
`9%
`
`16%
`
`27%
`
`19%
`
`6%
`
`15%
`
`17%
`
`13%
`
`8%
`
`11%
`
`(a) As reported.
`(b) Excludes injectables for Q1 and Q2 in YTD organic growth.
`
`6
`
`Page 7 of 41
`
`

`

`Bausch + Lomb Organic Growth
`Country/Region
`Q4 2014
`Y/Y%
`2014
`Product
`Sales
`$386M
`
`United States
`
`Since
`Acquisition
`(8/5/13)
`13%
`
`8%
`
`12%
`
`Consumer
`
`Rx Pharma
`
`Surgical
`
` $102M
`
` $118M
`
`4%
`
`7%
`
` $56M
`
` -4%(a)
`
`Contact Lens
`
` $43M
`
` 13%
`
`Generics
`Other Developed
`Markets
`Emerging Markets
`Total
`
` $67M
`
` $264M
`
` $211M
`
` $861M
`
` 29%
`
` 2%
`
`15%
`
`8%
`
`12%
`
`11%
`
`4%
`
`16%
`
`21%
`
`6%
`
`
`14%
`
`11%
`
`11%
`
`13%
`
`8%
`
`14%
`
`25%
`
`4%
`
`14%
`
`10%
`
`(a) Y/Y growth reflects shift in commercial model from sale of Victus lasers to lease arrangements.
`Excluding the impact of this change, Q4 organic growth is flat and FY organic growth is 5%
`
`7
`
`Page 8 of 41
`
`

`

`2014 Top 20 Global Brands
`
` Top 20 products revenue of $795M in Q4 2014, representing 36% of total
`revenue
`
` Top 20 products grew 28% Q4 2014 over Q4 2013 and 20% YTD
`
` All 20 products grew in Q4 2014 over Q4 2013
`
` Jublia now our 4th largest product
`
` Top 20 products demonstrate diversification
`
` Largest product contributed ~3.6% of Q4 revenue
`
` Top 10 products contributed 24% of Q4 revenue
`
` Mix of products includes Rx, OTC, and devices
`
`8
`
`Page 9 of 41
`
`

`

`Q4 2014 Top 20 Global Brands
`($M)
`
`
`
`Product
`
`1) Wellbutrin®
`
`2) Ocuvite®/PreserVision®
`
`3) Solodyn®
`
`4) Jublia®
`
`5) Xenazine®
`
`6) Targretin® Capsules
`
`7) ReNu Multiplus®
`
`8) Lotemax® Franchise
`
`9) Carac®
`
`10) Arestin®
`
`Q1
`
`$69
`
`$59
`
`$51
`
`$0
`
`$50
`
`$15
`
`$55
`
`$26
`
`$12
`
`$15
`
`Q2
`
`$72
`
`$66
`
`$43
`
`$3
`
`$54
`
`$29
`
`$49
`
`$45
`
`$12
`
`$30
`
`9
`
`Q3
`
`$80
`
`$62
`
`$53
`
`$12
`
`$56
`
`$44
`
`$41
`
`$35
`
`$14
`
`$30
`
`Q4
`
`$82
`$62
`$61
`$54
`$52
`$48
`$46
`$45
`$42
`$38
`
`2014
`
`$303
`
`$250
`
`$210
`
`$69
`
`$212
`
`$136
`
`$192
`
`$151
`
`$80
`
`$113
`
`Page 10 of 41
`
`

`

`Q4 2014 Top 20 Global Brands
`($M)
`
`
`
`Product
`
`11) Zovirax® Franchise
`
`12) Syprine®
`
`13) Elidel®
`
`14) Retin-A® Franchise
`
`15) CeraVe®
`
`16) BioTrue® Solution
`
`17) ArtelacTM
`
`18) Ziana®
`
`19) Boston® Solutions
`
`20) Prolensa®
`
`Q1
`
`$40
`
`$19
`
`$26
`
`$18
`
`$22
`
`$24
`
`$24
`
`$29
`
`$19
`
`$17
`
`Q3
`
`$23
`
`$20
`
`$22
`
`$30
`
`$20
`
`$26
`
`$25
`
`$35
`
`$20
`
`$16
`
`Q4
`
`2014
`
`$35
`$31
`$31
`$30
`$27
`$25
`$24
`$23
`$21
`$20
`
`$117
`
`$88
`
`$103
`
`$98
`
`$95
`
`$103
`
`$100
`
`$68
`
`$80
`
`$65
`
`Q2
`
`$19
`
`$18
`
`$25
`
`$19
`
`$28
`
`$27
`
`$27
`
`$26
`
`$20
`
`$13
`
`10
`
`Page 11 of 41
`
`

`

`Q4 U.S. Business Highlights (1/3)
` Dermatology, $425M Revenues, 70% Y/Y Growth
`
` Strong growth for promoted brands, e.g. Solodyn, Elidel, Retin-A Franchise
`
` JUBLIA launch continues strong growth trend
`
`
`
`4Q sales of $54M; Annualized run rate >$200M
`
` Weekly scripts are now above 20,000, yielding an annualized run rate of ~$250M
`
` DTC campaign now driving primary care physician prescribing to ~40% of script volume
`
` LUZU TRx up 12%, sequentially
`
` Retin-A Micro 0.08% TRx up ~200%, sequentially
`
` Consumer, $141M Revenues, 6% Y/Y Growth
`
` CeraVe - fastest growing (major) skin care brand: 49% growth Y/Y
`
` PreserVision AREDS 2 - #1 selling Vitamin SKU(a): 17% growth Y/Y based on consumption
`
`
`
`Entire PreserVision brand grew 14% Y/Y
`
` BioTrue Multipurpose Solution: 7% growth Y/Y
`
`
`
`
`(a) Source: IRI consumption data.
`
`
`
`
`
`11
`
`Page 12 of 41
`
`

`

`Q4 U.S. Business Highlights (2/3)
`
`
`
` Ophthalmology Rx, $132M Revenues, 8% Y/Y Growth
` Continued strong performance of Prolensa, and Lotemax franchise
`
` Contact Lenses, $43M Revenues, 13% Y/Y Growth
` 3rd straight quarter of double digit growth
`
` Market share now 10%(a) in the U.S.; 3% point market share improvement since
`acquisition (8/13)
`
` Ultra continues to gain momentum
`
` Total revenues for Ultra were $4.2 million – capped due to capacity constraints
`
` First Ultra commercial manufacturing line expected to come on-line in Q2, with
`second line up in Q4
`
` Signed strategic partnership with Vision Source, the largest independent doctor
`alliance group, across all brands and solutions
`
`(a) Source: GfK
`
`12
`
`Page 13 of 41
`
`

`

`Q4 U.S. Business Highlights (3/3)
` Surgical, $57M Revenues, -5% Y/Y Growth
` Number of cataract surgeries flat in Q4, continuing into Q1; given demographics, we expect a
`rebound to historic growth rates
`
` Decline in Excimer laser sales
`
` Continuing to gain share in IOLs and Femtosecond lasers with increased sales of Victus machines
` Neuro & Other/Generics, $453M Revenues, 28% Y/Y Growth
` Neuro & Other growth driven by Xenazine, Wellbutrin XL, Cuprimine/Syprine and Virazole
`
` Generics business continues to benefit from competitor stock outs and AG launches
` Dental, $41M Revenues, 38% Y/Y Growth
` Continued growth from Arestin and 2014 product launches (Onset, Ossix Plus)
`
`13
`
`Page 14 of 41
`
`

`

`Q4 Rest of World Business Highlights
`
` Emerging Markets-Europe/Middle East, $267M Revenues, 9% Y/Y Growth
` Strong performance despite significant FX headwinds
`
` 33% Y/Y growth excluding the impact of FX; FX impact on European Emerging Markets: ~ $(60M) in revenue
`
` 13% organic growth in Russia
`
` > 20% organic growth in Middle East; Medpharma off to a terrific start
` Emerging Markets-Asia, $143M Revenues, 12% Y/Y Growth
` 15% Y/Y growth excluding the impact of FX
`
` Continued strong growth in a number of countries including China (12%), Korea (15%), and Malaysia (24%)
`
` In Q1, Bescon lenses launched in China, Korea, and Japan; expanding capacity to meet demand in Asia and
`rest of world
`
` Armoxindo (Indonesia) acquisition off to a strong start
` Emerging Markets-Latin America, $113M Revenues, -7% Y/Y Growth
` 3% Y/Y growth excluding the impact of FX
`
` 11% organic growth in Mexico
`
` Brazil continues to struggle due to slower market growth and weakness in the Probiotica business
` ROW Developed, $423M Revenues, -13% Y/Y Growth
` -5% Y/Y growth excluding the impact of FX
`
` Significant currency headwinds: Euro, Yen, Canadian Dollar, Australian Dollar
`
` Both Western Europe and Japan grew organically at low single digits
`
` Australia and Canada with flat organic growth due to patent expiries: Wellbutrin (Canada) and Aldara and
`Tambocor (Australia); but we expect to return to growth in the first half of 2015
`
`14
`
`Page 15 of 41
`
`

`

`Restructuring and Integration Charges
`Q1 2015 Q2 2015
`Estimate(a) Estimate(a)
`
`
`
`Q1
`
`Q2
`
`Q3
`
`Q4
`
`
`Restructuring / Integration
`Expense
`
`
`$135M $143M $63M $47M
`
` < $25M
`
`< $15M
`
` B+L Restructuring and Integration charges were $15M for the quarter, down from $36M in
`Q3
`
`
`
`
`
`In Q4, $29 million relates to deals closed in 2014 including Solta (Q1), ECR (Q2), Croma
`(Q3), Precision (Q3), Bescon (Q3), and MedPharma (Q4)
`
`
`
` Only $3 million of Q4 restructuring and integration charges relate to deals closed more than
`12 months ago and was primarily due to the closure of an Obagi facility
`
`
`
` Excluding Dendreon and Salix, restructuring and integration charges will continue to trend
`to zero
`
` We expect restructuring and integration charges equivalent to ~65% of annual
`synergies for both Dendreon and Salix
`
`(a) Excludes Dendreon and Salix restructuring and integration charges
`
`15
`
`Page 16 of 41
`
`

`

`Full Year 2014 Cash Flow from Operations
`
`Adjusted Q4 cash flow impacted by the acceleration of interest
`payments for the repayment of $945 million of bonds in Q4 and
`increase in prepaid expenses, including cost of DTC campaigns
`associated with new product launches
`
`(a) Excludes $287 million gain from Allergan transaction in Q4 and YTD 2014
`16
`
`Adjusted Net Income
`GAAP Cash Flow
`from Operations
`Adjusted Cash Flow
`from Operations (a)
`
`Cash conversion
`
`
`Investment in
`Working Capital
`
`Q1
`
`600
`
`484
`
`636
`
`Q2
`
`651
`
`376
`
`500
`
`Q3
`
`719
`
`619
`
`771
`
`Q4
`
`880
`
`816
`
`Full year
`
`2,850
`
`2,295
`
`624
`
`2,532
`
`89%
`
`43
`
`166
`
`13
`
`343
`
`565
`
`Page 17 of 41
`
`

`

`Balance Sheet
`
` Significant deleveraging in 2014 from 4.5x adjusted pro forma EBITDA to
`3.5x
` Debt reduced from $17.6B to $15.4B in 2014
`
` Repaid $1.2B debt in Q4, including $945M bonds and $255M Term Loan
` Accounts Receivable DSO* in line with previous quarters (calculated
`using gross sales):
` Q1 2014: 72 Days
`
` Q2 2014: 66 Days
`
` Q3 2014: 64 Days
`
` Q4 2014: 66 Days
` Due to changes in product mix and higher gross sales, accounts
`receivable increased by $196M with an offsetting increase in accrued
`liabilities of ~$123M related to rebates, returns and allowances
` Net increase of ~$73M in receivables net of accrued liabilities in Q4 vs. Q3 2014
`against $224M increase in net sales
`
`* Gross revenue is disclosed in 10K for calculation purposes
`
`17
`
`Page 18 of 41
`
`

`

`Q1 2015
`
`Page 19 of 41
`
`'VALEANT
`
`Page 19 of 41
`
`

`

`Q1 2015 Guidance
` Organic growth of 10-15% for total company
`
` Strong performance in a number of our businesses, including:
`
` U.S.: Dermatology, Contact Lenses, Dentistry, Obagi, Consumer
`
` Ex-U.S.: China, Thailand, Malaysia, Mexico, Middle East, Poland
`
` Continued momentum in 2014 launch brands: Jublia, Ultra, Retin-A Micro 0.08%
`
` Strong early days for Onexton
`
` Soft market conditions in Western Europe and Russia will result in low single-digit
`organic growth for both Western Europe and EMENA businesses in Q1
` Expect Cash EPS of at least $2.30 per share
`
` Outperformance in the U.S. will continue to offset foreign exchange headwinds
` Plan to update 2015 guidance on Q1 2015 conference call to reflect:
`
` Dendreon: expected to be accretive in 2015
`
` Salix: due to work-down of wholesaler inventory levels, expected to be modestly
`accretive in 2015, but >20% accretive in 2016
`
` Base business outperformance
`
`19
`
`Page 20 of 41
`
`

`

`Dendreon
`
`Dendreon
`
`Page 21 of41
`
`'VAL EAN T
`
`Page 21 of 41
`
`

`

`Dendreon
`
` Purchased assets for $415M net of cash
` Represents 1.3x sales
`
` The increased $15M from the original $400M was for a pipeline product and tax attributes
` Oncology is a platform that fits the Valeant business model
` Strong market growth
`
` Concentrated specialist prescribers where relationships matter
`
` Some large pharma companies beginning to de-emphasize
`
` Favorable reimbursement
`
` Opportunity to invest in targeted R&D for additional indications
` A company that fits our investment criteria
` Provenge, a unique immunotherapeutic, is durable, and we believe we can accelerate its growth
`
` Provides significant optionality, establishing a platform for additional tuck-in acquisitions
`
` Under-managed company; infrastructure built for a $1B+ product
`
` Financially compelling transaction
`
` Synergies of ~$130M+ (including manufacturing) excluding benefit of VRX corporate structure
`
` Ability to increase gross margin to approximately 65% by the end of 2015, with a longer term
`plan to reach ~80%
`
` IRR of ~30% at statutory tax rates, with a cash payback of ~5 years
`
`21
`
`Page 22 of 41
`
`

`

`Salix
`
`Page 23 of 41
`
`'VALEANT
`
`Page 23 of 41
`
`

`

`Transaction Highlights
`
` Acquiring all outstanding shares for $158.00 per share in cash
` Enterprise value of approximately $14.5 billion
`
` Fully committed financing from a syndicate of banks led by Deutsche Bank and HSBC
`
` Expected to close in the second quarter of 2015
` Transaction creates a new specialty platform for growth
` Branded GI market is growing at 5%
`
` Salix’s key promoted products are showing strong double digit growth
`
` Expected near-term approval for IBS-D indication of Xifaxan, providing an additional catalyst for
`future growth
`
` The launch of Uceris Foam and the approval of Relistor Oral will also contribute to future growth
`
` Attractive near-term pipeline
` Compelling returns for Valeant shareholders
` Expected to achieve run rate cost synergies of >$500 million across combined company cost base
`within six months
`
` From a 2015 ~$750M Salix OPEX base and a ~$3.2B combined company OPEX base
`
` Does not include any benefits of Valeant’s corporate structure
`
` No planned reductions to Salix’s Specialty sales forces or Hospital, Key Account, and Field
`Reimbursement teams; optimal size of Primary Care sales force to be evaluated
` IRR and cash payback in-line with our other large transactions
`
` Greater than 20% accretive in 2016
`
`23
`
`Page 24 of 41
`
`

`

`Salix is an Attractive Entry Into a Growing
`Therapeutic Area
`Criteria
`
`GI
`market
`
` Concentrated specialist prescriber population
`
` Sales representative and prescriber relationship matters
`
` Less of a priority for many larger pharmacos
`
` Favorable reimbursement
`
` Opportunity for low-risk, incremental innovation
`
` Market segment growth higher than average
`
`Salix
`
` Strong underlying volume growth in core products
`
` Attractive short-term pipeline
`
` Significant opportunity to create value through application
`of Valeant operating model
`
` Financially compelling returns
`
` Platform for value-added tuck-in acquisitions
`
`24
`
`Salix
`
`
`
`
`
`
`
`
`
`
`
`
`
`Page 25 of 41
`
`

`

`Why Gastrointestinal?
`Attractive market fundamentals
`U.S. Branded GI drug sales1
`USD MM
`▪ Growing market with attractive sub-
`segments
`▪ Significant patient unmet needs, since
`illnesses are:
`– Typically chronic
`– Damaging to quality of life
`– Undertreated
`▪ Strong potential to significantly expand
`the IBS-D market through DTC and
`other commercial levers
`▪ Majority of prescribing influenced by a
`concentrated specialist GI population
`▪ Competition primarily mid-sized and
`smaller players
`
`6,700
`
`5,000
`
`1 Excludes gastroesophageal reflux disorder and includes estimated GI revenue of major immunomodulators
`2 Other includes opioid induced constipation, ulcers, hemorrhoids, pancreatic insufficiency, etc.
`25
`
`SOURCE: EvaluatePharma, CDC
`
`2014
`
`2019E
`
`+5%
`CAGR
`
`8,700
`
`1,200
`300
`650
`
`11,200
`
`1,600
`
`550
`
`Other2
`
`Constipation
`
`Pancreatic
`insufficiency
`
`Ulcers
`
`Diarrhea
`
`Inflammatory
`Bowel Disease
`and Irritable
`Bowel Syndrome
`
`750
`850
`750
`
`750
`800
`
`Page 26 of 41
`
`

`

`Salix at a Glance
`
` Mid-sized specialty pharma company that is a clear
`leader in the GI market
`
` Ranked #1 GI sales force 3 of the past 4 years(a)
`
` Xifaxan comprises ~50% revenue
`
` Approved for Hepatic Encephalopathy (HE) and
`Traveler’s Diarrhea
`
` PDUFA date for IBS-D – May 27, 2015
`
` Other major products for Ulcerative Colitis (Apriso
`and Uceris) and opioid induced constipation
`(Relistor) with attractive growth prospects
`
` Attractive, low-risk short-term pipeline
`
` Xifaxan IBS-D indication
`
` Relistor oral indication (approval expected
`2016/2017)
`
` Xifaxan Crohn’s indication
`
` Xifaxan Early decompensated liver cirrhosis
`indication
`
`(a) Source: IMS
`
`26
`
`Traveler’s Diarrhea &
`Hepatic Encephalopathy (HE)
`
`Ulcerative Colitis
`
`Ulcerative Colitis
`
`Opioid Induced Constipation
`
`Page 27 of 41
`
`

`

`Recent Salix TRx Growth
`
`Xifaxan TRx trends
`
`Apriso TRx trends
`
`17% y/y
`
`160,000
`
`140,000
`
`120,000
`
`0
`
`25% y/y
`
`140,000
`
`120,000
`
`100,000
`
`80,000
`
`0
`
`1Q13
`
`2Q13
`
`3Q13
`
`4Q13
`
`1Q14
`
`2Q14
`
`3Q14
`
`4Q14
`
`1Q13
`
`2Q13
`
`3Q13
`
`4Q13
`
`1Q14
`
`2Q14
`
`3Q14
`
`4Q14
`
`Relistor TRx trends
`
`Uceris TRx trends
`
`15% y/y
`
`107% y/y
`
`11,500
`
`11,000
`
`10,500
`
`10,000
`
`9,500
`
`9,000
`
`8,500
`
`0
`
`1Q13
`
`2Q13
`
`3Q13
`
`4Q13
`
`1Q14
`
`2Q14
`
`3Q14
`
`4Q14
`
`1Q13
`
`2Q13
`
`3Q13
`
`4Q13
`
`1Q14
`
`2Q14
`
`3Q14
`
`4Q14
`
`Sources: SHS PHAST Retail
`
`27
`
`35,000
`
`30,000
`
`25,000
`
`20,000
`
`15,000
`
`10,000
`
`5,000
`
`0
`
`Page 28 of 41
`
`

`

`Salix Adds Another Growth Platform in
`the U.S.
`
`2015(E) Valeant U.S. Revenue
`
`2015(E) Pro Forma U.S. Combined Company
`Revenue
`
`Oncology
`5%
`
`Eye Health
`
`16%
`
`Gastrointestinal1
`24%
`
`Eye Health
`
`12%
`
`Neurology&Other/
`Dental/Gx
`
`39%
`
`Oncology 4%
`
`29% Dermatology
`Rx
`
`Dermatology
`Rx
`
`22%
`
`30%
`
`8%
`
`Consumer
`
`11%
`
`Consumer
`
`Total: ~$5.9B
`
`1 Excludes the impact of wholesaler inventory levels
`
`28
`
`Neurology&Other/
`Dental/Gx
`
`Total: ~$7.9B
`
`Page 29 of 41
`
`

`

`Wholesaler Inventory Management
`
` On November 6, 2014 Salix disclosed that it had 5-9 months of
`inventory of its top four products at wholesalers
`
` Valeant has conducted extensive due diligence and taken into
`account Salix’s wholesaler inventory levels and remediation plan,
`as well as associated potential litigation and regulatory exposure
`
` Valeant expects to work down wholesaler inventory and plans to
`target two months or less of inventory by year-end 2015
`
` The net impact of the plan to reduce wholesaler inventory levels
`on 2015 revenues is expected to be greater than ~$500 million
`
`29
`
`Page 30 of 41
`
`

`

`Key Products
`
`($M)
`
`Product
`
`Xifaxan
`
`Condition/
`Indication
`
`Patent
`Expiry
`
`Competitive advantage
`
`
`
`
`
`2015E revenue1
`(% contribution)
`
`Hepatic
`encephalopathy/
`Travelers’
`diarrhea
`
` 2029
`
` Label expansion expected into
`IBS-D
`
`$900
`(50%)
`
`Uceris
`
`Ulcerative colitis  2031
`
` Favorable safety profile
` Foam formulation to expand usage
`
`$195
`(10%)
`
`Apriso
`
`Maintenance of
`remission UC
`
` 20223  Strong formulary coverage
`
`Purgatives Colon cleansers  20182, 3
`
`Relistor
`Injection
`
`OIC
`
` 2030
`
` Moviprep differentiated by the
`inclusion of ascorbic acid in its
`formulation
`
` Recent label expansion for
`treatment of patients on opioids for
`chronic pain unrelated to cancer;
`Relistor Oral approval expected
`2016/2017
`
`$150
`(8%)
`
`$85
`(4%)
`
`$80
`(4%)
`
`Base case
`volume
`growth
`assumptions
`2015(E) vs.
`2014
`
`30%
`
`40%
`
`5%
`
`0%
`
`5%
`
`Glumetza Type 2 diabetes  20163
`
` Extended release formulation
`allows more convenient dosing
`
`$200
`(10%)
`
`5-10%
`
`1 Excludes the impact of wholesaler inventory levels
`2 Patent expiry for Moviprep, which has majority of revenue
`3 Reflects generic entry settlement date
`
`
`30
`
`Page 31 of 41
`
`

`

`Significant Combined Company Synergy
`Opportunity
`
`2015(E) Combined Cost
`($M)
`
`Synergies ($M) % Reduction
`
`SG&A
`
`R&D
`Manufacturing
`(COGS)
`
`Total
`
`~$2,700
`
`~$450
`
`~$2,600
`
`~$5,750
`
`~$350
`
`~$150
`
`$0
`
`>$500
`
`13%
`
`33%
`
`0%
`
`9%
`
` No planned reductions to Salix’s Specialty sales forces or Hospital, Key
`Account, and Field Reimbursement teams; optimal size of Primary Care
`sales force to be evaluated
`
` Run-rate cost savings achieved within 6 months; expected integration
`costs of ~65% of total annual synergies
`
`31
`
`Page 32 of 41
`
`

`

`Financing and Financial Impact
`
` Transaction is entirely debt financed
`
` Transaction will be financed with a combination of bank debt (~35% of total) and bonds (~65% of
`total)
`
` Committed financing from Deutsche Bank, HSBC, MUFG, DNB Bank ASA, and SunTrust
`Robinson Humphrey, Inc.
`
` $22.5B in committed debt consisting of $15B to finance the transaction and $7.5B to backstop
`VRX’s existing secured debt while seeking amendment to credit agreement
`
` ~5.6x Net Debt/ Adjusted Pro Forma EBITDA
`
` Negatively impacted by Salix’s artificially low EBITDA due to its plan to reduce wholesaler
`inventory levels
`
` Attractive deleveraging profile – company expects leverage to be below 4.0x by the second half of
`2016
`
` In 2016, Valeant expected to have pro-forma EBITDA in excess of $7.5 billion and free cash flow
`in excess of $4.0 billion before any mandatory repayments
`
` BD activity to focus on tuck-ins
`
` In the near term, we continue to expect combined company tax rate of ~5%
`
` Greater than 20% accretion in 2016
`
` Modestly accretive in 2015 due to the plan to reduce wholesaler inventory levels
`
`32
`
`Page 33 of 41
`
`

`

`Enterprise Value
`($ M)
`
`Salix Equity
`(65.7M fully diluted shares at $158/share)
`
`2015 Convertibles
`
`2019 Convertibles
`
`Term Loan
`
`Senior Notes due 2021 (including
`breakage)
`
`$10,382
`
`$1,181
`
`$1,683
`
`$1,126
`
`$857
`
`Estimated balance sheet cash/convert hedge unwind ~$(660)
`
`Total enterprise value
`
`~$14,500
`
`Note: includes accrued interest; excludes fees and expenses
`
`33
`
`Page 34 of 41
`
`

`

`Summary
`
` 2015 is off to a strong start
`
` Many businesses are over-delivering against high expectations, e.g.,
`
` U.S. Dermatology (e.g., Jublia, Onexton)
`
` U.S. Contact Lens business and U.S. Consumer
`
` Middle East and Africa
`
` China
`
` Salix: A new platform for growth
`
` Attractive, growing market
`
` Exciting portfolio of growth products
`
` Attractive tuck-in opportunities
`
` We will report Salix and Dendreon going forward as two U.S. business units, including
`revenue and restructuring and integration charges; this will enable investors to see the
`continued strong organic growth performance of our base business
`
` Look forward to updating guidance on our Q1 conference call
`
`34
`
`Page 35 of 41
`
`

`

`Back Up
`
`Page 36 of 41
`
`'VALEANT
`
`Page 36 of 41
`
`

`

`Full Year 2014 Financial Results
`
`
`
`2014
`
`2013
`
`Y/Y %
`
`Total Revenue
`
`$8.3B
`
`$5.8B
`
`43%
`
`Cash EPS
`
`$8.34
`
`$6.24
`
`34%
`
`GAAP Cash Flow from Operations
`
`$2.29B
`
`$1.04B
`
`120%
`
`Adjusted Cash Flow from
`Operations*
`
`$2.53B
`
`$1.78B
`
`42%
`
`Cash Conversion
`
`89%
`
`87%
`
`N/A
`
`* Excludes $287M gain from Allergan transaction
`
`36
`
`Page 37 of 41
`
`

`

`Jublia Weekly TRx Growth Accelerating from
`DTC
`• 4Q 2014 sales >$50 million
`• Annualized run rate >$200 million
`
`
`
`20,000+
`
`DTC TV
`
`37
`
`Page 38 of 41
`
`

`

`New JUBLIA Football Commercial
`Debuted During Super Bowl
`
`• Strong integrated DTC campaign
`igniting growth
`• TV, Print, Digital to maximize
`Super Bowl airing
`• Reached an audience of >50M
`Households, >114M People
`• Generated more than 1.2 Billion
`media impressions
`• DTC activating largest pool of
`patients who see PCPs
`• PCPs are now largest group of
`prescribers
`
`38
`
`Page 39 of 41
`
`

`

`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
`
`
`
` Q4 2013
` $2,064M
`
`Q1 2014
`$1,886M
`
`Q2 2014
`$2,041M
`
`Q3 2014
`$2,056M
`
`Q4 2014
`$2,280M
`
`
`
`
`
`
`
`26%
`
`22%
`$60M
`
`49%
`$2.15
`
`$280M
`$607M
`341M
`
`26%
`
`26%
`$61M
`
`28%
`
`25%
`$66M
`
`26%
`
`24%
`$59M
`
`24%
`
`23%
`$59M
`
`
`
`
`
`
`
`
`
`
`
`45%
`$1.76
`
`$484M
`$636M
`342M
`
`44%
`$1.91
`
`$376M
`$500M
`341M
`
`47%
`$2.11
`
`$619M
`$771M
`341M
`
`50%
`$2.58
`
`$816M
`$624M
`342M
`
`* Excludes $287M gain from Allergan transaction
`
`39
`
`Page 40 of 41
`
`

`

`FX Impact on Q4 versus October
`Guidance
`
` Significant Q4 FX headwinds from October spot rates
`
`Q4 impact
`•
` Revenue: ~$(42)M
`• Cash EPS: ~$(0.09)
`
`40
`
`Currency
`Russian Ruble
`
`Euro
`
`Japanese Yen
`
`Polish Zloty
`
`Mexican Peso
`
`Australian Dollar
`
`Brazilian Real
`
`Serbian Dinar
`
`Canadian Dollar
`
`Singapore Dollar
`
`British Pound
`
`South Korean Won
`
`Q4 Actual % Change
`vs. 10/15/14
`(17.6)%
`
`(2.8)%
`
`(8.2)%
`
`(2.7)%
`
`(2.6)%
`
`(3.3)%
`
`(3.7)%
`
`(3.6)%
`
`(0.9)%
`
`(2.9)%
`
`(1.2)%
`
`(2.2)%
`
`Page 41 of 41
`
`