Valeant
`Pharmaceuticals
`International, Inc.
`
`First Quarter 2015
`Financial Results Conference Call
`April 29, 2015
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1612
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`Page 1 of 29
`
`

`

`Forward-looking Statements
`
`Forward-looking Statements
`Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements regarding the
`expected integration of the Dendreon and Salix businesses, the amount and timing of expected synergies, expected future performance, including
`2015 guidance with respect to revenue, Cash EPS, organic growth, our inventory reduction program, and our outlook with respect to performance in
`2016, expectations with respect to gross margins, marketing efforts, debt reduction, and restructuring expenses, the timing of and outcome of
`regulatory approvals and commercial plans with respect to product candidates. Forward-looking statements may generally be identified by the use
`of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,” or
`“continue” and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are
`subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
`These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the Company's most recent annual or quarterly
`report and detailed from time to time in Valeant’s other filings with the Securities and Exchange Commission and the Canadian Securities
`Administrators, which factors are incorporated herein by reference. 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 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,
`April 29, 2015, and will not be updated or affirmed unless and until the Company
`publicly announces updated or affirmed guidance.
`
`1
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`Page 2 of 29
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`

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`Agenda
`
`1. First Quarter 2015 Results
`
`2. Business Performance
`
`3. Dendreon and Salix Integration
`
`4. Financial Summary and 2015 Guidance
`
`
`
`2
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`Page 3 of 29
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`Q1 Highlights (1/2)
` Continued outperformance of U.S. businesses, driven by recent
`product launches, fueled top line and bottom line results
` Exceeded Q1 Guidance despite losing $140 million of revenues and $0.12
`Cash EPS due to the rising U.S. dollar
`
` Excluding negative impact from foreign exchange and divestiture of
`injectable business, revenue increased 27% and Cash EPS increased
`50% Y/Y
` Strong performance from most business units around the
`world helped to fuel 15% same store organic growth in Q1
` Third consecutive quarter of organic growth >15%
` Salix and Dendreon integrations largely complete
` Salix to deliver more than $530 million in synergies and achieve $500
`million run rate synergies by the end of Q2
`
` Dendreon to deliver more than $130 million in synergies and achieve 90%
`run rate synergies by year-end
`
` Dendreon profitable in Q1 with revenues as expected
`
`3
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`Page 4 of 29
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`

`

`Q1 Highlights (2/2)
`
` Increasing 2015 Cash EPS guidance to $10.90 - $11.20
` Based on outperformance of Legacy Valeant, coupled with contributions
`from Salix and Dendreon
`
` Total company organic growth > 10% (same store) Q2 through Q4;
`Bausch + Lomb organic growth ~ 10% full year 2015
` Reconfirming 20%+ Cash EPS accretion and expectation to
`exceed $7.5 billion EBITDA in 2016
`
`4
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`Page 5 of 29
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`

`

`Q1 2015 Financial Results
`
`
`
`Q1 2015
`
`Q1 2014
`
`Y/Y%
`
`Adjusted
`Y/Y%(a),(b)
`
`
`Total Revenue
`
`$2.19 B
`
`$1.89 B
`
`16%
`
`27%
`
`Cash EPS
`
`$2.36
`
`$1.76
`
`34%
`
`50%
`
`Salix Acquisition Related
` Includes ($0.01) impact from incremental shares issued
` Excludes ($0.02) impact from cash interest expense for debt issued
`prior to close
`
`a) FX Impact: Revenue -$140 million and Cash EPS -$0.12
`b) 2014 includes $53 million in revenue and $0.11 Cash EPS from divested injectable business
`
`
`5
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`Page 6 of 29
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`

`

`Q1 2015 Organic Growth
`
`Same Store Sales – Y/Y growth rates for businesses that have
`been owned for one year or more
`
`
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`
`
`
`
`Q1 2015
`
`26%
`
`18%
`
`7%
`
`15%
`
`Pro Forma – Y/Y growth rates for entire business, including
`businesses that have been acquired within the last year
`
`
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`Q1 2015
`
`36%
`
`25%
`
`7%
`
`21%
`
`6
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`Page 7 of 29
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`

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`Bausch + Lomb Organic Growth
`
`Country/Region
`
`United States
`
`Consumer
`
`Rx Pharma
`
`Surgical
`
`Contact Lens
`
`Other Developed Markets
`Emerging Markets
`Total (a)
`
`Q1 2015 Product Sales
`
`$321
`
`$111
`
`$116
`
`$48
`
`$48
`
`$240
`
`$184
`$745
`
`Y/Y%
`
`14%
`
`4%
`
`32%
`
`0%
`
`17%
`
`-4%
`
`7%
`6%
`
`Other Developed Markets impacted by Japan’s -14% Y/Y due to April 1, 2014 sales
`tax increase in Japan, which resulted in incremental Q1 2014 demand
`Excluding impact from Japan – Bausch + Lomb grew 8% Y/Y
`
`(a) Excludes Bausch + Lomb generics which are managed and reported with Valeant generics and total company organic growth
`
`7
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`Page 8 of 29
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`

`

`Q1 2015 Top 20 Brands
`
` Top 20 products revenue of $857M in Q1 2015, representing
`40% of total revenue
`
` Largest product contributed ~3% of Q1 revenue
`
` Top 10 products contributed 27% of Q1 revenue
`
` Top 20 products, excluding newly acquired products
`(Provenge, Isuprel, Nitropress), grew 36% Q1 2015 over Q1
`2014
`
` Majority of growth from volume
`
` Once Salix wholesaler inventory levels have normalized,
`4-5 Salix products will enter the Top 20
`
`8
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`Page 9 of 29
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`

`

`Q1 2015 Top 20 Brands (1/2)
`($M)
`
`
`
`Product
`
`Q1 14
`
`1) Isuprel®
`
`2) Wellbutrin®
`
`3) Jublia®
`
`4) Nitropress®
`
`5) Ocuvite®/PreserVision®
`
`6) Xenazine®
`
`7) Solodyn®
`
`8) Targretin® Capsules
`
`9) Lotemax® Franchise
`
`10) ReNu Multiplus®
`
`-
`
`$69
`
`$72
`
`-
`
`-
`
`$60
`
`$50
`
`$51
`
`$15
`
`$26
`
`$55
`
`$3
`
`-
`
`$66
`
`$54
`
`$43
`
`$29
`
`$45
`
`$49
`
`9
`
`Q2
`
`-
`
`Q3
`
`-
`
`$80
`
`$12
`
`-
`
`$62
`
`$56
`
`$54
`
`$44
`
`$35
`
`$41
`
`Q4
`
`Q1 15
`
`-
`
`$82
`
`$54
`
`-
`
`$62
`
`$52
`
`$61
`
`$48
`
`$47
`
`$46
`
`$72
`
`$68
`
`$62
`
`$62
`
`$60
`
`$57
`
`$57
`
`$51
`
`$43
`
`$42
`
`Page 10 of 29
`
`

`

`Q1 2015 Top 20 Brands (2/2)
`($M)
`
`
`Product
`
`11) Virazole®
`
`12) Arestin®
`
`13) CeraVe®
`
`14) Provenge®
`
`15) Retin-A® Franchise
`
`16) BioTrue® Solution
`
`17) Elidel®
`
`18) Carac®
`
`19) Ziana®
`
`20) Zovirax® Franchise
`
`Q1
`
`$13
`
`$15
`
`$22
`
`-
`
`$18
`
`$24
`
`$26
`
`$12
`
`$14
`
`$40
`
`Q2
`
`$7
`
`$30
`
`$26
`
`-
`
`$19
`
`$27
`
`$25
`
`$12
`
`$13
`
`$19
`
`10
`
`Q3
`
`$3
`
`$30
`
`$21
`
`-
`
`$30
`
`$26
`
`$22
`
`$14
`
`$17
`
`$23
`
`Q4
`
`$17
`
`$38
`
`$27
`
`-
`
`$30
`
`$25
`
`$31
`
`$42
`
`$23
`
`$35
`
`Q1
`
`$33
`
`$32
`
`$30
`
`$30
`
`$28
`
`$28
`
`$26
`
`$26
`
`$26
`
`$25
`
`Page 11 of 29
`
`

`

`U.S. Dermatology Highlights
` All promoted products had positive organic growth
`
` Driven by new product launches, dermatology grew 38% Y/Y
`
` Jublia
`
` Jublia TRxs Up 87% Q/Q resulting from sales force and DTC efforts
`
` New Jublia Tennis Commercial aired April 20th featuring John McEnroe
`
` Jublia 8mL launch planned for early May
`
` #1 among Dermatologists with 50% market share
`
` #1 among Podiatrists with 38% market share
`
` Primary care writers continue to grow
`
` Onexton
`
` January launch; script trends similar to Jublia launch; ~5,000 scripts per week after
`14 weeks
`
` First commercial aired April 6
`
` Fully integrated DTC campaign accelerating growth
`
` Retin-A Micro Franchise
` Sales up >50% Y/Y
` Luzu
`
` New Luzu DTC campaign accelerated weekly TRx to new high
`
` Obagi and Solta
`
` Combined growth of 24% Y/Y
`
`11
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`Page 12 of 29
`
`

`

`
`
`U.S. Eye Health Highlights
` Contact Lenses
` Growth driven by the success of Biotrue ONEday
`
` Biggest revenue quarter for Biotrue ONEday since launch, growing >100% Y/Y
`
` Biotrue ONEday Toric approved
`
` Bausch + Lomb Ultra continues to be well received by healthcare professionals
`and is currently selling to capacity (pilot line only)
`
` Bausch + Lomb Ultra production from first commercial line beginning in May
` Ophthalmology Rx
` Continued strong double digit growth across multiple brands
`
` Bausch + Lomb Ultra Multifocal and Toric approved
` Surgical
` Double digit growth for Trulign, enVista, Stellaris/PC and VICTUS procedures Y/Y
`
` Growth offset decline in Excimer laser and conversion from sales to leases of
`VICTUS Femtosecond lasers
`
` 3 product launches including VICTUS which received 510K clearance on new
`software and hardware
`
` Minimal market growth in cataract surgeries Y/Y
`12
`
`Page 13 of 29
`
`

`

`Other U.S. Business Highlights
`
` Neuro & Other/Generics
` Organic growth driven by Xenazine, Ammonul and Virazole
` Consumer
` Strong organic revenue growth from CeraVe (40%), Preservision (20%), Occuvite
`(15%) and Soothe XP (19%)
`
` Lens care grew 17% Y/Y driven by 24% growth in BioTrue Multipurpose Solutions
` Oral Health
` High double digit growth driven by strong volume growth for Arestin
`
` Continued additions to the dental product portfolio
`
`13
`
`Page 14 of 29
`
`

`

`Rest of World Business Highlights
` Emerging Markets - Europe/Middle East, $212M Revenues, 6%
`Y/Y Organic Growth
` Strong organic growth in Poland (29%) and the Middle East (26%)
`
` Russia organic growth negative given strong consumer buying in Q4 14 ahead of
`retail price increases
` Emerging Markets - Asia, $125M Revenues, 10% Y/Y Organic
`Growth
` Strong organic growth across most markets including Thailand (30%+), China
`(17%), S. Korea (15%), and Malaysia (13%)
` Emerging Markets - Latin America, $89M Revenues, 7% Y/Y
`Organic Growth
` Mexico delivered 11% organic growth
` ROW Developed, $361M Revenues, -1% Y/Y Organic Growth
` Strong performance in Canada and Australia, with 9% and 3% organic growth,
`respectively
`
` Japan declined by (10%) Y/Y due to April 1, 2014 sales tax increase which resulted
`in incremental Q1 2014 demand
`
`14
`
`Page 15 of 29
`
`

`

`Dendreon Integration
`
` Dendreon off to a strong start
`
` Revenue on plan
`
` Profitable in Q1 as a result of restructuring of the business
`
` All synergies identified with total plan of ~ $130 million+ (including
`manufacturing)
`
` 90% of synergies on a run rate basis to be achieved by year-end
`
` Gross margins in mid-60% by year-end
`
` Focus on new accounts while maintaining support with existing users
`
` Renewed emphasis on urology in addition to oncology
`
`15
`
`Page 16 of 29
`
`

`

`Salix Integration (1/3)
`
` Completed acquisition on April 1, 2015
` New Leadership team appointed
`
` Bill Bertrand: General Manager, former COO Salix
`
` John Temperato: Head of Sales, previously held senior sales positions at
`Salix
`
` Tom Hadley: Head of Marketing, former marketing lead for Jublia and
`Luzu
` Synergies
` All synergies identified, plan to exceed original synergy guidance of $500M
`with $530 million in synergies now expected
`
` $500 million run rate synergies to be captured by end of Q2 – remainder by
`year-end
`
` All office based employees notified Day 1
`
` Order to cash processes integrated Day 1
`
`16
`
`Page 17 of 29
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`

`

`Recent Salix TRx Trends (2/3)
`
`+19% y/y
`
`Sources: SHS PHAST and Company Data
`
`17
`
`Page 18 of 29
`
`

`

`Salix Integration (3/3)
` Expanded and refocused sales forces
` Maintaining three specialty GI sales forces with some realignment
` Expanding Hospital and Federal teams which will also promote select
`Valeant products
`
` Creating new sales force to provide greater focus on pain covering Relistor
`and Valeant brands
`
` Plan to cover primary care through specialty sales force coupled with
`extensive DTC advertising once IBS-D indication is approved
` Refocused marketing
` Greater focus on DTC and patient engagement across brands
` Xifaxan - IBS-D Update
` PDUFA date of May 28
`
` In discussion with the FDA on labeling
`
`
`
`18
`
`Page 19 of 29
`
`

`

`Key R&D Milestones for 2015
`
`Product
`
`Category
`
`Action
`
`Status
`
`EnVista Toric
`
`Eye Health
`
`File PMA 1H 2015
`
`Additional studies requested
`To Be Filed mid- 2016
`
`Luminesse™ (Brimonidine)
`
`Eye Health
`
`File NDA 1H 2015
`
`Filed NDA in March
`
`Vesneo (glaucoma)
`
`Eye Health
`
`File NDA 1H 2015
`
`On Track
`
`Lotemax Gel Next Gen
`
`Eye Health
`
`File NDA 2H 2015
`
`Filing delayed until mid-2016
`
`Ultra Multi Focal
`
`Eye Health
`
`File PMA 1H 2015
`
`Ultra Toric
`
`Eye Health
`
`File PMA 2H 2015
`
`BioTrue Toric
`
`Eye Health
`
`File PMA 2H 2015
`
`Approved
`
`Approved
`
`Approved
`
`IDP-118 (moderate to
`severe plaque psoriasis)
`
`IDP – 120 (novel acne
`combination )
`
`Derm
`
`Initiate Phase III 1H 2015
`
`Phase III Initiated
`
`Derm
`
`Initiate Phase II 2H 2015
`
`On Track
`
`Arestin LCM
`
`Oral Health
`
`File NDA 2H 2015
`
`Xifaxan (IBS-D Indication)
`
`Gastrointestinal
`
`PDUFA Date May 28
`
`On Track
`
`On Track
`
`19
`
`Page 20 of 29
`
`

`

`Financial Outlook
`
`Howard Schiller
`
`Page 21 of 29
`
`

`

`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
`
`
`
` Q1 2014
` $1,886M
`
`Q2 2014
`$2,041M
`
`Q3 2014
`$2,056M
`
`Q4 2014
`$2,280M
`
`Q1 2015
` $2,191M
`
`
`
`
`
`
`
`26%
`
`26%
`$61M
`
`45%
`$1.76
`
`$484M
`$636M
`342M
`
`28%
`
`25%
`$66M
`
`26%
`
`24%
`$59M
`
`24%
`
`23%
`$59M
`
`
`
`
`
`
`
`
`
`44%
`$1.91
`
`$376M
`$500M
`341M
`
`47%
`$2.11
`
`$619M
`$771M
`341M
`
`50%
`$2.58
`
`$816M
`$624M
`342M
`
`25%
`
`26%
`$56M
`
`47%
`$2.36
`
`$491M
`$708M
`343M
`
`21
`
`Page 22 of 29
`
`

`

`Geographic breakdown
`
`Based on actuals & projected 2016 revenue
`
`Q1 14
`8%
`4%
`6%
`5%
`10%
`7%
`12%
`
`Q1 15
`
`4%
`
`6%
`
`8%
`
`8%
`
`10%
`
`64%
`
`64%
`
`53%
`
`9%
`
`13%
`
`9%
`
`2016 Est.
`
`12%
`6%
`
`3%
`4%
`
`19%
`
`7%
`
`9%
`
`49%
`71%
`
`20%
`
`United States
`
`Emerging Europe, Africa, & Middle East
`
`Asia
`
`Western Europe
`
`Canada / Australia
`
`Latin America
`
`22
`
`Page 23 of 29
`
`

`

`Restructuring and Integration Expenses
` Q1 restructuring and integration expenses of $65M
` As projected, pre-2015 transactions represented < $25M; Majority related
`to Bausch + Lomb Waterford plant
`
` 2015 transactions represented $41M in the quarter of which Dendreon was
`$35M
` Q2 restructuring and integration expenses for pre-2015
`transactions expected to be < $10M
` Salix and Dendreon
` Salix: Restructuring and integration expenses expected to be ~$300M
`
` Significant restructuring accounting charge to occur in Q2 2015, while cash
`severance will be paid out over 1-3 years, depending upon employee position
`
` Dendreon: Additional $20M restructuring charge in 2015 (for a total of $55M
`or ~40% of synergies)
`
`23
`
`Page 24 of 29
`
`

`

`Cash Flow from Operations
`Q1 2015
`
`
`Adjusted Net Income
`
`GAAP Cash Flow from
`Operations
`
`Adjusted Cash Flow from
`Operations
`
`
`$809 million
`
`
`$491 million
`
`
`$708 million
`
`Cash Conversion
`
`88%
`
` Adjusted cash flow from operations excludes build up of A/R related to
`Marathon where we did not purchase A/R
` Under the terms of a renegotiated managed care contract, two quarterly
`rebate payments made in Q1 2015
` Excluding second payment, adjusted cash flow would be $757 million,
`or 94% cash conversion
` Investment in working capital was $78 million driven largely by an increase
`in inventory
`
`24
`
`Page 25 of 29
`
`

`

`Balance Sheet
` Post- Salix: $31.2B total debt
` Weighted average cost of debt: 5.1%
`
` ~ 40% bank / 60% bonds
` Revolver currently undrawn
` Bonds for Salix acquisition consolidated on Balance Sheet in Q1
`even though transaction had not yet closed
` ~ $10.1 B bonds closed into escrow on March 27th
`
` Proceeds from bonds included in restricted cash
`
` Proceeds from equity included in cash and cash equivalents
`
` Fees and expenses related to Salix debt financing in accrued liabilities
` Accounts Receivable DSO* in line with previous years (calculated
`using gross sales):
` Q1 2014: 72 Days
`
` Q1 2015: 71 Days
`* Gross revenue is disclosed in 10K for calculation purposes
`
`
`25
`
`Page 26 of 29
`
`

`

`Updated 2015 Guidance (1/2)
`New 2015
`Previous 2015
`$10.4 - $10.6 billion
`$9.2 - $9.3 billion
`
`
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`Revenues
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`Cash EPS
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` Organic growth > 10% (same store) expected Q2 through Q4
` Bausch + Lomb organic growth ~10% for full year 2015
` Timing of synergy capture
` Salix to deliver more than $530 million in synergies and achieve $500
`million run rate synergies by the end of Q2
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`$10.90 - $11.20 per share
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`$10.10 - $10.40 per share
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` Dendreon to deliver more than $130 million in synergies and achieve
`90% of run rate synergies by year-end
` Debt and Shares Outstanding
` Weighted average cost of debt: ~5.1%
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` 350 million fully diluted shares outstanding Q2 through Q4
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`Updated 2015 Guidance (2/2)
` Salix revenue of ~$1.0 billion
` Does not assume IBS-D approval; we will update guidance post approval
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` Assumes inventory levels reduced to 1.5 months or less by year end
` Operating cash flow
` Legacy Valeant will continue to target greater than 90% cash conversion
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` Salix operating cash flow impacted by wholesaler inventory work down program
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` Will update guidance for operating cash flow when work down program is well under
`way
` Guidance does not include use of balance sheet
` Expect debt paydown and small acquisitions
` Q2 Guidance
` Revenues: $2.45 - $2.55 billion
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` Cash EPS: $2.40 - $2.50
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` Reflects significant inventory work down of Salix products
` 2016 Outlook
` Reconfirm 20%+ Cash EPS accretion assuming IBS-D approval by end of 2015
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` Expect to exceed $7.5B EBITDA in 2016
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`Valeant
`Pharmaceuticals
`International, Inc.
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`First Quarter 2015
`Financial Results Conference Call
`April 29, 2015
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`Page 29 of 29
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