THOMSON REUTERS STREETEVENTS
`EDITED TRANSCRIPT
`VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings
`Call
`
`EVENT DATE/TIME: JULY 23, 2015 / 12:00PM GMT
`
`OVERVIEW:
`VRX reported 2Q15 total revenues of $2.7b and cash EPS of $2.56. Expects 2015
`revenues to be $10.7-11.1b and cash EPS to be $11.50-11.80.
`
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`Page 1 of 18
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`ACRUX DDS PTY LTD. et al.
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`EXHIBIT 1660
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`IPR Petition for
`
`U.S. Patent No. 7,214,506
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
`
`C O R P O R A T E P A R T I C I P A N T S
`Laurie Little Valeant Pharmaceuticals International Inc - Head of IR
`
`J Michael Pearson Valeant Pharmaceuticals International Inc - Chairman & CEO
`
`Rob Rosiello Valeant Pharmaceuticals International Inc - CFO
`
`Ari Kellen Valeant Pharmaceuticals International Inc - Company Group Chairman
`
`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
`Chris Schott JPMorgan - Analyst
`
`Andrew Finkelstein Susquehanna Financial Group - Analyst
`
`Brandion Folkes Guggenheim Securities LLC - Analyst
`
`Annabel Samimy Stifel Nicolaus - Analyst
`
`David Amsellem Piper Jaffray & Co. - Analyst
`
`Tim Chiang BTIG - Analyst
`
`Gregg Gilbert Deutsche Bank - Analyst
`
`Alex Arfaei BMO Capital Markets - Analyst
`
`Marc Goodman UBS - Analyst
`
`Gary Nachman Goldman Sachs - Analyst
`
`Douglas Tsao Barclays Capital - Analyst
`
`David Risinger Morgan Stanley - Analyst
`
`Corey Davis Canaccord Genuity - Analyst
`
`Glenn Greenberg Brave Warrior Advisors - Analyst
`
`David Steinberg Jefferies LLC - Analyst
`
`Alan Ridgeway Scotiabank - Analyst
`
`P R E S E N T A T I O N
`Operator
`
`Good morning. My name is Angela, and I will be your conference operator. At this time, I would like to welcome, everyone, to the Valeant
`Pharmaceuticals' second-quarter 2015 financial results conference call.
`
`(Operator Instructions)
`
`Thank you. I would now like to turn the conference to Ms Lori Little, Head of Investor Relations. Please go ahead.
`
`Laurie Little - Valeant Pharmaceuticals International Inc - Head of IR
`
`Thanks, Angela. Good morning, everyone. Welcome to Valeant's investor conference call, where we will be discussing our second-quarter 2015
`financial results. Participating on today's call are: J Michael Pearson, Chairman and Chief Executive Officer; Rob Rosiello, Chief Financial Officer; Dr
`
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
`
`Ari Kellen, Company Group Chairman; and Anne Whitaker, Company Group Chairman. In addition to a live webcast, a copy of today's slide presentation
`can be found on our website under the Investor Relations section.
`
`Before we begin, 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 non-GAAP financial measures, please refer
`to slide 2. Non-GAAP reconciliations can be found in the press release issued earlier today and posted on our website.
`
`Finally, the financial guidance in this presentation is effective only as of today. It is our policy to update or affirm guidance only through broadly
`disseminated public disclosure. With that, I will turn the call over to Mike.
`
`J Michael Pearson - Valeant Pharmaceuticals International Inc - Chairman & CEO
`
`Thank you, Laurie. Good morning, everyone. Thank you for joining us.
`
`We are pleased to report exceptional results across all financial and operational metrics for our second quarter. Driven by a strong sales growth in
`profitability across our regions and businesses and once again demonstrating the strength of our diversified and decentralized business model.
`
`Before we begin discussing the details of our performance, I wanted to provide the highlights of the quarter. We have now delivered four consecutive
`quarters of more than 15% same-store organic growth. Strong performance throughout our businesses resulted in both our top and bottom line
`exceeding the Q2 guidance that we provided on our last call. These results were driven by the continued outperformance of our US businesses
`and strong results around the world including Asia, Australia, Canada, Mexico, and the Middle East and North Africa.
`
`I am also pleased to report that Salix is off to a fast start. The productivity of Salix's R&D portfolio is demonstrated by the approval of Xifaxan for
`IBS-D in May and the NDA filing for Relistor Oral in June; two significant milestones for our GI business. We remain focused on reducing Salix's
`wholesaler inventory and are on plan.
`
`Specifically, we have reduced inventory levels for Salix products to approximately 3 to 3.5 months as compared to 4 to 5 months at the April 1
`close. Finally, we have already achieved $500 million in run-rate synergies and fully expect to achieve $530 million by the end of the year.
`
`Third, Dendreon continues to exceed our expectations for both revenue and profitability. We achieved: $74 million in revenues through the second
`quarter, an increase of 18% versus the previous quarter; and gross margins of approximately 64%, an improvement of 15%. And operating margins
`of approximately 40% to 45%, which we expect to continue to improve through the remainder of the year. This is a huge turnaround for a Company
`that was unprofitable just last year.
`
`On the business development front, we have remained quite active with eight tuck-in deals already signed and/or closed so far this year. Later in
`the presentation, we will provide an annual update on M&A performance since 2008.
`
`Based on our strong base business performance and the approval of Xifaxan for IBS-D, we are raising 2015 cash EPS guidance to $11.50 to $11.80.
`Our revenue guidance, we're raising to $10.7 billion to $11.1 billion for the year. We continue to expect total company same-store sales organic
`growth to exceed 10% for the remainder of the year, despite the genericization of Targretin in July and the expected genericization of Xenazine
`in August.
`
`For the quarter, our total revenue was $2.7 billion, an increase of 34% over the prior year, largely driven by the exceptionally strong growth in many
`of our US businesses, which offset negative headwinds from foreign exchange. Adjusting for the negative impact of FX of $173 million, revenue
`grew 42% over Q2 2014. Cash EPS was $2.56, an increase of 34% over the prior year, which includes the negative impact of $0.13 from the
`strengthening US dollar. Adjusted for FX, cash EPS grew 41% over Q2 2014.
`
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
`
`As mentioned in our press release, Salix had a negative impact of $0.04 on our cash EPS this quarter; therefore, our cash EPS would have been $2.60
`for the quarter without Salix. Rob will take you through the math later in the presentation.
`
`Turning to organic growth, our overall same-store total company organic growth was 19% for the quarter. The exceptional growth of our US
`businesses driven by the strength of dermatology, contact lenses, dental and Obagi was complimented by many of our emerging markets including
`China, Middle East/North Africa, Russia and South Korea. As we are now halfway through the year, our same-store sales organic growth was 17%
`for the first six months.
`
`Our overall pro forma total company organic growth was primarily impacted by Salix, as we continued to reduce inventory in the wholesaler
`channels. Salix's revenues declined by approximately $16 million in Q2 2015 as compared to Q2 2014. Our pro forma total company organic growth
`excluding Salix was 20%. B+ L continues to demonstrate strong organic growth led by Rx pharmaceuticals in the United States, our US contact lens
`business and our emerging markets.
`
`Q2 revenues increased to $836 million from Q1 revenues of $745 million. We continue to expect B+ L organic growth to be approximately 10% for
`the full year. As we approach our two-year anniversary of the B+ L acquisition, we have fully integrated the business and manage it as an integrated
`iHealth portfolio; therefore, this will be the last quarter that we break out the US B+ L organic growth by sub category.
`
`Turning to our Top 20 products. Our Top 20 products represented 40% of total second-quarter revenue, with the Top 10 products contributing
`approximately 28% of revenue. Our Top 20 products delivered organic same-store growth of 32% for the quarter.
`
`Excluding new product acquisitions, roughly half of our growth came from volume and half came from price. Our largest product, Xifaxan, represented
`approximately 5% of Q2 revenues, despite revenues that were muted due to excess inventory in the channel.
`
`Jublia is now our second largest product with annual run-rates sales of approximately $450 million. Due to the generic launch of Targretin in July
`and the generic launch of Xenazine expected in August, we believe both products will fall out of our Top 20 products in Q3. I would also like to
`note that one of our new products Glumetza loses it's patent protection in February 2016 and will fall out of the list in 2016.
`
`Our US dermatology business had another excellent quarter with our launch brands leading the way. Both launch and core brands contributed to
`the dermatology revenue growth of 55% year-on-year. Jublia scripts grew 37% in Q2 versus Q1, which points to an increase of 55% on a 4-millimeter
`equivalent basis. Our DTC campaign featuring John McEnroe is having a positive impact on the product and continues to expand prescribing
`volume, particularly with the primary care physician base.
`
`Onexton has demonstrated rapid TRx uptake since its January launch and recently reached 8,000 scripts per week. The fully-integrated DCT campaign
`with TV, print and digital is accelerating growth. The current annualized run-rate for Onexton is approximately $70 million.
`
`Luzu scripts have reached a new record high with volume up 55% relative to Q1. Luzu continues to grow with our new DTC campaign driving
`awareness. The current annualized run-rate for Luzu is approximately $26 million. Lastly, our script trends for our base dermatology business,
`including Solodyn, Ziana, Atralin, Elidel and Zyclara are all demonstrating strong double-digit growth rates.
`
`Our US eye health business continued its strong growth trend and delivered 10% growth over the prior year. Contact lens grew 19% organically
`over the prior year. Biotrue ONEday continues to grow 4 times faster than its category. Based on the growth of the Biotrue franchise over the last
`five quarters, six additional Biotrue lines are currently planned.
`
`B+ L's ULTRA contact lens continues to be well received by eye care professionals. Our first commercial manufacturing line for ULTRA is operational.
`We continue to sell to capacity. We recently approved lines five and six for ULTRA to support the long-term global demand.
`
`Our prescription drug ophthalmology business continues to see strong -- extremely strong growth across promoted brands fueled by the Lotemax
`Franchise and Prolensa. We are also quite pleased to announce that we have filed Vesneo with the FDA.
`
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
`
`Organic growth for surgical was 1% for the quarter. Adjusted for the continued shift from the sale -- from sales to leasing models of femtosecond
`lasers, organic growth would have been 3%. We expect to see improving organic growth for surgical for the remainder of the year, driven by market
`share gains across our product lines including our IOL's and our surgical equipment.
`
`The strong performance of neuro and other, as well as the generics portfolio was driven by promoted brands including Aplenzin, Cuprimine and
`Syprine. In our consumer business, CeraVe, Preservision and BioTrue MultiPurpose Solution all demonstrated strong double-digit growth demand.
`
`Finally, our dental business continued its track record of strong double-digit growth. In March, we expanded our dental product portfolio through
`the acquisition of Neutrasal, a treatment for general dry mouth and oral mucositis.
`
`When we acquired Neutrasal, its annual revenues were approximately $8 million. After four months, the run-rate revenue for Neutrasal is over $16
`million. This is another example of our ability to quickly have an impact on our acquisitions.
`
`Now, turning to the rest of the world. In our emerging markets, organic growth for our business in Asia was 10% versus the prior year. We continued
`to see strong growth in a number of countries, including China at 15% and South Korea at 23%.
`
`In Latin America, we delivered 7% organic growth, with Mexico at 12%, offsetting more modest growth in Brazil and Argentina. Central and Eastern
`Europe, the Middle East/North Africa delivered strong double-digit growth of 18%. Russia returned a positive organic growth this quarter.
`
`Overall growth in other Central and Eastern European countries were slightly negative this quarter as they were primarily impacted by Ukraine and
`Greece. For the rest of the world developed markets, the underlying business remained strong with our Australian, Canadian and Western European
`businesses performing well, with 6%, 7% and 5% organic growth respectively.
`
`Now let me turn to the Salix acquisition. We completed our acquisition of Salix on April 1. We have already achieved several significant R&D
`milestones with the approval of Xifaxan for IBS-D, the submission of Relistor Oral NDA and the approval of the Relistor injection in Europe.
`
`Obviously, the big event was the IBS-D approval where we saw immediate growth in script uptake of Xifaxan post-approval. Our soft launch
`commenced right after approval with our sales force undergoing training the first week of June. At this time, we continue to promote the package
`insert as we are still awaiting regulatory approval for our marketing campaign, including our first DTC advertisement.
`
`Based on our quick start, revenues and EBITDA are both significantly ahead of the deal model and the integration is nearly completed. In addition
`to the realignment of the sales force, which we discussed in our last earnings call, we revamped the sales-force compensation model to be in line
`with our existing performance-based compensation structure versus Salix's structure which force-ranked the sales team. We believe these adjustments
`will maximize the effectiveness of our sales team going forward.
`
`Finally as I mentioned earlier, we are pleased to report that our wholesale inventory reduction program is on plan. We are currently at approximately
`3 to 3.5 months as compared to 4 to 5 months at the April 1 close. We still expect inventory levels to be reduced to 1.5 months or less by year-end.
`Rob will take you through the details later in the call.
`
`As slide 15 shows, we have experienced a significant increase in script trends from 15% to 33% year-over-year growth for Xifaxan since the approval
`for IBS-D on May 27. Following the close of the acquisition, we held a pipeline review session with the Salix R&D team, the Valeant R&D team and
`several external experts. The purpose of the session was to provide an in-depth discussion of the pipeline products and determine which ones
`would move forward. I am pleased to report that a vast majority of the programs are still ongoing and are detailed on slide 16.
`
`As expected, we continue to be very active in the business to all MENA activities. We have closed or signed eight deals so far this year, with the
`most significant one being Amoun, an acquisition we announced last week. This acquisition adds approximately $225 million to our existing Middle
`East/North Africa sales, which is one of the fastest growing emerging markets in the world. Including Amoun, our Middle East business will be
`approximately $500 million in 2016.
`
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
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`As we have mentioned for a number of quarters, we're continuing to look for opportunities to grow in Latin America. We recently agreed to acquire
`Humax, a branded generics company in Columbia that provides us entry into a new market and will compliment our current business in Mexico.
`Finally, we have recently agreed to buy Commonwealth Diagnostics, a company that sells a recently approved test for IBS-D. We believe this test
`will represent an important piece of our efforts to tap into the under-diagnosed IBS-D patient population.
`
`When we embarked on our new strategy in 2008, we began to acquire assets that would build a strong foundation and fuel future growth. Since
`2008, we have completed over 140 acquisitions, license deal and co-promote agreements and deployed over $40 billion in capital.
`
`Our IRR hurdles continue to be the highest in the industry. We target IRR's of at least 20% based on local statutory tax rates and a cash payback
`period of six years or less. We monitor the process of each deal by tracking both top line and EBITDA by quarter.
`
`We share these results with our Board of Directors every quarter and provide an update to investors on an annual basis. Today is that update. I'd
`also like to note that senior management's compensation is tied to past deal performance.
`
`As we break down our deal performance into large, medium and small deals, our track record, I believe speaks for itself. Our large transactions such
`as Biovail, Medicis, Bausch + Lomb, and Salix have all performed in line or ahead of the deal model. We believe there are several factors contributing
`to the success of our large deals, including the benefits of our decentralized model, detailed review of key business drivers and pipeline or other
`unexpected product upsides.
`
`For our medium sized deals, those $300 million to $1 billion, 10 of the 11 transactions are tracking towards or delivering well above our 20% IRR
`hurdle. All have delivered above our cost of capital. We have had a number of home runs in this category, including Ortho, Dermik, Aton and Sanitas.
`
`Finally, our small deals, approximately 50 are small acquisitions -- approximately 50 which are less than $300 million (inaudible), in aggregate are
`performing well above expectation, that is greater than returning an -- returning an IRR of greater than 20%. This category also includes several
`home run deals, deals of greater than 35% IRR fully taxed, such as Coria, Natur Produkt and Targretin. While we have had great success on the small
`deal front, we do have four failed deals, which performed lower cost of capital: Neotensil in the US; Vita Direct in Russia; PFI in Australia; and Vital
`Science in Canada.
`
`We have analysed the performance across all of our deals since 2008. Our achieved cumulative EBITDA exceeds our deal models by 18%. This
`reflects performance of our deals before applying the benefits of our lower tax rate. On a cumulative net income basis, the deal model net income
`reflects our analysis using the statutory tax rates, the approach we take when reviewing potential acquisitions.
`
`The cumulative achieved net income includes the benefit of our lower tax rate. When comparing the deal model and the accumulated -- achieved
`accumulative net income, our achieved outcome exceeds our deal models by 59%. Based on our performance of deal to date, our expected IRR
`excluding the benefit of our tax rate is approximately 26%. Our expected IRR including the benefit of our tax rate is greater than 37%.
`
`The important part of our deal analysis is our targeted six-year payback period. We have reviewed our largest deals since 2008. We are pleased to
`report that five of these deals have already been paid back entirely including Coria, Dow, Aton, Biovail, Ortho and Dermik. While many of the small
`or mid-sized deals, including Targretin, Elidel and Tecnofarma, which are not included on this page, have also been paid back.
`
`Other deals, such as B+ L, are on track to meet their expected payback period. B+ L is approximately 30% paid back after less than two years since
`the closing of the acquisition. Since the time of the acquisition, B+ L has delivered approximately 30% of Valeant's total EBITDA. I'd also like to note
`that B+ L, our largest deal prior to Salix -- we have improved organic growth from 2% to 9% since the acquisition, demonstrating our ability to
`create value under the Valeant business model.
`
`One of the more important parts of our internal deal review is looking back at past acquisitions to determine what has contributed to our success
`and failure. Slides 24 and 25 outline our key learnings from the acquisitions.
`
`Now, I will turn the call over to Rob.
`
`6
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`Page 6 of 18
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
`
`Rob Rosiello - Valeant Pharmaceuticals International Inc - CFO
`
`Mike already described our exceptional Q2 results. Our revenue of $2.7 billion exceeded the mid-point of the guidance we provided during our
`Q1 earnings call by approximately $200 million, primarily driven by the outperformance of our US businesses, including dermatology, contact
`lenses and dentistry. Our overall cost of goods sold improved to 23% in the second quarter, primarily due to the continued growth in dermatology,
`as well as the acquisition of Salix, resulting in improved gross margins of 77%.
`
`SG&A remains above historical levels, but improved by 1 point from last quarter on an overall basis, despite increased costs associated with our
`launch initiatives. In the second quarter, we spent approximately $60 million in DTC advertising supporting Jublia, Onexton and Luzu. The overall
`improvement also demonstrates our rapid synergy capture from the Salix integration. R&D was $81 million in the quarter, an increase of approximately
`45% relative to Q1, reflecting our continued investment in legacy Valeant programs and the addition of the Salix programs described earlier.
`
`As Mike mentioned, Salix contributed negative $0.04 in cash EPS for quarter, taking into consideration the incremental interest and incremental
`shares related to the Salix financing. Valeant, excluding Salix, showed an even stronger sequential and year-over-year cash EPS. Legacy Valeant's
`top line organic growth and improved product mix more than offset increased investment in our launch brands.
`
`Turning to slide 28. The acquisition of Salix had an even more significant impact on GAAP cash flow than adjusted cash flow. Valeant's GAAP cash
`flow excluding Salix was substantial, at $714 million. There were minimal add-backs to arrive at adjusted cash flow of $770 million.
`
`Salix had negative GAAP cash flow of $303 million, driven by significant cash charges related to: unvested equity awards; restructuring charges,
`primarily severance; and the buildup of accounts receivable and growth to nets of $96 million. In Q2, Salix contributed $3 million to our adjusted
`cash flow. Starting in Q3, we expect our aggregate cash flow to improve significantly as Salix's inventory normalizes and one-time restructuring
`items are reduced.
`
`Cash conversion for both the Valeant stand-alone and overall business was 86%, reflecting our continued investment in working capital to support
`the exceptional growth of our business. Given our acquisition of Salix, our goal is to achieve 90% cash conversion by the end of the year. As we
`have discussed, we plan to reduce inventory levels for Salix to 1.5 months or less, ideally 1 month by year-end.
`
`Currently, individual wholesalers have varying amounts of inventory for specific Salix products. So while we continue to work down inventory,
`wholesalers are placing orders for specific products where inventories have been reduced to our targeted levels. For Q3, we expect our reported
`net sales for Salix to be about the same as Q2 sales or approximately $300 million, due to the continued reduction in wholesaler inventory levels.
`By the end of Q4, we expect to normalize inventories and enter 2016 with sales reflecting actual product demand.
`
`On slide 3, in Q2, we incurred restructuring and integration expenses of $153 million, approximately $122 million of this quarter's charges relate
`to Salix. We expect to realize up to an additional $175 million of charges for Salix during the remainder of 2015. We also recorded $18 million of
`charges related to Dendreon. We expect any additional charges for Dendreon for the remaining of the year to be minimal.
`
`Bausch + Lomb restructuring is complete. Restructuring and integration charges for other recent small deals were approximately $13 million this
`quarter. For the remainder of the year, we expect less than $20 million of incremental charges for deals already closed, excluding Salix and Dendreon.
`This guidance excludes any deals that have not yet closed and any new deals that might occur.
`
`In terms of our balance sheet, we ended the quarter with a strong liquidity position through a combination of a $1.5 billion undrawn revolver and
`$958 million of cash on hand. Our net debt to pro forma adjusted EBITDA ratio was approximately 5.5 times. We remain committed to reducing
`that ratio to below 4 times by the end of 2016. During the quarter, we opportunistically repurchased $50 million in Valeant equity at $223 per share.
`Our accounts receivable DSO's improved this quarter as compared to the second quarter of 2014 at 65 days.
`
`2015 continues to be a strong year for our Company. Based on the continued outperformance of Valeant's business and the approval of Xifaxan
`for IBS-D, we are increasing our 2015 guidance. Given the Salix inventory situation, we are making an exception to past practices and are providing
`Q3 and Q4 guidance. Until Salix is fully normalized, we feel it is important to provide investors with this information.
`
`7
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`Page 7 of 18
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
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`For 2015, we are increasing our guidance for revenue to $10.7 billion to $11.1 billion from $10.4 billion to $10.6 billion. We had previously guided
`that Salix revenues would be $1 billion for the year. Given the approval of the Xifaxan IBS-D indication and progression of the planned reduction
`in wholesaler inventories, we are taking our 2015 guidance for Salix revenues up to $1.2 billion. We are also increasing our guidance for cash EPS
`to $11.50 to $11.80 from $10.90 to $11.20; and our adjusted cash flow from operations guidance to greater than $3.2 billion from greater than $3.1
`billion for the year.
`
`Our Q3 and Q4 guidance reflects both the expected generic impact from Targretin and Xenazine, as well as the Salix inventory drawdown program
`still underway. We expect our same-store organic growth to be greater than 10% for the second half of the year, despite the impact of generic
`entrance for Targretin in July and the expected generic entrance for Xenazine in August.
`
`Finally, although I will not go through all of our key assumptions used to build our forecast, they are listed on slide 33 for your reference. Now I
`would like to turn the call back over to Laurie.
`
`Laurie Little - Valeant Pharmaceuticals International Inc - Head of IR
`
`Thanks, Rob. Before we open the call to questions, I'd like to remind everyone that in order to ensure that we have adequate time to take everyone's
`questions, we will only take one question per caller. If you'd like to ask a follow-up question, you're welcome to get back in the queue.
`
`We'll try and take as many questions as possible in the time allotted. With that, we will take our first question.
`
`Q U E S T I O N S A N D A N S W E R S
`Operator
`
`Chris Schott, JPMorgan.
`
`Chris Schott - JPMorgan - Analyst
`
`Congrats on the very strong results here.
`
`Mike, Can you just elaborate a little bit more on the Xifaxan launch in IBS-D? Just, specifically, how should we think about the rest of the year in
`terms of priorities for the organization? When should we think about DTC really starting to roll out? Are you comfortable at this point giving us a
`little bit more color in terms of peak sales opportunity for this particular indication? Thanks very much.
`
`J Michael Pearson - Valeant Pharmaceuticals International Inc - Chairman & CEO
`
`Hi, Chris. Thank you.
`
`We've submitted the marketing materials to the Agency. We hope to get those approved sometime in August -- unfortunately probably late August.
`So our current expectation is we'll roll out our DTC program in September. We plan for a very heavy spend in the back half of the year, actually
`much higher than we had for Jublia last year. As long as it, again, keeps working like it has for Jublia, continue that spend.
`
`We are not going to give a peak sales yet. We're not ready to give a peak sales yet for IBS-D. We'll pull the whole sales force -- all the sales forces in
`that are going to be selling the IBS-D indication in late August, and have at launch meet as well. We also recently decided to actually create a fifth
`specialty sales force covering GI and doctors who have the potential to prescribe Xifaxan. So we'll now have five sleeves rather than four sleeves.
`
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`JULY 23, 2015 / 12:00PM, VRX.TO - Q2 2015 Valeant Pharmaceuticals International Inc Earnings Call
`
`Operator
`
`Andrew Finkelstein, Susquehanna Financial.
`
`Andrew Finkelstein - Susquehanna Financial Group - Analyst
`
`Congratulations on the results.
`
`Perhaps you could address it in a bit more detail, what you're seeing i