`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`FORM10-Q/A
`
`Amendment No. 1
`
`181 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`For the Quarterly Period Ended June 30, 2022
`OR
`□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`
`For the transition period from_ to _
`
`Commission File Number: 001-14956
`
`Bausch Health Companies Inc.
`(Exact name ofregistrant as specified in its charter)
`
`British Columbia, Canada
`(State or other jurisdiction of incorporation or organization)
`
`98-0448205
`(I.RS. Employer Identification No.)
`
`2150 St. Elzear Blvd. West, Laval, Quebec, Canada H7L 4A8
`(Address of Principal Executive Offices) (Zip Code)
`
`(514) 744-6792
`(Registrant's telephone number, including area code)
`
`Title of each class
`Common Shares, No Par
`Value
`
`Trading
`Symbol(s)
`
`BHC
`
`Name of each exchange on which registered
`New York Stock
`Toronto Stock
`Exchange,
`Exchange
`
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13
`or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
`registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
`Yes l&l No □
`
`Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required
`to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months ( or for such shorter period that
`the registrant was required to submit such files). Yes l&l No D
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
`filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer",
`"accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
`
`Large accelerated
`filer
`
`181 Accelerated filer □
`
`Non-accelerated □
`filer
`
`Smaller reporting □
`company
`
`Emerging growth □
`company
`
`If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
`period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
`Exchange Act. □
`
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
`□ No 181
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 1 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest
`practicable date.
`
`Common shares, no par value - 361,728,490 shares outstanding as of August 4, 2022.
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 2 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`EXPLANATORY NOTE
`
`This Amendment No. 1 on Form 10-Q/A ("Amendment No. l") to the Quarterly Report on Form 10-Q of
`Bausch Health Companies Inc. (the "Company"), amends the Company's Quarterly Report on Form 10-Q for the
`quarterly period ended June 30, 2022 (the "Quarterly Report"), which was initially filed with the Securities and
`Exchange Commission on August 9, 2022. Capitalized terms used in this Explanatory Note and not otherwise
`defined herein shall have the meanings ascribed to such terms in the Quarterly Report.
`
`This Amendment No. 1 is being filed to correct an error in the Liquidity and Capital Resources section of
`Management's Discussion and Analysis of Financial Condition and Results of Operations, included in Part I, Item
`2 of the Quarterly Report. The Quarterly Report incorrectly stated that, with respect to the Company's Senior
`Unsecured Notes, on a non-consolidated basis, the non-guarantor subsidiaries (which, for the avoidance of doubt,
`does not give effect to the release of the guarantees in connection with closing of the B+L IPO) had total assets of
`$6,343 million and total liabilities of $7,106 million as of June 30, 2022, and revenues of $755 million and
`operating income of $50 million for the six months ended June 30, 2022.
`
`This Amendment No. 1 revises the Quarterly Report to correctly disclose that, with respect to the Company's
`Senior Unsecured Notes, on a non-consolidated basis, the non-guarantor subsidiaries had total assets of $12,558
`million and total liabilities of $4,299 million as of June 30, 2022, and revenues of $2,028 million and operating
`income of$10 million for the six months ended June 30, 2022.
`
`No other changes in the Quarterly Report are being made by this Amendment No. 1. However, in accordance
`with Rule 12b-15 promulgated under the Securities Exchange Act of 1934, as amended, the complete text of Part I,
`Item 2, as amended, is included herein.
`
`In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this
`Amendment No. 1 also contains new certifications of our principal executive officer and principal financial officer
`as Exhibits 31.1, 31.2, 32.1 and 32.2 hereto. This Amendment No. 1 speaks as of the date of the Quarterly Report,
`and has not been updated to reflect events occurring subsequent to the original filing date of the Quarterly Report.
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 3 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`BAUSCH HEALTH COMPANIES INC.
`FORMIO-Q/A
`FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022
`
`INDEX
`
`Part I. Financial Information
`Item 2. Management's Discussion and AnalY.sis of Financial Condition and Results of012erations
`Part II. Other Information
`Item 6. Exhibits
`Signatures
`
`l
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 4 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
`
`INTRODUCTION
`
`Unless the context otherwise indicates, as used in this "Management's Discussion and Analysis of Financial
`Condition and Results of Operations, " the terms "we, " "us, " "our, " "the Company, " and similar terms refer to
`Bausch Health Companies Inc. and its subsidiaries. This "Management's Discussion and Analysis of Financial
`Condition and Results of Operations" has been updated through August 9, 2022 and should be read in conjunction
`with the unaudited interim Consolidated Financial Statements and the related notes (the "Financial Statements'')
`included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 (this
`"Form 10-Q"). The matters discussed in "Management's Discussion and Analysis of Financial Condition and
`Results of Operations" contain certain forward-looking statements within the meaning of Section 27A of The
`Securities Act of 1933, as amended, and Section 21E of The Securities Exchange Act of 1934, as amended, and that
`may be forward-looking information within the meaning defined under applicable Canadian securities laws
`(collectively "Forward-Looking Statements"). See "Forward-Looking Statements" at the end of this Item 2.
`Management's Discussion and Analysis of Financial Condition and Results of Operations.
`
`Our accompanying unaudited interim Consolidated Financial Statements as of June 30, 2022 and for the
`three and six months ended June 30, 2022 and 2021 have been prepared in accordance with accounting principles
`generally accepted in the United States of America ("US. GAAP") and the rules and regulations of the United
`States Securities and Exchange Commission (the "SEC") for interim financial statements, and should be read in
`conjunction with our Consolidated Financial Statements for the year ended December 31, 2021, which were
`included in our Annual Report on Form 10-Kfiled on February 23, 2022. In our opinion, the unaudited interim
`Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments,
`necessary for a fair statement of the financial condition, results of operations and cash flows for the periods
`indicated. Additional company information is available on SEDAR at www.sedar.com and on the SEC website
`at www.sec.gov. All currency amounts are expressed in US. dollars, unless otherwise noted. Certain defined terms
`used herein have the meaning ascribed to them in the Financial Statements.
`
`OVERVIEW
`
`We are a global company whose mission is to improve people's lives with our health care products. We
`develop, manufacture and market, primarily in the therapeutic areas of gastroenterology ("GI") and dermatology,
`and eye health, a broad range of: (i) branded pharmaceuticals, (ii) generic and branded generic pharmaceuticals,
`(iii) over-the-counter ("OTC") products and (iv) medical devices (contact lenses, intraocular lenses, ophthalmic
`surgical equipment and aesthetics devices), which are marketed directly or indirectly in approximately 100
`countries.
`
`Our portfolio of products falls into five operating and reportable segments: (i) Salix, (ii) International
`(formerly International Rx), (iii) Diversified Products, (iv) Solta Medical and (v) Bausch + Lomb. These segments
`are discussed in detail in Note 19, "SEGMENT INFORMATION" to our unaudited Consolidated Financial
`Statements. The following is a brief description of the Company's segments:
`
`•
`
`•
`
`•
`
`•
`
`The Salix segment consists of sales in the U.S. of GI products. Sales of the Xifaxan® product line
`represented 81 % and 80% of the Salix segment's revenues for the three and six months ended June 30,
`2022, respectively.
`
`The International segment consists of sales, with the exception of sales of Bausch + Lomb products and
`Solta aesthetic medical devices, outside the U.S. and Puerto Rico of branded pharmaceutical products,
`branded generic pharmaceutical products and OTC products.
`
`The Diversified Products segment consists of sales in the U.S. of: (i) pharmaceutical products in the
`areas of neurology and certain other therapeutic classes, (ii) generic products, (iii) Ortho Dermatologies
`(dermatological) products and (iv) dentistry products.
`
`The Solta Medical segment consists of global sales of Solta aesthetic medical devices.
`The Bausch + Lomb segment consists of global sales of Bausch + Lomb Vision Care, Surgical and
`Ophthalmic Pharmaceuticals products.
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 5 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`During the first quarter of 2022, the Company changed its segment structure. The new segment structure
`resulted in a change to the Company's former Ortho Dermatologies segment whereby its medical dermatology
`business (Ortho Dermatologies) is now managed by the Chief Operating Decision Maker ("CODM") as part of the
`Diversified Products segment and the Solta Medical business is now managed by the CODM as its own operating
`and reportable segment. Prior period presentation of segment revenues and segment profits has been recast to
`conform to the current reporting structure.
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 6 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`Our Focus on Value
`
`In 2016, we implemented a multi-year plan designed to transform and bring out value in our Company. The
`multi-year plan increased our focus on, among other factors, our: product portfolio, infrastructure, geographic
`footprint, capital structure and risk management. Since that time, we have been executing and continue to execute
`on our commitments to transform the Company and generate value. As discussed below, under the multi-year plan,
`we have taken actions that among other things included: (i) divesting non-core assets, (ii) making strategic
`investments in our core businesses and (iii) making measurable progress in improving our capital structure. These
`measures gave us operating flexibility and put us in a strong position to unlock the additional value to be found in
`our specific businesses. We believe that these and other actions we have taken to transform our Company, have
`helped to focus our operations, and improve our capital structure. These positive actions also presented us with an
`opportunity to unlock potential value across our portfolio of assets by separating our pharmaceutical and eye health
`businesses. Although management believes the B+L Separation (as defined below) will bring out additional value,
`there can be no assurance that it will be successful in doing so.
`Separation of the Bausch + Lomb Eye Health Business
`
`On August 6, 2020, we announced our plan to separate our eye health business consisting of our Bausch +
`Lomb Global Vision Care (formerly Vision Care/Consumer Health), Global Surgical and Global Ophthalmic
`Pharmaceuticals businesses into an independent publicly traded entity, Bausch + Lomb from the remainder of
`Bausch Health Companies Inc. (the "B+L Separation"). In January 2022, we completed the internal organizational
`design and structure of the new eye health entity. The registration statement related to the B+L IPO was declared
`effective on May 5, 2022, and Bausch+ Lomb's common stock began trading on the New York Stock Exchange
`and the Toronto Stock Exchange, in each case under the ticker symbol "BLCO" on May 6, 2022. Prior to the
`effectiveness of the registration statement, Bausch + Lomb was an indirect wholly-owned subsidiary of the
`Company.
`
`On May 10, 2022, a wholly owned subsidiary of the Company (the "Selling Shareholder") sold 35,000,000
`common shares of Bausch+ Lomb, at an offering price of $18.00 per share, pursuant to the B+L IPO. In addition,
`the Selling Shareholder granted the underwriters an option for a period of 30 days from the date of the B+L IPO to
`purchase up to an additional 5,250,000 common shares to cover over-allotments at the IPO offering price less
`underwriting commissions. On May 31, 2022, the underwriters partially exercised the over-allotment option
`granted by the Selling Shareholder and, on June 1, 2022, the Selling Shareholder sold an additional 4,550,357
`common shares of Bausch+ Lomb at an offering price of $18.00 per share (less applicable underwriting discount).
`The remainder of the over-allotment option granted to the underwriters expired.
`
`Upon the closing of the B+L IPO and after giving effect to the partial exercise of the over-allotment option,
`the Company directly or indirectly holds 310,449,643 Bausch + Lomb common shares, which represents
`approximately 88.7% of Bausch+ Lomb's outstanding common shares. The aggregate net proceeds from the B+L
`IPO and the partial exercise of the over-allotment option by the underwriters, after deducting underwriting
`commissions were approximately $675 million. The Company remains committed to completing the B+L
`Separation as soon as is practical and believes the B+L Separation makes strategic sense. The completion of the
`B+L Separation is subject to the expiry of customary lockups related to the B+L IPO, the achievement of targeted
`debt leverage ratios and the receipt of applicable shareholder and other necessary approvals. The Company
`continues to evaluate the factors and considerations related to completing the B+L Separation and the effect of the
`Norwich Legal Decision (see "Xifaxan®Paragraph IV Proceedings" of Note 18, "LEGAL PROCEEDINGS" to our
`unaudited interim Consolidated Financial Statements) on the B+L Separation.
`
`The B+L Separation will establish two separate, independent companies:
`
`Bausch + Lomb - a fully integrated, "pure play" eye health company built on the iconic Bausch + Lomb
`brand and long history of innovation; and
`
`Bausch Pharma - a diversified pharmaceutical company with leading positions in gastroenterology,
`hepatology, dermatology, neurology and international pharmaceuticals, and aesthetic medical devices.
`The remaining pharmaceutical entity will comprise a diversified portfolio of our leading durable brands
`across the Salix, International, dentistry, neurology, medical dermatology and generics, and aesthetic
`medical devices businesses.
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 7 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`We believe the B+L Separation will result in two highly attractive but dissimilar businesses. As independent
`entities, management believes that each company will be better positioned to individually focus on its core
`businesses to drive additional growth, more effectively allocate capital and better manage its respective capital
`needs. Further, the B+L Separation will allow us and the market to compare the operating results of each entity
`with other "pure play" peer companies. Although management believes the B+L Separation will bring out
`additional value, there can be no assurance that it will be successful in doing so.
`
`2
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 8 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`At the time of our announcement of the B+L Separation, we emphasized that it is important that the post(cid:173)
`separation entities be well capitalized, with appropriate leverage and with access to additional capital, if and when
`needed, to provide each entity with the ability to independently allocate capital to areas that will strengthen their
`own competitive positions in their respective lines of business and position each entity for sustainable growth.
`Therefore, we see the appropriate capitalization and leverage of these businesses post-separation as a key to
`maximizing value across our portfolio of assets and, so, it is a primary objective of our plan of separation.
`
`As discussed in further detail below, the proceeds from the B+L IPO, along with those from the offering of
`the February 2027 Secured Notes, the B+L Debt Financing and the 2027 Term Loans (each as defined below),
`along with cash on hand, were used to repay and refinance a portion of our existing debt. In addition, we intend to
`use the proceeds from any potential future offers of Bausch + Lomb common shares to further repay, to the extent
`possible, a portion of our existing debt, thereby improving our capitalization and leverage. We believe the B+L
`Separation, if consummated, provides us with an attractive opportunity for liquidity to support the appropriate
`capitalization and leverage of the Bausch + Lomb entity and the remainder of Bausch Health Companies Inc.,
`which we refer to as "Bausch Pharma" and which will assume a new name upon completion of the B+L Separation.
`However, management will also continue to explore additional alternatives in order to properly capitalize the two
`entities.
`
`We have previously stated that all options for achieving the appropriate capitalization and leverage for these
`entities post-separation were being considered. Management remains focused on the capitalizations of the post(cid:173)
`separation entities and has considered and continues to consider alternative means of achieving this, including
`dispositions from our existing business that we believe represent attractive opportunities for the Company and are
`in line with our plan of separation. This informed our decision to divest Amoun Pharmaceutical Company S.A.E.
`("Amoun") on July 26, 2021 and, as discussed below, use the net proceeds to repay certain debt obligations.
`
`In addition to the capitalization and leverage ratios of each entity, there are considerations, approvals and
`conditions, including market conditions, that will determine the ultimate timing and structure of the B+L
`Separation, including regulatory approvals, final approval by our board of directors, any shareholder vote
`requirements that may be applicable, compliance with U.S. and Canadian securities laws and stock exchange rules,
`receipt of any applicable opinions and/or rulings with respect to the Canadian and U.S. federal income tax
`treatment of the B+L Separation and determination of the pro forma capitalization of each of the two entities post
`separation. The failure to satisfy all of the required conditions could delay the completion of the B+L Separation
`for a significant period of time or prevent it from occurring at all. We will need to complete a number of additional
`steps that will depend on the ultimate structure of the transactions (in addition to obtaining the regulatory approvals
`and satisfying the conditions described above) before we can complete the B+L Separation. As a result, there can
`be no assurance as to the timing of the completion of the B+L Separation or its structure or terms, and the
`information in this Form 10-Q relating to each transaction is preliminary and may change as the transactions
`progress and any such changes and their impact on the Company, or any of the companies that result from the
`consummation of the B+L Separation, may be material.
`
`Solta Medical
`
`On June 16, 2022, the Company announced it was suspending its previously announced plans to pursue an
`IPO ofour Solta aesthetic medical device business ("Solta Medical") (the "Solta IPO"). By the end of 2021, we had
`substantially completed the internal objectives necessary to facilitate the Solta IPO, however, we believe that the
`interests of the Company and its stakeholders, including shareholders and creditors, are best served in the near-term
`by focusing on driving Solta's revenue, profitability and cash flow while also achieving key operational and
`regulatory milestones, and as such, Solta will remain as part of Bausch Health and continue to contribute to the
`Company's performance, including the deleveraging of the Company's balance sheet. The Company will revisit
`alternative paths for Solta in the future.
`
`See Item lA. "Risk Factors - Risk Relating to the B+L Separation and the Solta IPO" of our Annual Report
`on Form 10-K for the year ended December 31, 2021, filed with the SEC and the CSA on February 23, 2022, for
`additional risks relating to the B+L Separation and the formerly planned Solta IPO.
`
`Setting Up Our Company to Unlock Value
`
`To position ourselves to unlock the value we see in our individual businesses, we have sought to right-size
`https://otp.to8W:iR~~IY:l2>fMdlr'ffift~J\OOaWs?:t4fe~'tiff/ptlRrOOM~t~sh8JP.YlW?P~!~Sl~ifffci?Jl8~'&1t$iWbF&hasPdf=1
`
`Slayback Exhibit 1069, Page 9 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`that remain a focus of our growth strategies today:
`
`on May 10, 2022 in connection with the B+L IPO, the Company completed a series of transactions in
`which among other things: (i) Bausch+ Lomb entered into a new credit facility, (ii) the Company repaid
`certain amounts outstanding under its existing term B loans, (iii) the Company refinanced the remaining
`amounts outstanding under its then existing credit facilities and (iv) the Company discharged the
`indenture governing its 6.125% Senior Unsecured Notes (as defined and described in the table in Note
`10, "FINANCING ARRANGEMENTS," to our
`
`3
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 10 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`unaudited Consolidated Financial Statements) due 2025 (the "April 2025 Unsecured Notes" and the
`related indenture the "April 2025 Unsecured Notes Indenture"). We believe these transactions bring us
`one step closer to meeting our commitment to properly capitalize the two entities post-separation while
`improving our overall capitalization and leverage. These actions are discussed in more detail below in
`"- Liquidity and Capital Resources - Liquidity and Debt - Long-term Debt";
`
`•
`
`divested non-core assets in order to narrow the Company's activities to our core businesses where we
`believe we have an existing and sustainable competitive edge and the ability to generate operational
`efficiencies. To date, we received approximately $4,100 million in net proceeds from these divestitures,
`which includes the sale of Amoun as discussed below, on July 26, 2021;
`
`• made strategic investments in our core businesses in order to support recent revenue growth and prepare
`for additional growth opportunities we plan to capitalize on for our core businesses;
`
`• made measurable progress in improving our capital structure as we have repaid approximately
`$10,600 million in long-term debt obligations (net of additional borrowings, amounts refinanced and
`excluding the $1,210 million financing of the U.S. Securities Litigation settlement discussed below)
`during the period of January 1, 2016 through June 30, 2022, using the proceeds from the divestiture of
`non-core assets, proceeds from the B+L IPO, cash on hand, and cash from operations, including from a
`focus on working capital management; and
`
`•
`
`resolved many of the Company's legacy litigation matters originating back to 2015 and prior, including
`the most significant legacy legal matter, the U.S. Securities Litigation settlement, significantly reducing
`related possible disruptions and other uncertainties to our operations.
`
`We believe that these and other actions we have taken to transform our Company, have helped focus our
`operations, unlocked value across our product portfolios, improved our capital structure and mitigated certain risks
`associated with legacy litigation matters. We believe that these measures, along with our continued commitment to
`improving people's lives through our health products, help position us to unlock potential value across our portfolio
`of assets by separating our eye health and pharmaceutical businesses. Although management believes the B+L
`Separation will unlock additional value, there can be no assurance that it will be successful in doing so.
`
`Divest Assets to Improve Our Capital Structure and Simplify Our Business
`
`In order to better focus on our core businesses, we continue to evaluate opportunities to simplify our
`operations and improve our capital structure, including dispositions of various assets. For example, on July 26,
`2021, we completed the sale of Amoun for total gross consideration of approximately $740 million, subject to
`certain adjustments (the "Amoun Sale"). Amoun manufactures, markets and distributes branded generics of human
`and animal health products. The Amoun business was part of the International segment (previously included within
`the former Bausch+ Lomb/International segment). Revenues associated with Amoun were $137 million for the six
`months ended June 30, 2021 and $157 million for the period of January 1, 2021 through July 26, 2021. On July 30,
`2021 and August 3, 2021, the Company made aggregate payments of $600 million, to repay $469 million of its
`June 2025 Term Loan B Facility and $131 million of its November 2025 Term Loan B Facility" (each as defined
`below), using the proceeds from the Amoun Sale and cash on hand.
`
`We will continue to consider further dispositions of various assets in line with this strategy. While we
`anticipate that any future divestiture activities will be on non-core assets, we will consider dispositions in core
`areas that we believe represent attractive opportunities for the Company. See Note 4, "LICENSING
`AGREEMENTS AND DIVESTITURE" to our unaudited interim Consolidated Financial Statements for additional
`information.
`
`Focus on Core Businesses
`
`In line with this focus on our core businesses we have: (i) directed capital allocation to drive growth within
`these core businesses, (ii) made measurable progress in effectively managing our capital structure, (iii) increased
`our efforts to improve patient access and (iv) continued to invest in sustainable growth drivers to position us for
`long-term growth.
`
`Direct Capital Allocation to Drive Growth Within Our Core Businesses
`
`Our capital allocation is driven by our long-term growth strategies. We have been aggressively allocating
`resources to our core businesses globally through: (i) R&D investment, (ii) strategic licensing agreements and (iii)
`https://otp. tools.investis.com/clients/us/bausch _health_ compan1es/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 11 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`strategic investments in our infrastructure. The outcome of this process allows us to better drive value in our
`product portfolio and generate operational efficiencies.
`
`4
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 12 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`
`
`R&D Investment
`
`We search for new product opportunities through internal development and strategic licensing agreements,
`that, if successful, will allow us to leverage our commercial footprint, particularly our sales force, and supplement
`our existing product portfolio and address specific unmet needs in the market.
`
`Our internal R&D organization focuses on the development of products through clinical trials. As of
`December 31, 2021, approximately 1,300 dedicated R&D and quality assurance employees in 25 R&D facilities
`were involved in our R&D efforts internally.
`
`As of June 30, 2022, we have approximately 160 projects in our global pipeline. Certain core internal R&D
`projects that have received a significant portion of our R&D investment in current and prior periods are listed
`below.
`
`Gastrointestinal
`
`• Rifaximin - Top line results from a Phase 2 study for the treatment of overt hepatic encephalopathy with a
`new formulation (SSD IR) of rifaximin showed a treatment benefit. Patients receiving 40 mg twice daily
`showed a statistically significant separation from placebo. The top line results from this Phase 2 study will
`help inform further research on potential new indications for rifaximin. A Phase 3 study has commenced
`(RED-C) with patients actively enrolling for the prevention of the first episode of Overt Hepatic
`Encephalopathy.
`
`• Rifaximin - Rifaximin recently received orphan drug designation for sickle cell disease. A phase 2 study
`with novel dosage formulation is currently enrolling patients for the treatment of sickle cell disease.
`
`• Rifaximin - Development of a fit for purpose Patient Reported Outcomes tool for small intestinal bacterial
`overgrowth, or "SIBO", is continuing in 2022.
`
`• Rifaximin - We have entered into an agreement with Cedars Sinai Medical Center to evaluate a new
`formulation of rifaximin for the treatment of IBS-D. Two preclinical studies have been completed. A
`Proof of Concept study, that was paused due to COVID-19 pandemic related factors, has recommenced
`and is fully enrolled. Based on recent FDA comments dated February 10, 2022, the program is being
`assessed and related timelines reviewed.
`
`• Envive™ - In October 2020, we launched, on a limited basis, a probiotic supplement that was developed to
`address gastrointestinal disturbances. In April 2021, we expanded the launch to additional territories in the
`U.S.
`
`• Amiselimod (SIP modulator) - We commenced a Phase 2 study during the first half of 2021 to evaluate
`Amiselimod (SIP modulator) for the treatment of mild to moderate ulcerative colitis.
`
`Dermatology
`
`• Arazlo® (tazarotene) Lotion, 0.045% - In June 2020, we launched this acne product containing lower
`concentration of tazarotene in a lotion form to help reduce irritation while maintaining efficacy.
`
`•
`
`•
`
`Internal Development Project ("IDP") 120 - An acne product with a fixed combination of mutually
`incompatible ingredients: benzoyl peroxide and tretinoin. Phase 3 clinical studies have been completed
`and met the primary endpoints. We are currently evaluating next steps for this project.