Next question is from David Amsellem from Piper Sandler. Please go ahead.
`
`David Amsellem
`
`Thanks. I wanted to focus just on the Salix business, and in particular, I'm still struggling to
`understand why XIFAXAN has been relatively weak in the context of-well, if you look at
`TRULANCE, which has done quite well, more practices have opened. So in the second half,
`I would have expected to see more recovery out of the XIFAXAN. And then still, we're seeing
`year-over-year declines in total prescriptions. So can you just enlighten me as to what is
`happening with XIFAXAN? Do you think the product is maturing and its performance vis-a-vis
`TRULANCE? Thanks.
`
`Joe Papa
`
`Yes. Number one, we think XIFAXAN still has a lot of runway in front of it, just let me say that
`right upfront. We think the issues for COVID have been two factors: number one, we have
`seen reductions in patients being admitted to nursing homes. It makes sense, knowing what
`we know about what's happened with COVID in patients and nursing home. And as a result,
`some of those patients have just not shown the growth that we've seen in the past. The
`second probably more important factor though is IBS-D. What we know about IBS-D is that
`particular treatment is more episodic. The number of patients that have gone to
`gastroenterologists is down from where it was a year ago. So - and that's mostly related to
`COVID. We think as the patient started to come back to gastroenterologists, they focused on
`what we think are the key things for them. We're doing the endoscopies, the colonoscopies.
`And over time, we do think that we - the IBS-D will pick up. So, for an example, while IBS-D
`was down to be clear in 2020, the most recent data with IBS-D shows us now flat over the
`last 10 weeks versus a year ago. So we are now seeing that starting to turn. The other thing,
`data point, I will remind you of is that we know that IBS-D still has about 12 million
`prescriptions a year for antispasmodics, anti-diarrheals products like Lomotil, BENTYL
`dicyclomine things like that, that are opportunities, and we believe we have a better solution
`for those patients. You don't have to take a chronic medication like BENTYL dicyclomine type
`product. They can get episodic treatment. Treat for a couple of weeks, and many patients will
`respond, and they will not need to take a chronic medication. So we do think, over the long
`term, there is still a lot of growth in IBS-D and especially as we start to take some of these
`actions for these new indications like reduction in the symptoms of cirrhosis, we think those
`are going to be really big opportunities for the rifaximin molecule over the long term. So a lot
`of upside, we still believe and what we will see with XIFAXAN and the rifaximin next(cid:173)
`generation products. Operator, next question please.
`
`Operator
`
`Slayback Exhibit 1072, Page 16 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Gregg Gilbert
`
`Hi, thank you, guys. Two questions. First, did your newest shareholder bring to the table any
`new ideas that you were not already pursuing or an urgency that you were not pursuing them
`with? Trying to understand what's changed there or whether the settlement is more of a
`reduction in distraction? And then as it relates to B&L longer term, guys, earlier in your
`tenure, you were asked frequently whether B&L was investing for the long-term. And could it
`stand on its own and be competitive. Maybe you could update us on your thinking there in
`terms of how B&L would be positioned versus its peers from an investment rate? Growth is
`obviously there, but perhaps pros and cons. Thank you.
`
`Joe Papa
`
`Sure. So first of all, we are delighted to welcome a highly respected investor who agrees with
`us that there is an opportunity to increase shareholder value with the overall Bausch
`Healthcare business. So we are delighted to welcome highly respective investor Carl Icahn
`and his team to join the Board, on the first comment. On the second comment, I think it's
`clear. We welcome open communication with all of our shareholders, and we have
`constructive input along the way from all of our shareholders. We have already on our Board
`two great investors, John Paulson and Rob Hale from ValueAct. So we're delighted to get
`this. The important comment I want to make sure is that there has been absolute alignment
`that, number one, there is a lot of upside or opportunities to unlock upside in our company,
`significant value upside. And I think that's been echoed by our discussions with Carl Icahn
`and his team. And also that we are aligned that we believe the important question is how can
`we unlock this value by spinning out B&L, which we think will trade very well with the peers in
`the eye health business. I mean if you - I won't go into all the details. You all are the experts
`on comparing us with other companies. But if you look at where companies like Alcon traded
`where Cooper trade, where Zeiss traded, they are all at 25x plus EBITDA for 2020 numbers
`So clearly, we think there is a significant upside opportunity for us at the Bausch and Lomb
`spin for our business. Paul, do you want to take the second part of the question in terms of
`our investments that we've made in B&L and importantly, how we're looking at that?
`
`Paul Herendeen
`
`https://seekingalpha.com/article/4408646-bausch-health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-eamings-call-transcript
`
`Slayback Exhibit 1072, Page 17 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Sure. And thanks for the question, Greg. Yes, I mean, we did talk about this a lot because the
`B&L, if you went back, let's call it, pre 2016, did not have the level of investment that -
`certainly, if Joe and I had and at the helm and allocating capital. We would have allocated
`more capital to that business. It's a great business, and we would be ahead of where we are
`today. The easiest example of that is INFUSE and what we call ULTRA ONE DAY outside the
`U.S., the daily silicon hydrogel lens. Like how can you be in the Vision Care business did not
`have this. And when Joe and I got here, it was one of the first things that we activated, was a
`program to do that. Now as a result of that, they say about investment and investing behind
`that business, in '17, '18, '19 and '20, the preponderance of our CapEx really was focused in
`the B&L business where it had been under invested in. I like the CapEx in B&L to investment
`in R&D. I mean, it's kind of growth - that is growth CapEx and was decision that even though
`we were and are a levered company, and obviously, capital is very dear to us. Absolutely
`turned and allocated that CapEx. That's one example. Second is we have rotated it and we
`continue to invest in R&D. I used the example a moment ago. I won't jump all over it, but of
`how we enhance the Ophtho Rx pipeline by pursuing business development deals. There is
`an example. Another one I would throw out to you is look at how well our consumer business
`is doing, particularly in the U.S. That is a function of providing Joe Gordon and his team that
`run that business with the resources that they need to drive that growth at very attractive
`rates. The mostly used example there is OTC advertising. I hope everybody on this call
`constantly seize our advertisements for our eye vitamins and for LUMIFY. We are allocating
`capital to that business in a way that is giving us the opportunity to start to demonstrate on a
`very consistent basis, the kind of growth that, that business can do on its own. To be
`perfectly clear, that business was as part of the whole - as part of BHC whole benefited from
`Joe's and mine perspective way back that it was a very attractive business that deserve more
`investment certainly than it had seen under the prior management regime and honestly,
`perhaps even under prior ownership before that.
`
`Joe Papa
`
`https://seekingalpha.com/article/4408646-bausch-health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-eamings-call-transcript
`
`Slayback Exhibit 1072, Page 18 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`I think Paul answered it really well, Greg. The only thing I'm going to add to what Paul said is,
`I think the concept that we have of an integrated eye health business is the other issue that I
`think gives us an advantage. And by what that I mean the fact that we have a vision
`correction business. We have a prescription business. We have a surgical business. We
`have a consumer business. We think those are important as you think about the ability to
`compete in the eye health business going forward. We know there is a lot of roll-ups of the
`ophthalmology practices. We think having a place where they can get the full line offering
`that's important to patients. Important to our customers is one of the things that we will have
`an advantage in the marketplace, and that clearly is something that we think will be
`important. A simple example, when a patient needs surgery or a cataract procedure, they are
`also going to need the ophthalmology prescription products. We have them. We think we
`have an integrated offering. We think that's the other reason why we will be very successful
`in competing. But obviously, we will leave it in your hands to make those judgments to peer
`multiples. Let's take our next question.
`
`Operator
`
`Next question is from Akash Tewari from Wolfe Research. Please go ahead.
`
`Akash Tewari
`
`Hey, guys. So just a few. We've seen a few of your peers recently guided to FX tailwinds for
`2021. Given where you are today and kind of your geographies is it crazy to think that
`Bausch could see maybe a $200 million to $300 million FX benefit that's kind of embedded in
`your guidance? And then, Paul, I know you can't comment on this stuff totally, but there is
`some investor speculation that you might be involved in some capacity, whether it's with the
`RemainCo or the Spinco. What is - can you kind of maybe, with broad strokes, speak about
`your interest and potentially the Spinco and the commercial opportunity that stands in front of
`you? And then just lastly, on Slide 20, you noted that B&L, SiHy Daily are expected to
`exceed $250 million in sales. Is that a peak number or is that for 2021? Thanks.
`
`Joe Papa
`
`Let me take that last question first, because I think [indiscernible]. On the question of the
`SiHy Daily to be clear, that is an opportunity that we believe it can exceed peak sales
`numbers of over $250 million to be clear. That is not a number for 2021 to be clear. We
`viewed that and the way we phrased it, it was a global expectation for our SiHy Daily and that
`we viewed that as a peak number, not a 2021 number. So Paul, why don't you take the FX
`question?
`
`Paul Herendeen
`
`https://seekingalpha.com/article/4408646-bausch-health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-eamings-call-transcript
`
`Slayback Exhibit 1072, Page 19 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Sure. And it is a good question. So even if you look at the bridge on Slide 15 going from '20
`to '21, you see that at revenue, FX is a tailwind of $165 million and arriving at our guidance
`range of $8.6 billion to $8.8 billion. That's as of now. And if there is - you are going to try to
`forecast that we're expecting FX rates to improve from here, I will tell you that I've been
`terrible at forecasting FX rates. It's one of the reasons why I always talk about constant
`currency and organic growth because it takes the currency out of the mix. We benefit from it
`when it comes in our direction. And it feels good. But frankly, if that was the only thing that
`caused you to grow, it's not all that interesting. We always call it out and always try to isolate
`it for you and will even isolate it for you in May when we report our first quarter. And again, in
`August when we report our second and show you how it changed from where we were prior.
`So I'm going to hope that currency moves in our direction because it feels good. But from a
`constant currency organic basis, not how we measure ourselves. We measure ourselves
`constant currency in organic to get back to what did we do versus the serendipity of how did
`FX rates go around the globe. The second question you asked around - it's kind of like are
`you interested in RemCo. I think your former partner, Umer, asked me this. It might have
`been last quarter or the quarter before. You probably heard it in my response to thinking
`about RemCo. That is a very attractive business. It will be definitionally a levered business
`when it comes out. And these are all things that I like. So yes, if you would ask me pick one,
`as much as I love the B&L business, I'm probably more suited to thinking about RemCo.
`
`Joe Papa
`
`So I think I'll just repeat in addition to what Paul said. We think from a leadership point of
`view, we'll have more to say about that in the May timing. We think we've got a great team at
`Bausch Healthcare, and we think we'll have more to say in terms of how we're looking at
`leadership and what's going to happen with the business when we come out with our
`financial segment reporting in May of 2021 and then have more comments about the
`leadership team and the individuals that will be involved and how they will be evolved in May.
`Operator, let's take the next question.
`
`Operator
`
`Next question is from Terence Flynn from Goldman Sachs. Please go ahead.
`
`Terence Flynn
`
`Great. Thanks for taking the questions. Maybe two for me. I was just wondering, as you think
`about 2021, you mentioned as procedure backlog in cataracts as a growth tailwind. Just
`wondering if there is anything you can do to capture maybe a larger share than your current
`market share of that backlog? And then on RemainCo, just wondering if you're still
`committed to the 5.5x leverage target? Thank you.
`
`https://seekingalpha.com/article/4408646-bausch-health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-eamings-call-transcript
`
`Slayback Exhibit 1072, Page 20 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Joe Papa
`
`Sure. On the first part of the question, I think I'm going to just refer you back to the slide that
`we put forth in that. We are clearly seeing a return to pre-COVID levels for our procedures as
`evidenced by - as a reminder, everyone, we have a Stellaris Elite machine, it reports on a
`daily basis. What- how much it's being used, so we can track what's happening around the
`U.S. We don't have those capabilities in Europe because of some reporting requirements,
`but we do have it to see what's happening in the U.S. and we are seeing the ability to show
`our Stellaris Elite machines are back to pre-COVID levels. On the specific question of gaining
`this year, we have shown, at least in the U.S. data that the U.S. Bausch and Lomb IOL
`market share has moved from, I'd say, a low of around 10.2%, we're up to about 11.6%. So
`we are gaining share in the IOL market. We are continuing to move forward with new
`innovations there. Our belief is that's what will drive that. But we do believe that, as I said,
`both in the United States and around the world, you're seeing somewhere around 15% to
`20% delay in cataract surgeries because of COVID, our expectation for 2021 and beyond is
`that those procedures will come back. We have looked at some of the IQVIA data that has
`said. And looking at elective procedures, one of the procedures that's coming back the
`quickest is cataract surgery. So we are tracking that type of data, and that is the basis for
`why we do think there is a tailwind for us for 2021 and beyond. So operator, I think we have
`time for maybe one more question, and then we'll conclude. So, one more question please.
`
`Operator
`
`Next question is from Doug Miehm from RBC Capital Markets. Please go ahead.
`
`Doug Miehm
`
`Yes. Thank you. So just on the debt. So you'd indicated that you were going to go out
`perhaps at 4 and 5.5x for the individual businesses. I'd just like you to confirm that. And then
`how important is investment-grade to the Spinco? And then finally, Paul, can you comment -
`it looks like you've reiterated your '22 growth targets of 3 to 5 and 4 to 7. But maybe you can
`comment on why the street remains so far below those numbers right now. And I'll leave it
`there. Thanks.
`
`Paul Herendeen
`
`https://seekingalpha.com/article/4408646-bausch-health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-eamings-call-transcript
`
`Slayback Exhibit 1072, Page 21 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Sure. Yes, thanks for the question, Doug. Let's start with the debt leverage. So I'm going to
`take this in order. First, we're going to be ready to go, as Joe said, operationally with the
`things that we need to do internally in order to be able to go here by the end of Q3 of this
`year. Our primary commitment is to unlocking shareholder value. And frankly, the leverage of
`the entities will be an outcome of that work to determine what's the best path forward. The
`value of RemainCo is important to the equation. And frankly, the way you described it, is it
`important to be investment-grade for Spinco? As I would submit, there is a relationship
`between the degree of leverage on Spinco and your ability to attract a higher multiple. If you
`were to lever up Spinco to a high level, it's unlikely that you would get the right EV multiple in
`order to unlock that value. At the same time, the leverage that you put on Spinco is important
`to the leverage at RemCo. So there are lots of levers that need to be pulled here in order to
`try to find the place where we deliver value to all BHC shareholders. And so we're looking at
`all of those things. And it is something that they are an endless array of alternatives here,
`and we will be ready to execute on that spin operationally in 2021 and move forward as
`expeditiously as possible in order to unlock value. Joe, do you want to take the CAGR or to
`do you want me to?
`
`Joe Papa
`
`No, why don't you quickly do it and I'll do a closing comment.
`
`Paul Herendeen
`
`Yes, sure. On the long-term base, yes, we kept it in there because definitionally, we believe
`we could still hit that. I said in my remarks, regarding our guidance for 2021, and to be triple
`clear, we would be ahead of this unquestionably, my mind, anyway, in 2021 from both a
`revenue and profitability standpoint, but for COVID. We are not in 2021, fully recovered from
`COVID. But as we regain that, we think we have every ability to still produce the results
`within the ranges that were articulated by that long-term - longer term CAGR guidance. I'll
`stop there, Joe.
`
`Joe Papa
`
`Thank you for the comments, Paul. I agree with what Paul said. And just let me say in
`closing, thank you, everyone, for joining us today. I would just quickly summarize by saying
`we exited 2020 with great momentum, and we remain strategically focused on executing on
`the business, capitalizing on the key growth drivers and catalysts to grow EBITDA. We want
`to continue to improve working capital efficiency, delever our company. And importantly,
`unlock shareholder value with the spin of the B&L business. So thank you for joining us. I
`look forward to having further conversations with everyone in the near future. Have a great
`day, everyone.
`
`https://seekingalpha.com/article/4408646-bausch-health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-eamings-call-transcript
`
`Slayback Exhibit 1072, Page 22 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Operator
`
`The conference has now concluded. Thank you for attending today's presentation. You may
`now disconnect.
`
`https://seekingalpha.com/article/4408646-bausch-health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-eamings-call-transcript
`
`Slayback Exhibit 1072, Page 23 of 23
`Slayback v. Eye Therapies - IPR2022-00142
`
`