Clearly, though, I think one of the slides we included in the presentation was TRULANCE, a
`product that we acquired for approximately $180 million. And you can see it's already
`generating over $100 million of revenue. Things like those type of bolt-on opportunities we
`think are going to be the perfect type of programs. I'm going to probably ask Tom to speak
`specifically before we go to Ortho Derm but a little bit maybe about some of the things he's
`been able to do in the international pharma business and some of the products that he's
`been able to acquire help build that segment of the business as well. So maybe talk a little bit
`about the international pharma business and the past success you've had in predictor of the
`future.
`
`Thomas Appio
`
`Yes. So when I look at the R&D pipeline, clearly, we'll have to accelerate the R&D pipeline.
`And as Joe pointed out, clearly, there will be a balance between paying debt versus the
`assets that we can bring into the organization. When I look at it, clearly, we have a wonderful
`footprint in GI with our Salix business, and we've already started screening opportunities that
`we could take a look at there in adjacent categories as well to be able to leverage our
`footprint there and our scale.
`
`When we take a look at the business internationally, we have, as we said in the presentation,
`in over 70 countries, we have scale in Eastern Europe, Latin America and Canada. And over
`the last few years, we've been able to do many deals that we call -- I would call tuck-in deals
`that are -- that bring us revenue and EBITDA at reasonable rates and reasonable prices,
`given the fact that with the scale that we have and be able to leverage that, we already have
`many deals that are sitting there that we can continue to execute on.
`
`And that's why I see an opportunity to leverage the international business with the scale that
`we have and the ability to grow it with no LOEs. So it's going to be a balance, of course,
`between the U.S. business and the international business and then paying down debt. We'll
`have to be extremely focused of what we bring in and making sure that we do exquisite due
`diligence on any deals that come in to make sure that we have success.
`
`Joseph Papa
`
`Tom is a little modest. He's got 45 products that he is planning for 50 different markets in the
`next 5 years that he's expecting to launch, and I think that's going to be a really important
`part of what he's done historically, both what he can do for the future as well. So you'll see
`that on Page 35 of our presentation.
`
`https://seekingalpha.com/article/4489552-bausch-health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-transcript
`
`Slayback Exhibit 1073, Page 17 of 24
`Slayback v. Eye Therapies - IPR2022-00142
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`

`

`And then the other question was on the Ortho Derm business. Does it fit within the pharma
`business? I think the answer is still yes. We will continue to look at all opportunities, though,
`in terms of looking at our portfolio. But as we sit here today, we've got a new product, IDP-
`126 that we have now completed 2 Phase Ill clinical trials that have met their primary end
`points. We do expect to submit that NDA in the second half of 2022. So we're excited about
`what that means in terms of the opportunity in addition to what we've previously said.
`
`And I can't leave this without also commenting, David, as you know, the plans we have for
`the rifaximin novel formulations and the MSL model, as we mentioned in the call, also are a
`big part of that organic story that we're putting together. So thank you for the question.
`Operator, next question please.
`
`Operator
`
`Our next question comes from Gary Nachman with BMO Capital Markets.
`
`Gary Nachman
`
`So Joe, when you say actively monitoring market conditions for B&L and Salta IPOs, do you
`see the conditions or receptivity to those IPOs being very different? Is it more likely one will
`happen before the other? And if market conditions are not good, how long can this potentially
`be on hold beyond the March time frame that you just outlined?
`
`And then with all the moving pieces and changing dynamics on capital generation for the
`spins, why are you confident you can still get to the leverage targets that you laid out a bunch
`of months ago? Are you starting to think any differently about those targets at all? So if you
`could just walk through your confidence there that would be great as well.
`
`Joseph Papa
`
`I'll start with -- a lot of good questions there. In terms of looking at the market conditions for
`both IPO, once again, I want to start with -- we have substantially completed the preparations
`for both the B&L IPO and the Salta IPO at this time, which I think that's important. We
`obviously will need to update our financials, which we'll do. But essentially, the mid-March,
`end of March timing is what we are currently contemplating.
`
`Obviously, the market conditions can change, and we're going to work with our advisers on
`that particular question as to when to go forward. What I will say is that we're balancing 2
`things. Number one, the desire to move expeditiously in terms of moving forward these IPOs
`to unlock what we believe is significant shareholder value. So we would like to move
`expeditiously. Having said that though, the bigger commentary that goes along with that is to
`maximize the shareholder value creation opportunity. So we're going to balance those 2
`thinas as we think ahout how we ao forward with these IPns.
`'Https:l/seekingalplia.comtart1cfe744!3'9552-oaus!:Pi=healtli.:companies-1nc-bhc-ceo-josepn-papa-on-q4-2021-results-earnings-call-transcript
`
`Slayback Exhibit 1073, Page 18 of 24
`Slayback v. Eye Therapies - IPR2022-00142
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`

`

`I think part of the question you're asking is, is there a different market potential for each of
`these IPOs, yes, they are different IPOs. They have -- one is a pure play Bausch & Lomb eye
`health business. The other one is a Salta Medical aesthetics business. There's differences in
`valuation in terms of overall valuations, in term relative size. One of them is, a ballpark $4
`billion business in terms of revenue. The other was $350-plus million revenue business.
`
`So depending on which one we're talking about, there's going to be a different market for
`each of those. But both of them, we think, are exciting opportunities. And once again, being a
`pure-play eye health business or a pure-play medical aesthetics, we think there's great
`opportunities for both of them.
`
`How long will we wait in terms of the March time line? I think, once again, I'm going to just
`simply stick with the point that we want to move expeditiously, but we're also looking to
`maximize our shareholder value creation across the entire Bausch Health Company.
`
`Our confidence in getting to the leverage targets would change them? The answer to that is
`simply we are highly confident we will get to these leverage targets.
`
`We are not going to change them. We are looking at these leverage targets being Bausch &
`Lomb at less than 2.Sx leverage and Bausch Pharma at that 6.Sx to 6.7x is the leverage
`target that we've spoken about in the past, and we'll stay with those leverage targets as we
`look at them right now.
`
`Obviously, the important thing that would change to that is when we actually do the full
`separation is the only question that's going to depend upon, of course, our performance and
`our ability to raise the capital through the IPO, so the Bausch & Lomb business, the Salta
`business and the amount of incremental debt that will put towards the Bausch & Lomb 2.5x
`leverage. I think I got all your questions, Gary. Thank you very much for the question.
`
`Operator
`
`Our next question comes from Jason Gerberry with Bank of America.
`
`Jason Gerberry
`
`Just wanted to ask about the XIFAXAN patent litigation situation. And basically, what can you
`offer Alvogen to try to drive a settlement? As we look at the situation, trying to offer early
`market entry versus the January 2028 entry data of the other generic settlements, we just
`pull forward the other generics, I would assume. And I was also looking at a settlement to
`launch alongside 3 other generics probably is not hugely valuable to Alvogen.
`
`https://seekingalpha.com/article/4489552-bausch-health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-transcript
`
`Slayback Exhibit 1073, Page 19 of 24
`Slayback v. Eye Therapies - IPR2022-00142
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`

`So just sort of curious what you can offer incrementally? And if you can't drive a settlement
`and you have to go to court, just curious, and we could get a decision by the end of the year
`in worst case, if that goes against you, how does that impact the ability to spin off P&L?
`Because I know B&L spin-off would occur something like 6 months after the IPO. So just
`curious, given XIFAXAN sort of really important to absorbing a lot of the debt for RemainCo?
`
`Joseph Papa
`
`Sure. Very good question. Maybe I'll just review a couple of the facts and get to your specific
`question. There is, in fact, a planned trial with Norwich on the XIFAXAN intellectual property,
`and that's planned for March 21. No back up now in terms of how we view this, number one.
`We believe we have very strong intellectual property for the XIFAXAN product. We have 26
`patents. We obviously believe very strong intellectual property.
`
`Number two. As you appropriately pointed out, we have previously visited this question 3
`times before. We settled with Teva, a very leading generic company for 2028. Number two,
`we settled for Sandoz, a leading generic company for 2028. And number three, Sun
`Pharmaceuticals, a leading generic company, we settled for 2028. I think there's a theme
`there. These are 3 very strong, very good generic companies. They've reviewed our
`intellectual property that we've had the conversations and we settled with them for 2028. I
`think the -- my view of been around the business for over 30 years. Teva, Sandoz and Sun
`are very capable, very competent companies.
`
`They've looked at intellectual property, and they've made the decision to settle for 2028. So
`we feel very good about our capabilities here in terms of our ability whether to settle or to go
`to trial, we feel very strong about our position. And I think it's certainly indicated by not just
`my point of view, but the point of view of what Teva, Sandoz and Sun previously decided.
`
`As to the question of how this could impact the B&L spin off, once again, we feel very
`confident in our abilities to prevail in this trial. The other thing though that has happened
`since we prevailed or since we settled, let me say that, one thing has happened since we
`settled with Teva is settled with Sandoz, and we settled with Sun for 2028. We've also seen
`the FDA make a decision to add to the rifaximin product guidelines -- product-specific
`guidelines, and they've added an additional requirement.
`
`So we think that even strengthens our position for 2028 when the FDA put forth an in-vivo
`bioequivalency study requirement. So we feel very good about our situation. Obviously, it's
`up to whether we settle or whether we go forward with the trial. I'm not going to comment
`specifically on that, but we like our intellectual property position and as evidenced by
`decisions that Teva made, decision that Sandoz made and decision that's Sun made.
`
`Jason Gerberry
`https://seekingalpha.com/article/4489552-bausch-health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-transcript
`
`Slayback Exhibit 1073, Page 20 of 24
`Slayback v. Eye Therapies - IPR2022-00142
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`

`

`Joe, if I can just quickly follow up. Can you just confirm in a worst-case scenario if you lose
`on the patent litigation, there's nothing in the debt covenants as it pertains to the RP basket
`that would preclude a spin-off?
`
`Joseph Papa
`
`The only thing that I'll say on that is that relative to the full spin-off, we want to make sure we
`hit the debt leverage ratios that I talked about previously, the 6.5x to 6. 7x for the Bausch
`Pharma. So we'll obviously consider that. But otherwise, we have the ability to go forward.
`But Sam, anything you want to add to that question?
`
`Sam Eldessouky
`
`No. You covered it well, Joe. And Jason, just the covenant. The way I look at it is, we are in
`full compliance today with the covenants. We're watching the covenants and as we go
`forward with our strategic alternatives and we're going to continue to be in compliance with
`that.
`
`Operator
`
`Our next question comes from Greg Fraser with Truist Securities.
`
`Greg Fraser
`
`I was wondering if you could provide some color on the growth assumptions for the Salix
`business and specifically XIFAXAN that's contemplating in the revenue guidance? And then
`on cash flow, how much do you anticipate pay in 2020 related to the settlement of legacy
`litigation? I'm just trying to get a sense for how much free cash flow you'll have available to
`deploy towards debt reduction?
`
`Joseph Papa
`
`All right. I'll take the growth assumptions for Salix business and specifically XIFAXAN.
`Obviously, we're very pleased with the overall growth that XI FAXAN showed specifically the
`record revenue that we saw in the fourth quarter. Our view of the growth for Salix business
`will be a balance. It will be a balance of the TRx growth that we've seen with XIFAXAN and
`then also the ability for the XIFAXAN to -- we've achieved certain pricing. I haven't talked
`about it, but we did take pricing on our prescription products and some of our consumer and
`vision products early in January of this year. So we do have that pricing that is part of the
`overall growth assumptions for Salix. So -- but also for the rest of our business, I probably
`should say.
`
`https://seekingalpha.com/article/4489552-bausch-health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-transcript
`
`Slayback Exhibit 1073, Page 21 of 24
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`

`So it's going to be a balance. It's going to be a balance of TRx growth as well as what we
`expect to have as a realized pricing. I remind you that when we take a price increase for
`XIFAXAN specifically, if we take somewhere in the 7% range, we expect that we'll realize
`approximately 50% of that in terms of a net pricing. It's going to vary firm product to product,
`year-to-year, but a ballpark way to think about it is about half of the price we take will be a net
`price adjustment. On the second point, Sam?
`
`Sam Eldessouky
`
`Greg, on the cash flow, let me just remind you that we have roughly about $1.5 billion of cash
`sitting on our balance sheet as restricted cash. And that's really dedicated towards the
`litigations and legal settlements. We expect that to start going out. We've already seen
`disbursement out of that balance, and we'll continue to see that in 2022. The timing exactly
`when it's going to happen in 2022 is not really going to be clear because it's in the hands of
`the judge and multiple administrative processes.
`
`From an overall cash flow, I'm just getting -- take the opportunity just to comment on overall
`cash flow because you touched on it, the $1.7 billion that we're guiding to, the way you think
`about it, it's really running on the strength that we built in 2021 from a cash conversion. We
`roughly convert about 47% of our EBITDA to adjusted cash. And that's really up about 5%
`from where we were in 2019, which was running the low 40s. So we're continuing to run with
`that high level of cash conversion, which is really a very strong thing that we're very pleased
`with.
`
`Joseph Papa
`
`Thank you, Sam. Operator, we have time maybe for one last question, please.
`
`Operator
`
`Our last question will come from Balaji Prasad with Barclays.
`
`Balaji Prasad
`
`I'll just restrict my set to one question. With regard to the guidance that you provided in
`Bausch & Lomb of 4% to 5% growth, can you contextualize this with broader industry trends
`that you're seeing and also the upside and downside risk to this guidance? If you could also
`maybe compare this number with the guidance provided by one of its peers, Alcon with the
`7% or 9% growth. And what do you see are the key differences between these 2? That
`would be great.
`
`Joseph Papa
`
`https://seekingalpha.com/article/4489552-bausch-health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-transcript
`
`Slayback Exhibit 1073, Page 22 of 24
`Slayback v. Eye Therapies - IPR2022-00142
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`

`

`So I'll start, but Sam, you may want to add as well. Number one, as we think about the
`opportunity, we're excited about what we see in terms of the overall the Bausch & Lomb
`opportunity. The upside for us is going to be -- we're seeing some very significant growth in
`the Bausch & Lomb on the consumer side of the business, for example, in consumer eye
`health area, we're seeing market growing somewhere in that 7% range. So that's a real
`positive indicator for us.
`
`Number two, we are seeing some pricing in our overall B&L business pricing opportunities in
`both the vision business as well as what we're seeing on the consumer side. And of course,
`we've also seen some on the pharmaceutical prescription side of our business. We think that
`those are things that we're continuing to monitor, and we're looking at selected pricing in
`each of those categories that's going to help on the overall and would be probably on the
`upside depending on what happens to the overall portfolio.
`
`So seeing clear growth in the consumer side of the business, seeing clear growth in the
`Vision business, especially for us, the opportunity as we're launching our SiHy daily product.
`We think that's a very important driver of the 2022 opportunity as we launch both the
`spherical and the multifocal product. So I think all those will be some of the critical part of the
`P&L guidance as we're thinking about the overall question.
`
`The only other thing that -- Sam, is anything else you want to add to this quick question or -(cid:173)
`
`Sam Eldessouky
`
`No, you covered it pretty well, Joe. I'll -- in terms of the guidance, I will look at that we're
`striking a balance between the positive business performance that we see in 2021 and how
`is that momentum is going and carrying us into 2022. So we're very excited about that. We're
`also balancing it with positive trends that we're seeing in the overall market, where in
`Surgical and as well as in Vision Care and Consumer business.
`
`And we're excited about the new launches that we're going to be seeing in 2022 for
`ophthalmology and going to 2023. So we're bouncing all those factors with, I'll call it, the
`macroeconomics and the different situations that emerged and making sure that it is
`factoring in the positives and the negatives as we went through our guidance.
`
`Joseph Papa
`
`https://seekingalpha.com/article/4489552-bausch-health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-transcript
`
`Slayback Exhibit 1073, Page 23 of 24
`Slayback v. Eye Therapies - IPR2022-00142
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`

`

`The only thing I'll add to -- I think the last part of your question was the Alcon Cooper
`comparisons and what they're seeing. I can't obviously speak for them. But when I talk about
`our growth, it comes down to, I think, a couple of things. Number one, the new products that I
`talked about the INFUSE or the ULTRA ONE Day product, clearly and the launch of that
`comes back to our XIPERE new product launch opportunity and the additional new products
`that we expect to launch during the year in our Surgical business.
`
`I know that Alcon and Cooper, when they talk about their growth, they're also talking about
`some of the bolt-on acquisitions they do, we're talking about our growth simply as -- and only
`as the true organic growth, not including any M&A or business development. So I think that's
`maybe a slight differential versus what they talk about. They talk about their growth inclusive
`of the -- any business development M&A activity.
`
`So maybe that's probably the only difference that I'm aware of right now as I sit here today.
`Obviously, as we go out as an independent B&L business, we do think there's going to be
`opportunities for additional bolt-on opportunities for us. But at this point, we do not build it
`into our current 2022 guidance.
`
`Operator, thank you very much, everyone. Thank you very much for joining us. I think that's
`going to conclude our conversations for today, but I appreciate everyone's interest in the
`business. We're excited about what's in front of us. We have the simultaneous opportunity to
`continue to increase our EBITDA also to launch new products and then clearly make
`progress on our strategic alternatives. Thank you all for joining us today. Have a great day.
`
`Operator
`
`The conference has now concluded. Thank you for attending today's presentation. You may
`now disconnect.
`
`https://seekingalpha.com/article/4489552-bausch-health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-transcript
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`Slayback Exhibit 1073, Page 24 of 24
`Slayback v. Eye Therapies - IPR2022-00142
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