Valeant: An Enduring Engine for Growth

Valeant: An Enduring
Engine for Growth
December 16, 2015
Forward-looking Statements
Forward-looking Statements
Certain statements made in this presentation may constitute forward-looking statements,
including, but not limited to, statements regarding guidance with respect to expected
revenues, non-GAAP cash earnings per share, adjusted cash flows from operations and
organic product sales growth, future disclosures, launches and approvals of products,
business development activities, and the 2016 strategic initiatives of Valeant Pharmaceuticals
International, Inc. (the “Company”). Forward-looking statements may be identified by the use
of the words “anticipates,” “expects,” “intends,” “plans,” “could,” “should,” “would,” “may,”
“will,” “believes,” “estimates,” “seeks,” “potential,” or “continue” and variations or similar
expressions. These statements are based upon the current expectations and beliefs of
management, and depend on assumptions, data or methods that may be incorrect or
imprecise and are subject to certain risks and uncertainties that could cause actual results to
differ materially from those described in the forward-looking statements. These risks and
uncertainties include, but are not limited to, risks and uncertainties discussed in the
Company's most recent annual or quarterly report filed with the Securities and Exchange
Commission ("SEC") and other risks and uncertainties detailed from time to time in the
Company's filings with the SEC and the Canadian Securities Administrators ("CSA"), which
factors are incorporated herein by reference. Readers are cautioned not to place undue
reliance on any of these forward-looking statements. The Company undertakes no obligation
to update any of these forward-looking statements to reflect events or circumstances after
the date of this presentation or to reflect actual outcomes.
Note 1: The guidance in this presentation is only effective as of the date given,
December 15, 2015, and will not be updated or affirmed unless and until the Company
publicly announces updated or affirmed guidance.
1
<portrait>
J. Michael Pearson
Chairman and CEO
2
Drivers of Valeant’s success
Our collection of great healthcare brands around the
world
Our relentless focus on providing easy and affordable
access for physicians and patients
Our innovative strategies (often disruptive), which have
challenged industry convention
Our exceptionally productive approach to R&D
Our decentralized model and talented people, which give
us a competitive edge (speed of decision making and indepth customer knowledge)
3
A collection of great brands in a breadth of
therapeutic areas
Valeant 2016 forecast revenues
Total: $12.5 – 12.7 B
Oncology, Dentistry,
Women’s Health,
Neuro and Other
17%
22%
Dermatology and
Skin Care
22%
Emerging
markets (including 19%
Ophthalmology,
Dermatology,
and GI sales)
Ophthalmology and
Eye Care (B+L)
21%
4
Gastrointestinal (GI)
Dermatology
▪ Great brands in attractive segments
▪ Importance of trust-based physician
relationships
▪ Concentrated, specialist prescriber base
▪ Attractive from a payor standpoint
– High component of cash pay
– Reasonably priced products
▪ Lower-cost, lower risk R&D
4-year mkt CAGR: ~5%
5
Ophthalmology (B+L)
▪ Strong underlying global growth
drivers (e.g., demographics)
▪ Attractive specialty Rx and OTC segments
▪ Importance of trust-based physician
relationships
▪
▪
▪
▪
Concentrated, specialist prescriber base
Significant unmet medical needs
Opportunity for lower-risk innovation
Low exposure to reimbursement pressure;
significant cash pay
▪ Durable products
4-year mkt CAGR: ~6%
6
Gastrointestinal
▪ Concentrated, specialist prescriber
population
▪ Importance of trust-based physician
relationships
▪ Concentrated, specialist prescriber base
▪ Less of a priority for many larger pharma
companies
▪ Favorable reimbursement
▪ Opportunity for low-risk, incremental
innovation
7
Emerging markets
▪ 1,000+ brands with sales in
emerging markets
▪ High growth markets (e.g., Mexico,
China, Middle East / North Africa)
▪ Rich pipeline of upcoming launches
▪ Decentralized operating model
▪ Products not dependent on
reimbursement
▪ Local R&D capabilities
4-year mkt CAGR: ~7%
8
Valeant Access Program with Walgreens –
Physician/Pharmacist/Patient-led experience
▪ Direct distribution to patients through
Branded Access
Program
Walgreens
▪ All products in Walgreens on
consignment; Walgreens never takes title
▪ Walgreens paid a distribution and
pharmacy fulfillment fee
Branded Generic
Access Program
▪ Valeant sets prices to the patient
▪ Ensures affordable, immediate access to
all Valeant brands in program that
physicians prescribe (for eligible patients)
9
Our innovative strategies – the early years
2008
2009
2010
Then
▪ ~$600M in revenue
▪
Dramatically
reduced OPEX
(e.g., to focus
predominantly on
customer-facing
areas)
▪
Shifted from highrisk/high-spend
R&D (e.g.
neurology,
virology) to lower
cost “singles and
doubles”
▪
Built unrivaled
M&A capabilities
(e.g., requiring
returns in excess of
cost of capital)
▪ 8% operating margin
and 1% growth
▪ Imminent Effudex generics
▪ Bloated cost base and
infrastructure
▪ High risk, high spend R&D
▪ Demotivated organization
10
▪
Began building
undervalued
BGx and OTC
businesses
(e.g., in
emerging
markets)
▪
Initiated new
R&D capability
and operating
model (e.g.,
Dow)
▪
Executed
merger of
equals with
Biovail (strong
strategic fit,
improved tax
rate)
Our innovative strategies – recent years
2011
/12
▪
Built a leading
US market
position in
dermatology,
with a series
of focused
acquisitions
(e.g., Medicis,
Obagi,
Dermik/Ortho)
2013
/14
▪
▪
▪
Gained critical
mass in
ophthalmology
with acquisition
of B+L
New R&D model
beginning to
pay dividends
Created
attractive
access program
in dermatology
initially through
partnership with
Philidor
2015
Now
▪
Secured entry into
attractive GI space with
acquisition of Salix
▪
Created even better,
branded access
program with Walgreens
▪
Launched with
Walgreens the first
branded generics
program in the US
▪ $12.5-12.7B in revenue
▪ Double-digit organic
growth
▪ Great brands around
the world
▪ Attractive geographies
and TA platforms
▪ Energized and
committed talent base
11
Our R&D model
▪ 6 NDAs approved in last 3 years
▪ 200+ active US programs
8%
Rx R&D spend
as a % of
branded Rx
sales
▪ Dermatology Phase II and
Phase III success rates 3-5x
better than industry averages
▪ Highest 5 year output1 on R&D
spend in the industry
1 Number of NMEs/BLAs approved 2009-'14 for each $1 billion spent;
peer set is 15 companies with the highest number of NME/BLA approvals
12
Our decentralized model
▪ Empowers local leaders to make decisions that are right
for their business
▪ Allows us to move with speed and agility
▪ Aligns with our customers’ needs
▪ Ensures strong centralization and controls in key
functions/ activities, e.g.,
–
–
–
–
Finance
Compliance
Audit
Pharmacovigilance
13
How you can measure our progress in 2016
▪ Retained all key management talent and added
new key hires
▪ Dermatology returned to growth
▪ Maximized Xifaxan – created our first $1B brand
▪ Got approval and successfully launched
– Brodalumab
– Latanoprostene Bunod
– Relistor Oral
▪ Delivered $100-150M in addyi sales in 2016
▪ Brought leverage to ~4.0x by end of 2016
14
Who you will hear from – Our business leaders
Robert Rosiello
EVP, CFO
Deb Jorn
EVP, Dermatology and GI
Tracy Valorie
SVP and GM, Women’s Health
and Bausch + Lomb
Pharmaceutical Division
Mark McKenna
VP and GM,
Bausch + Lomb
Yang Yang
BU Director,
Vision Care China & Japan
Joe Gordon
SVP and GM,
Consumer Health Care
Fernando Zarate
GM, Mexico, Andean region,
Central America and
Caribbean
Dr. Tage Ramakrishna
Chief Medical Officer, Head of
R&D and Quality
15
Financial guidance
<portrait>
Robert Rosiello
Executive VP, CFO
16
Revised Q4 2015 and full-year 2015 guidance
Previous Q4
2015
Guidance
Revised Q4
2015
Guidance
Revenue
~$3.25 - $3.45B
~$2.7 - $2.8B
Adjusted EPS*
~$4.00 - $4.20
per share
~$2.55 - $2.65
per share
>$1.0B
>$600M
Adj. Cash
Flow from
Operations*
* Non-GAAP (see Appendix)
17
Bridge from previous Q4 2015 guidance
Revenue
Midpoint of previous guidance
Adjusted
EPS*
~$3,350M
~$4.10
Philidor separation
~($250M)
~($0.65)
Estimated one-time revenue impact from
Walgreens transition
~($150M)
~($0.40)
Pricing and volume-related changes (e.g., nonpromoted products)
~($200M)
~($0.45)
~$2,750M
~$2.60
Midpoint of revised guidance
* Non-GAAP (see Appendix)
18
Philidor separation
 Announced Philidor separation October 30
 Provided free scripts from October 31 to November 8
 Dispensed refills without seeking reimbursement from payors
from November 9 to present
 Average cash pay price declined from $67 to $23
 Lost ~20% of scripts from business disruption in Q4, virtually all
Philidor covered scripts
Estimated Q4 Revenue Impact: (~$250M)
19
One-time revenue impact from Walgreens transition
 Transition to consignment model at Walgreens for
current inventory on hand
 Under this arrangement, Valeant will hold title to products
sold under this program until dispensed to a patient
 Valeant will credit Walgreens for any inventory on hand in
its stores or distribution centers as part of transition
 Estimated reduction in traditional channel
inventories for the products included in Walgreens
program
20
2016 guidance
2016 Guidance
Revenue
~$12.5B – 12.7B
Adj. EPS*
~$13.25 – 13.75
per share
Adj. EBITDA*
~$6.9 – 7.1B
* Non-GAAP (see Appendix)
21
Bridge from previous 2016 EBITDA outlook
Previous 2016 Adj. EBITDA* Outlook
>$7.50B
Dermatology Patient Access Program ramp-up
~($225M)
Changes in pricing assumptions
~($125M)
Employee retention bonuses
~($75M)
Incremental legal fees
~($75M)
2016 Adj. EBITDA* Guidance (Mid-point)
* Non-GAAP (see Appendix)
22
~$7.0B
2016 guidance vs. revised 2015 guidance
Revenue
Organic Growth*
Adj. EPS*
Adj. EBITDA*
Revised 2015
Guidance
2016
Guidance
2016
Guidance %
over Updated
2015
Guidance
$10.4B – 10.5B
~$12.5B – 12.7B
~21%
Double-Digit
Double-Digit
NA
$10.23 – 10.33
per share
~$13.25 – 13.75
per share
~31%
>$5.4B
$6.9 – 7.1B
~30%
* Non-GAAP (see Appendix)
23
2016 guidance assumptions (1/2)

Exchange rates based on current spot rates

No use of balance sheet/acquisitions

Planned impact from generics expected ~($140M) in revenues


Glumetza (Q1); Zegerid (Q3); Nitropress (Q4); Virazole (Q4)
No use of balance sheet/acquisitions

U.S. branded drugs (excluding drugs in the Walgreens program) consistent
with PBM, managed care contracts

Other U.S. businesses (e.g., contact lenses, consumer) typically no more
than CPI

Ex-U.S. driven by volume, pricing impact is immaterial

Negotiated price discounts for hospital-administered drugs of ~30% (e.g.,
Nitropress, Isuprel, Virazole, Ammunol)

COGS* ~20-21%

SG&A* ~23-24%

R&D spend ~$400-500M
* Non-GAAP (see Appendix)
24
2016 guidance assumptions (2/2)

Restructuring charges expected <$200M

Higher charges in Q1 and Q2 due to completion of restructuring and
integration programs for Salix, Sprout, Synergetics, Amoun, trending
downward in Q3 and Q4

Cash tax rate expected to be ~5%

Interest expense ~$1.6B

Sequential quarters for Revenue and Adjusted EPS* are expected to be higher
than the previous quarter


2H will be substantially higher than 1H due to ramp up in Walgreen’s
programs
Cash Flow Items

Cap Ex - ~$350M

Depreciation - ~$200M

Stock Based Comp - ~$200M (includes impact of employee retention
plan)
* Non-GAAP (see Appendix)
25
Q1 2016 guidance
Q1 2016
Guidance
Revenue
$2.8 - $3.1B
Adj. EPS*
$2.35 - $2.55
per share
 Dermatology Patient Access Program ramp-up
 Continued impact of reduction in channel inventories
* Non-GAAP (see Appendix)
26
Balance sheet update
 Majority of 2016 free cash flow used for debt pay down

Committed to minimum debt pay down in 2016 of >$2.25B including
$562M term loan amortization and $260M maturities
 Remain in clear compliance with credit agreement financial maintenance
covenants

Senior secured leverage covenant: 2.5x (secured debt to pro forma
adjusted EBITDA*)

Interest coverage covenant: 2.25x though March 31, 2016, then 3.0x (pro
forma adjusted EBITDA* to pro forma interest coverage)
 Net leverage to pro forma adjusted EBITDA* expected to be ~4x by year end
 Minimal amortization and maturities until 2018

2016: $822M

2017: $631M

2018: $2,923M + $1,500M (Revolver)
* Non-GAAP (see Appendix)
27
Changes to planned quarterly disclosures

Cash flow

“Adjusted cash flow from operations” and “Cash conversion” will no
longer be reported each quarter

Only GAAP Cash Flow will be reported going forward

We will continue to report integration expenses by acquisition on
quarterly basis so investors can continue to calculate adjusted cash
flow, if desired

Adjusted EBITDA* will be reported on a quarterly basis

“Cash EPS” to be labeled “Adjusted EPS* (non-GAAP)”

Top 30 global brands

Volume and Price/Mix for total company and U.S. branded Rx business
* Non-GAAP (see Appendix)
28
Deb Jorn: EVP, Dermatology and GI
Background
▪ 30+ years in Pharma industry
▪ Bausch + Lomb; VP and CMO (3 years)
▪ Schering-Plough (5+ years)
– VP for Women’s Healthcare and Fertility
– VP for Allergy, Respiratory, and Urology
▪ J&J (2 years)
– VP for Internal Medicine
▪ Pharmacia Corporation (2 years)
– VP for Detrol / Detrusitol and Urology
▪ Merck (20 years)
– Executive Director, Worldwide Human Health Marketing;
Respiratory Products; senior marketing roles
Education
▪ M.B.A., NYU Stern Graduate School of Business
▪
Administration
B.A., Rutgers University
29
Jublia
30
Onexton
31
Key Takeaways
• Valeant is the #1 Medical Dermatology Company1 in
the U.S.
• Internal R&D efforts resulted in approval of 4 new
products in 2014 (Jublia, Onexton, RAM .08, Luzu)
• Strong near-term pipeline expected to sustain organic
growth
• Deep, trust-based relationships with dermatologists and
podiatrists
• New Valeant Access Program, in partnership with
Walgreens, launching in January 2016
Source: Symphony Monthly PHAST Audit MAT October 2015
1. Excluding biologics and oral antibiotics
*Dermatology Rx refers to entire USC2 37000 (Dermatological, Ethical)
**Sales are based on MBS Dollar Sales (MBS represents a standardized dollar
metric based on manufacturer’s published catalog or list prices to wholesalers
32
3 phase transition plan
Phase I:
Initial Transition
Oct 30th 2015 – Nov 8th 2015
 No submission of claims to
payors after October 30th
 All prescriptions filled at no
cost to patient
 Commercial insured and
uninsured only – no
government plans
Phase II:
Full Transition
Nov 9th 2015 until new
program in place (before
Jan 30th 2016 Philidor
closing)
 $35 cash pay option for
all new and refill
prescriptions sent to
Philidor
 Refills already in Philidor
prior to Nov 9th filled for
$0 if previous refill was
that copay or $35
 Commercial insured and
uninsured only – no
government plans
33
Phase III:
Relaunch
 Rapidly developed new
access program
 Entered into agreement
with Walgreens
 Prepared for execution
with excellence
Key recent actions
Customer outreach

20 cities covered in 6 weeks by senior
management and sales & marketing team

Reaffirmed commitment to Dermatology /
Podiatry specialty

Retained all sales & marketing leaders

Retained all but two sales representatives out
of field force of over 350

Maintained historic vacancy rate of 5% (lower
than industry norms)

Gathered input regarding key elements of new
access program

Established new relationship with leading
consumer retailer (Walgreens), streamlining
prescription process for patients and physicians
Retention
New Access Program
34
We have retained 81% of dermatology prescriptions
# of weekly TRx
Covered
Uncovered
Cash
Retail
140,000
~116,000
120,000
100,000
Philidor
80,000
~94,000
60,000
grew by 17% to 66,000,
mitigating overall drop
in total prescriptions
+17%
40,000
20,000
-
1
Pre
1 October average pre Philidor
2 November average, excluding Thanksgiving week post Philidor
▪ Retail prescriptions
2
Post
35
Valeant’s new access program
2
1 Commercial insured and uninsured only – no government plans
▪
Ensures affordable, convenient patient access
to medicines prescribed by their physician1
▪
Some products as low as $0
▪
Allows physicians, NPs and PAs to focus their
efforts on patient care
▪
Sales force will start providing physicians with
program overview as of Dec 21st
▪
Goal: fully operational January 15th
36
New access program is simpler for patients and
physicians
New Approach
HCP sends
Rx to Walgreens
Patient picks up
Rx at Walgreens
same day
Old Approach
2-3 days later Rx
arrives at home
HCP sends
Rx to Philidor
Patient calls Philidor
with insurance, credit card
37
Strong Organic Growth in Dermatology
Valeant Dermatology Revenues
Total Revenue
New Product Revenue1
$1,266M
76%
$718M
$150M/quarter
160
140
120
100
80
60
40
20
Q3 YTD
9/14
YTD
2014
Launch brand1
Q3 YTD
9/15
YTD
0
Q2
2014
2015
In-line brand
1 Brands launched 2014+: Luzu (Q2 14), Jublia (Q3 14), Ram08 (Q3 14), and Onexton (Q1 15)
38
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Exciting Late-stage Dermatology Pipeline
Select pipeline products
2016
Brodalumab (plaque
psoriasis)
2017+
IDP – 118 (plaque psoriasis)
IDP – 122 (plaque psoriasis)
IDP – 120 (acne vulgaris)
IDP – 121 (acne vulgaris)
39
Gastrointestinal health
40
Xifaxan 550mg
Hepatic Encephalopathy (HE)
Irritable Bowl Syndrome – diarrhea (IBS-D)
Gut GuyTM
41
IBS-D indication Drives Xifaxan TRx Growth
Thousands of
Xifaxan scripts
(US)
Retail + Hospital TRx’s*
85
81K Rx /
month
+27%
TRx
80
TV
75
DTC
Launch
70
PRINT
65
64K Rx /
month
IBS-D
Indication
60
55
DIGITAL
50
Jul14
Oct14
Jan15
Apr15
Jul15
*Note: TRx’s are Unit-adjusted each month based on the different Pack Sizes of 42 and 60
Source: Symphony PHAST 2.0
42
Oct15
Xifaxan continues to have substantial growth potential
in hepatic encephalopathy (HE)

Up to 8M in US at risk for Chronic Liver Disease1, including those
with Overt HE

Only 2 products are approved for Overt HE: lactulose and Xifaxan

2014 AASLD/EASL Guidelines recommended the addition of
Xifaxan to lactulose to maintain Overt HE remission, which has
been shown to reduce risk of Overt HE recurrence by 58% and
hospitalizations by 50%2

Today only 45% of NRx for Lactulose are written with Xifaxan,
creating a large untapped opportunity for Xifaxan to help HE
patients
1 Includes patients with HepB, HepC, NAFLD, NSH, and OHE; source: National Institute of Diabetes and Digestive and Kidney Disea se.
Digestive Diseases Statistics for the United States. Assessed September 7, 2010
2 Bass NM, Mullen KD, Sanyal A, et al. Rifaxamin treatment in hepatic encephalopathy. N Engl Med. 2010;362(12):1071-1081
43
Key actions to accelerate Xifaxan growth

Increase sales force by a further 100 representatives to
support Xifaxan growth in HE

Expand the GI team in high density areas

Increase continuity of care between sales teams working in
hospitals and out-patient settings
44
Strong growth of in-line brands
Brand
% TRx
Growth
YOY October
Apriso
8%
Uceris
30%
Relistor
33%
Ruconest*
140%
Source: Symphony PHAST 2.0 + VA Procurement, Non-Retail TRx’s are unit-adjusted each month based on the different Pack Sizes of 42 and 60
* Since Ruconest Launched in Dec 2014, Growth Rates are 5 vs. 5 months (instead of 12 vs. 12 months).
45
Relistor Oral (April 19, 2016 PDUFA)
 An estimated 3% of the adults in the US are receiving longterm opioid therapy
 41% of those patients, or approximately 3.7 million patients,
develop Opioid Induced Constipation (OIC)
 The prescription market for OIC is growing rapidly now that
there is an oral option
 In our phase III program, Relistor oral significantly increased the
percentage of patients with a rescue-free bowel movement
(RFBM) within 4 hours
Source: Spencer Dorn, et al. American Journal of GASTROENTEROLOGY 2014
46
Strong Late-stage GI Pipeline
Select pipeline products and launches
2015
 Xifaxan
IBS-D
2016
2017+
Relistor Oral
Opiod induced constipation
SAL-023
Chronic cirrhosis of liver
SAL-024
Crohn's
SAL-022
Diabetes
SAL -021
Rheumatoid arthritis
SAL-020
Hereditary angioedema
47
Tracy Valorie: SVP and GM, Women’s Health and B+L
Pharmaceutical Ophthalmology
Background
▪ 20+ years in Pharma industry
▪ Bausch + Lomb
– Vice President of Pharmaceutical Marketing
– Former Global Head of Glaucoma
▪ Pfizer
– Global Commercial Lead of Ophthalmology
▪
▪
(Xalabrands and Macugen), mid-stage development
portfolio, and long-range planning
Experience in discovery, clinical development, commercial
assessment, marketing and strategic planning
Previous board membership The Glaucoma Foundation
and ARVO Foundation for Eye Research (AFER)
Education
▪ M.B.A., Rensselaer Polytechnic Institute
▪ B.S. Molecular Biology, University of Connecticut
48
addyi is a breakthrough product with great potential
▪ addyi is the first FDA approved product for Hypoactive Sexual Dysfunction
Disorder (HSDD) in premenopausal women and is not the “Female Viagra”
▪ Hypoactive Sexual Dysfunction Disorder effects many premenopausal
women
– ~15M premenopausal women have HSDD
– Only 10% diagnosed
– Opportunity to educate on the disease state and expand the diagnosed
population
▪ Physician and Patient Education, and managing expectations is critical to
success, including:
– Education on disease state
– Physician and patient education on features, benefits, and risks of addyi
49
Challenge ahead of us: TRx’s are not being filled
addyi TRx (# TRx cumulative)
8000
Total TRx
7000
6000
5000
-82%
4000
3000
2000
TRx filled
1000
0
Oct-23
Source: McKesson
Oct-30
Nov-06
Nov-13
Nov-20
50
Nov-27
Dec-04
Dec-11
Physician sentiment is positive
Physicians are optimistic
about addyi as an FDA
approved treatment
option
Physicians who have
experience with addyi are
enthusiastic about its
potential
Physicians caution that
managing expectations is
crucial
““
“
“
It is fantastic that we have an FDAapproved medication for a woman with a
sexual health concern… I did not think this
was possible prior to this day and age
We discuss and write scripts for multiple
patients in our clinic every day
Physicians need to be educated on the
disease state and the product so they can
appropriately counsel patients on how the
product works and what they can expect
Source: Symphony, RelayHealth as of Dec. 2015, physician outreach
51
”
”
”
We have a strong assessment of the issues
▪ Limited physician education /
awareness of HSDD and addyi
▪ Confusion around REMS certification
process (physicians and pharmacies)
▪ Sales force targeting not optimal
52
Go forward plan
▪ Remove barriers to REMS certification
▪ Physician and patient outreach, MSL recruiting
and training
▪ Build an integrated Valeant team (Commercial,
Medical, Sales, etc.)
▪ Improve field force effectiveness
– Revisit targeting and call plan
– Improve reach and frequency on key targets
– Retrain our sales force
– Enhance performance management
▪ Improve patient access (thru Walgreens Access
Program as of Jan. 15th)
53
Market Access: Continuing to improve
Seeking
coverage /
under
negotiation
50%
Restricted
coverage
15%
Unrestricted
coverage
35%
▪
50% of US lives are covered to date
▪
>1/3 of all US lives have unrestricted coverage
▪
Managed Markets team is working diligently
with our payor stakeholders to improve access
U.S. lives
covered
54
addyi: 2016 Expectations
USD 100-150M+
net revenue
55
Mark McKenna: Vice President and General Manager,
Bausch + Lomb
Background
▪ 13+ Years of diverse experience in the eye health category in
leadership roles across sales, marketing, operations and strategy
▪ Led the reinvigoration of the U.S. contact lens product portfolio,
making Bausch + Lomb the fastest growing contact lens
company in the U.S.
▪ Held positions of increasing responsibility in Bausch + Lomb’s
sales and marketing division, most recently as Head of Sales and
Operations
▪ Global Marketing experience leading new product
development projects for Bausch + Lomb from ideation through
commercialization
▪ Joined Bausch + Lomb in 2006 after spending several years with
Johnson & Johnson Vision Care
▪
Speaker at the 5th Annual Life Science Executive Leadership forum
Education
▪ MBA from Azusa Pacific University
▪ BA in Marketing from Arizona State University
56
Biotrue lens
57
The resurgence of an iconic eye care brand
▪
Valeant has transformed the underperforming Bausch + Lomb
(B+L) company into a $1.2B+ diversified vision care business
▪
Products are outgrowing category averages through
commercial investments in the US and a decentralized model
▪
Global roll out of contact lens pipeline, which will build on US
and Asia success
▪
One of the fastest growing contact lens solution brands in the
world
▪
Strong pipeline, with >20 product launches and extensions
planned for next 3 years globally
58
B+L contact lens business turnaround under Valeant
US B+L contact lens revenue and
growth in millions
$300
+26%
$250
$200
$150
Annual
growth
▪
Innovation and Organic Growth: Our
investments in R&D, DTC marketing
and manufacturing have allowed us
to drive organic growth in vision care
▪
Distinctive Commercial Model: Our
physician oriented approach has
enabled us to transform Biotrue®
ONEday into one of the fastest
growing daily disposable brands
+26%
-1%
-7% -2%
-8%
+16%
-8%
$100
$50
$-
2009 2010 2011 2012 2013 2014 2015 2016 E
20% lens CAGR under Valeant
ownership vs 5% lens category CAGR1
1 Category CAGR over same time period
Source: Management estimates, 3rd party data
59
B+L is growing rapidly relative to competitors
Lens sales growth
Solutions sales growth
2013-’15
2013-’15
22%
7%
7%
-1%
-5%
6%
-3%
Market
Average1
All others2
Market
Average1
5%
1 B+L and top market competitors
2 Excludes private label sales
Source: 3rd party data, Company filings
60
2%
0%
Winning Strategies for Contact Lenses
Forge Higher Performance Leadership Team
•
•
Upgraded organization with top industry talent
Formed Professional Strategy group to enhance peer-to-peer
outreach
Enhance Operational Effectiveness
•
20%+
Annual
Growth
Next
3 Years
Expanded Sales Force by 50% to increase frequency and reach
Strengthen Customer Partnerships
•
Signed multi-year partnership agreements with leading optical
retailers; Vision Source (#2) and NVI (#4)
Launch Excellence
•
Innovative launch strategies to maximize launch trajectory
Accelerate the Pipeline
•
Accelerated Bausch + Lomb ULTRA Multifocal & Toric launches
by 12 months
61
Bausch + Lomb ULTRA® is Fastest Growing
Frequent Replacement Contact Lens
9
ULTRA share of dollars in FRP category
 Sales: Forecasted to more than
double from $45M in 2015 to
$100M+ in 2016
8
Market share (%)
7
 Share: Unprecedented 7.9 share
within 18 months of launch
6
5
 Distribution: Gained +13k
doorways in 2015 resulting in 22k
total ECP’s1 with diagnostic
fitting sets
4
3
 DTC Campaign: Delivered over
1B impressions via Digital, Social,
and Paid Search in 2015, and TV
spots planned for first half of
2016
2
1
0
1 Eye care professionals
Source: 3rd party data, Management Estimates
62
Bausch + Lomb ULTRA®
63
Bausch + Lomb ULTRA, a CLEAR standout in recent
Eye Care Professional poll
40%
When ECP’s Were Asked:
30%
Which recently launched lens has gained
the most traction in your practice?
34%
22%
20%
19%
15%
10%
7%
3%
0%
ULTRA
Clariti
Freshday
Cleveland Research Company, Nov 2015
MOIST for
Presbyopia
64
Acuvue
OASYS One
Day
Air Optix
Colors
MyDay
Bausch + Lomb ULTRA® 2016 Launch Activities
Launching Bausch + Lomb ULTRA® for
Presbyopia and Astigmatism in 2016

Expand Bausch + Lomb ULTRA® reach by 35%
of the market (multifocal and toric)

Halo effect on Spherical business
Investing Multi-Million Dollar in DTC campaign

TV, Digital, Social Media, Search

In-office Digital Displays to create 360
campaign
Targeted Professional Outreach

Largest Eye Care Professional Share of Voice
within contact lens industry

High impact launch events to generate
awareness and request of new products
65
Biotrue® ONEday is one of the fastest growing daily
disposable brands through a change in go-to-market strategy
US Biotrue ONEday net sales since acquisition
9
8
Sales ($M)
7
Biotrue
ONEday is
on track to
achieve a
60% YOY
growth rate
in 2015
6
Base trend
5
4
3
2
1
0
Q3 '13
Q4 '13
Q1 '14
Q2 '14
Q3 '14
Q4 '14
66
Q1 '15
Q2 '15
Q3 '15
13 New Product Launches Planned Over the Next
3 Years Across Lens and Lens Care
Select product pipeline and launches
2015
2016
Q1

2017 - 2020
Q2
Q3
Q4
Biotrue Multifocal
BLC-009
(Astigmatism)
BLC-007 (Multifocal)
BLC-008
(Astigmatism)
BLO-030
(Disinfectant)
67
▪
BLC-003 (single vision spherical /
multifocal / astigmatism)
▪
BLC-005 (single vision
spherical / multifocal)
▪
BLC-001 (single vision
spherical)
▪
▪
BLC-006 (single vision spherical)
▪
▪
▪
▪
BLC-004 (Novel Astigmatism)
BLC-002 (cosmetic single vision
spherical)
BLO-027 (Lubricant)
BLO-028 (Lubricant)
BLO-029 (Disinfectant)
Yang Yang: Business Unit Director, Vision Care China & Japan
Background
▪ 15+ years China and overseas consumer marketing & sales
experience. Born and raised in Beijing, China
▪
Bausch + Lomb / Valeant (China & Japan)
- Business Unit Director – Vision Care
- Marketing Director – Vision Care
▪
L'Oréal (China)
- Director of e-commerce – L'Oréal Paris, Maybelline, & Garnier
- Marketing Director – Garnier
▪
Johnson & Johnson Consumer Products
- Marketing Manager – Listerine, Carefree, & o.b. (China)
- Brand Manager – Reach & Visine (USA)
▪
▪
Citigroup CitiCards – New Product Development (USA)
Procter & Gamble (China)
- Category Management Manager
- Key Account Manager & Unit Manager
Education
▪
▪
MBA, University of Michigan, Ross School of Business
BA English Language & Literature, Peking University
68
Valeant China
69
Vision care is growing strongly in Asia
China
Korea
Vision care sales
$491 million (2015)
+6% annual growth
Japan
Taiwan
India
Thailand
Singapore
Hong Kong
Malaysia
70
Valeant China business overview
Valeant China business by franchise 2015
▪ 1st contact lens
company to enter
China; the brand
name has been used
as synonym for
contact lens
▪ B+L is the #1
OTC eye drop
15%
45% Vision Care
Rx 15%
recognized brand in
China and preferred
by consumers
▪ B+L is also the #1
vision care brand in
China, with fastest
growth
Surgical
25%
Total China sales: $ 277M
71
China is a half yearly / yearly lens market;
cosmetic lens is 1/3 of total lens market
China Market – All companies
2014 China vision care market
revenue & % growth: ~$438M, +2%
2014 China lens market by modality
revenue & % growth: ~$284M, +3%
22%
21%
+1%
+15%
44%
54%
+4%
24%
+2%
-3%
35%
+1%
Clear lens
Lens care
NOTE: USD at constant dollars
Source: CLI, credit report and trade intelligence
Cosmetic lens
72
Half yearly / Yearly
Daily
Monthly
B+L is the #1 and the fastest growing vision care
brand in China
2013-’14 growth rate
%
16
9
8
-6
-26
Total
Source: CLI, credit report, and trade intelligence
2
73
Revenue 2014
$M
Market Share 2014
%
$125
28%
$105
24%
$49
11%
$57
13%
$8
2%
$438
100%
Growth is driven by all three segments
China vision care business
2012
$M
2015
$M
Growth
%
Clear lens
46
63
+37%
Lens care
21
35
+61%
Cosmetic lens
12
28
+131%
Total vision care
79
125
+58%
74
Clear lens portfolio
Clear lens revenue
Drivers of growth
▪ Diverse full modality portfolio (daily to
$ 70 M
$ 60 M
$ 50 M
63
CAGR:
11%
46
54
yearly), different materials (hema /sihy
/hypergel), spherical and toric
▪ Introducing innovative
49
premium products while
continuing to grow user
base of long modality
lenses
$ 40 M
▪ Professional training to ECPs
$ 30 M
on toric and multifocal
$ 20 M
$ 10 M
2012
2013
2014
2015
75
Lens care portfolio
Lens care revenue
Drivers of growth
▪ Segment market with multiple offerings
$ 40 M
$ 35 M
and pack sizes
CAGR:
17%
35
$ 30 M
28
24
$ 25 M
21
$ 20 M
▪ Cross-sell with lens to maximize B+L strong
brand equity
$ 15 M
$ 10 M
$ 5M
2012
2013
2014
2015
76
Cosmetic lens portfolio
Cosmetic lens revenue
$ 30 M
$ 25 M
28
CAGR:
32%
Drivers of growth
▪ Variety of patterns and colors, along with
full modality offerings
23
19
$ 20 M
$ 15 M
▪ Positioning cosmetic lens as beauty
12
necessity, and B+L as trend setter
$ 10 M
$ 5M
2012
2013
2014
2015
77
Valeant’s decentralized model has enabled
China business to grow faster than competition
We have a distinctive commercial model
▪
Best-in-class team and talent pipeline for future growth
▪
Stable, passionate sales force committed to growing with
customers and consistently delivering results, which exceed
expectations
▪
Robust local portfolio to meet the diverse consumer needs
▪
Insights into customer needs, values, and behavior drive the
development of successful local marketing campaigns
▪
Content-based digital social media model is proven to be
effective and cost efficient
78
Our pipeline in China is set up to fuel further growth
2015
2016
2017-2019
2017-2019 NPD Pipeline
 Biotrue ONEday
 PureVision2 Toric
 Bescon half yearly
cosmetic lens
XUV-011 (Multifocal)
XUV-014 (Multifocal)
XUV-002 (Color)
XUV-007 (Multifocal)
XUV-005 (Lubricant)
XUV-004 (Single vision
spherical)
XUV-001 (Cosmetic)
Bescon half yearly

clear lens
XUV-008 (Lubricant)
79
Joseph Gordon: General Manager, Consumer Health
Care
Background
▪
▪
▪
▪
28 years in OTC Health Care
Valeant / B+L (5 years)
Wyeth (19 years)
– VP, Sales
– VP, Marketing, Advil
– GM, Nutritionals Business Unit
GSK (5 years)
Education
▪
B.A. Economics, Rutgers University
80
Valeant Consumer Healthcare drivers of growth
▪ Strong and diverse portfolio of products
▪ Exceptional retailer relationships
▪ Consumer marketing expertise and effectiveness
▪ Drive recommendations through detailing of:
dermatologists, ophthalmologists, and optometrists
▪ Physicians’ intimate involvement in our product
development process
81
Valeant is one of the fastest growing US consumer
healthcare companies
Fastest growing US consumer healthcare companies (3-year CAGR)1, %
9.8
7.9
7.7
7.6
6.6
5.7
5.3
4.5
2.8
1.5
1.4
1.0
-0.4
-1.6
-2.0
2
1 CAGR calculation based on retail sales; Total US 3 year CAGR for latest 52 weeks ending 11-29-2015. Based on biggest manufacturers in Healthcare. Excludes
private Label.
2 Alcon growth figures have been disaggregated from Novartis
Source: IRI Market Advantage
82
Valeant has a strong portfolio of consumer products
Skin
Care
Eye
Care
Eye
Vitamins
83
Important relationships with key leading retailers
Strong account
management
Effective customer
marketing
Private label
Eye Care
category captain
84
Comprehensive marketing approach
Print
Television
Digital / social media
Integrated
and diverse
consumer
marketing
85
Professional
Consumer Marketing: PreserVision
Net sales
AREDS 2
Launch
Q4 TV
TV
Consumer Campaign Campaign
Launch (continued)
Print
$140M
$113M
AREDS vitamin market
▪ First to market with
AREDS 2 formula
$100M
$72M
▪ 88% share of the
▪ AREDS clinically
$80M
proven
▪ Estimated 7M+
2012
2013
14
Retail
consumption
growth
+8%
+15%
Source: IRI data, NEI incidence and prevalence data
15
+17%
86
2016E
+20%
diagnosed non-users
(growth opportunity)
PreserVision
87
Biotrue is the fastest growing multipurpose contact
solution brand
Biotrue net sales
CAGR (2012 – 2015)
▪ Biotrue: 23%
▪ Category: 1%
Biotrue Challenge
re-launched
$88M
$76M
$63M
$41M
2012
Source: IRI data
$46M
2013
2014
88
2015
2016 E
Biotrue fast facts
1 Million
1/3
#1
New users who took
the Biotrue
Challenge
Doctors’ primary
recommendation
Contact lens solution
at Walmart
Biotrue contact lens solution works like
your own eyes – 20 hours of moisture
89
Biotrue solution
90
Focusing on the professional
▪ Over 600 sales
reps selling to
dermatologists,
optometrists, and
ophthalmologists
▪ Reps have
reached 10,000
dermatologists,
distributing 15
million samples
▪ CeraVe #1
dermatologist
recommended
moisturizing brand
Source: Valeant sales force productivity, Symphony Health Survey of Dermatologists
91
CeraVe has been the fastest growing skincare brand
for four straight years
Net Sales
Competitive Trends
(2013-2015 CAGR)
CeraVe new products
CeraVe core products
24%
$135M
$114M
8%
$88M
$69M
$50M
12
3%
2013
2014
2015
2016 E
Category
1%
▪ Professional support and involvement has driven commercial success
▪ Growth sustained in both core and new products
Source: IRI data
92
CeraVe has generated a digital buzz on Facebook,
boosting viral impressions by 600%
“The CeraVe Moisturizing
Lotion and Hydrating
Cleanser are just the best
products out there”
- Kathy M.
“Seriously, CeraVe is the best
product ever. Totally obsessed
and refuse to use anything else. I
use the lotion, the wash, all of it.
Great stuff.”
- Melissa M.
“My allergist insisted I use
CeraVe…I had no idea they
had so many products!”
- Christie C.
“Just bought the am/pm
lotion today and I love it,
my face is so soft and
smooth…”
- April M.
93
“I love your Foaming Facial
Cleanser but have recently
fallen in love with your Baby
Wash & Shampoo to clean my
face during the Winter!”
- Diana D.
“My dermatologist
recommended CeraVe Skincare
to me yesterday…I’m really
looking forward to trying it out!”
- Emily M.
Creating long-term growth
Select product pipeline and launches
Recent
CeraVe
Skin
Care
 Baby
 CeraVe Sun
anti CeraVe
aging
2016
2017
Healing
ointment1
Body wash
2018
Targeted
therapies
Core
upgrades /
claims
Project
‘lightbulb’
Product
upgrade
Dry Eye
extension
Project
‘moisture’
Anti-itch
 CeraVe
cleansing bar
Eye
Care
Eye
Vitamins

Peroxiclear
 SootheXP
 AREDS 2
Product
upgrade
AREDS 2
multivitamin
AREDS 2
advanced
1 All pipeline skin care products planned as part of the CeraVe family
Note: Position of star in box does not reflect anticipated launch timing within a given year
94
Valeant consumer healthcare company is poised to
continue its strong growth trajectory
Valeant US consumer healthcare revenues
High singledigit growth
expected in
2016
~$625M
~$590M
~$540M
2013
2014
2015
95
Fernando Zarate
General Manager, Valeant Mexico, Andean region,
Central America and Caribbean (CAC)
Background
▪ 24 years in Pharma industry
▪ Valeant-Mexico; General Manager (8 years)
▪ Teva (3+ years)
– OTC-Consumer Business Director
▪ Schering Plough (3+ years)
– Pharma Division Director
▪ SmithKline Beecham (7+ years)
– Consumer business Commercial Director (VenezuelaAndean)
– Commercial Director (Mexico)
Education
▪ M.B.A., IPADE Business School Administration
▪ B.A., Iberoamericana University (Mexico City)
96
Strong growth across all businesses
Mexico, Central America, Andean Revenue (Constant US$)
15% growth
overall
Device
OTC
$199M
$14M
$228M
$17M
Growth’14-’15
18%
$64M
15%
$23M
16%
14%
$56M
Innovative (Rx)
$20M
Generics
(Branded
Generics)1
$109M
$124M
2014
20152
1 ~90% of generics in Mexico & Andean region sold as Branded Generics
2 2015 data actual through Oct., on track to outperform forecast for Nov. and Dec.
97
Branded generics success in region depends on four
defining features
First-to-market
advantage
driven by local
R&D
▪
▪
Mexico R&D team: 32 professionals
9 mo. for Valeant vs. 2-3 years for
competitors to launch new BGx
Well-known local
brands with
▪ Trusted company names: Atlantis,
Tecnofarma, Grossman
strong reputation
for quality
▪
Local
manufacturing
skill and agility
▪
Two local manufacturing facilities
with internal capability to produce
injectables, oral solids, topical, liquids
~800 manufacturing employees
producing 30M units/year (30% YOY
growth)
▪ ~600 sales employees drive
Proven
distinctive level of geographic
commercial
coverage (92%)
model with direct ▪ ~45% of sales through direct
distribution
distribution channels
98
Mexico, Andean region, Central America and
Caribbean branded generics pipeline
Select product pipeline and launches
2015
2016
2017

Spagnosan
(osteoporosis)
XUG-012 (vaginal infections)
XUG-002 (glaucoma)

Ciscotan
(glaucoma)
XUG-010 (ocular lubricant)
XUG-013 (vaginal infections)

Sotoldor
(glaucoma)
XUG-011 (anti-inflammatory)
XUG-001 (joint pain, RA)
XUG-003 (antifungal)
XUG-004 (oral inflammatory
disorders)
We have plans to release many new branded generics in the
next few years to supplement strong growth in existing offerings
99
Dr. Tage Ramakrishna
Chief Medical Officer, Head of R&D and Quality
Background
▪ Valeant Pharmaceuticals (4 years)
– Chief Medical officer, Head of R&D and Quality
▪ Progenics Pharmaceuticals (4 years)
– VP Clinical Research
▪ Nycomed (formerly Altana) (5 years)
– Corporate VP International Drug Safety
▪ Insmed, Inc.
– Medical Director
▪ Degge Group
– Pharmacovigilance Consultant
Education
▪ M.D., Karol Marcinkowski University of Medicine
▪ Medical College of Virginia
▪ B.A. in Biology, Rutgers University
100
R&D team
101
Valeant R&D at a glance
6
NDAs approved
in last three
years
13
200
510K and PMA
approvals in
last three years
+ active
US programs
43
102
1,000
+
R&D and quality
employees
R&D
facilities
100
+
MD, PHD, PharmD, JD
and DMD degrees
R&D: Key messages
We have a distinctive R&D model with high quality people
Our robust pipeline
positions us well for future
growth
We are the most productive
R&D organization in the
industry
We have a strong track
record of launching products
We are excited about our
numerous upcoming
launches
103
Our R&D activities look similar to
other Pharma companies…
▪ Study design leveraging TA expertise
▪ Input from KOLs and customers throughout the
development process
▪ Collaboration between R&D and commercial
▪ Outsourcing rather than fixed infrastructure
▪ Internal expertise in regulatory,
pharmacovigilance, quality, and medical
affairs
104
Our execution of R&D makes our model distinctive
Partner with
third parties
to leverage
capabilities
Embrace
incremental
as well as
transformative
innovation
Take actions
when needed,
rather than
waiting for
committees
Eliminate
non-value added
bureaucracy
Empower
individuals and
regions to make
their own
decisions
Terminate
non-promising assets
early, based on
data
105
Outside experts
participate in key
decision meetings
(e.g., portfolio
reviews)
Our productivity is higher than peers
R&D Productivity for 15 PharmaCos with most approvals - 2009-’14
# of NMEs/BLAs1 per $B R&D spend
3.02
2.1
1.2
“
0.5
0.3
0.3
0.3
0.3
0.2
0.2
0.2
0.2
0.2
0.2
0.1
Innovation has nothing to
do with how many R&D
dollars you have. When
Apple came up with the
Mac, IBM was spending at
least 100 times more on
R&D. It's not about money.
It's about the people you
have, how you're led, and
how much you get it
- Steve Jobs
”
Top 15 average
1 Refers to New Molecular Entity and Biologic License Application
2 Does not include Contact lenses and surgical devices. Does not include B+L and Salix approved products (Fulyzaq, Bepreve and Besivance) that
were not developed under the Valeant model; all other companies include acquired brands, which overstates their productivity
Source: Evaluate Pharma, FDA, Capital IQ, Annual reports, Press search
106
We believe we are significantly more successful at
developing products than the industry
Success rates in dermatology
Valeant’s success rate in dermatology2
Industry1
Valeant2
100%
69%
56%
55%
20%
18%
Ph. I
Ph. II
1 Average of all competitors from 2010-2014
2 2011-2015
Source: Pharmaprojects 2014, Management Estimates
107
Ph. III
Global product launches
Product launches1, 2014-’15
218+ 131
32
76
32
1 Includes global line products launched in Ex-US markets
Source: Management estimates
108
How our R&D pipeline was built
Internal
Inherited
In-licensed /
purchased
In Dermatology, we
have built capabilities
from discovery to
commercialization
We have acquired
new platforms and
capabilities in
attractive TAs
We continue to invest
in TAs with attractive
assets
We are building similar
capabilities in
Ophthalmology and GI
Post-acquisition, we
have supplemented
the pipeline where
required and de-risked
where possible
Our selection and
portfolio de-risking
give us an advantage
Brodalumab
109
We have dramatically expanded our significant US
R&D programs
Dec. 2010 Dec. 20151
Dermatology
9
15
Consumer
17
26
Ophthalmology
1
7
Surgical
N/A2
32
Contact lenses
N/A2
9
GI
N/A2
6
Others3
5
17
Total
32
112
1 US programs only; Includes generics; excludes 90+ programs related to post marketing commitments and other small programs
2 Prior to acquisitions in TA (e.g., B+L in 2013 and Salix in 2015)
3 Includes aesthetics, women’s health, and generics
110
We have good depth of early and late
assets across TAs
Early1
Late2
Significant active US programs as of Dec. 2015
Dermatology
8
Consumer
Opthalmology
4
1
7
6
12
Contact lenses
Others3
26
22
Surgical
GI
15
7
6
4
20
3
9
2 6
17
5
12
40
early
72
late
1 Prior to Phase III for Pharma, 2018+ expected launch for others
3 Includes aesthetics, women’s health, and generics
112
total
2 Includes Phase III and FDA submitted products
111
32
US prescription and generic drugs pipeline
Dermatology
GI
Early stage
(Pre Ph. III)
Ophthalmology
Women’s health
Generics
In-house development
Late stage
(Ph. III - submission)
SAL-020: HAE
IDP-120: Acne
IDP-118: Psoriasis
Relistor Oral: Opioid
induced constipation
SAL-021: RA
IDP-125: Actinic
keratosis
IDP-121: Acne
SAL-024: Crohn’s
SAL-022: Diabetes
IDP-131: Psoriasis
IDP-124: Atopic
dermatitis
Brinzolamide Gx: OAG
SAL-023: Cirrhosis
IDP-126: Acne
IDP-122: Psoriasis
BLG020: Disclosing
agent
BLO-020: Inflammation
IDP-127: Anti-fungal
IDP-123: Acne
BLG021: Anti-infective
SPT-201: HSDD
IDP-128: Actinic
keratosis
VAL-BRO-03: Psoriatic
arthritis
BLG022: Anesthetic
IDP-129: Acne
Brodalumab: Psoriasis
BLG023: Anti-infective
IDP-130: Acne
BLO-021: Cystoid
Macular edema
EGP-437: Anterior uveitis
Latanoprostene Bunod:
OAG
BLO-022: Post-operative
inflammation
112
US OTC pipeline
Early stage
Aesthetics
Lens Care
Nutritionals
Dermatology
Ophthalmology
In-house development
Late stage
BLO-027: Lubricant
OBG-001: Cleanser
ACF-001: Lotion
CER-001: Oil
BLO-028: Lubricant
OBG-002: Skin lightener
ACF-002: Device
CER-002: Cream
BLO-029: Disinfectant
OBG-003: Sunscreen
CAL-001: Spray
CER-003: Oil
OBG-004: Reformulation
STS-001: Spray
CER-004: Ointment
OBG-005: Cleanser
PUR-001: Wash
CER-005: Wash
OBG-006: Kit
PUR-002: Wash
CER-006: Wash
BLO-026: Dry eye
PUR-003: Wash
CER-007: Lotion
BLO-031: Eye whitener
PUR-004: Bar
CER-008: Lotion
BLO-023: Nutritional
PUR-005: Cream
CER-009: Lotion
BLO-024: Nutritional
PUR-006: Cream
BLO-025: Nutritional
BLO-030: Disinfectant
113
US Devices pipeline
Early stage
Aesthetics
Contact lenses
Surgical
In-house development
Late stage
SOF-010: Skin resurfacing
BLC-001: SVS
SOM-010 Vascular Lesions
BLS-021: Retina
SOT-011: Fine Lines & wrinkles
BLC-002: SVS
BLC-007: MF
BLS-022: Retina
SOT-010: Fine Lines & wrinkles
BLC-003: SVS/MF/fA
BLC-008: Astigmatism
BLS-023: Retina
BLS-001: Cataract
BLC-004: Toric
BLC-009: Astigmatism
BLS-024: Retina
BLS-002: Cataract
BLC-005: SVS/MF
BLS-014: Refractive
BLS-025: Retina
BLS-003: Cataract
BLC-006: SVS
BLS-015: Cataract
BLS-026: Retina
BLS-004: Cataract
BLS-008: Cataract
BLS-016: Cataract
BLS-027: Retina
BLS-006: Cataract
BLS-009: Retina
BLS-017: Therapeutics
BLS-028: Retina
BLS-007: Cataract
BLS-010: Cataract
BLS-018: Retina
BLS-029: Retina
BLS-011: Cataract
BLS-019: Retina
BLS-030: Retina
BLS-012: Retina
BLS-020: Retina
BLS-031: Retina
BLS-013: Retina
BLS-005: Retina
BLS-032: OEM
114
Ex-US pipeline
Generics
Women’s health
Nutritionals
Dermatology
Early stage1
Ophthalmology
Contact lenses
In-house development
Lens Care
Aesthetics
Surgical
Late stage1
XUO-001: Inflammation
XUO-008: Dry eye
XUD-001: cleanser
XUG-001: RA
XUO-002: Glaucoma
XUO-009: Glaucoma
XUD-002: Sunscreen
XUG-002: OAG
XUO-003: Dry eye
XUO-010: Conjunctivitis
XUD-003: Lotion
XUG-003: Anti-fungal
XUO-004: Glaucoma
XUO-011: Inflammation
XUD-004: Device
XUO-005: Lubricant
XUO-012: Corneal lesions
XUD-005: Cosmetic
XUG-004: Oral Inflamatory
Disorders
XUO-006: Decongestant
XUO-013: Conjunctivitis
XUD-006: Onychomycosis
XUO-007: Decongestant
XUO-014: Dry eye
XUD-007: Cosmetics
XUN-001: Nutitional
XUO-015: Dry eye
XUD-008: Second degree burns
XUN-002: Vitamins
XUO-016: Lubricant
XUD-009: Emollient
XUN-003: Magnesium caps
XUO-017: Lubricant
XUV-001: Cosmetic
XUI-001: IBS-D
XUO-018: Lubricant
XUV-002: Cosmetic
XUW-001: HSDD
XUV-003: Aphakia
XUW-002: Osteoarthritis
XUV-004: SVS
XUA-001: Hair removal
XUV-005: Lubricant
LAV-006: Lubricant
XUV-006: Lubricant
LAV-001: Aphakia
XUV-007: MF
XUN-004: Nutritional
XUV-008: Lubricant
XUN-005: Nutritional
XUV-009: SVS
XUN-006: Nutitional
XUV-010: Astigmatism
XUN-007: Nutritional
XUV-011: MF
XUV-012: SVS
1 Excludes EU Generics (listed on the next page)
115
XUG-005: Cholestrol
XUG-006: Diabetes
XUG-007: Hypertension
XUG-008: Hypertension
XUG-009: Hypertension
XUG-010: Ocular lubricant
XUG-011: Anti-Inflammatory
XUG-012: Vaginal Infections
XUG-013: Vaginal Infections
XUV-013: Astigmatism
XUV-014: Presbyopia
XUV-015: MF
GI
EU generics pipeline
Early stage
Generics
In-house development
Late stage
EUG-001: Hypertension
EUG-014: Antispasmotic
EUG-034: Hypertension
EUG-059: Lung and
pancreatic cancer
EUG-086: Adrenocortical
insufficiency
EUG-002: Acne vulgaris
EUG-015: Hypertension
EUG-035: Angina pectoris
EUG-060: Pain
EUG-087: Dry eye
EUG-003: Atopic dermatitis
EUG-016: Dermtitis
EUG-036:
Hypercholesterolemia
EUG-061: Pain
EUG-088: Eye inflamation
EUG-004: Acne vulgaris
EUG-017: Antiseptic
EUG-037:
Hypercholesterolemia
EUG-064: Schisofrenia
EUG-089: Eye inflamation
EUG-005: Acne vulgaris
EUG-018: Cough and cold
EUG-038: Prevention of
blod clots
EUG-065: Schisofrenia
EUG-090: Dry eye
EUG-006: Hypertension
EUG-019: Eye inflamation
EUG-039: Whitenning
cream
EUG-066: Pain
EUG-091: Eye infections
EUG-009: Dermatitis
EUG-020: Chemotherapy
induced nauzea
EUG-040: Cosmetics
EUG-067: Pain
EUG-092: Eye inflammation
EUG-010: Severe acne
EUG-021: Type II diabetes
EUG-041: Atopic dermatitis
EUG-068: Cough and cold
EUG-093: Allergy
EUG-011: Hyperuricemia
EUG-022: Haemorrhoids early stage
EUG-042: Bacterial skin
lesions
EUG-069: Asthma, copd
EUG-094: Dry eye
EUG-012: Glaucoma
EUG-026: Local hemostasis
EUG-044: 0
EUG-070: Copd
EUG-095: Glaucoma
EUG-013: Glaucoma
EUG-027: Prevention of
deep vein thrombosis
EUG-045: Benign prostatic
hyperplasia
EUG-071: Asthma
EUG-096: Glaucoma
EUG-028: Chronic nevous
insufficiency
EUG-046: Benign prostatic
hyperplasia
EUG-079: Allergy
EUG-097: Glaucoma
EUG-029: Chronic nevous
insufficiency
EUG-047: Rheumatoid
arthritis
EUG-080: Allergy
EUG-098: Eye infections
EUG-030: Hypertension
EUG-048: Osteoporosis
EUG-081: Pain
EUG-099: Glaucoma
EUG-031: Hypertension
EUG-051: Bacterial
infections
EUG-082: Eye vitamins
EUG-100: Glaucoma
EUG-032: Hypertension,
heart failure
EUG-052: Cell lung cancer
EUG-083: Allergy
EUG-101: Glaucoma
EUG-033: Hypertension,
heart failure
EUG-057: Mlaignant
melanoma
EUG-084: Glaucoma
EUG-058: Myeloma
EUG-085: Allergic
conjuctivitis
116
Select pipeline opportunities
US
Prevalence
Expected
launch
Opioid induced
constipation (OIC)
with chronic noncancer pain
~3.7M
2016
Latanoprostene
Bunod (LBN)
Reduction of
Intraocular
pressure in patients
with Open Angle
Glaucoma (OAG)
and Ocular
hypertension
~3.0M
2016
IDP118
Moderate to
severe plaque
psoriasis
Moderate to
severe plaque
psoriasis
~9.5M
2017/18
~9.5M
2016
Drug1
Indication
Relistor Oral
Brodalumab
1 Product candidates, not yet approved by the FDA
Source: Decision Resources, BioMed Tracker
117
Relistor Oral could be a new option for patients
suffering from opioid induced constipation (OIC) with
chronic non-cancer pain
▪ Subcutaneous injection
currently approved for OIC
in patients with advanced
illness and chronic noncancer pain
▪ Oral methylnaltrexone2 300
mg and 450 mg
significantly increased the
percentage of patients
with a RFBM3 within 4 hours
▪ Incidence of SAEs4 was 3%
in the all tested groups
versus 4% in the placebo
group
MNTX 3201 Oral formulation Primary Efficacy Endpoint (% of
respondents1)
24.6
27.4
MNTX 300 mg
MNTX 450 mg
18.1
Placebo
MNTX 3356 SC Formulation Co-Primary Efficacy Endpoint
28.9
9.4
Placebo
12 mg QD
1 Peripherally acting, selective μ-opioid receptor antagonist with restricted CNS penetration
2 Product candidate, not yet approved by the FDA
3 Rescue-free bowel movement - defined as a bowel movement that occurred without laxative use (i.e., no laxative use within 24 hrs prior to the
bowel movement); tested for within 4 hours of dosing during daily dosing period
4 Severe adverse events
Source: Digestive Disease Week, 2012 (R. Rauck, J.Peppin, R.Israel, J. Carpentino, J.Cohn, S.Huang, E.Bortley,
118
C.Paterson, W.Forbes)
Latanoprostene Bunod (LBN) ophthalmic solution
(0.024%) combines Latanoprost and Nitric Oxide in a
single molecule to lower Intraocular pressure (IOP)
LBN will be the first novel OAG
monotherapy approved in 20
years:
Open Angle Glaucoma (OAG)
▪ Nitric oxide plays a key role in
numerous functions throughout
the body including many well
documented functions in the
healthy eye1
▪ Glaucoma patients have lower
levels of ocular nitric oxide than
those observed in normal eyes2,3
▪ LBN4 lowers IOP by increasing
outflow through both the
uveoscleral and trabecular
meshwork pathways
Source: Mayo Clinic
▪ PDUFA date – July 21st 2016
1 Culotta E, et al. Science. 1992;258:1862-5
2 Nathanson JA, et al. Invest Ophthalmol Vis Sci. 1995;36:1774-84
3 Galassi F, et al. Br J Ophthalmol. 2004;88:757-760
4 Product candidate, not yet approved by the FDA
119
Clinical Studies Support Viability of LBN (1/2)
Summary of Phase II results
Reduction in mean diurnal IOP on day 7, 14 and 28
Latanoprostene bunod 0.024%
Latanoprost 0.005%
In a Phase II dose-ranging
study, LBN3 showed positive
results including
consistently better control
of IOP over 28 days as well
as a statistically significant
greater percentage of
responders vs. latanoprost
0.005%1,2
8.9
9.0
8.3
7.7
7.8
7.3
1 Defined as patients achieving an IOP ≤18 mm Hg
2 Weinreb RH, et al. Br J Ophthalmology. 2015;99:738-45
3 Product candidate, not yet approved by the FDA
P = 0.033
P = 0.015
P = 0.005
Day 7
Day 14
Day 28
120
Clinical Studies Support Viability of LBN (2/2)
Summary of results of two phase III pivotal studies
▪ In two phase III studies LBN provided a mean IOP reduction of 7.5-9.1 mm
Hg over three months of treatment (statistically superior to timolol
between 2 and 12 weeks)1
▪ LBN3 was safe and well tolerated with no significant adverse events.1,2
Rates for hyperemia were comparable to latanoprost2
1 Data on file
2 Weinreb RH, et al. Br J Ophthalmology. 2015;99:738-45
3 Product candidate, not yet approved by the FDA
121
R. Todd Plott, MD
Dermatologist
Background
▪
16 years in the pharmaceutical drug development
including at Medicis Pharmaceuticals
▪
Led the development of Solodyn, Vanos, Ziana,
Loprox Shampoo and Ammunol while at Medicis
▪
Over the past 5 years, in solo dermatology practice
in Ft Worth, TX
▪
Unpaid (expenses only paid) Valeant R&D
consultant; holds no Valeant stock
Education
▪
▪
University of Texas Medical Branch Galveston, M.D.
▪
National Cancer Institute - Fellowship
University of Arkansas Heath Sciences - Intern and
Dermatology Residency
122
My observations
• Patients have a medical need for the unique
dermatology drug products that manufacturers provide
• Access to these drugs can be a problem
• Many manufacturers offer drug assistance programs for
patients
• Drug assistance programs have been very helpful to
patients
• Patients do better when they get the medications that
they need
123
IDP118 – Topical Treatment of Psoriasis
▪ A combination topical drug product1 containing and
retinoid and a steroid
▪ Phase II clinical results suggest the combination is
superior to the individual components
▪ Expected completion Phase III Studies - Q4 2016
1 Product candidate; not yet approved by the FDA
124
Brodalumab is an anti–interleukin-17 receptor-A
mAB that could address moderate-to-severe psoriasis
▪ Brodalumab 210 mg was superior to
Response rate (%)
placebo and to ustekinumab1 in
treatment of moderate-to-severe
psoriasis
PASI 75
response
100
85%
69%
50
▪ Symptoms of psoriasis reduced ~2x
faster than the median response
time with ustekinumab (4.1 weeks vs.
8.1 weeks)2
▪ Results for Brodalumab3 210 mg
6%
0
1 02 03 04 05 06 07 08 09 10 11 12
Week
Response rate (%)
100
were confirmed in two phase III
studies
69%
50
0
PASI 100
response
37%
27%
19%
0.3%
1 02 03 04 05 06 07 08 09 10 11 12
Week
1 At week 12, PASI 75 response rates were significantly higher with brodalumab at a dose of 210 mg and at a dose of 140 mg than with placebo
2 Tested median time to a PASI 75 response for patient arm given 210 mg of brodalumab every 2 week
3 Product candidate, not yet approved by the FDA
Source: New England Journal of Medicine (M. Lebwohl, B. Strober, A. Menter)
125
Looking forward
▪ We have a history of successes
across key therapeutic areas
▪ We have intelligently invested in
R&D to build a deep and exciting
pipeline
▪ I am passionate about our R&D
model and strategy, and confident
about the future
126
Drivers of Valeant’s success
Our collection of great healthcare brands around the
world
Our relentless focus on providing easy and affordable
access for physicians and patients
Our innovative strategies (often disruptive), which have
challenged industry convention
Our exceptionally productive approach to R&D
Our decentralized model and talented people, which give
us a competitive edge (speed of decision making and indepth customer knowledge)
127
EMT
J. Michael Pearson
Chairman of the Board
and Chief Executive
Officer
Robert Chai-Onn
Executive Vice
President, General
Counsel and Chief
Legal Officer
Robert Rosiello
Executive Vice
President and Chief
Financial Officer
Dr. Pavel Mirovsky
President and General
Manager, Europe
Dr. Ari Kellen
Executive Vice
President/Company
Group Chairman
Anne Whitaker
Executive Vice
President/Company
Group Chairman
Deb Jorn
Executive Vice
President Dermatology
and GI
Tom Appio
Sr. Vice President - Asia
Pacific, Managing
Director, China
128
Senior Management Team Panel
J. Michael Pearson
Chairman of the Board
and Chief Executive Officer
Dr. Pavel Mirovsky
President and General
Manager, Europe
Anne Whitaker
Executive Vice
President/Company Group
Chairman
Robert Rosiello
Executive Vice President
and Chief Financial Officer
Dr. Ari Kellen
Executive Vice
President/Company Group
Chairman
Deb Jorn
Executive Vice President
Dermatology and GI
Tanya Carro
Senior Vice President,
Finance and
Corporate Controller
Dr. Tage Ramakrishna
Chief Medical Officer,
Head of R&D and Quality
Tracy Valorie
Senior Vice President and
General Manager,
Women’s Health and
Bausch + Lomb
Pharmaceutical Division
129
Financial guidance appendix
130
Definition of terms
To supplement the financial measures prepared in accordance with U.S. generally accepted accounting
principles (GAAP), the company uses the following non-GAAP financial measures: Adjusted EPS, non-GAAP
revenue, non-GAAP cost of goods, non-GAAP selling, general and administrative expenses, Adjusted Cash flow
from Operations. Reconciliations of these non-GAAP financial measures to their most directly comparable
GAAP financial measure can be found in our earnings release and Form 8-K on Tables 2 through 2b, Table 3,
Table 4 and Table 5.2, respectively. A copy of the earnings release, including financial schedules, is posted on
the “Investors” section of the Valeant.com website. In addition, Adjusted EBITDA is a non-GAAP financial
measure that will be provided in our earnings releases and Form 8-K going forward.
The Company does not provide guidance with respect to GAAP financial measures other than revenues or
provide reconciliations to GAAP of its forward-looking [non-GAAP financial measures] due to the inherent
difficulty in quantifying certain amounts that would be required to be included in the GAAP measure of
earnings per share due to their unknown effect, timing and potential significance. Examples of these items
include impairments of assets, gains and losses from the extinguishment of debt, legal settlements, purchases of
in-process research and development assets, and gains and losses from asset sales. Accordingly, the GAAP
calculation of projected net income (loss) is not available for Valeant without unreasonable efforts.
By disclosing the non-GAAP financial measures referenced above, management intends to provide investors
with a meaningful, consistent comparison of the company’s baseline operating results and trends for the
periods presented by excluding items that are considered by the company not to be reflective of the
company’s ongoing results. Management uses all of the above named non-GAAP financial measures internally
for strategic decision making, forecasting future results and evaluating current performance. [For example: to
set internal budgets, evaluating company performance, setting incentive compensation targets and planning
and forecasting of future periods] Non-GAAP financial measures are not prepared in accordance with GAAP.
Therefore, the information is not necessarily comparable to other companies and should be considered as a
supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with
GAAP.
131
Adjusted EBITDA calculation
Adjusted EPS* (non-GAAP) multiplied by Shares Outstanding
Add:
Taxes
Interest
Share Based Compensation
Depreciation
Adjusted EBITDA*
Note: Adjusted EBITDA as defined in our Credit Agreement excludes certain charges and
includes certain pro forma adjustments for acquisitions and divestitures. Details of the
Adjusted EBITDA calculations per our Credit Agreement can be found in our Credit
Agreement, which is filed as an exhibit to our 10-K and can be found in the investor relations
section of the Valeant website.
** Non-GAAP
See Page
132