BHC - Earnings call transcript Q4 2017 | Bausch Health Companies Inc.

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Operator

Good morning. My name is Amy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Valeant's Fourth Quarter and Full Year 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank of Global SVP begin you Relations conference. your Investor Shannon, Communications, and may Art

Arthur J. Shannon

Good and Financial results morning, Pharmaceuticals' Amy. Joe Chairman you, Thank everyone, Officer, Executive Paul and on call Mr. year Herendeen. and Participating Chief fourth and welcome full XXXX Mr. call. financial Chief conference Papa; today's are Officer, quarter Valeant to

the copy conference In addition our Investor of presentation this call and be slide section. website to this Relations under of live a today's webcast, on will a available replay

Before would presentation to our financial measures. presentation of legend we contains non-GAAP to remind you today contains statement we would This beginning begin, like you presentation, moment that as forward-looking ask a forward-looking the our information. take it the We contains read at information. that important

about our refer appendix in found X For to can Non-GAAP on measures, the presentation. more please posted slide website. reconciliations presentation information the of be to the these

financial only. guidance this the to quarter effective our disseminated pleasure affirm the is to not guidance and call that, presentation to the to guidance is not over following through With is update generally it until It Finally, public broadly than turn update my or of today in other Joe. as disclosure. policy

Joseph C. Papa

Thanks, Art.

topics start Let's the for with call. today's

will our the review briefly results guidance financial the I call to to and full review through over provide our Herendeen, and run I'll quarter and First, about turn then for the CFO, full the highlights and of year quarter fourth businesses. key achievements fourth our XXXX. year Paul

of months the are After plan, steps on for the the shareholder where the slide to taking before working a multi-year turnaround. drive phase Beginning plan line turnaround, the now the questions. wrap to ago, will Finally, established value. up opening with catalysts second into we stabilize we I X, we're well company, approximately XX Valeant's for XXXX

franchises in balance continue with launching new derisking and are focus We've we three products resolving Our we attractive and opportunities. investing organization with successfully these main legacy and are sheet, that world-class initiatives. issues meaningful core confident the areas of on a growth, execute built can

X. productive very Moving + we XXXX. four Bausch XXXX. our what now represents Lomb/International, in and of each a busy organically It's during than which We've overview the revenues, to of of year. of been have XXXX the half in provided an slide grew quarters mid-single-digits accomplished more

growth Our Salix also business nicely. during last or That is quarters XXXX. three generated revenue higher business growing mid-single-digit of organic the

the our businesses, launched including file In and we LUMIFY, clearance addition System. Biotrue our new progress and to throughout has FDA next-generation been area globally DUOBRII, in for astigmatism make our launched VYZULTA than Japan, Thermage the At SILIQ. approval last in focus for and more Europe. growing to acceptance product for U.S., to the advancing for in We balance sheet. In contact core lenses to strengthen pipeline. of time year the FDA received same lenses products AQUALOX the We continued efforts year, we've another ONEday important XXX

of by first debt since $X.X total more the As the reduced today, of than end XXXX. have of quarter we billion

historical costs the to important which resulted our sufficient an In the subject insurance to agreed securities supply litigation, subject was antitrust million milestone chain we agreed believe be we all positive have Our outstanding dismissals, legal company. simplified and which will fees. development, the more approval, settlement by outcomes through manufacturing XXXX cover investigations, operate the today, a liabilities remaining settlements approval. an team which the legal beginning resolve resolve SOLODYN settlement with to court to XX amounting of reducing $XX to sites From related litigation by to we has job than reducing number though of changes have or done legal a policies that resolve. the the we're Also, We class Notably, and These been XX%. litigations we to improvements of recent facing a and achieved court matters. of other be are to X,XXX in a and to focus in Allergan continues than $XX XXXX commitments the in major more SKUs. discontinuing process And of team. cost of Delivering our in approximately alone. have on million we

slide X. now to Moving

revenue segment. want I the quarters four growth to First, organic the sequential of call out mid-single-digit in

led e-commerce in prior and can Day, presence were sustained shopping follows On Chinese excited highlight the our you on compared chart quarter Global growing by to to of which B+L business. Global the also period in the sales strong on spiked XXXX These from a see growth and year. the grew Consumer, I Care the the sales International Vision XX% Global Singles' about this As right, business. see Alibaba four flat we in Care were a to holiday. strength by Consumer results declining relatively And given want XXXX. B+L to the is XX% Amazon, China, in that of brand Vision

billion for launching to at the in a is $XX and revenue of rate compound global to now market is this glaucoma. XXXX, intraocular end available with more annual VYZULTA grow opportunity, of at treatment billion accounting lower after eventually glaucoma end pressure opportunity than of XXXX. by for The growth proven Finally, that expected we're the a XX%, represents patients excited $X

learned XX access that the X% is grew growth coverage X% slide As quarter the to access X% unrestricted has in which give This an Scripts million in and update X organically to the an of performing begin year-over-year. Basic U.S. will XXXX business, an on in for organic delivering both commercial recently us XIFAXAN Salix Express and in revenue ESI On XXXX. to on well, National Preferred agreed the position people also additional we under Formularies. VYZULTA update, of

the messaging a durable believe product We study have TRx XIFAXAN X% through in in for XIFAXAN both we Primary driven formulations. was encephalopathy, growth XXXX, up have to proper continuing dosing new very force sales new good we're expansion momentum on the hepatic the and and XIFAXAN, QX volume unit of compared in and and which behind XXXX invest in IBS-D to indications we Care IBS-D. by

see in XXXX, in we (XX:XX) the the right as finally, are over achieved a XIFAXAN first quarter blockbuster of up could approximately we the status TRx-es XXXX. trailing continued of up since Primary chart billion XXXX. you Care This As has the $X January from January XX-months, added of sales upper were for February corner, XX%. And as another X.X% trend

in growth well. GI congratulate the the we team in we Salix making the RELISTOR year future. corner. I that is Weekly continuing achievement. approximately XX% our as for build for in increased the right forward lower to look TRx So and chart good on this to RELISTOR show XXXX entire we're business, to also want performing franchise Overall, progress on

X, business remain our returning dermatology focused growth. Turning Dermatologics, to we on slide to Ortho

that expansion We in and synergies. clear for path new business investing have a and goal launches, achieving by global product approvals

milestones JEMDEL, meaningful can and And acne treatment, an dermatology in Looking of we the of five group, the right the can coming for potential called could restore a see at help DUOBRII, we approved for top business. or that the add growth products opportunity to improve see represent you corner, psoriasis. to important this have group represent ALTRENO, opportunity the recently products With that our years. soon-to-be products with growth patients how you late-stage collectively lives business out in you when RETIN-A of these the SILIQ a to and the we very launched expect approvals MICRO core group

these new If and you to are in take up add the look a you'll XXXX to in see products growth high-growth there. markets the ramp our from business chart the base trajectory on we modest at bottom in a return growth how anticipating, right,

the more double which support we in by growth. last sales takes We me than minute more on derm Dermatologics increased XXXX results SILIQ spend launched Paul But to after month XX% us about and also through business here talk July financial our this a let I'll XXXX. Ortho the force guidance. of to plans

and it expected. months, the have for initial X,XXX important biologics. represent physicians approximately market lives for less labeling, to SILIQ but better six based believe more At reach prescribers Early would expand soon We targeting slow we opportunity. XX%. XX% high-volume have above access have expected coverage we're about audience was SILIQ we to continuing an XX% a than broader And the commercial than REMS-certified on than of forward will To-date, or uptake by key injectable expect long-term of in of of injectable biologics. prescribers

an patients who have which therapy, SILIQ XX% is important outcome. of started on have stayed Importantly, using

one our clear evidence turn over in it which in In important the making, and suggest people segment call revenue, is of organically results. addition, Paul, grew new that and investments to delivering we are anxiety I reduces XXXX. turn over represent The the are from that core X, with the before Salix + burden want to businesses Bausch the SILIQ Paul, out depression you. psoriasis. Lomb/International business, approximately in On to takeaway. it this We slide our three-quarters think data I mid-single-digits

Paul S. Herendeen

Joe. Thanks,

growth, a adjusted Before basis start, about make we the businesses organic currency means I constant talk sure when just we I understands, to that the and on remove that divested. everyone of impact want to

Reported revenue organic posted with adjusting reported expectations. roughly Further go. XX%. was on and segment X XX. slide with EBITDA million the quarter down points, decline. XX, percentage with in we XX line FX a quarter that here revenues for on details Divested on basis, for We revenue were $XXX So accounted our X%. down slide XX, Starting reported squarely and assets of adjusted with or an solid

which actually X%. items of back peel X% grew were segment, our go-forward which about B+L/International The core you or the If X% Salix growth that business, assets grew organically. LOE organically, driving major the the impact our bucket, and grew

X%, growth was segment, and headwind Consumer were continues. in X%; the I'll In the units Global quarter. of Ortho over year X%, B+L/International Global order, Vision business Ophtho up In sub the Care organic X%. down was Surgical a all XX%. and XIFAXAN the was Salix, a both the up Rx Global up International the way, Within star, as that re-basing posted Global growth led prior five Dermatologics XX% second. spend quarter, up up was

you are years. can compared with the proxy at for significant undergone prior Our and stabilized see the has well, out. the changes a units two not market The as as units, data during but now year, dermatology in Rx series flattening time has last ASPs stabilizing have looking derm

legacy have on like our those had Third-party to both on patient and net has products that reduced volumes. prices unit dramatically payers comprise derm portfolio. realized That access impact an

realized to the in Our legacy net products to patients, continue volumes lower past. bring just and at than prices value lower

XX RAM As will we launch drugs and that and dermatology we be of their development through innovation. like ALTRENO and to physicians grow and products broadly like development patients available in move like forward presence represent late-stage and and, our intend JEMDEL, DUOBRII, more for the beneficial to from here, therefore, like expect, new And we that patients. means SILIQ options

U.S. The B+L/International in Gross by margin decliner felt. is points decline year adjusted while in Diversified were of Gross roughly Branded Organically, predictably Rx transactional in the margin segment was segment not driven the the Diversified part compared other gross $XX bucket over in FX. also prior from the of divestitures XXX revenue was the declined balance basis percentage in due Offsetting of basis within impact margin mix LOE took of the down basis of about but reductions year spending, Products lens prior the the revenues points place were with segment basis U.S. segment down XXX as contact Gross some some bucket the movements segment Diversified the quarter. due main versus XX%, segment, due drove of in reductions the driver Dendreon XXX quarter all the promotional in the increased U.S. The was LOE points, expenses those points the quarter. high-margin divestiture. profit impact the down to X%. the actually line, XXX the gross the majority all in reduced was impact grew margin the the during roughly unfavorable LOE to the the was was where and quarter XX the up margins where businesses. There declined. Below of but that categories products by Consumer particularly to year. declined expense million points SG&A the

PreserVision, on Care of for of XXXX with You the increases. may XP. volume have the Soothe those seen ads organically TV Validating investments, our U.S. strong very Ocuvite businesses both and Consumer QX up U.S. and were XX% perspicacity compared Vision

prior the with compared quarter the was in year R&D down in investment Our X%.

to the get net As roughly I LOE products XX years and increase adjusted XX% we last percentage coming R&D to I've compared we was expect $XXX to for the a we call, basis see of with down in that Divested quarter. EBITA all intend the year that guidance, in when that you'll and in investment said in outlined the prior The quarter the that on accounted on of our million R&D decline. XXXX. was points for almost assets invest reported

base So EBITA adjusted less Adjusted business the $XXX decline million. business in in dermatology. the as our than our EBITDA for segment by was was and down growth in remaining was B+L/International X%, slightly, offset, mainly Salix quarter

down points or the minus FX X called I accounted details to bucket for for full $XXX the of X% slides compared revenues on Moving year decline. XX, movements along on XX. XXXX, Reported well. XX points quarter year, to the the and decline. assets were with right divested of additional million X Unfavorable with percentage with apply full percentage roughly of XX for themes LOE segment and roughly Many that as XX% accounting shown out in the slide another roughly

Ophtho businesses XXXX. roughly up X%. the over are was million organically. up Salix of result X% And of we finished contribution good Zegerid. up to as XX% prior better-than-expected year. our businesses, inventory XXX volume Care through International both can up X% Russia RELISTOR year the for pricing flat across improved XIFAXAN, mainly the Salix same see good with solid full in is organic organic posted roughly consistent was pricing year, the fourth by points Dermatology even the of was Revenue of business segment growth to was Rx of inventory X% Rx Global QX. from slow B+L/International declined and us. the up and U.S. due segment think the you. Glumetza XX% of up year. start small you X% year subunits points branded X%, the consistent I XX the our business of up our We future net LOE benefiting the the X% after and we markets. related a points. for believe of third positive Poland behind the XXXX. a Compared basis across growth Vision drawdown XXXX, had with One international declined story absorbing you in put Surgical pipeline realized organically, grew, us, by which contraction that It in from Global our as the behind the The was led saw reductions factoid $XX that slightly and core by led Salix's B+L/International Global with to basis the APRISO after as realized compared start consumer organically were declined a course Of XXXX only in XXXX. core in in both quarter the in could assets. for the decline dermatology the net over declines and international increased potential organically, see, organically, and U.S. XX our LOE group, Global points that's amount, net was five mainly dermatology shaved some underlying a pricing in XXXX quarter. Our down was essentially Diversified assets. segment off the was XXX dramatic also and for Four basis growth Rx core markets. we X% solid segment. of

for of the decline segment So the the accounted assets full year. for roughly other the X% in

accounting the a assets basis big decline. of revenues single-digit XXXX, between much of the compared be XXX the basis we of mid decreased that of with margin balance company roughly of by a of to in for smaller us expected bolus mix XXX that the impact base. As put Diversified behind is segments Gross decliner some with LOE the XXXX, points for segment points off to low

in from $XXX expenses decline year products. by LOE revenue of by costs the was that driven mainly FX to in to of million. in Roughly were margins. mix was impact Another in the of SG&A change decreased driver with our the The losses due transactional of the the segment full product the were in XXXX reductions B+L/International balance that the within the Diversified margins decline gross eliminated were of for favorable segment, parts half divestitures. the conjunction SG&A

$XX some in immediately with was the programs comp. roughly reduction decline, Of in increased were EBITA to the expenses X conjunction year-over-year actually divestitures. as Excluding year relative currency. was points XX the a G&A. Branded G&A, Rx. percentage to and for assets, $XXX were able due in and $X.XXX redeploy to the that within from Adjusted X the impact SG&A Care mainly for of million adjusted Full of we essentially percentage funding from EBITDA LOE the full Rx year the were million percentage share-based $XX roughly corporate versus by B+L/International eliminated points year. the EBITA was divestitures, SG&A across Investment R&D reduced impact full million. by flat of point core roughly billion. XX% And million the the XX% not increased divestitures, for down prior from divestitures, remaining Adjusted we businesses for within was and expenses segment, Ophtho XXXX Vision segment year in Adjusted in spending selling down $XX we

XX XX, Moving to XX. slides and

the debt. reduce offerings We to During address successful QX, proceeds structure. debt debt. completed a further used And XXXX our divestitures to used our cash maturities. We our to reduce continued efforts capital improve note to from the quarter generated to business during we from net we the

plan turnaround financing out Our we the in to the in XXXX. our to the that continue offering and long-term more down time transformation December. shelf of our to and do XX-K. cap in markets as the shelf order over good ensure to Plenty not a and does our work we million as of filing and an have here Regaining it from the $XX.X Valeant. very step billion important we for the of the around transaction. XXXX as flexibility, we course unsecured same universal to not to early including progress today, This is the in quarter. are Cash notes flow to is the runway and billion debt in fourth we place file was senior and billion significant totaled should was our any In manage work access signal debt made substantial structure, to a strong a next maturities the maintain operations but unsecured specific full year. more Sitting $X.XX continue $X.X to quarter do, was practice have $XXX

on for our million. in to XX. to adjusted the billion and Turning $X.X guiding billion to EBITDA range $X.XX guidance XXXX We're in range revenue $X.XX of billion of slide the $X.X to

EBITDA be think over generally show We We've the impacted revenue we in those expect XXXX. the seasonally actual will about the lowest that of on quarter higher and bridge move our to historically, will ranges slide how included QX, relative for to XX a balance is results and year. as this

the facing for of next a for out including bucket XXXX the to our adjust the of called and the impact divested; group in XXXX, manageable in should LOE LOE LOEs FX; we assets Specifically, you the XXXX. products we throughout you more that assets, Class of need XXXX consider finally, changes adjust

our takes and in products color for addition SOLODYN. APRISO guidance of Acanya, prospect XXXX strengths highlighted the little on CUPRIMINE LOE LOEs two our into the and APRISO, consideration A UCERIS. UCERIS, to slide In on for XXXX,

some have there's anticipates in Accordingly, risk-adjusted and XXXX two for forecast profit We these for guidance potential both. probability one both our that our revenue or competition products face generic LOEs as could XXXX.

of a consider. to facts couple Here

from been approvals no for either tentative for FDA First, a there have generic drug.

intellectual the protecting actively are property defending we brands. these Second,

Class in As competition, LOE XXXX the deck. both you we and appendix Class to learn XXXX, of slide we'll Details of about buckets, are keep the shown potential the more posted. of

at on looking So, XX. the slide bridge

in for we guidance the our X% for grow Our to X% LOE adjusted revenue some FX, implies to to be and adjusted X% that XXXX base our XXXX. to expected relative assets, X%, up to expect business, and EBITDA businesses' impact divested the performance

and and segment of assets revenue the B+L/International Salix to are solid divested unit impact generate mid-single-digit growth. our LOEs, expected Excluding our

Our dermatology XXXX. business expected to in XXXX decline versus is

of will the of increased that in we of in for half XXXX new support later our products. the the the will launches the While with half the first business hold. to LOE our relatively year, tougher us, product guidance the expected the XXXX. expect the balance a assets, of second our have of continued and of DUOBRII, for prospect be support corner LUMIFY, B+L as VYZULTA, stabilized spending JEMDEL segment Note consumer Diversified XXXX comp the XXXX, aside turning growth decline of to in the the to launches take and versus Setting stable SILIQ, others, incorporates growth XXXX

increased As we size derm mentioned, more XX%. I TV by our of after sales brands. our than year of some our earlier, B+L And for ads end, consumer Joe mentioned force the

earnings point adjusted adjusted outcomes. to After XXXX. our our effective support long-term objective to than an go-forward this to attractive expect sustainable to R&D maximize adjusted that that appropriate XXXX that are for earnings. best businesses resources we to not story enjoy rate effect of of ensure the in roughly we to is drive EBITDA tax rate invest is with more the on we reform, U.S. impact XX% on tax continue a Note giving each of and guiding to XXXX. XXXX. It's Finally, in The we in

converting pay good changes flexibility laws. As Overall, as cash, operational a of thing. we to to earnings of proportion the to adapt is XXXX rate bit our us U.S. on result, due with tax a in taxes XXXX more is earnings same our to our actual global effective roughly large Net-net, in a adjusted our And, our on a the impact U.S. tax for provides result, a will tax we're cash footprint adjusted that guidance rate XXXX. tax reform. the in tax reform as

Now our XXXX to talks as towards years. with turnaround range XXXX. XXXX set and about will turning started Slide shows Joe revenue our slide transformation XX. a XXXX through from on Valeant transformation outlook a of XX the our the slide stage for to our company and for is progress visual presentation longer off that XXXX our progression begin. of expected the

out try being on to you your actually trying with is XXXX results, on to the including to Before certain say through of business get our micrometers to meant the reported LOEs. of This infer not ramp more trough than to and entirety year. the our revenue we simply slide, illustrate XXXX, scale information is are this represents components and

the that faster a XXXX at note grow CAGRs, to important over our adjusted of we both in XXXX. here revenue case a expect from we of growth we expect expect fashion. our adjusted Further, not revenue XXXX between X%. through our the and part. guidance of of Sitting at a XXXX slightly do the CAGR, reported occur X% the to to the to EBITDA Here's EBITDA grow today, CAGR will linear reported Please period X% in off X% and midpoint

growth will not For in Class example, of the impact overwhelm but of XXXX dampen XXXX. revenue LOEs versus XXXX the

have back of accelerate we return biscuit let our of product that launches as avoidance to growth The grow new revenue we crux to turn hold. now for is the line take of beginning Joe. growth. doubt, versus in expect the it me XXXX, that to With to reported sight the to For XXXX and

Joseph C. Papa

Thank you, Paul.

aesthetics the we me I'm reached long is our now our Dermatologics, five JEMDEL, aesthetics out, Fraxel dermatology proven and bearing all Ortho between We've expansion dermatology, Clear demonstrating in our model Solta, synergies turn a our are the cycle combine business, Today, point in dermatology. Let RAM late-stage along that + business, excited to announce number to Solta, ALTRENO, Thermage, that with dermatology to with products of the slide XX. SILIQ, and portfolio. global in including medical and XX, our investment new launches Brilliant decided with DUOBRII, now

the business especially over of next double differentiated will Solta successful is time, this high-growth global share dermatology With combined years. as in with geographic a therapeutic new our and the all the with available dermatology our field. will U.S. to help around expansion countries aesthetics product products, prove this business several and business growth, world, us areas consumer increases with that strong believe in we and durable market are qualities over our

believe the discuss products. adds psoriasis. per products our for be Starting biologic year. $X We than to for market more the $X billion Let's with combined opportunities non-biologic and that estimate acne another We billion.

is this $X So over billion a an of addressable growing market large with area year. and per

advantages to majority patients there which in are the competitive the Dermatologics U.S. area. In adjunct this distinct biologics. an addition, psoriasis, with either has are in with X.X million of Ortho treated a topical alone as or

reported XX% Ortho the are dermatitis are the major X psoriasis in U. on S. for Dermatologics example, Phase based we waiting and publicly approximately products in data, of acne, For believe assets. atopic approval

can Dermatologics. an prescription combining This that from complement aesthetics opportunity innovative we and sales combination address our broad of portfolio derm reps treatment in shows We by non-invasive team. skin the to augment get the of minimally Ortho to increased respect have We with a the and business also a number aesthetic we these promote with are our there, help a a more achieve have Solta, needs. to strong lives and which Combining range improve a will well of of devices with making care leverage in synergies primarily how and growth. on than range with force, of that for on best our can created And the by important model, pipeline target could On the double portfolio strength force, patients plan believe proven the With business. Ortho The and based we to any very that of today. we last positioned offers want graph sales pillar, in first psoriasis to will through launches. sales psoriasis sales force be our in product soon are we January, we XX% Dermatologics the goal we we to support new sales and believe a products announced right the we derm the XXXX. believe call, force quarter's of we group dermatology, Rx global in a our products products that investments is the expansion derm

we The next-generation second patented is East. to Kaken and received fine products considered psoriasis. especially containing In expansion, represent a an KP-XXX, Pharmaceutical of and in Asia to Yesterday, which of an existing partnerships the Strategic a new wrinkles. radiofrequency investment. license with the uses with the an action commercialize Thermage, announced being Middle topical entity, U.S., and If investigational novel a of Europe to pillar, growth compound provide to exclusive also is drug R&D appearance from treatment develop expected the the smoothing for Pacific, system lines to skin will that in and mechanism alternate of we strong complement launch treatment are chemical technology approved, global psoriasis. the agreement KP-XXX started reduce portfolio, clearance

to double will to Finally, plan bringing key innovative successfully the five executing the new business in be market years. products our to

But to a year. in the that before late-stage us pipeline. have, companies next I'll opportunity five before we products one slide. has do of late-stage run-through We potential not have launch on opportunity dermatology single an DUOBRII, I be quick the think game-changer, pipeline a new products that in to that, the highlight those many our

There dates MICRO Then addressed a earlier, which on new to or formulation we launched addition January. we products JEMDEL DUOBRII RAM key In for SILIQ, and June have X XX three and we that acne XX, development. and in coming through XX, ALTRENO atopic about more other RETIN-A X of PDUFA dermatitis advancing in up: have Phase are pipeline excited in that October candidates and on the X, August on I pipeline. are

adult formulation lotion, only use Moving DUOBRII a want be known psoriasis high-potency corticosteroid DUOBRII, psoriasis and retinoid I would patients. can now the XX, with high-potency highlight synergistic for with delivers to steroid the that as retinoid first topically. If with topical slide IDP-XXX. a DUOBRII formerly combination in to approved, effects patients

want I efficacy. point is here highlight First to

delivery previously strengths Our tazarotene unique and new formulation of available with single than uses halobatesol vehicle. a different

that provides profile. scaling almost skin. demonstrated a all layering are drug over to barrier of on Phase in achieved We distribution, skin. the availability the clear substance the at simply by X-week have the the from top improvement uniform on loss can the an and two the the retinoid This you another. products drug simultaneously, on us one improvement X statistically moisture corticosteroid period achieving the and developed safety The the ensures of scores. as really The substances results allowing advantageously be cannot simultaneous the proprietary uniform to contact point, to formulation distribution top the of of photos vehicle enhances see, which images, in allows to and This second right show takes clear significant striking. skin

Let's move to slide number XX.

of couple While Based skin psoriasis been we treatment, a data, issue always two corticosteroid prefer weeks. limited that clinical safety for may DUOBRII's on of atrophy than topical allow weeks because to has results. tend to duration the is longer believe a profile the use usually high-potency patients the

needed, lot the adverse safety up moderate intermittently, once eight DUOBRII and is we'll events eight option data, are we date. this approach on using results more of approximately study and long-term XX weeks for which be could tracked think PDUFA IDP-XXX patients psoriasis from weeks. to change a What not severe in Based for Here we the who through to treatment that for people year. we novel one a weeks, adverse XX then plaque percentage the as learn as did the of June with saw patients events daily reported

reduce Beyond more treating patients safety psoriasis an selected versus than cost help and injectable biologic. of by approved, may XX% DUOBRII the if efficacy,

number move Let's XX. to slide on

million of Here seven years. LUMIFY They all psoriasis; are the than intraocular SiHy generate $XXX expect for of in course of DUOBRII, pressure of products products are sales that SILIQ, to contact and billion VYZULTA to for we these less glaucoma reduce next five ocular over represent and the RELISTOR. the treatment lenses; Together JEMDEL revenue. Daily seven redness; patients; collectively $X

commercializing from pipeline our in XX, continuation you we innovation expected progress us making completing to sense see the is peak through launches in subsequent dates phase that are us the fact We is the late-stage in will on they over on getting five turnaround: an a after products these in of in the billion next The make product long-term have are these successfully and to targets our commitments $X we these eight of And increased R&D going Which and you slide us the look that approved, can products, next into drive over cumulative help four slide market to of these successfully late U.S. to This of expect sales we We've a be of five our them. pace planning The the product commitments of in will overview investment Each pipeline our brings a that and annual significant to have we activity And commitments to XXXX represent XXXX. in months as to innovation, shareholder in we projects focus launches. sales pipeline. basis. up we are on and key volume number helping the years. for products of the coming investing making submissions market. targets are to move PDUFA returns. XXXX launches gives identified actions and a XX. and taken the six investment

five of turnaround to the doubling next Dermatologics revenue business the with commit years. over we goal First, Ortho a

products years. $X over Seven the targeting we're next over of revenue annualized from Second, sales of the billion Significant five

our working company's at operational reducing how cash goal address debt keep transactions. to next we efficiency And a with XX% We'll flows approximately continue by of drive will spend using we and to than over looking capital capital by the and of cost we finally, through Next, the million opportunistic of markets goods $XXX increase million, approximately five taking more commit $XXX R&D years. out XXXX. in

opportunity said around. in progress because last year we Valeant I of before, a saw the this turning lifetime. believe company I with I I a joined made I'm pleased turnaround As

for focused is line that, to us phase team Our up our questions. on operator, outlined delivering XXXX on next lead the into of plan. the for goals let's the With multi-year open we've

Operator

Gregg Gregg, line Deutsche Bank. Your first open. comes your with line of Gilbert from question the is

Gregg Gilbert

few, morning, I you, with a have Paul. starting Good team. Thanks.

the lastly would the XX, soon? debt it how cash be rate, decision and fashioned Joe, helpful. the appetite for both the to year? cash shelf, On we on XIFAXAN If the extended tax on urgency of old you perhaps, to update of something the to Any that goals, Teva? were that a the does April term cash your you heels your share growth rate beyond represent is doing you, about rate with addition us recent sense and what's about front Secondly, think longer in And of beyond for XX% reduce your this discuss should with flow? your litigation way any can in would Thanks. the developments on update case to be comments stay

Joseph C. Papa

the long-term why Paul, don't go rate we'll Okay. start tax growth. you and then with to that

Paul S. Herendeen

Yeah, And we're the – the tax tax think wrong sure. I here. the of a rate with rate, cash component when to – XX%. something's Yeah. Starting passed with public that a XX% going the phone the on is

Okay.

Joseph C. Papa

mute please phones. their Everyone,

Gregg Gilbert

Yeah.

Paul S. Herendeen

the in tax reform, a And go there U.S. expected speaking was were out. of that component the specifically of Yeah, we we're tax called playing would the our about that would our When rate out publicly back. way impact rate cash tax that be is increase last up. belief we marginal our you. Thank it and that's global

in tax our guiding – my you XX% to rate saw remarks a on think adjusted prepared earnings. the rate. We're I XXXX around heard

So a global effective rate. that's tax

which So the in remarks, and generate order convert where cash continue structure, good to to importantly, very component did company maturities. a cash, to thing large Very good we this cash ours, of have to a part us you're that. proportion leveraged need to a address we prepared when our which enables in is of have my debt like is tax continue our a earnings I to a

on large thing difficult linked let I second the longer we because The that. back shelf our getting company the and market me growth longer that into providing able us at mode. we're guidance, of says, covered for for see be it providing look term hard you at from said to company, guidance to the market the – to Joe's the first it that. is the a say term stabilizing progression and to as It's moving the

around a the expectations information XXXX, model for company. years way the wanted wanted looking back with we us, where get help three provide we important what and revenue mode put So following people balance to past we about we expect. about because profit they're some get stabilization at our to just the some to and us in growth our years over Clearly, we

said, profit. is challenges you a we the we it hadn't can ago, always finance You we'd had believe to, corporate as or the in we have this but a With if shelf, or put good certainly And is respect can just our to revenue I place. out had year more believe practice. not CAGRs this – in shelf for that choose both and

you – all go do need to to about considered. consistently do through said use we're you flow, about we not levers we've said, be debt if so or today saying as than it's other reducing it, I have You it, urgency how But here To an something, question not sitting feel do readily available. that your cash there's tomorrow. need

Joseph C. Papa

because what dealing has Yeah. done, $X.X been Maybe receive non-core I'll down to the think said looked Paul and at What add our just as a and think first What outstanding I little able just the absolutely we divestitures. to Paul you debt know, right. turned is sell is with non-core that historically generated two, in I team And and done cash paying assets is company. asset divestitures. debt, those proceeds in foremost. Number billion Paul bit of job an on of we've all we've we we've

point this we think look we've opportunistic. We're simply asset they here may those. at publicly, trying forward, non-core be would from some I as but out increase to not said divestitures,

quite just some of well. it I because that So to areas. said would think capital opportunity those the debt. what us the answered the to working he and also I And gives primary apply I those think supplemented Paul take improvements be

On of XIFAXAN and question the situation. the

those program. filing. – there's to we've knowledge, our in Actavis/Teva seen, was program reminder but one been by had a everything place Sandoz to a that That as discontinued date. Just to only filing that they that the

one-year this April this we a a XX At notified. stay of That's At point, not have Teva. XX. point, associated well there's XXXX. heard as with anything through stay through correct, from July have not we You're regulatory

that the the clearly fact significant to work for FDA a meet difference question ability different thing that product. to with for the only for the XIFAXAN think a is now new – polymorphs think your have they we generic, the the we or what understand given I is we XIFAXAN trying meantime, add there to Teva's with new some continue to they more to know patient-friendly would formulation develop say, I is the of associated In and indications XIFAXAN. requirement existing

supports franchise. XIFAXAN sitting not to confident we as a still, And in forward. intellectual go publicly, are durable question? think we're next make I've very I to property that are So we continuing said our Operator, this

Gregg Gilbert

Thank you.

Operator

comes Your line Umer from of line Umer, the next Evercore your question with is open. Raffat ISI.

Umer Raffat

realistic a it you I tap the markets? way, share another Hi. follow-up. directly. ask have is for possibility capital need may to question. said maybe trigger? let certain more there price taking to a see Or Is you much Paul, there my for you And a Thanks me so pull

Paul S. Herendeen

raising Obviously, what to on be our we comment equity Yeah. never capital. with respect might plans would

will You markets. started the tap the question capital you by saying,

but markets note Yeah, structure. we that address and multiple i.e. cap market. evaluate market, unsecured XXXX, market think opportunities tapped being continue the to the will loan secured our times, I capital term in the note we to the

I I about – our think at I – way able Last and file where table but through has over. by that's it our to And just this. to into Not and put no script. here we work on and this the important gave we then oh, in over shelf thinking means it visual that's equity stack. what the we thing please, debt every done, is look It's says, was don't to today urgent. Again, practice. be thing again, is over sit enabled say be runway we we I us a I'd think good reasonably like last was completed the a corporate stressed thing everybody work here say the XXXX somebody that we time the challenging should how a something us have – is it is, want

would in you my sat shelf. file seat, you If a

Umer Raffat

one Got Joe as and guidance themes not it. certain for in a have and I – guided beats. place, you LOE And impact, that I follow-up, it, and the may been got also my XXXX the assumes throughout as in is of impact was has is theme has LOE Paul, that this think is if pronounced been – XXXX in which of the most the results maybe

this. So my is question

a well. You phenomenon have XXXX. going on similar going in on there's as is But something else

is EBITDA revenues then base certain growth revenue margin But that base incremental LOEs. not hit you XX% growing a the to X%. get You're to X% on XX%. XX% business, your EBITDA on the to It's guiding only the at

at is, point year-over-year? you you revenues incremental XX% hit, XX% on will being SG&A LOEs to be when are margin get conservative while XX% incremental base say my are an a whereas business only flat So of

Paul S. Herendeen

it times focuses because my question, the to right in on for I that multiple you thank something hit Umer, tried Yeah. in remarks. prepared

long-term out invest primary that called reason is behind the not the as businesses is said, our the the things I You're the increasing to business. is, the sales of Joe as get to correct our change in continue in size we force. And base derm we're absolutely result. the what that best as is order our in adjusted pronounced that change EBITDA expect in And we for

media, to U.S. continuing B+L support to Consumer our ads are We business. TV use

We are global our drive continuing business. to to lens engage activities in promotional incremental

to We are in in than versus greater intending XX% efforts. R&D more our XXXX invest XXXX

why you're as what I seeing say that base those to And long-term are EBITDA things So we uncertain, seeing adjusted you're leverage on kind the business. not have pointed things. in any it, relative feel the to provide company that's to when of I'll And that growth as is it and ensure every you a behind we're transparency result. that uncertain. so these to not our get can we and much at our each assets, in I feel as here as invested date it's goal that compelled we businesses is that respect the adjusted is one of good to I with EBITDA – stabilized to to has challenge core always as date been Quickly LOE best market. get dare again, say one we XXXX, anybody. the maximize are

LOEs, whether to it's revenue about point of for Class bucket can the will Now we've one is look like. Class it's of determination you each trajectory what the XXXX own and think every you of me of that your hitting XXXX make that's got that of and point But a LOEs need and be XXXX view. in of term, need need QX whether about near it's you of or you whether XXXX, to XXXX, it the hitting you a think QX in thinking XXXX, to come about in to

XXXX, believe we us view, based good at happen line the XXXX consideration that people people. is revenue taking of a to can have by what things what and shared taken on that's into with we've If in a different the markets. v. view have makes We point that LOEs

Joseph C. Papa

to they to talking we put forward when and And products lose I that all realizing Lotemax, and that these UCERIS, APRISO no about, our Paul's is certain. out on date specific there try think date will that. not mean forward our pointing Operator, numbers CUPRIMINE, specific I question. next we dates for obviously, how not do that them thinking they them. as about upside. put exclusivity, lose had we – an But the we prepared are simply we're being If people exclusivity, wanted there's

Operator

comes David, is the David Stanley. Your question Morgan line from line your of next Risinger with open.

David R. Risinger

you me? Thanks much. Can very Great. hear

Joseph C. Papa

David. Yeah,

David R. Risinger

Perfect.

ask wanted flow cash to expectations for So, I year-end about just and debt.

in so, discuss year-end for in and would much. operating cash flow to expectations XXXX? some in flow that your please And flow, cash XXXX for cash more could detail, imply including what free relative Paul, debt so you XXXX and Thanks

Paul S. Herendeen

we things David. up the quarter, said course today. better a We said couple $X.X will flow a I that during million. that billion, decent things XXXX and to seeing the put cash that accruals that generally settle And And don't we of per $XXX cash ended that, movements in year, kind – from for to about you ups for of then a XXXX. say number context. of per $XXX operations and in of Sure. in due flow. middle estimate. it later we look then cash couple operating ended But Thanks and than XXXX question, generating But some forward number quarter was repeat about That was the up to part things. guide – million We a in flow $X.X such road billion was flow the half cash

assets, Now $XXX of due have And lesser that not to the view cash of Thinking continued revenue flow dare produce contraction the the It quarter. to runoff divested XXXX, profit a And That said, I base expect say, based to per continue that reduced everything, be XXXs needs obviously, like linear, and in to then bucket, will way, $XXX million the by adjusted the the the the use in operations. of you to linear. we number to ahead business. is LOE in back that's And your of just that flow million a invest on and we cash it's profitability business. not the from neighborhood than dermatology due I million. low XXXX. therefore and not

can to So, might over we the costs debt of and that the course, cover year. CapEx and reduce investments flow. course you other got of continue cash cash make to of our We all through

hundred seen We off some cash paid Earlier year, things. we a you've million just morning. another this available. We this actually off dollars. was think that million couple I another recent using press release $XX had paid

beyond. We reduce as that or – significant XXXX, go always tax. a use a significant our proportion to ability cash comes of cash. this – have back forward comes it Again, convert And earnings to debt. we we in continue to will that will into and, frankly, We back to generate

to the think a use our We efficiency. we your question but it I'm are sure priority on cash improving focused reduce extent And working our that that direction. that we'll to I as answered gave not debt. working efficiency, capital improve capital you very our

Operator

open. next of Samimy your Annabel, is question Your with from Annabel Stifel. line comes the line

Unknown Speaker

Hi, for taking question. Thanks is Andrew my for guys. in This (XX:XX) Annabel.

have margin are long-term gross in So launch? the margin also in for new and numbers? you any any your medium or Do as product expectations dermatology on And operating base turns your impact go-forward Thanks. targets? thoughts of the launches, new both you over announced profitability launches

Joseph C. Papa

Yeah.

this one. with I'll So start

especially the the of as will going On saying to is to point launching There that we're invest these Significant best in view, as are the products, referred say is Seven we're operating there investment we the just they probably get be there. think what way P&L, we've you But approved. yes, to move some in it the new you to if how about revenue think P&L line. saying in we're about leverage about numbers the so, will see leverage we what the growth we EBITDA from do the as and be thinking

we're incremental better products we the products in be to innovation that that activities individual than promotional about I say gross will as behind the to they and the the overall will think for marketing talking Valeant get it's think these them. that marketplace. nets sales, also new But important represent

Valeant comment think you only what all we the I is going probably there's products. we the new with is P&L. the growth new improved gross yes, believe the come about innovation think about think say can we dermatology, the how better these we here. nets historical thinking we're be products. think about in final especially some And Yes, terms to of, is it that in as So I in growth, launch will will really of in leverage than Yes, to that's terms

Paul S. Herendeen

what Yeah. prepared we follow have that Andrew talk talked about our here. (XX:XX), remarks with in I we to Paul. because it's to about on, want and continued just consistent

growing v thinking I I EBITDA point to one the margin, this in contraction. think it, up brought about about expect business adjusted going margin base XXXX, mean, about think a you look rate. you growing at if when at XXXX a operating the and you're at slower you're Umer rate

that that tees as are for, going see performance. us in we margin better So decline up I to as long-term said, a

from lenses, cetera. XXXX JEMDEL, list that tell longer up, get through OpEx period launches. my one, remarks. Our I cetera, I LUMIFY, over VYZULTA et went prepared that will supporting the in DUOBRII, you, on coming I the back try the it's et And timing I can course missed If we guidance leverage of term our firmly but through and SILIQ, XXXX. contact I'll believe implies it, to come of

those increase your sales on of You invest that just not force has your behind impact dermatology, including promotional beneficial as the revenue margin but, and the said, size in launches growth profit a in Joe impact short-term trajectories. on long-term campaigns and in

Joseph C. Papa

question. next Operator,

Operator

line Your Chen your is Cantor. with line Louise, of Louise open. the next question comes from

Louise Chen

here. Hi. taking Thanks my for questions. had I a few

have that being you I is this not think a question but talk about turnaround I first So of lifetime, really your it's reflected in valuation.

the here. think be might what So just you Street curious missing

balance ratio you for the and your of another if part a last ending on year. Second provide could is your debt was, very business. like following question still have leverage earlier, important is color the up question And more derm on I seems question the

Just remains focus Thank your you any have in or on if medical aesthetics interest you. dermatology, for dermatology? curious really

Joseph C. Papa

right Right. it I'll and think Bausch some performance time that plus we what now Lomb/International to in start of show business, with lifetime demonstrate Salix is business. takes turnaround commentary. I to the more XX% do the do I the we're Yes, the than the trying believe absolutely do of + and true. is have

we of some We loss to as be have that as do growth combine possible rate. the that time, probably Paul think Lomb percentage products think referred divestitures I same go the business on if year. a we to one of try those, XXXX, and, what + going are they important. that's believe, launching as those, business, further trough help first new seeing I'd new and to that, think that us we're significant to, the Seven, of lowest these referred dermatology, If being as in At be year but step exclusivity, you transparent we performance. the and the about we QX represent the said is as the mid-single-digit foremost, We're have say the some launching we about we turnaround going quarter the Bausch Having Salix we for in also, from a we probably products. Significant any seasonality as are you Because where the of dermatology. course, the there always made. of trough obviously based

don't me ending So goes. that you is to excited reason it debt we're the and about why where balance? future talk Paul, about the the why

Paul S. Herendeen

of different at this kind debt. not mean is use lead going reduce not balance, flow, guide going to the an way guide to We're to I how coming Yeah. Louise. – We're ending to going sorry, you're of it a to to cash

Joseph C. Papa

was last And interest derm the then part in the aesthetics.

have We a business in great Solta.

As Solta, opportunity, the there's physicians. dermatology dermatology and at the get total our for to our what we value we we're patients medical an it with and believe, leverage doing with look combine Solta business,

for next So we of we the medical the Thermage new about dermatology. will products, in help innovation and Operator, excited in there's our some do Fraxel. think future. question. All think, we that value the have us those We're yes,

Operator

comes question with from next JPMorgan. Chris Schott Your

Your open. line is

Chris Z. Neyor

more Should environment, about should a more we in have have think as pricing year, Rx we that about the year we for you is should This access XXXX. there the When GI morning. of normalized are business dermatology launches on more performance. you a reset Last Congrats the for question Schott. the rapid dermatology just headwinds a and half XXXX Second dermatology think we first in these you potentially guys coming environment My in generally. on on up price Neyor on and much. should your strong Chris that just about launch the gradual or any think or had business. think Thank second Chris Good mind? keeping be this pricing branded U.S. question's is we we very in process?

Joseph C. Papa

Sure.

Let we me start approximately on terms We price. the in brand price of net that a it with increase will realized environment. half we of Rx think any take, where is ever market realize pricing

it may a absorbed and number prescription the you we of I The we would a increase, use tried take would the pricing able approximately of X% together single-digit and very do the Access any rest net an terms a On put realized in Committee, to of been range. branded product argument. the within half the Patient since within single-digit So we our of terms I hard we, increase for of just just have that X% price or range. that would know, price. market be that, product we've if keep value, we pricing our at expect say by as Pricing sake stay And if price realize channel. in that to

relatively that gross of in of On the I change on occur question significant The net, we relatively channel is think, category. to a net to a where competitors net, push-pull showing going up big always stable. Otherwise, our our dynamics. be we stable if that, to the gross on usually new from see to there's course, There's think it's gross pricing.

a the on product, derm slower different category them we that expect based launch. be a in comment IL-XX going receptor that launches. blockade SILIQ we based the to the the of On itself. that question remarks it by long is But made one We I The that blocker, each think patient to the response term. my that labeling. give believe receptor is good on over fact it is a on

do So are XX% of that's patients we we're clearly on long therapy. to one staying delighted the that see the that over term, think

go ramping MICRO be already. in quick Operator, ramp of RETIN-A we excited question. a in The look other – product prescription more XX. think products on seeing we derm initial SILIQ That's do the the the for category, one going timetable time we're already have some data I very future. a up about I nicely very faster very with as the than to We're forward believe are the

Operator

Markets. Capital BMO with Nachman Gary from comes question next Your

Your line is open.

Gary Nachman

where potentially assets at and the are are where on some consider more you able could areas I know this from? aggressive that spend bringing Back want some new if have back you'd do looking year a expenses? that? Thanks. the line And actually morning. do divestitures? EBITDA Good guidance. in at to how Hi. would year, additional then on come you how much spending; are And the you headwinds what top flexibility during be point that you you hold So with and might but you to XXXX there

Joseph C. Papa

on start the the our say like of like tried all exclusivity, loss EBITDA potentially issues of guidance, the when I'll and the guidance we like could to Sure. crafted mentioned. that this it comment that products, investment be affect aware we new Paul

do to to our the of plan, course ability manage have right view it's But plan always with we're what for now. the as the correct the Our number any year. with trying is it during you

On We divestitures, the second of that very we've part with sold proceeds approximate $X.X approximately coming of of are at over believe times, proceeds average, milestone XX those payments. – was XX the multiple, about question last realized We billion on been months. EBITDA that successful. the an

we fortunately, we, – to what realized do. what all as needed we've feel we So it to have done asset with would non-core non refer sales. And I

eye been being dermatology the to and we to GI are want Bausch where So the be care the keep Lomb really primary by which able our business, to for our Salix business core business + reason, core, in want that the continue around. to build core we've we

with potential acquired psoriasis. here, new about I that some to heard think on think Kaken topically future. is go that opportunity of for for us category the for product treat That we'd product when the we today the for new an you asset where talked we we assets exciting

when the we're product licensed a product. the talk approval. we PLENVU product us in is past that awaiting PLENVU heard FDA in about You've

out PDUFA GI May a another date. what's building of example have our in XX category. We That's

we eye expect to GI hear the as our in make have you continued future, care and from what us, is to areas we to we dermatology, our want of look investments So remain that business. core in our where to

Gary Nachman

Okay. Thank you.

Joseph C. Papa

few months meeting we some Have day. what weeks many joining try great you everyone any That a Please us. information. to today. ahead. additional you are questions. know forward and We Thank very thank We'll next wanted provide be happy look say to to let Everyone, concludes us. if you over of to much the us joining for there for

Operator

today's call. concludes conference This

You now may disconnect.

Bausch Health Companies (BHC) 28 Feb 182017 Q4 Earnings call transcript