BHC - Earnings call transcript Q2 2019 | Bausch Health Companies Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Bausch Health Second Quarter 2019 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Art Shannon, Senior Vice President, Investor Relations & Global Communications. Please go ahead.

Arthur Shannon

Thank you, Andrew. welcome second and results XXXX everyone, call. conference morning, to quarter our financial Good call and are Mr. today's in Participating Chairman Chief Officer, Executive Joe Officer, Financial Papa; and Mr. Chief Paul Herendeen.

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

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

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

presentation update financial the effective other affirm It not guidance today only. to this to our until than update broadly guidance public the not of or in is and disclosure. as policy generally disseminated guidance through quarter is following Finally,

my With that, to please over call it's Joe. the turn to

Joseph Papa

financial Art, you, questions. our Herendeen, with turning in then everyone, with begin us the We'll I'll for guidance. we XXXX our Slide update highlights today. the segment positioning highlights quarter X. future to long-term review second and the Beginning call review thank you, to the open shareholder CFO, over detail to line the we and our for Paul joining the and drive for Thank plan results how and value before before

growth, on consecutive time. million for XXXX of the more revenue, of organic L/International grew $XXX of a than efforts gain reported XXth was revenue in This our X% XX% B B revenue With offense the revenue to which quarter quarter total organic second quarter first traction. growth, quarter represent Salix total + to L/International's our combined results was and by organically revenue pivot organic basis. total growth. quarterly strong demonstrate to consecutive company + team's Our that now Xth X% continue second

by operational XX% second XXXX. of CORE efficiency Our our most than improving important more million aggregate during the operating or And deliver products the of focus XXXX. profit in products grew to our on $XX continued through Project compared organically expected is to top XX quarter

and Slide Moving the that is constipation TRULANCE, in a over to start. to right It we of new IBS LOTEMAX quarter full DUOBRII of its generated launch and X, products acquisition. vitamins in Ocuvite million July. in a our last treatment including $XX June Performance SM continued since our well, ULTRA April, of great off quarter first We've to Eye in acquired revenue lense as Multifocal

great dolcanatide; million; to development Overall, commitment patient health team of very improve operations help XX,XXX thanks new employees are effort lives. licensed a keep quarter, for the launch TRULANCE a products, and delivering commercialization. the motivated and of truly of We to strong by of quarter. capital. of million we August continue X, strategically $X.X $XXX debt second million operations approximately debt We reduce of the XX% the quarter. notes. by have year-to-date, XXXX generated in we cash to manage the We and improve and on to who acquisitions complete unsecured senior to increased engagement and continued allocated and from spend $XXX companies R&D used Finally, $XXX billion approximately amiselimod In during our refinanced to as

With that, Paul. turn it to I'll over

Paul Herendeen

Joe. Thanks,

the and provide walking start X, level down probably our top and by I'll Turning then color results. to around Slide some P&L

compared $XXX million, with XXXX. up revenue quarter quarter we a good QX As reported versus the EBITDA and of for organic had X% X% with growth of XXXX. Joe growth X% QX solid said, Adjusted was

on that good are our EBITDA raising we on revenue guidance, and first and So adjusted half we board more put a the later.

midpoint the pretty of million FX X% $XXX Assuming second at considering XXXX track good stays 'XX. growth and guidance, growth of the the our are we'll half. the of year first the LOEs expected year versus expected report million revenue the from That's in full about revised observed the we in half $XXX for where today, we've

versus So with and coming X% organic X% from revenue price that's growth QX wide. that X% net overall from XXXX of volume, company

improvement XXXX products. with QX Dennis versus declined Salix the led global its mainly organic four our XX% B of improvement of give organically declined to a five to LOEs, while the due up the Ortho that to the margin L/International I'll diversified XX% subsegments by with X% loss quarters Asharin organically. and And some hat chain. in XX way better despite posting mix basis continued operating for team X% approximately of of improved adjusted from balance a of + the that higher-margin XX% growth of of coming that. his points shift from was [indiscernible] up supply growth. the efficiency and string Derm Company-wide gross tip organically

$XX Biotrue ONEday reduced down due support reported selling, a $XX being G&A ULTRA promotion our and to or Adjusted Adjusted Salix on vitamins offset products, XXX LUMIFY, by to drivers in reps and increased increase + segment IT a associated on acquisition and including addition costs, our and the with and growth in Ocuvite biggest spend promotional with basis, support eye million the in costs. advertising in B connection our the X% bit spend increased a mainly an TRULANCE sales million L/International reported lenses. of corporate expense the basis, was the PreserVision,

to systems our Chief Our Officer, of underway his and in global Chuck team are IT future Information and transforming growth. infrastructure our support process the

we might on quick and to development product up mainly R&D P&Ls. the under to of only To is segments, reported external and continue on XX% out R&D segments, our think you protect directly organization longer-term you. projects as appears fuel $XX how construct of for a growth. or our portfolio the the those million help basis, allocate for to existing A build factoids segment cost costs. a note to reflects R&D shown provide a clinical R&D was franchises with here R&D in our you direct P&Ls in couple segment how about the associated

suggest Our R&D range be will X.X% revenue. of XXXX the X.X% company-wide of to guidance

Ortho less on color helpful. diversified think percent than might Salix but As how about of L/International that and than that might percent where of of and allocated our be less think at in a today, may our the That may future, look change average higher as revenue level that. segments current be forward + as across spending be I could we R&D company-wide we the B roughly that; based be Derm as evolve, are revenue; much we than a in

a and the advertising So stuff. higher constant good our to expense basis. That's and despite X% and currency reported R&D increased costs, rose selling, promotion brands support EBITDA on both adjusted growth

adjusted While you we that on that also know focus the I there of some line. EBITDA income believe below are continue is to operating most adjusted of note items couple indicator, and performance our profitability net important of

interest First, QX shipped manifestation accelerator. $XX enterprise as million. to of reduce declined and of then expense debt. use to we It's From of adjusted P&L net time cash declined value we interest the debt, reduce equity our from expense every predictably, debt earnings the act to to available 'XX, continue XXXX our as kind

this of combination adjusted items of XX% basis of up XXXX. The 'XX income note a quarter on in in in constant versus currency our net result The on roughly being tax of QX other item two those X% XXXX. is QX earnings, XX% rate QX income adjusted versus

growth + organic on driven was quickly to by the Slide X% X. with X% X% B Turning the L/International starting price and segments volume. and by by

note. of couple Just items a of

the was realized of contribution The Care of volume-driven Global the eye strong, Reliever quarter slightly. Consumer Global terms and of X% was a prices consecutive strong consumer organically up and plus PreserVision our all Ocuvite business growth X% of our in LUMIFY. on as Vision the dollar In Care solid business. Global growth, Redness growth sales down Xth was very organically, were Vision for vitamins

increased for realized QX a only stuff eight currently in the internationally. across retailers, was in Note care strategically, the the the Gordon's under U.S. leadership, was from realized Vision our QX with working have ratcheted and the consecutive regain and For versus and in over been while in slightly eye volume in dollar independent U.S. of we roughly segment. years, as net volume optometrists Joe good to direct our significantly, decreased while using It's equally Vision that partnering pricing that the Global in use in couple momentum quarters. back within of versus discounting dollars share. growth U.S. Care Vision 'XX, of Growth flat was last pricing and net has indeed. Global and was up came We've all grown business U.S., 'XX, Care Care of discounting XXXX

silicone growth segment AQUALOX particularly the Biotrue family, United The ONEday hydrogel outside drivers disposable, lenses, family States. the were hydrogel ULTRA in and in our Japan quarter daily the of for the silicone our

talked pharma international offset in that decline grew in loss markets. operating by about and in moon by see business in Global solid + earlier. and outside declined you in Europe benefited in Middle the X% in organically, Lotemax due advertising can X% growth organically, from and performance performance expenses strong in exclusivity by Down B the a selling, which X% in Eastern Surgical international international expenses for was and driven mainly our that impacted that Egypt. our Canada, Global mainly of mainly VYZULTA was U.S. Our grew businesses I promotion growth East L/International, to organically, Ophtho increase a

growth X%. gross well full of earlier about XIFAXAN and gross be and will after of up was growth in beyond. rebates line XIFAXAN the Project on X%, X. organically, this Slide Volume X%, the was the revenue in of added despite benefits but million impact with in XX% through the overall. brand have the net QX gross for Salix $XX a a to to contractual -- activities to our our increases bit tailwind GLUMETZA of up the was that's CORE them of with to through acquired to year. improved expect of exclusivity CORE net brand. for that that another year, loss up January likely net that's the this Salix do spreads price a net our star, from continue increase moderate added has plus I associated TRULANCE Project The associated On XX% QX improved was the TRxs, another excluding in

proactive of and to in quarter that volume. Our realized pricing brand exclusivity excellent caution respect our of in seeing word in with the GLUMETZA. through of net resulted a here uptick marked the management loss A

As significant net XXXX, we a GLUMETZA, into the move we for drop and half expect in pricing beyond. QX realized especially fully back of in

see expenses, the the in of impact the operating advertising you promotion Salix increase of acquisition in XX% in expenses. selling, Down and TRULANCE

as demand stronger the Asia XX%, not derm, pickup would down continued in was portfolio. impact growth $XX there FLX impact revenue segment the of the growth we Overall we was and and impressive X. even forecasted of XXXX. Solta balance Slide I out the million it overcome Solta, SOLODYN Pac, of could for Thermage driver was as the business. of in in Dermatologics medical the big medical including ZOVIRAX than over Ortho the $X derm the ELIDEL, rolled the in to QX On LOEs, XX% say, organic In I million of the had overwhelmed of LOEs

segment. Turning in diversified to Slide the X

UCERIS business of competitive our authorized team supply to issues. generics benefited and versions generic on Our continue capitalize and of from ELIDEl, lunches

and an versus for business particularly Dentistry absorbed impact million to business XXXX. $XX reimbursement neurology of challenges continues Our our payers LOE QX face of from

As not that quarter and expected the in investments. we the X% promotional the some is cash on like the is to our grow. and we the I'm about maximize We and revenue returns diversified decline us with in goal. over flows the manage in this for of that segment brand to selectively Note that enables assets time of consistent reminder, earn duration to products talking a the where believe Wellbutrin, promote Aplenzin appropriate products durability segment Migranal. those segment

promoting say but versus selling, of QX these promotion nevertheless. why. or increased that they see that's as I'd advertising high aren't profile expense activities XIFAXAN XXXX, generative as LUMIFY, valued are You and

delivered XX% over was now XXXX. for of she example, the earned with and up compared results business. to been colleague our Ortho that head excellent U.S. Aplenzin Yolanda run by to neural move And Rx a For The business and QX us. talented had named Barnard

on Slide the sheet to balance XX. On

year-to-date, If debt. we sheet from of XXXX June we debt you by I'll end paid point -- XXXX, XX $XXX of the balance also out look total the that played $XXX our million. down of at to another reduced recently million some

reduction XXXX debt million. $XXX today, roughly to year-to-date So is in

cash our and Turning to Slide flow. XX

cash some higher of activities expected of end in was the provided totaled the $XXX cash receipts quarter. the operating I'm Our by interest about activities off deputy in to of and take we at timing up due cash fortunate million. to QX that This inter-settlement this past clustering due QX. in cash in top in in in our QX, expected because X/X each weaker will the track the of to QX are still between in in to bringing be About The the to of quarters. and higher those generated we two QX said QX dates X/X and billion XXXX. generation quarters cash than $X.X generation the some in cash receipts cash and due to of are while from our QX generate QX billion QX of operating and cash we timing on $X.X

XX. to on On Slide guidance

our $XXX for the million. revenue unchanged, guidance across based range. where revised XX% share-based margin Most $XX increased other by raising we EBITDA gross point we million halfway million $XX to and range by except are across guidance roughly at our the to adjusted guidance the comp on for of and the We the that are we

the We you by see assets the improved for increased by profitability FX revenues $XX for and change that we million. from May, Since QX. base of the in LOE guidance million EBITDA, across last and driven the $XX was estimate profit guidance provided date increased for raised Slide XX, to adjusted moving million. million LOE our the level by the improved at based our by bridge. expectations in business LOE million back expectation revenue our On our range The our $XX base on $XX was for we by the and assets incremental At business. guidance $XX out in

stock were positioned it turn are quantum of our and future. of taking we managing of I upcoming to back made in for are it's Joe, maturities. I $X from the significant QX progress how billion since debt, worth We the today Before where think reducing we in and 'XX down our

came operate right loves on the As put to to Joe gave say, that our path. the us company to freedom

of through team. posted volume enable we deliver organic and now competitive its with expenses, profits an considering capitalize the growth six growth, putting started strength of sheer consecutive a strong LOEs, have and a which, work we on organic took laid That had revenue, cash foundation costs drive quite Then flow. to the look allocated revenue in We of and consistent place accomplishment. reorganizing resources our this we our to the hard leadership commercial quarters We've to growth. where and businesses could at operating eliminate ineffective additional company

we've we spend ensure our organically, increased that can R&D. To grow in

tax grow we diversified with progress So of we've can decreasing, capital made in of that with magnitude grades impact earnings amid and businesses, cash our single-digit core our value LOE the our of to equity positions shift the into great each is us of enjoys today, used dealing structure and believe can structure in large an convert is enables we to that a enterprise the highly our be from with holders the time, a [ph] debt percentage to with styrene over that holders. competitors company that efficient are global

a long come since Joe? We've XXXX. way

Joseph Papa

Paul. you, Thank

Another great review.

highlights go L/International Let's XX. B the of + in segment Slide on through our some

in. see the as segment can chart. delivered organic you this X% growth, First,

have Global trends The business, an Care. driven believe the and drivers to eye looking products ahead. demand second to mega by quarter's care the potential years Vision And that this particularly organic for future increase drive there we Consumer volume, growth in in in was are growth ahead for Global

trends these of increasing to mega nearsightedness is epidemic myopia level. or One

and almost glaucoma, rate doubled And global have unfortunately factor and and myopia age are XX% between affected XX for to of this risk have of macular a myopia, XXXX. the prior a Europe, and those Bausch to XXXX Nearly detachment. platform is ophthalmic born Kong XX% after XX including degeneration myopia, a with and seeing myopia Hong lives the eye XX% Asia. provide of of retinal number the also year-old, is XXXX. surgical have XX similar to to offerings over-the-counter lenses, XXXX prescription trend. North is myopia in to we're the corrective Lomb of positioned, Americans integrated well individuals + products, trend the XX% in care Importantly, now between treatments. compared In of adults by products of XX twice cases born Eastern improve

Global on now Turning XX. to Slide Consumer

on weekly a is XX%, year in IN second than PreserVision, by Amazon. basis, and order channel the expectations, organically Ocuvite be after of an XX% with product driven and Redness quarter of of the number achieved having E-commerce physician-recommended vitamins, category, combined eye a data as brand XX% to Amazon second one our important more continues XXXX. market the for growth LUMIFY Our Global on one grew Reliever drop extensions. just product number continues share a launch. one to quarter LUMIFY outpace by demonstrates eye Consumer to compared second

products we new Russia. growth. Vision Japan, Onto the organic International, and Vision significant month growth in China, X% And driving its Slide U.S., Care market-leading had in are Care. XX, XXst in of consecutive growth saw

Globally, Lomb's at look the you the astigmatism. first a drive one this lens fit of in approximately helping growth, as new sets, product as product toric want for chart multifocal industry this lens X% second to in highlight customer rather Bausch ULTRA B to available to Breaking ground, than the can offering of the the contacts order. new industry bottom multifocal standard launch contact X%. average I that is a average is you on see growth quarter If grew compared estimated by + XX% of U.S. left, + compared approximately the L X%.

that transition options ULTRA have for a the and growth significant allow people million for lenses a lenses seamless in U.S. market the will position who given opportunity. the distances astigmatism believe and available limited Now XX both have the between the we these in U.S., and strong

Slide and the to the a now by up date. to $XXX in Compared up TRULANCE was TRx million of Salix for XIFAXAN, its revenue up the revenue for prior was had nicely grew delivering promoted reported X%. oral highest year which XIFAXAN our XX%, second had driven XX, to grew over by first quarter. Turning quarter, time, brands great quarter, XX%. all RELISTOR quarterly

the activists litigation The two IP APRISO of Our important team of property terms tablets, our validity the resolved resolved with upheld and RELISTOR patent IV two we the four in also court matters. out filers. protecting paragraph infringe

developments Finally, this Rifaximin we for near-term three end. readout the includes are some anticipate for expected around that catalyst business. indication be and [indiscernible] a These are development programs we to new that Amiselimod cardiovascular year expecting for

right treatment team our to products, to proof-of-concept compound, our on demonstrated we're expanding and investigational modulator pleased an the basis, forward over-the-counter, in including indications expect treating in we which that we a next treatment which and of at finally, of investigational GI for an pipeline our months. has the the business, Overall, new for progress over activity which lot and SXP conditions, Amiselimod, the of to initiatives is looking base a of additional the TRULANCE GI NASH, XX has dolcanatide, rifaximin, probiotic. we that lands, ulcerative approach help for colitis, the are multiple and GI including recently On longer-term, show this the sales acquired. number over portfolio-promoted business we had diversifying Building and that grow

XIFAXAN talk growth. more reported Slide its to quarter of record XX% on about given XX want I revenue

We're up and steps primary care XXXX earlier, and first growth delivering. improve strong the the X% to primarily TRx expense gross quarter is proactive just seeing versus of script net. The of versus with up quarter this XXXX. sequential by to Paul X% was discussed driven volume As growth second

by in New the the Rxs prior quarter care grew in quarter. versus primary XX% year second

right, You the the quarter XIFAXAN non-retail in XXXX, can the was year the was the in see XX% quarter growth the channel, primary quarterly first And second of prior team TRx which the to care since compared of quarter. TRx in churn on up approximately shows XXXX. the added

we In sales relative to since the continues over TRx Onto quarter. quarter perform the gave first grew of GI guidance X% Salix TRULANCE force. the versus TRULANCE by prior care acquisition, existing the with Slide we Leveraging further our the to for quarter relation well first XXXX last XX, largest have and primary integrated TRULANCE, promotion XX% in quarter. XIFAXAN by TRULANCE

this As we quarter. we bottom TRULANCE We that on added reps increased the XXX reps of in about second XXX to the number sales another had first detailing we've TRULANCE. the month, promoting in reps quarter. XXX shown approximately ride, sales And as

in since increased second and targets frequency more than quarter, and to GI the by Primary Care XX% We more and providers the increased by XX% acquisition. reach also than healthcare

is for around pleased X commercial we done acquisition also are an improving the XX%, lives has coverage right across increased access, X.X million and We've also team excellent in unrestricted covered market roughly plans regional very to it improved job added Our million with five through program. TRULANCE performance. XX%. approximately as since coverage lives TRICARE Overall, and access federal

to Ortho XX. Dermatologics on Slide Moving on

revenue organic While our aesthetic up total decline of segment driven launch been a in FLX. the outstanding, organically has XX% by Thermage second of strong the business quarter, the we performance report

U.S. is be than retail the cash which Walgreens Dermatology.com, more highlight the gaining pharmacy that X,XXX We end program traction. recently by month. available of will locations is prescription program, at Another announced paid our this

leader the new prescription be XX a end as platform to the transformation on We real of channel access in to opportunity we're predictable and and products a dermatology aesthetics products prices. through the XXXX. be before Dermatology.com in delivering to for available Ortho whole, expect and business. year launch predictable e-commerce driving at telemedicine approximately the see a are Dermatologics dermatologies that to Segment pleased the We

bottom the Slide on graph the on making of progress the see can You XX.

from XXXX, and Solta half new are new the the Solta the of And the shown in in which the revenue Thermage total and XX.X% in base at products, revenue In Solta generated total shown products line XXXX, X.X%, of XX.X% contributed respectively, in XX.X% green Beginning of Global of segment of blue. time new grown approximately business of Global and bottom products the to percentage slide from XX% Global at revenue including segment we first Global XXXX, Here revenue. FLX, total generated Solta had revenue. revenue. and segment the

with and Solta in to trend product, segment revenue being and half the we're direction nearly newly continue. So Global of driven this moving launched total right by expecting

Slide positive. feedback on has XX. DUOBRII On been very Early to

chronic First and keep potential DUOBRII which that Xth In psoriasis, health is does recommended is you until disease. foremost, a treatment, treatment a which post This of value key proposition strong topical providers Many a than of We're topical could using result product other your savings. provide differentiator. prescriptions. It duration care we've products delay to before clear from managed is launch, momentum the limitation biological care for can healthcare an DUOBRII's demand. healthcare patients more switching compelling. and is the benefits is more instruction. week, in skin your some not Also to overall have the expensive X,XXX has treatments delivered

DUOBRII's very product. potential, this care, there which we create significant we is projecting efficacy enormous more reimbursement of of months has than launch. XX% DUOBRII's opportunity coverage, lives, on savings With post of are covered DUOBRII data, an treatment. XX optimistic and early at XX% potential remain managed terms its combined we as approximately believe In lives launch, for to cost about a Based for covered

XXXX. future by the half our versus company shareholder I'm to first first drive Significant half of have of the Segment all On And to growth long-term positioned Slide value. of Significant the in On now Slide revenue and and report Seven increased launched. XX% for we is XX, the prospective how how to XXXX, plan that XX, present we happy been products

de-risk earlier, debt reduced quarter by successfully and that first on improve the sheet. and points of since $X We're managing balance our continue Paul we profile. maturity made approximately billion building the we First, to our are XXXX,

the it, loss facing is Next exclusivity are we anyway And at you business. the primary of growing. now challenge look overcome We've growth.

quarter constitutive quarter growth. The second our company was of Xth organic total

Finally, investment.

not at expense tomorrow. is growth of the coming Our

through increased products and launched, growth also product R&D spend and future our while in We've we're investing are development. new pipeline We strengthening getting drivers. new approved business

and continue in invested commercial teams growth. to sales drive have We invest to

and reps a sales TRULANCE Our is behind team deploying driver sales delivering XIFAXAN our Salix for Primary XXX growth, Care as business. we are new

And highly also are do sales build continuing it. Solta's force to We expanding we and are out geographic were over footprint.

we that positioned Bausch is reasons, believe future. Health these For the well for

wrap set forth that review, to up, grow summarizes the on reported for we first, expectations year. beginning at the both of To we Slide To the XX XXXX expect organically a basis.

expect operations, cash is revenue CORE by Project our $XX we be to profit guidance in Second, we've expected strong grow more to million deliver R&D expected for XXXX; expected finally, from the is is the raised than flow Seven Significant XXXX; XX%; to approximately operating in year. and

the operator, let's for questions. With that lines open up

Operator

[Operator Instructions].

Schott comes first of The JPMorgan. Chris from question

Christopher Schott

me is with strong we're leverage I evaluation the guess, it hurdles position. your my one to light just delver the primary you business. further to business? I performance Alcon the company's shining a the on More organic bit B to guess, first is, relating can seems of spin seeing L little talk a a and more about + pathways further

margin We I the company much look find process to do in the to question I So But was the first to accelerate saw growth? on year. deleveraging see for first is organic I the ways just gross strong I XX% how year, if priority a My half at averaged And think, of half just think you beyond the performance. you it that? the guess, pathways second of obviously very do results.

baseline half? kind the step of And the seeing XXXX? just driving comments the What's some second about given XX%. should time maybe think we're is down guidance in Your in about gross how we that XX% margin over trends

Paul Herendeen

generated Certainly, there you earnings mean, we expected surely are free Paul Chris. Sure. prioritizing It's growth are is the the speaking. I the to to dollars Thanks then now and for that debt. primary -- organic questions, we reduction the delever of more R&D. of way -- through flow cash hit our on to allocating

I starving said path So we short-term. the over remarks, and flow can allocating maximize to drive in R&D That's much able we we dollars longer to are order haul. in be in come half. a to, going would the number good and respect really ensure whole that are With first a we time, to not maintained we're not we we margin, the primary And to quarter business as communicated the But down in be at expecting will organic put growth put go the that, and to. cash year prepared indicated that We my order up that first that that expected did strong to gross it persist our through we've profit that the guidance. strong up we down. in

And arranged, was continue it's was end put manage. and we said the so to efforts to a books our half that's we XX.X%. having it in well instead lower reflective do with be think of I going of to We XX% and year I

keep mix second You from a $XXX very over of are expect that need and that LOEs of that are drive hit high-margin perspective, million on large are down. products, in to half your a going to of to we the second going hit year to and by LOEs eye the in that half those the

Joseph Papa

great our structure debt complements would I and did job The to answering. us job great say to feel think just Paul our this would only Paul operate. have freedom who I done given treasurer a is and thing with

we're putting M&A opportunities. cash, this allowing generate we some to As us either debt or at towards look it payment

overall to to answers. leverage. grow our way So But good we're to is our going -- questions reduce reduce that good still and the most me EBITDA important

Next question?

Operator

the question of Tewari comes next Wolfe of line Akash Research. from The

Akash Tewari

questions. Few

able your decreased for will lag spend it realize and clear. formulation January the year-over-year. a back that the like contribution for any of can you XXXX, internally run realized XIFAXAN XIFAXAN a noticed for about be math, for you've of corporate X Today's realized of time? is for And it Via previously looks think looking what And the indication about how of XIFAXAN XX% that that trial that? increase. recently. talk operating use XIFAXAN you've we increases million to allocation a that was the we opportunity do via What trials? you year-over-year, on what's X% comment about stated amount about Next, been overtime? have drove that this and will that historically. to make on in was at reduce a decrease that project going XX was commercial our you've from So volume, forward? explicitly the you price lastly, you And dose. for much over How talk increase to there pretty to for large Do million net should core price $XX price allowing corporate $XX third this third allocation then leverage third up SG&A Can you

Paul Herendeen

Three Akash. questions. really good Thanks,

improve Let question XIFAXAN to how gaining that me the us price. able start via and are gross with which the we to around of has appearance net,

talked back simply that with we steps of and we already that versus we've at the better about up was clinics, those groups great not at a in beginning buy and didn't discounting. renew the clinics other not big it's 'XX, prior just are are the we by deals into channels, mainly to came lot non-retail And 'XX channels. through you driver If directly, reduced not XXXX, some enter a a non-retail when XXXX that Those look to those was hospitals, of frankly beginning and the took play -- XXXX. agreements. they regime That was made

suck recall us, the just XIFAXAN, well. that of all by as not across a to The and, inventory end other we that XXXX. of having board, we've that pipeline thing big whereas year, helped net same is for gross XIFAXAN like assisted if down on us substantially the but our XIFAXAN course, the the our across in you of but products product Glumetza, respect XIFAXAN, at Generic a for not really XIFAXAN improving And into product was to U.S. board continued specific APRISO the requirement but really for accruals with [indiscernible] and last

because And with we don't so result are the lift us doing part certainly getting Project clean We've called in gross take our to system. gross of CORE. realization we the net, our across that increase the better products prices Board all up, we're raising the been helpful. for What of want not want of in impact give quite a January XIFAXAN the is a is impression to you things the with Joe, the just to growth is to that's just as price the we trial? many of we're that, but of We successful managing which it. net, out

Joseph Papa

revenue. we Paul last where cost and grow to of that I that revenue stands CORE appropriate That's thing about we only what is Project so The that's the Sure. net those, to overall all the for we're helping say why the be optimization want think cards, we're it. put part just are doing what to CORE enhancement, are is, we're [indiscernible] said about. to trying gross to getting smarter to

On had the the clinical on on you that. question We previously correct. about XXX-milligram the talked dose are trial,

point, controlled the way immediate that very got very interesting going SSD. the release had going I I'll some our ERR SSD We and we or is things with release then things best interesting on with say our this with some formulations. SSD think on at formulations additional

to at looking try importantly, this. to for ways that the but patient efficacy different formulation the needs not on a And have IBSC just we're lot a new improve So better of have indication. to

So stopping on I we with side. deliver we efficacy new we let at response that, but get are to want about have, you the ways just say have for to that look what more and not patient a looking to we know to us XIFAXAN are just better

you launch as comment? the at but the XIFAXAN to we say looking trial, want largest for investing in are SG&A actually new product formulations, behind we corporate last that Paul, that So do when us all that our of and we'll more know about just opportunities front have

Paul Herendeen

is we more calling SG&A, in the remarks, activities corporate the that called doing in think, Those to mean, I enabling in effective much to are I noncustomer-facing the our whole. deploy what my trying I we're out we are be dollars Sure. back activities.

very perhaps four, that as as then. out that there. the area more quarter-to-quarter, also other going might point we our invest go This together is infrastructure. if $XX that they out overall, you lot, a and we we've I down but investing did company a came an six which is that have acquisitions, not we IT years call the behind and on much were being did efficient of focused IT not through are in million, been So are back five, series here way, as if we

are now. that We funding with will supporting and us. that them We've fixing put together team a terrific enable we're

can somebody that our as the unless me called revenue. enabling tell got efficient as importantly, typically we're different being can up you because more going that's why But of enabling it and balance So out. functions we functions drive don't I

Operator

Raffat next The question comes Evercore of Umer from ISI.

Umer Raffat

growing a us you consider while would questions may. your whether open to like for possibly had I you're today open it's Would getting Joe not quantify the don't RX? I something ask flow et you retirement term. added, even to is, if you and a cetera? may can deal one is and perhaps of China, China what if to percentage size on question anyway, large for should how I but of the a assets in Paul, And Joe, kept business be near Paul, know one I've ask, cash you for And asset, I that? bunch be exactly

like you still looked you August? I Do like curious So your into Scott? renewing contract beyond you have Do Joe? still was

Joseph Papa

We like Paul a too one. good much. That's

start Let time the contemplate first Paul comment back. and question give will you with to your me

to I think long-term think options shareholder cash that at is So value. I shareholder Umer, on deal, drive the best that can we that flow way continue will long-term the all question on We'll value. answer drive are large to driven

if allow business overall a our EBITDA. a we flow improve leverage other to large we can cash especially always that look it's flow would relative at that grow clearly if as help, things, cash to the anything or it's So that's something us would and

value, the that. So to think opportunity do would has drive shareholder we anything that we

question million the On of remind is business China it I our China, sales. that we eye in of obviously the contact player you the The majority ballpark lenses. one $XXX is number are of in business. approximately care

your one areas our That's in to China. number the are comment? We the to want Paul, importance eyedrops do there. you of answer player two in primary

Paul Herendeen

well, year Thanks contract, Christine, I'd there. joined, When me to say, automatically contract Yes, spot to of equity. think to going. around at The on if Counsel, years seen me settle on we keeps with me right stick last incentives looking three for General comp has in the sure. question a terms it renews I putting want the was provide it and fit I'm our correct committee couple the of I we incremental mean, and I on

fun, as I'm I having around. long to as like I'm adding I'm So intending value. stick feel

Operator

Annabel from Stifel. comes question next of The Samimy

Annabel Samimy

to new ask psoriasis of some at you expense the about to the be offset clearly saw in with at we seems want dermatology products? if to And could I it again? of the others. these pressure sizable get Do us than see coming Dermatology.com. that rapidly then environment? this the to you more DUOBRII business growth launch help the other Are dermatology. enough launching now Is

you now there the addition just the us these give to the offset If pricing? and dynamic could you you increased expect the help With Or do understand volumes volume between both and Walgreens, do pricing? by better the pricing? of see benefit volume of

Joseph Papa

of good questions there. Okay. A lot

what XXX week. see over with we per First and versus we and doubled. you last And we pleased essentially approximately a to ago. quarter, during here, year have foremost, we Sales are were up SILIQ if do DUOBRII able the are prescriptions very to grow approximately versus seeing able year. was XXX% are SILIQ

going So prescriptions the in around that's clearly level. that right during direction X,XXX are quarter. right the DUOBRII

So it's still holding its own.

not simply not So still BRYHALI just to replacing. DUOBRII able simply well. hold it's BRYHALI. coming, as We're is replacing

alternatives on some of model for most way then is overall new looking for in and seeing for manage lower to the the them psoriasis psoriasis, had think through. the care, the as cost this going are to I it's right business all prescribing reasons LOEs for our work treatment I probably the overall, we thing our them going to the absolutely dermatology and us Topical, is But think the biologics, are and call DUOBRII you're for the what if dermatology physicians this needs help patients to patients, it. mentioned business is dermatology. of delay and had about can importantly, why direction. transform So say that gives is, We that And the of can doing truly best we the patient, strength our the ability which business for for we

how slide You're growth products we today in our it that that can That's somewhere truly overall of clearly plus Solta as put in showed new when together business. the I this are show to it. XX% as seeing the transformation XX%

the two, have be the the where a what number there, cash X,XXX is Dermatology.com, of gets stores number representing having going to happen there very additional to the an second place it is is patient. predictable and one, a price situation Dermatology.com where On part issues can pay no a of we have for

where outlets, part So because no as there's There no important convenient what authorizations patient. all predictable to course, clearly accomplish for variations on these that. for prior more the a That's with that's price. we we're trying patient physician our of even another They is is more got the Dermatology.com. additional places of requires. have And, very

and to think So for products future. it physicians we adding predictable formation access most a for the the winning prescribe, get patients, we're they for the prescribe, they combination formation it's patients, predictable price

Paul Herendeen

said, I to well. go new. Humphries I want to on something jump his did want not do as is we're we out in and it. to well, Bill going else and look, and this Paul. This team because recognize it this somebody It's something is

great place the the Bill it addition of progress using with remember this just is this making, the I because XX we Dermatology.com. We've side. like And some that model, more absolutely going think and way But team, that's all this, that brands get I at them from those at have effective, have targeting a and Walgreens from products coming job nine step-by-step-by-step. memory. have making a in done a we putting [indiscernible] are all by us in conceiving can that year-end them XX to beyond progress doors But not cash coming it's we his we they've of with point, that. I on am point the currently with we're can't to cash bunch helping that

the benefit to patients think way the change I some it's of delivered of everybody. drugs are with these

Operator

of Gilbert next line The from question of comes SunTrust. Greg

Gregory Gilbert

I X something growth benefit few. a what third facts have the sure nothing point quarter, going forward. question. Should percentage net then first and benefit I to That's you're suggesting another expect less in XQ thereafter? want understand I the Paul, make to in on we the and

going for. Secondly, yet. to But we on or you're label know a in lastly, wishing And DUOBRII, or Joe, obviously, back anyway that not trying prayers in are China China structure there inside your highlight, bad on any sort to aware of? in of that be would that business got our course, of of terms the going you you dynamics and refills do limit things then question, duration to we and like should good things

Paul Herendeen

to in growth, as job improvements terms are for unit that little kind beyond have and growth we and It's QX guide as to basis driver, group benefit of to what then rifaximin, a versus XXXX of of going of Paul. to the we're not points QX digits, the lapping single and doing will it bit goes team and kind in there where QX we will the and we be on I But and can mean, With all secondarily, I'm significantly, high of price his in And be growth first one. as the still is to that the in a generate there. say what will well. sets opportunity strong QX great I'll I limited brand say, of and in and Mark improvements respect away take less continue be be may think it XXX a then QX. we it TRx put a

Joseph Papa

can look outstanding. high being that's to On clearance comparing for label with by important the coming the other say agree, and call, tree most the a certain the The I'd and in the on foremost, a rather especially physician [indiscernible] labels. on which retinoid at take the previous important is combination question absolutely think on comment. I than very the a on use time, label label. I comment critical the a We thank truly can DUOBRII, first everyone I the to that for to label, first physician you limited steroid to just the that is is potency product -- think allows duration. corticosteroid invite

putting question did regional putting they The $X impact million I'd every on are the $X plan, DUOBRII on million model save lives per on to $X health of comment the formulary. between second that for can managed to care, that million year offer DUOBRII budget a that formulary, in by care by shows we the managed in million

the to in duration patient a per of allows way delay would to year biologic, the to $XX,XXX it go range. per potentially type I longer And be for use essentially say what need simplistic topical the to that, patient which may product high-priced a a

clearly, that's think real So we the benefit.

extend to going haven't towards at limitations is, biologic often would biologic, clearly, at on think some that's one time. are cost reality need or patients any but expect refills we potentially of to patient this we'll able keeps which therapy. I less time go that patient for seen a We keep lower managed the wouldn't patients much because a DUOBRII, every be that care plan the on

$XX,XXX the biologic, of in one for that talking the range the are less tenth than We for of DUOBRII.

contact business. that, quarter the our think percentage lenses Care business. overall in overall I for the of biggest the simply a of it's is us, clearly Vision business China one contact China number lenses, of question out of as the China at the looking coming the business I player Vision about it's and dynamics, would a On say -- Ballpark, Care

I other China. are to important the But us. in one relative that's clearly, So place we it's think to our eyedrops, number

about of all So part is constraints production major of happening see them. but exactly both your it's any are based at our And -- the based big locally say, very feel this producing don't China, don't of in for we not I so on in question, China. good will any see we time we eyedrops we real that's

Paul Herendeen

Paul So you mean, probably -- again. Greg, it's

in thing certainly that's us. not was as But all it's saw our it into In into good so situation another product account. U.S., and [indiscernible] tariffs we facility, chunk the so we supply Ireland that's in Milan, point, taken in good the when baked assisted recently well. is to facility can just well. say about manufactured You the other have And guidance, people again, out, our trade the to of and guidance our our consumer helpful are chunk of, in to probably point I to and facility good the would lenses is a China all think have

forecast so We all far are we could account get, impacted. much been into It's it our and but how within guess, taken so far. can't good. so guidance it's I worse manageable

Operator

comes of Bank Jason question from next Gerberry of America. The

Jason Gerberry

A couple here.

conversion step the Seven the just like Seven guidance you revenues competitors think thinking DUOBRII Just for different I mainly general improve that about about talk year, the question, Sig up? and of expecting amiselimod in upon you in $XXX How the first that DUOBRII early. a space in realized are of revenue little there But the opportunity sales just in Significant full safety half to it profile SXP mind class? the the the given looks maybe what's can second then your number what's half? are second bit by million or -- half just do you it's aiming Joe, back first ahead it CB you drugs my -- Is good generated of products. And on for in

Joseph Papa

Okay.

it's questions that a understand think us. an address. for So here. absolutely important we're that cardiovascular we of is question We opportunity Amiselimod, a couple good to there going

address to a study it start get that end We and we year. by are going going accomplished to with of the approximately are

positive answers go can get that get us question we we'll So that so negative. that very We'll get either behind quickly or and that forward. the

us in dozing. there. out to area better for terms to exactly of it trials opportunity has the of a clearly what what that which is we But On half-life, believe obviously about be got the the try do view find to benefit of we Phase we that amiselimod, we II longer talked could

where question guidance, very in the Seven good XXXX we about are. of we Significant feel On

the First thereabouts, but XXXX. importantly, of half, first versus $XXX XX% of half more million approximately accelerating

approximately think right we're on to track million. we $XXX be So the

especially grow need to what DUOBRII faster are the we on we little So that we've but for in expect clearly, Japan. now launch with track the AQUALOX product a the we right marketplace, got in

and going Very right are direction. them results. now of launched pleased with all in So the the

Operator

Stanley. comes from The Morgan next David Risinger question of

Zhu Shen

in And Zhu of quick Shen business could half? the momentum the the on David the key drivers including talk flow into It's to Could half for discuss please second Vision you cash ahead? you Two about Risinger. know question some second also Care impact today. going

Joseph Papa

I'll and do Vision in Okay. Care we that presented new the happening so flow. the probably that outgrowing ULTRA, what's chart; look Biotrue, with the growth very the quickly strong see are Care take we first we you it's with you our cash at products the have our generated. business, market. in if Clearly, But Vision data can our

up Lomb up Bausch performance is If the market globally you being market being It XX%, look versus being about approximately X% X%. U.S., about in contact lenses a our at up + X%.

think being share, mostly There's are I incidents as the our this environmentally taking number that factor. issue. a because I've So is to repeat new mega-trend to big one it's behind myopia continuing climb. clearly, success Longer-term, truly of we the of got product a

and that Unfortunately, we We're spending This a spent lot time something spending is on et outside. problems one of epidemic much right you is too those on front screens the on and believe at four we is cetera. time iPads, looking time of myopia your kids of in computers. now That real. phone even and computers, screens time less all are

outdoors it and with environmental and XX genetic. You in time can't XX, playing activities. call see time video a think supreme to we games kids in with has It sporting years it's doubling and versus spent of be doors myopia

lenses, going with say that, to think and And towards try it's think over that's the it's including product drive we have as our we myopia patients directed improve it. not be at going of the to million mega delighted trend, look lives am So I to sales, a $XXX work, to real. to to we continue myopia. We helping of

about the take care for opportunity how we the most So we we and the part help have what with to integrated cash want these do we very second us flow? think Paul, eye about patients. can platform you excited are

Paul Herendeen

Sure.

flow mentioned, in to we As from we operations the range have of for cash that generate have I from our the guidance to -- expect X.X X.X year.

financial restructuring slides, you of of Full of the look year-to-date back were expected and The information other other you're about of year, be compare the contingent to it's your to year that milestones XX. If XX. attention the at other it call is couple things to year-to-date second to point the couple consideration thinking half out. is guidance The XX.

is expected be So far to year-to-date XX.

more bit the to second year. of come. weighted the towards little is So half CapEx actually

through XX. was X for X are X X guidance XX. The June We

in is as reflective So of in U.S. that's the also -- daily a fair launch markets activities amount to us the our production more. for that ramp other lenses well. And continuing of the up silicone hydrogel and for

that it quarter little settles a because be ones then interest the QX, QX weaker interest should settles because of say again, flow QX. QX would I'll call and is a out. in is that less during are that cash I those remember though So stronger of

out I are cash things So perspective. from the flow those point a

Arthur Shannon

Probably we have a for time two about just questions. more

Operator

The of from Amsellem Piper comes next question David Jaffray.

David Amsellem

eye have I consumer a a care. from question

LUMIFY, on mean, peak where in there nice go growth also thoughts share other I label. on I you get So There competitors. several private share. your is can market here? think is wanted to

just the LUMIFY And you does us the can this of of then also terms second go sales in on product if may and for part your quarter? [indiscernible] miss second were in question is net give e-commerce. where So what the view this, on I

product. for on probably the You the cited years? for growth how you expectations consumer over next thinking can into am I e-commerce care your is e-commerce about if portfolio? wondering eye how growth elaborate And of you're factored much for the that few

Joseph Papa

a going, readiness have that We In a product for best lot do LUMIFY think you questions product relief need for it's is not with So believe arterial simple to to a blood all. I someone's LUMIFY with patients start But lead had I'd you member there product release. flow, always him of eye, where very try and restrict like deals patient to deal I'd of got the metric. arterial we we that I'll the from restrict to blood not with to friend, view, how I but the venous a know feel, point flow that does which if want flow don't I blood eye. them

to So a to other out way this think the we any better think from physicians number there. why That's we're getting one have use we treating LUMIFY. we product recommendation

The the $XX the LUMIFY revenue in So important of revenue going is the that quarter. our million an think future over driver in from quarter, ballpark be success. we of to was

LUMIFY. for going very where there with that's on of us direction growth in pleased the we're the So

On the question e-commerce broadly. of

up We Gordon health. better we Joe business. products if and on strong. to the of globally is them think with vitamins look doing come a are an the tied just I both very internationally those we're Ocuvite, doing of it for doing initiatives performance how help overall mean that's two this large need team programs drive Ocuvite And you is part outstanding for at with and to I also of our The led think job by have our what and Tom business. consumer PreserVision,

that's So do. we what are planning to

a the make today. future grow and expand as right to us we beyond the launched is us, this in putting fiber at product with and not help us extensions launch Look either look have out sure. to Luma but planning be where line now to I it We just readiness to combination are class there clear. but the That We on things to absolutely, category product help more allergy it to look this guys. to apparently also also other that

Paul Herendeen

It's I segment, think is in It L/International to + very the in consumer like business, of the take to contributor the run Paul. business total entire our is couple us, that XX% internationally if business. B a factoids important of by really business. A it's on you and the for our and U.S. well consumer segment largest relation I mean, bigger to bite XX%, Tom being

So we're doing well. really

Arthur Shannon

the Operator, we for last time have question.

Operator

for question come from Chen Cantor. Yes. Louise The will today last of

Louise Chen

I you've I So I what of the was update capital the some if there? this you respect stride? timing. then earlier. an see sales TRULANCE. us question first on hitting could with had thickening to new But wondering do you facts. last if give opportunities When was about its be? What versus promotional question for second And timing curious know allocation. this on us you're it increased on And talked you one could just think peak give is you just product

Paul Herendeen

allocation Joe, portion, to capital first? take you the want

Joseph Papa

first, capital it Sure. more in function that's I And now our spending allocation. in have R&D into organic mean, legs growth of I'll results. here the and we you the start drive I see on ensuring mean, our future. us. that we a are

So we're increasing spend in our R&D.

which are Care our the spend is Vision in in another increasing R&D. of CapEx, of We business kind form

if flow, opportunities that. our left is seriously to acquisitions then cash If owing that there we right when free of high fit we core that think reduction tuck-in over waterfall can about entertain after businesses, you secondarily, are have prioritize the what's would you debt, leverage. very where And our within

pretty that take we the with ahead straightforward. But if to TRULANCE to We're repay development you it's this acquisition and core then, using for advantage cash. of in in go business our great year. we earlier business We're that that we that and saw opportunity, debt. will extent our And think areas. the generate I see investing

Paul Herendeen

approximately or And the your new year, then growing from I remind that that at of numbers. of you looked getting opportunities XXX,XXX terms in timing the hospitalizations the to study the end second been [indiscernible] we data this the part question, is on in for that. of XIFAXAN

give an some So good But opportunity. most for on that indications us SSD the also it's clearly, just important important, dosing opportunity.

get couple like away, we in us away, an or give clinical more trial patient to expect beginning always quarter But able of good approval be there opportunity two, predominantly three Phase ranging. in trial. are enrollment and we for II first That's an trial Beyond us. for the results some terms XXXX. something about actual being of have years to of that, That's actually on dose to that talked information going opportunity years to

States surgery the opportunity it's there also we trial you remind patients important in But is trail about of there. million with have opportunity XXX,XXX that That's then patients Crohn's IBS-C. will three terms when out them Crohn's. get We will time the view with of for XX total United approval, their something is to duration to that a think start And in that about of have as postoperative There's need And XX% disease. we number first terms you the an actually, within with unfortunately, patients big just in about trial a year year. think in a approximately that's of XXXX. We one of like symptoms in XX% half recurrence About approximately lifetime. of will frame.

we're us. excited with XIFAXAN So we're opportunities think really about going We the trials. where for some great there's

that will it's the I very IBS-C, just question going that running. hit On together an But the they the now job we product, up sales in in what I quickly. outstanding IBS-D. are TRULANCE, for reps say ground for final any new to If the XIFAXAN TRULANCE, primary the take is with hit best X with plux the ground sales IBS-D, care done believe usually, to new believe X-month a of say growth have These we sales reps what platform. IBS always we have have us on have to the we

between I things So is in done the to six this I'm always look future. team. excited would great results in I gain but the to say to They've months great the see seeing a three forward past. traction, us, to

may the joining I us day, for you hearing you, you for thank for concludes But us. comments a everyone. and Operator, today. forward that today, look that in near great thank any to future. Having everyone, additional joining questions our have

Operator

The for presentation. conference you attending has Thank now concluded. today's

You may now disconnect.

Bausch Health Companies (BHC) 6 Aug 192019 Q2 Earnings call transcript