BHC - Earnings call transcript Q2 2022 | Bausch Health Companies Inc.

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Operator

Good morning and welcome to the Bausch Health Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Christina Cheng, Senior Vice President, Investor Relations. Please go ahead.

Christina Cheng

Thanks, Andrew. to quarter welcome call. earnings and morning our XXXX second conference Good in J. Thomas call Participating are today’s Appio, Officer Financial Officer Chief Vadaketh, of Tom Executive Bausch of Bausch Health. and Health Chief

our They would like that of ask I’d remind like read Before moment take the contain accompany to contains at the we We you slides forward-looking you begin, statements that important information. information. forward-looking presentation a to presentation. to to this today beginning the

or statements. implied vary you expectations. filings and may actual could be our to Canadian accordance expressed financial for list performance. our the statements undue business from use to, similarly Our titled securities results to by We our our an with our materially calculated as and measures measures that a be to in GAAP. operating cause actual non-GAAP with, Non-GAAP understand investors these of should reliance alternative performance to results in forward-looking on comparable Please should SEC from place of not measures used materially considered companies differ some filings factors along help to administrators any but and forward-looking ongoing refer not measures not may financial other the

reconciliations You this the slides presentation in our that to will website. the find accompany Investor Health’s available measures non-GAAP appendix Relations of in Bausch

presentation as to today of this effective only. not is in guidance. update obligation guidance undertake do financial any the Finally, We

discussion Our on focus Pharma today will Solta. Bausch and

of Lomb’s separate ownership Health to our over results not & results. we Lomb, Bausch & J. release attributable Companies, the include consolidated Health results, and Bausch on CEO, to we earnings will details With Appio. Lomb Tom? my pleasure a which the week results approximately XX-Q Bausch Please call However, excludes that, Lomb’s discussing to in will of turn discussion & Companies to comment on is owned Beginning XX.X% portion Inc., this when for by Bausch interest more results. B&L’s it to last Bausch quarter, briefly a Health. Inc. Bausch refer Bausch & Thomas attributable

Thomas Appio

joining quarter cover. Thank to a the would you, Christina call that like of during number welcome today. had we significant of developments to the those We and you

Let’s three hope this away see call, things start you by will on giving take I you X. you that as from Slide can

in First, patent property we vigorously intellectual the will litigation. our defend XIFAXAN

committed we improving balance as litigation. are we sheet advancing patent work to Second, and creating value, our strategic through our alternatives

rebasing for driving results. new year, series are we focused of a while expectations on actions taken performance and the to has our our Third, team improve is leadership

Before I Joe get want started, it Chairman CEO to during Board his is for Bausch I of his thank the Health. Bausch of welcome John as of the as Papa and contributions Health. my many years pleasure Paulson the Chairman to

U.S. me Let indicated District risk protecting use patent start indicated valid and also IBS-D of XIFAXAN protecting court and XXX of use for Delaware The in find HE be the reduction of find that Court U.S. the litigation. they U.S. they infringed. patents would milligram patents the The for with that to the would invalid. tablets treating reoccurrence of XIFAXAN certain composition

and take state we the the vigorously out One, strongly me minutes intend Let outcome. disagree anticipated play. to the few of court’s a with appeal decision lay to

cannot a a prevents court’s ANDA, ANDA rifaximin. and in and XX or Application, XX decision Abbreviated generic New Three, for tentative HE. XXXX to Norwich expect pending full take patent months. to the both Norwich’s to launched. Two, be generic until FDA our existing HE process The approval appeal have indications, expired We approval applies version doesn’t therefore, IBS-D Drug

approval. OHE product update from the or requirements FDA bioequivalent the including XIFAXAN seek cannot composition equivalent compared defend of in to require property to full another efficacy Differences expires on HE intellectual unique its a patients of modification we take the humans. clinical there could a half. required have out could patent to reduces guidance Six, and and until carve rifaximin XXXX. in risk Four, reoccurrence we of by death. studies related generic their XX% number to properties between rifaximin our and placebo. FDA attempt could the injunction, drug. launch plans will The the the the OHE patients, and are in existing risk has rehospitalization product vivo they they It and to for they generic for HE While many the related stated episode XIFAXAN’s indication aggressively ANDA of hepatocoma secure the HE in by include raise HE years. only approved cut safety to depending product-specific to Five, until serious HE risk this

protecting number As hurdles see, of you can market are our there a exclusivity.

families. Our on teams patients their will this to continue be for important and providing drug focused

value to committed advancing the alternative creating the our on improving topic. by and sheet. We remain balance next to Moving process strategic

earlier First, conditions the the Solta we and due market to plans to Medical factors. our other IPO quarter, second in challenging suspended

Solta medical market is Bausch important a for aesthetics Health. leading is player an franchise in the and fast growing

are We significant market very geographic about and its excited potential.

Bausch to leverage Global enters of and scale team. capabilities growth, Solta next will its phase the As it of Health the our continue

and satisfy that soon off as believe so makes strategic Second, conditions to are we applicable Bausch disclosed. sense all previously Lomb as as committed doing able we remain continue spinning & to to

impacts all and distribution XIFAXAN litigation. Norwich as considerations the We we regarding potential patent the factors assess are evaluating of the relevant

Third, committed we sheet. to are balance our improving

which of our quarter, at paper, market $XXX significant a retired million discount. This we executed open an repurchase long-term

significantly the the earlier XXXX. profile, reduced extended maturities our through which we maturity quarter, In debt in second addition,

a and who provide Tom details created further over ownership sense more urgency, second series May strategy accountability. closer our near-term our for and the XX, and on driving our our the taking outlook is to year. began We performance. With Tom? I reevaluated call quarter taken of focused to returns the on and turn of that core leadership operational of that, Finally, will Vadaketh has greater new team remainder on organization performance focused since to flatter will We our implementing actions businesses. accelerate a with over initiatives a

Tom Vadaketh

everyone us. on will Hello, remarks thanks business Solta’s focus My results. largely Pharma today Bausch and for joining and

versus X, quarter year. of changes inventory revenues second in revenues were see retail As up Slide including of Pharma half for basis the quarter on XXXX, second changes second and $XX the On down XIFAXAN million Bausch last versus decline $X year. on volume, you of X% effect organic improved quarter X% quarter unfavorable versus an can Solta XX, but revenue down Slide approximately the were second flat billion, was and with $XXX the largely by sequentially remaining driven essentially million. QX year. Salix of retail in channel TRxs X%, The year-over-year first the of was in the primarily last

solid $XX quarter hand long-term softer for particularly International mainly to below growth revenue demand approximately Canada revenues to East, of of in X% the expected care delivered second offset staffing America. of occupancy HE the post-COVID rates face for channel continue million $XXX a industry XXXX remain observe in was Latin versus returns future and the provision last performance, We a of million year continues sanitizer product. organic driven product the levels. quarter X% as by This constraints in and second and Middle by

dermatology. provision, quarter return to X%. down basis the on this of impact was Products year, $XXX organic Diversified the and was an compared due revenue XX% quarter in of revenue neurology the growth declines organic last to second for million, Excluding second primarily

in down primarily was to is up business from certain revenues our products demand investments. neurology Our were COVID-related XX%, and to JUBLIA brand due benefit marketing for prior XX% the and up TRx XX% the Wellbutrin year. demand as year-to-date for lower continues demand

and Our in decline legacy the loss of products dermatology. drove exclusivity

Solta about in in business due business, down Medical’s stable double-digit was was revenue XXXX. while lockdowns the volume The China, a Solta’s Asia of COVID U.S. accounted continued XX%, China, in growth, the million, third for excluding posted demand which $XX to largely

XX, Organic Bausch Vision growth partially Surgical to Lomb quarter lower Lastly, & and were in compared second up Care million, offset reported of pharmaceuticals. on ophthalmic in revenues the XXXX. X% Slide sales organically by $XXX were

my for results on to non-GAAP the consolidated am on to Turning I focus you XX. Slide see P&L the can going that quarter, comments

quarter net adjusted to expenses R&D pandemic. the G&A year, revenues, attributable last year XX% a the the and a the and partly offset by XX%, includes quarter Solta’s the by XX.X%, partially to Second gross XX.X%, basis lower of to was write-offs XX to adjusted compared adjusted and in versus portion year, points Health XXX operating Consolidated inventory to was lower adjusted following last versus of quarter driven adjusted the of approximately lower is driven costs the divestment compared of levels second due quarter was quarter Amoun EBITDA compared quarter, represented the investments to million second in R&D. margin of second Pharma year’s the to was X.X% points EBITDA $XXX consolidated lower margin increase of sales, XXX and marketing year. for B&L’s higher reflect B&L adjusted that plus was basis, reduction approximately Bausch last Adjusted X.X% R&D EBITDA up basis X% million, minority the EBITDA consolidated On expenses. and attributable a shipping selling Health shareholders. attributable basis a down and and Bausch with $XX in sales inflation to by segment. last by million marketing an were normalization offset second for XX% $XXX of decrease margin Bausch Consolidated XX.X%. up points prior second gross spending

margin and XX%. adjusted approximates Bausch and Pharma Lomb EBITDA combined reminder, approximates a for As & XX% for Bausch Solta

million For the million, Pharma revenue of a profit divestiture impacts. $XXX the Solta, and versus Amoun and foreign to decrease approximately segments last Bausch decline, exchange was year approximately comprise segment $XX that due

adjusted Excluding to cash versus million operations $XXX activities and capital. settlements, from legacy last due cash year million and costs $XXX by flow Amoun, legal operating working provided was separation

balance billion, cash debt our revolver the discuss hand using IPO and were me with debt XX. quarter a down $XX.X of Slide of of billion XX, repayments debt of by sheet net B&L net let offset $XX.X partially as proceeds on the Now, from million. We consolidated March as on $XXX ended of draw

Slide Moving on XX. to

a program by Slide discount debt at of this our & debt repurchase and no $XX.X billion company debt Bausch Bausch maturities cash. for XX% of XXXX billion. an & Lomb, XX. you open to XX% see million was $XX.X and can $XXX the remaining have we gross deleveraging today, our debt is net on excluding quarter, Excluding Lomb million We retiring as using fixed significant XXXX Approximately of consolidated XXXX, market bonds accelerated $XXX executing was until

can find I debt available We extend debt XXXX, outlook reduce to our Slides our will of you and and on for continue discuss evaluate remainder options to now maturities. XX which the XX. will

Given are environment the uncertainties assessment operating our the business, and detailed overall XXXX expectations. by in our we rebasing

year a assumes investments improvement marketing and sales half seasonal the of outlook sequential the driven in Our and by restocking. back

year adjusted year to full EBITDA consolidated $X.XX of Solta basis, On flat X% be revenues X% organic growth expect last billion up to the are consolidated at revenues in of & to for and X% the Pharma the up we We $X.XX to Bausch billion to billion Lomb. to $X.XX consolidated range X%. down Organic a over Bausch and expect $X.XX full of and expected year. flat to at billion generate

and Solta, to of assumes of R&D gross As million. adjusted outlook Pharma expense margin Bausch pertains $XXX and XX% it this

will You our on find assumptions XX. Slide

$XXX interest of year. for million operations to approximately expense now $X.X call generate We in hand back billion the adjusted will from this concluding cash and Appio Tom remarks. expect I flow will

Thomas Appio

you, Thank Tom.

ahead want of of and suspension and from for disruptions was with quarter become B&L our company Health to the changes, a the return transitional the mid-quarter, second management IPO leadership urgently the team the I excited distractions opportunities with Solta and new Having executive IPO. growth. the are The to quarter Bausch CEO and

Turning XX. to Slide

operating want through We focus have objective I culture; to today. value focus four three, growth; strategic rigor; first four, EBITDA priorities: and the developing on sales and two, creating one, alternatives. high-performance and a

with taken to near-term. Despite the EBITDA have the adapting of Let segments our in for several facing, are great revenue and immediate are headwinds moving business our we to urgency. me we drive discuss and we the actions current each environment

energized me dedicated They let with I on team. to and Salix patients. committed with Slide fully our sales First, XX. start are our national and met

need we we, as believe is XX the HE. have team, unmet and have market space last patient believe days, the IBS-D analyzed white a and there Over both management to significant in grow. We

and XIFAXAN treatment are will caregivers We activating omni-channel who strategies patients targeted that as choice. of the establish

I journey. patients adherence to will and it. want specific the GI continue available patient the and with for along make doctors increasing are and affordable who depend access interventions to the We emphasize patient on that we XIFAXAN

International. Second,

International a truly they team in commercial strong our drives have understand We execution and business, growth. how

generic geographies. We new will line branded into product continue expand to our

We as digital continue from expansion channel core Mexico to Poland, and our in of focus franchises on the key growth benefiting America the is of Canada. strategies. growth Latin Codril markets Bedoyecta is our driving Furthermore, region. Mexico, our such throughout and

enable strategy key We further customers will us expect our in engagement markets. win to more

products next X countries launching enter are and as the We XX across increase countries. XX investment markets in we high-growth new in years

Third, Solta a Medical significant international is for Medical. Solta with expansion. We a business believe runway high-growth

seeing the pent-up in continue we to U.S. and We necessary markets South investments the signs of are and Korea. to make drive as such growth, demand developed

global to of with and Health continue support the are strong and We will that excited them part team is scale we Bausch capabilities. our organization, our Solta

I dermatology promising. portfolio to height XX% in this year. during an X of the quarter of the and to U.S. increase campaign in diversified second new results the had products. early products. two our years launched major revenue Lastly, season cities asset are a summer brand July quarter highlight in last with exclusivity, want JUBLIA, of compared We

continue periodontal new strong dentistry to share in growing in a leader. market invest our product for also leading Arestin scripts and We of under business disease,

vigorously to our in XIFAXAN. In opportunities property our we the balance we set. needs diversified Going will the product intellectual address with our more to and mature forward, with ways patient conclusion, cash continue of contribution growth maximize businesses defend will

product. state does Norwich Let approval either not generic have full tentative rifaximin FDA for or a again, me

We profitability and our improving driving are on creating focused value through sheet. growth, balance

and that, open you working please now a questions Q&A. taken any for of We a have the resilient Andrew, ownership will team, are a highly With with we to performance. and already motivated we series of improve sense actions urgency have. take line our

Operator

go [Operator first from Instructions] Cacciatore The comes Please you. ahead. with Cowen Thank question Ken & Company.

Ken Cacciatore

patent situation. question My team. this is Thanks, around

So I’m upon patents settled by on is Meaning, this technical wins on just And to that the have again, we Thanks of about in anything driving preclude it. have any does Norwich the this. multiple appeal, settlements, are there other of on be Norwich any agreement? can trying successful, parts exclusivity to If Norwich more settlements? were would how appeal, conversation to given if there also trigger bearing hear understand prepared that much. is lot triggering all with at some that other of could there have how there win the there little an in Norwich to own something all debt? secure bit just in I approval on settlements trigger you triggers, understand we could a approval? does such we’re trying on remarks, so absence settlements, trying There tentative here a to going an contextually that we Norwich or or tentative this if would settlements understand was or implications they are agreement. situation get a those to other other And if us Obviously, cash like So to its of to of to approval, wait and exclusivity? Norwich yield, exclusivity to this cash this don’t. maximize you’re help you out but is then for know that terms Norwich reach actual is apply approval

Thomas Appio

had in you a there let is – of regarding to of cover off lot just questions lot Norwich. the there Ken, but Okay. try questions, on me a

launch speak but whether say is or or first cannot the XIFAXAN this, so we not appears would ANDA to the FDA first-to-file can’t the will parties forfeit be have Teva other to got final of the to status. and Norwich. their by likely has file, maintained we to is I order final findings, a in approval until court’s does they not the reiterated settled Norwich Teva have generic of accelerate order Norwich’s forfeited FDA is So if remember approval, not yet, launch. also What

stated in add stated to to guidance they the has prepared FDA study. revision, to rifaximin an a product-specific in major remarks, plan the So in as make bioequivalency that vivo my I

So I FDA approval exclusivity said a prepared can time. that, potentially Teva’s remarks, they Norwich appeal rights first take as If decision, my could in as an launch subject secures before filer. to

we would launching the the complicated, from would situation, pending enjoins HE they damages. HE that appeal, data what involve risk. the absent indication be I However, Norwich’s at patent. a their very Norwich’s judgment on but ANDA of removal the for ANDA, And win of significant until it’s multi-factorial would expiration court’s the and is, monetary if say lastly, then liable And again,

a is data in of that that clearly, HE. a very part it safety So is was And the there, of important point. lot

So carve a out it being able difficult to do task. that is and

So safety we vigorously approval by is to but again, got remove was we Norwich my intend, data we of what ahead first indications one in that Not the said HE I first, of know, oppose for. prepared any remarks, to the attempt indication to the first HE IBS-D. the as

data And HE be safety so therefore, the very, the difficult. very ANDA from will

now Tom So because it over question just your to yield. regarding on the turn I’ll cash

Tom Vadaketh

Thanks, cash I of back to that expectation just cash asked $XXX prepared now operations yield, million Tom. and for we a about will yes, talked portion about Ken, the you year. generate flow remarks, I’ll our from my about go

our and million. thought capable always generating, of the the about have is million $XXX We The $XXX expectations say, delta million P&L. essentially business the in of between that to the $XXX lowering

our year, flowing rebased so thought cash. what versus we’ve with So the guidance, our and that’s going to into we through EBITDA taken new down

explanation the what before. it’s why versus only $XXX of said million that’s So we’ve

look are – than When we have generative. no to any company. receivables we at payables, business have CFO On my be for weeks be will other what a year. a levers it I, finance and of to X months string terms look And my that issues the few we the first And in share really team To That’s probably that pharma of different lumpiness. cash are no in maximize for we we we May. cash highly the year. – first focused the cash to team obvious the the a on fair here very But we I point, as flow reasons and been the continue really at the continues yield payables. Now since us it’s outflows from front, will critical even The I’ve the very, see business half, the and the we do it in to of and focused that for to just through had full we have, yield, business. and more in the de-lever. is out holds lot continue think from your

Thomas Appio

question. next Andrew,

Operator

next Samimy Annabel The Please go Stifel. comes from with question ahead.

Annabel Samimy

Hi, taking here. a have for I thanks actually question. my number

expect could Bausch with a revenue an making So doing to going I’m to And it on EBITDA program it’s for always goal where that mean, been you’re you’re white I spin-off, for been significantly looks first understanding effort of Health. while. and XIFAXAN, has with not that space. that drive is be a a is obviously a the that with drive There significant really business different and Salix, good generator guess what Solta, you postponed growth. always part And revenue you more strategic revenues. then I a like

part postponed Bausch larger of my plan that of guess, all and any So debt? the B&L So contribution advantage Would meaningful to it without of questions. cancel to reduction Health that a you divestments consummate but is those take are keep pretty two able considering longevity? really that, it just I spend and there and not revenue be has as together

Thomas Appio

Annabel. Okay.

a both this okay? address May, and So since believe first, me large at HE taking really IBS-D XIFAXAN. question the in we see Let indications to hard were we there are and look Salix opportunities for

the perspective only look nature. at direct also really of become and a IBS-D which has the due incidence is take believe health to increasing, you not a but of demographic If epidemic it, in the from indirect COVID, authorities impacts not

specifically ago in the that but with and those who staff say have that, the prior investments bringing investment, is done did the look years using what support that Reinvesting we What period at there HE, still I with a to happened you that XIFAXAN you we identify relief abdominal do significant understands safety authorizations. clearly, took in long-term we over, you at from not pool. things and the if there specifically, What of make the at and other know, know, size can sales training I it take many with the low really we’ve look okay, offers in that in at COVID taking that you look going at sure is thing would And data has after a look at contact. asked grow when diarrhea you there if maybe and at then think we are are that really at of that when reinforce out having and just when if back. that majority when since of days are of care, – many you closely if look and of look how research, the you Clearly, excellent we you into DTC and are then are to do working going HE and DTC HE marketing PCP to patients there is care in as adherence points a HE. the look pain doctors is caregiver that in So terms also that things for. an of about early episodes, we tactics patients you terms that some home, and lot our long-term could look of what is as the to specifically patients look And profile.

and clearly, filled the authorization. what getting sure drug the when we’ve seen, they in in do look terms that of doctors’ is make of will to that prior at One things the you offices, to the need turnover

we’ve a sales year some turnover COVID, been filled the in X Along at have rep there had over field our doctor’s force. lot offices. is within XXX positions. last with the And turnover we So of months,

So is those those put to still lot of grow, we more to believe address think a do. the in all but can place, we’ve with we where tactics strategy we there work

the we other in growth We’re will drive things next over the – that of believe HE. quarter next identifying help the and IBS-D

Let talk to me just Solta.

a part Solta business well. – used as were know is of part the – was the actually entire when as Solta Solta I very was as for took International, U.S. it I things run given of to business over reported the ago to changing, company me Solta even I years business. that

I an it’s business. think excellent

through. business. that lot starting a growth I recovery when Europe of in America, we we again, opportunities look we’re as can we to is, see to by specifically in impacted those. – Clearly, and Latin it China, take there think had reaccelerate you the this grow but COVID, white if space work at a China, been it in has a and And

business next I think grow. There And a a it’s we options on believe can for shareholders. value on generate a exists team keep us. our innovation now, the Andrew, open. lot question. our to work to think opportunities grow growth is still lots we it of is priority to significant for potential right that in and it of has going there, create lot to of R&D And and

Operator

with ahead. Please Nachman Gary go BMO. question comes next from The

Gary Nachman

Hi, morning. good

that the forward has to work? how With the limitations spin? certain thoughts is Slide expected a that restrictions leverage curious front. to decision don’t on by months. is that. the your XX. uncertainty, XX How RemainCo? I And or B&L target shareholders? the on full X.Xx you highlighted appeal you’ve process know then to XIFAXAN ratio with still which Bausch on XX to on B&L timing that I distributed if there sticking X.Xx if are mentioned to timeframe still the be move there is for You it the the any with are And I’m actually could of possible changed saw

Thomas Appio

Okay, Gary.

Let me from work bottom the up. just start and

question there we then the are conditions me my I to say again, remain able what committed And your we to I’ll So, yes, continue back. sense targets which to let timeline. – to we previously had are X.Xx No, would the is, & that satisfy as first sticking doing disclosed. it and X.Xx, required makes to Lomb prepared no of strategic point we work so get is, just applicable our I Bausch stated that to remarks, in believe all spinning of off as and is

not. part point decision. Norwich is month, to we of we We impacts this here of have are but relevant potential out XIFAXAN yet the hoping as regarding I like and we assess are a for or patent don’t – have evaluating as a did We we we the reason early factors to the Norwich all said were would things don’t We ruling considerations distribution were – going the before, of the see I that the in litigation. one

be we potential assess the so expect see to And And in and will the decisions, once ruling now probably to and okay. to impacts, mid-August. able receive continue we look were the to able it we

I where are. be would we Alright. where that would – that’s So, say

Gary Nachman

a follow-up? get Yes. I Can

looking to whether So, try facts other to or and how you divestitures, assets, now Thanks. been X.Xx active to at aggressive given have And Solta that and get being it’s are leverage more you uncertainty? X.Xx the target?

Thomas Appio

always we have. open at value the really really we that are looking have show What of good at say I divestitures, the to businesses to is be they would prices and but

are, it’s be what have really say price that business, the really that would always to So, got would but I it valuation. to but good be looking, we of it of value reflects a openly And are a at we may be.

Gary Nachman

for you Thank Okay. taking questions. my

Operator

comes David Please Thank go Sandler. you. from Piper ahead. The Amsellem next question with

Unidentified Analyst

David. Hey guys. questions. is much for my so taking Isaac This Thanks on for

from Just few us. a

I XIFAXAN LOE what’s have mean formation generic for established next the divest ahead? we market more what road international worst-case so, your thinking if brands your And wondering Would Bausch? XXXX, am few I brands, some for of scenario got And is follow-ups. does potential which you shape XIFAXAN earlier So, the here, to then than a how for your for assume peers? is I a

Thomas Appio

Yes.

let going I So vigorously prepared it again, mean we just remarks, let to I take what Dave, me, are defend said me in on this patent XIFAXAN. the way. our

So, that’s now. priority right the

I going I land. products. strong. need look businesses at you As are multiple, growing be today, steps it’s and is, mentioned there to this say in multiple going our if if international look all is we out, would what new What terms I is that our going where laid actions launch of had taken at you already business, – to that to is XX

We continuing are fuel pipeline. that to

If I I talked Solta, at build there business. a to look you is about take on think that great opportunity what

If we there RED-C be interesting in in look novel have We at is programs, vigor and there for what will remarks growth this of along operating what in we it that, and in very of those call, is our believe doing. is the that prepared with going, driver. the about some that touch my it in in We aesthetics but a and really pipeline at we what XIFAXAN. are did things you not looking I terms clearly, are where new talked formulations

studies. are we those patients course, recruiting Of into

it, when really, we at at, look I So, looking defending we – okay. our again, patent, are when

looking our acquisitions a – sense and then not various But So, make bolt-on could are for do forward, business. as we clearly, preparing strategies that. that move are we we like we for

is is late continue deliver talked near a in R&D in where stage. say the pipeline. the is to and this would innovation you priority for us lastly, what – build then to and to long-term about So, I point our Clearly,

we we things in I things be from XIFAXAN other will working are look think clearly with that that with innovation, or the now whether other effort that sickle cell innovation aesthetic there and can of interesting. have are that the that some things IPO R&D or an that that the on an there quite focused the standpoint, from RED-C with perspective B&L, of to along we one have able be

question. next Andrew, Okay.

Operator

with Greg go comes question next ahead. The from Securities. Please Fraser Truist

Greg Fraser

for taking the Thanks Great. questions.

FDA Trust what provided situation. towards inclusion on expected of the any move come formal out, will receive much guidance second much. is And that vivo specifics you the revised the my to into beyond can insight process just question IRS? its an Has on in so guidance study? is communication thinking have bioequivalence On resolution? new And visibility to the require? of how any do when is there Thanks from that that do might the Do anything you along have kind Granite you into you

Thomas Appio

But take I generic an we a terms what has that Trust. that terms vivo statement we what FDA Tom now, Greg. need of The will – Granite Right is, Okay, don’t would vivo. there team first speculate I know about will year study can’t point, add what our that in generics hand in there things perform the it requirement the U.S. for the of test guidance. an speculating to rifaximin get once requirement to safety in of would would multiple to has in product. in and public additional could the would the to must requirement, – be. speculate. study. I and create be But what would mean will they previously bioequivalent published, that, going But would I new we FDA outcomes bioequivalent require do be. into The rifaximin clearly, generic avoid on Clearly, is off when we guidance thoughts of of talk be say indicated what don’t would Greg, would last product-specific an then bioequivalence be. to vivo permitted bioequivalence on what in product-specific in The the to

the I to will Tom published waiting to hand Granite that, what will We over talk to With be. about guidelines are Trust. see

Tom Vadaketh

terms much last Trust, this nothing had we has – we time on the visibility, changed in Greg, actually since Granite update. of the Yes,

in confident position for remain to waiting continue run IRS to the We our course. process and are its we with through the

IRS have obviously, depend to along. do audit has not contact, have we that to rely raised the the one issue, We if been us with and and can outside But much on office, IRS. the that is the there they up. this would ready basically, from speed we the the And and local approach really rush doing process it

Thomas Appio

Andrew, next question.

Operator

comes Gerberry Please with of The Bank America. go next question Jason from ahead.

Unidentified Analyst

gating is the consideration want to This taking for Thanks sensitivity. our of factors on I follow-up questions. for Chad for Jason. what distribution morning. are Good on sort the doing Hi. or

help X.Xx. this can’t intermediate now, of is I between you comfortable X.Xx but give with a in And in timing table? how truly perspective, off leverage leverage thoughts the understood right guidance do could the you you planned your any On the as do and the ratio on just options curious the Solta, you X.Xx updated on a of the any provided distribution that could and Thank or of timeline have with And to But curious, X.Xx, ratio, updates. you to strategic XXXX? ratio know do a scenario am From I actually XXXX already all guess between X.Xx you. how comments you have facilitate is you target need have the as restrict distribution. the lot any much if leeway X.Xx are sort Solta I P&L? high recent you

Tom Vadaketh

me stab Jason. Tom let Vadaketh take that. It’s here, a Well, at

not X.Xx feel spend that recommitted the the of defined to that That’s until way referred leverage and the is efficiently X.Xx. have we it will terms have in know, covenants will commitments, that’s the to for achieve want. has you today and to to we the and in our ratios company we is the committed we we perform you what and needed continue So, as our But that remaining so operate something in that. X.X we company to achieve and

remain committed that. to we so And

of I In a terms communicated know XXXX was by timing, B&L. that

obviously, to all XIFAXAN Strategic order have we towards think need And said, evaluate ratios matter. meet referred in Tom options As will those in to that to and we those conditions and continue ratios. for work to Solta, the it. distribution an to Tom Norwich achieving I will matter the litigation we impact, working that are addition as do we the that

IPO. we the have focus, Our suspended

are potential and of potential has lots it’s business, lots a of on We very that We exciting business. focused think operating for growth.

And question we also, Tom as looking a so there at that’s every divestitures. earlier business, what we are was about are with focused other And said, on.

is public the everything up at said and valuation. for are the before, right sense, a sale as in a We company company,

I for moment, for is we us the believe And to But Solta in run the best it. at it. so we the that and think place would family consider

Thomas Appio

that like business there do I accelerate is clearly, get add continue the to to can and that, Solta. said, can expansion priority that to about we with Chad, And a The would talking lot that the to in I do focus return as Europe, Yes. to value. the right growth. is we there now and growth create

global as also as Health it benefit in our think Companies, family, I the Health of part will Bausch from Bausch structure. Tom put they

R&D structure comes to building have structure, an support the next clearly, if global on We business. to look you it products innovation to continue we create Andrew. especially ability and an have Andrew, great And bring market. this to at focus when question. a there to effort, them and

Operator

Excuse me. be go Please Umer Raffat The question from last Evercore. will from ahead.

Umer Raffat

million. that And the on be if on restricted also Lomb of RemainCo unrestricted the shareholders subsidiary think you. Salix The think saw as CEO Thanks of Salix $XX of your were Hi the Thank margin profit you is incremental I in in year-over-year I there of future business, – segment sales reduction? for time sales your that the entirety? million, here, many the down any question. was the not down $XX would one decision, as I of Should with have to longer were and the on then going again? the no for Perhaps, point mechanics being finally, plan the How subsidiary? guys. guys importantly, asked you shareholders designating shareholders. may. & more I I speak how where have forward can And a if could three the do approach of is, best of and you Bausch ever taking when an Tom, again, unrestricted spin first, second interest my

Thomas Appio

for thanks Umer, Yes. the question.

the Let’s and so. at the beginning. & we believe Again, spin-off just Bausch strategic makes one of first we the that hit to Lomb remain committed doing to sense continue

evaluating this continue Again, and process. address potential for I it to Norwich assess to I will to are going written and responsibility I issue have, to all we can make have said factors we of as light – distribution. makes distribution litigation am continue have to sure – get to the it relative we through over the What sense considerations we would pass have have and regarding we the to B&L in when impacts make I evaluate sure have I again, And regarding we the to will say to as of before, Tom continue at it, the going We are just I once I look – decision. that of unrestricting the issues he that is you. move the

Tom Vadaketh

criteria leverage X The it’s ratio. as know X.Xx X coverage Yes. to Umer, as well hi, unrestricting, Tom Vadaketh. meeting you for is as the the cost fixed

have no no there perspective, really. at I already really on So, – the acquisitions. the can at restriction they unrestrict they They their now. investments, mean difference right make my we call, There you that have B&L. heard From have point, is is ostensibly, would freedom would really operate to moment.

is restricted ratio company’s X.Xx. at a perspective, leverage From a me is to what little from for going spin target least, the to So, X.Xx unrestricted bit academic. the

criteria the that that’s so And are we following.

unrestricted your again. of terms be an third can question, sub In restricted

We haven’t that. considered really

So, myself. I speak not don’t want that. to to I am

on your side get We through. profitable totally but to And finally, and very gross clear them but when is, before, what you Salix technical don’t one-for-one have is so significant It’s the I pretty Salix flow-through, margins are basically of reduction. but a we disclosed plans And there quite at that question moment. was it’s have that pretty think last do not no closed are very am high. sure know. revenue they high as a are you and I then on a the business, we flow

Thomas Appio

– Andrew, can one last operator think we I Okay, take question.

We have just few minutes. more a

Operator

Yes, sir.

Please Sahil ahead. go from RBC. Dhingra have We

Sahil Dhingra

question remaining XX the – the the to Hi. Sahil stipulation stipulation happens were you that our Are the patent, bioequivalent vivo This they there for company Are which or final approval the the patents, be they My label, be Thank is, question Norwich once out not do Miehm. what trial, litigated HE study March is exclude for my do is you. In guidelines? first into one done publishes to that play? so FDA Can tentative there. Doug with aware decides addressed is questions. will at And taking if agreement? in to the go bench agreement. again? Thank on has second skinny you required come is case those the

Thomas Appio

Okay.

agreement just with try go the one the from skinny to the the me of in So label. on stipulation let impact first terms

in So, ruling is I that the think that know, what don’t we believe expect and with Norwich receive we we August. and to again,

the modifies on The going when to So, that’s apply what would be, have But at see we exclude would seven its say to if we is case look the agreement, stipulation Norwich HE it, patents this in the that case. indication. okay, I XIFAXAN first. has what to will been ANDA not heard for

remaining options data, So, the exclude patent. we of for weigh if the would, to ANDA or Norwich chooses, okay, modify its to all safety indication HE HE XIFAXAN asserting course,

at you there opinion. approval. just of question saying? Could we still where when – get are from seeing so be. to to was we the at we and multiple that it’s is there really your court take a again, the again, what lot And a written it. were And So, it final learn you last tentative – still the going with waiting decision things But look can we moving look last as repeat a

Sahil Dhingra

Yes.

out guidelines? study, So, do there company that there bioequivalent in I final know if is will publishes to has FDA aware for that which done once approval you tentative be tentative approval – the was supposed the one rifaximin. I got vivo the to are they or an wanted

Thomas Appio

really know don’t on that. speculate and can’t We Yes. you

Sahil Dhingra

you. Thank Okay.

Thomas Appio

Q&A. the Okay, conclude Andrew will that

Operator

second Thank you Thank you. quarter for Health our earnings attending XXXX today’s concludes Bausch conference call. This and presentation. today’s session question-and-answer

may You now disconnect.

Bausch Health Companies (BHC) 9 Aug 222022 Q2 Earnings call transcript