Valeant Pharmaceutical International, Inc. 2016 J.P. Morgan Healthcare Conference Howard Schiller Interim CEO Dr. Ari Kellen EVP, Company Group Chairman January 13, 2016 Robert Rosiello EVP, Chief Financial Officer Forward-looking Statements Forward-Looking Statements Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements regarding the expected future performance of Valeant Pharmaceuticals International, Inc. (the “Company”), including 2016 forecast revenues and guidance with respect to revenue, adjusted EPS, adjusted cash flow from operations and adjusted EBITDA, potential exclusivity risk to certain of the Company’s products, anticipated product approvals and product launches of the Company’s pipeline products, the Company’s ability to reduce leverage, the anticipated launch date of the Valeant Access Program with Walgreens and the expected impact of such program, and the Company’s short-term priorities and ability to achieve such priorities. Forward-looking statements may be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “could,” “should,” “would,” “may,” “will,” “believes,” “estimates,” “seeks,” “potential,” or “continue” and variations or similar expressions. These statements are based upon the current expectations and beliefs of management, and depend on assumptions, data or methods that may be incorrect or imprecise and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the Company's most recent annual or quarterly report filed with the Securities and Exchange Commission ("SEC") and other risks and uncertainties detailed from time to time in the Company's filings with the SEC and the Canadian Securities Administrators ("CSA"), which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on any of these forward-looking statements. The Company undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect actual outcomes, except as required by law. Non-GAAP Information To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses the following non-GAAP financial measures: Adjusted EPS and Adjusted Cash Flow from Operations. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measure can be found in documents posted on the “Investors” section of the Valeant.com website. In addition, Adjusted EBITDA is a non-GAAP financial measure that will be provided in our earnings materials going forward. The Company does not provide guidance with respect to GAAP financial measures other than revenues or provide reconciliations to GAAP of its forward-looking non-GAAP financial measures due to the inherent difficulty in quantifying certain amounts that would be required to be included in the GAAP measure of earnings per share due to their unknown effect, timing and potential significance. Examples of these items include impairments of assets, gains and losses from the extinguishment of debt, legal settlements, purchases of in-process research and development assets, and gains and losses from asset sales. By disclosing the non-GAAP financial measures referenced above, management intends to provide investors with a meaningful, consistent comparison of the Company’s baseline operating results and trends for the periods presented by excluding items that are considered by the Company not to be reflective of the Company’s ongoing results. Management uses all of the above named non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. Non-GAAP financial measures are not prepared in accordance with GAAP. Therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Note 1: The guidance in this presentation is only effective as of the date originally given, namely December 16, 2015, and will not be updated or affirmed unless and until the Company publicly announces updated or affirmed guidance. 1 Howard Schiller Interim CEO January 13, 2016 Valeant today Collection of great healthcare franchises and brands around the world Deep bench of talented people Exciting pipeline of new products Relentless focus on providing easy and affordable access for physicians and patients Remain committed to our strategy with a relentless focus on execution 3 A collection of great brands in a breadth of therapeutic areas Valeant 2016 forecast revenues Total: $12.5 – 12.7 B Ex-U.S. Developed Markets (including Ophthalmology, Dermatology, and GI sales) U.S. Gastrointestinal (GI) ~10% ~20% Emerging Markets (including Ophthalmology, ~20% Dermatology, and GI sales) U.S. Revenue: ~70% ~15% ~10% ~5% ~20% U.S. Oncology, Dentistry, Women’s Health, Neuro and Other U.S. Dermatology (Includes Solta and Obagi) U.S. Ophthalmology and Eye Care (B+L) U.S. Consumer 4 Strong Growth Platforms U.S. Gastrointestinal U.S. Dermatology Emerging markets U.S. Ophthalmology and Eye Care (B+L) (1) ~10% ~15% ~20% (2) ~20% (1) Including Solta and Obagi (2) Including Ophthalmology, Dermatology, and GI sales % 2016 Est. revenue Ex-U.S. developed markets ~10% 5 (2) U.S. Consumer ~5% U.S. Oncology, Dentistry, Women’s Health, Neuro/Other ~20% Potential Exclusivity Risk Products 2015 2016 2017 2018 2019 2020 Xenazine Targretin Atralin Tasmar Ziana Zirgan Visudyne Glumetza Zegerid Virazole Nitropress Lotemax Gel Macugen Deflux Solesta Isuprel Acanya Solodyn Istalol Elidel Moviprep Zyclara Luzu Tiazac (CAD) Annual 2015 ~$300 million ~$750 million ~$350 million ~$450 million ~$50 million Sales Limited risk relative to expected 2016 revenues of $12.5-$12.7B 6 ~$50 million How you can measure our progress in 2016 ▪ Retained all key management talent and added new key hires ▪ Dermatology returned to growth ▪ Maximized Xifaxan – created our first $1B+ brand ▪ Got approval and successfully launched – Brodalumab – Latanoprostene Bunod – Relistor Oral ▪ Delivered $100-150M in addyi sales in 2016 ▪ Brought leverage to ~4.0x by end of 2016 7 Dr. Ari Kellen EVP, Company Group Chairman Key facts on our R&D approach ▪ 6 NDAs approved in last 3 years ▪ 200+ active US programs 8% Rx R&D spend as a % of branded Rx sales ▪ Dermatology Phase II and Phase III success rates 3-5x better than industry averages ▪ Highest 5 year output1 on R&D spend in the industry 1 Number of NMEs/BLAs approved 2009-'14 for each $1 billion spent; peer set is 15 companies with the highest number of NME/BLA approvals 9 Valeant R&D at a glance 6 NDAs approved in last three years 13 200 510K and PMA approvals in last three years + active US programs 43 10 1,000 + R&D and quality employees R&D facilities 100 + MD, PHD, PharmD, JD and DMD degrees How our R&D pipeline was built Internal Inherited In-licensed / purchased In Dermatology, we have built capabilities from discovery to commercialization We have acquired new platforms and capabilities in attractive TAs We continue to invest in TAs with attractive assets We are building similar capabilities in Ophthalmology and GI Post-acquisition, we have supplemented the pipeline where required and de-risked where possible Our selection and portfolio de-risking give us an advantage Brodalumab 11 Early and late assets across TAs Early1 Late2 Significant active US programs as of Dec. 2015 8 Dermatology 22 1 6 7 6 Contact lenses Others3 26 12 Surgical GI 15 4 Consumer Opthalmology 7 4 20 3 9 2 6 5 12 40 early 72 late 17 1 Prior to Phase III for Pharma, 2018+ expected launch for others 3 Includes aesthetics, women’s health, and generics 112 total 2 Includes Phase III and FDA submitted products 12 32 US branded and generic drugs pipeline Dermatology GI Early stage (Pre Ph. III) Ophthalmology Women’s health Generics In-house development Late stage (Ph. III - submission) SAL-020: HAE IDP-120: Acne IDP-118: Psoriasis Relistor Oral: Opioid induced constipation SAL-021: RA IDP-125: Actinic keratosis IDP-121: Acne SAL-024: Crohn’s SAL-022: Diabetes IDP-131: Psoriasis IDP-124: Atopic dermatitis Brinzolamide Gx: OAG SAL-023: Cirrhosis IDP-126: Acne IDP-122: Psoriasis BLG020: Disclosing agent BLO-020: Inflammation IDP-127: Anti-fungal IDP-123: Acne BLG021: Anti-infective SPT-201: HSDD IDP-128: Actinic keratosis VAL-BRO-03: Psoriatic arthritis BLG022: Anesthetic IDP-129: Acne Brodalumab: Psoriasis BLG023: Anti-infective IDP-130: Acne BLO-021: Cystoid Macular edema EGP-437: Anterior uveitis Latanoprostene Bunod: OAG BLO-022: Post-operative inflammation 13 US Devices pipeline Early stage Aesthetics Contact lenses Surgical In-house development Late stage SOF-010: Skin resurfacing BLC-001: SVS SOM-010 Vascular Lesions BLS-021: Retina SOT-011: Fine Lines & wrinkles BLC-002: SVS BLC-007: MF BLS-022: Retina SOT-010: Fine Lines & wrinkles BLC-003: SVS/MF/fA BLC-008: Astigmatism BLS-023: Retina BLS-001: Cataract BLC-004: Toric BLC-009: Astigmatism BLS-024: Retina BLS-002: Cataract BLC-005: SVS/MF BLS-014: Refractive BLS-025: Retina BLS-003: Cataract BLC-006: SVS BLS-015: Cataract BLS-026: Retina BLS-004: Cataract BLS-008: Cataract BLS-016: Cataract BLS-027: Retina BLS-006: Cataract BLS-009: Retina BLS-017: Therapeutics BLS-028: Retina BLS-007: Cataract BLS-010: Cataract BLS-018: Retina BLS-029: Retina BLS-011: Cataract BLS-019: Retina BLS-030: Retina BLS-012: Retina BLS-020: Retina BLS-031: Retina BLS-013: Retina BLS-005: Retina BLS-032: OEM 14 Select pipeline opportunities US Prevalence Expected launch Opioid induced constipation (OIC) with chronic noncancer pain ~3.7M 2016 (PDUFA Date April 19th) Latanoprostene Bunod (LBN) Reduction of Intraocular pressure in patients with Open Angle Glaucoma (OAG) and Ocular hypertension ~3.0M 2016 ((PDUFA Date July 21st) Brodalumab Moderate to severe plaque psoriasis ~9.5M 2016 IDP118 Moderate to severe plaque psoriasis ~9.5M 2017/18 Drug1 Indication Relistor Oral 1 Product candidates, not yet approved by the FDA Source: Decision Resources, BioMed Tracker 15 Valeant Access Program with Walgreens ▪ Objectives: – Ensure affordable access to Valeant products that doctors choose to prescribe (for eligible patients) – Jointly take costs out the healthcare system ▪ Status – Signed December 14th 2015: 20 year partnership ▫ Strong ongoing momentum and collaboration between Walgreens/Valeant teams – Two distinct programs ▫ U.S. Brands Program: first phase (dermatology) operational January 15, 2016, with ophthalmology products and Addyi to follow shortly thereafter ▫ U.S. Brand for Generic program: expected to be operational Mid 2016 – Exploring additional collaborations beyond the U.S. 16 Two distinct programs U.S. Branded Access Program (Phase 1 (derm) on Jan 15th) U.S. Brand for Generic Program (Expected Mid-2016) ▪ Patient access and co-pay program to ensure affordable access to branded products ▪ For selected products, make branded product available at generic price ▪ 25+ brands across Dermatology, Ophthalmology Rx, and Addyi ▪ ▪ 10% WAC price reduction (weighted average) across Derm and Ophth Rx Currently Valeant has sub 5% market-share creating a meaningful volume opportunity ▪ In process of building a complementary network of independent pharmacies Common program features ▪ ▪ Products on consignment, Walgreens does not take title Walgreens to be paid fee-for-service for distribution and fulfillment services 17 Valeant’s new branded access program ▪ Ensure affordable access to Valeant products that doctors choose to prescribe (for eligible patients)1 2 ▪ Take costs out the healthcare system ▪ Allow caregivers to focus their efforts on patient care ▪ Walgreens and Valeant teams prepared for Jan 15th launch of Dermatology brands; Ophthalmology Rx and Addyi to follow 1 Commercial insured and uninsured only – no government plans 18 Robert Rosiello EVP, Chief Financial Officer Q4 highlights Confirming Q4 and 2015 full-year guidance Strong continued momentum across business units Strong year-over-year dermatology script growth even with disruption (retained approximately 80% of dermatology scripts) Continued strong GI growth driven by double-digit Xifaxan script growth and strong script growth in other key products (Relistor, Apriso, Ruconest) Expect ~10% same store organic sales growth for full year, despite negative Q4 organic growth Preparing for launch of new Branded Access Program with Walgreens 20 Latest 2015 guidance vs. 2014 actual Latest 2015 Guidance (12/16/15) 2014 Actual Latest 2015 Guidance vs 2014 Actual Revenue $10.4 - $10.5B $8.29B 26% Adj. EPS* $10.23 - $10.33 per share $8.36 per share 23% >$2.95B $2.5B 18% Adj. Cash Flow from Operations* * Non-GAAP, for Non-GAAP definition – See December 16, 2015 Presentation: Valeant: An Enduring Engine for Growth, Pages 131 and 132 See Note 1 21 2016 guidance vs. latest 2015 guidance 2016 Guidance Latest 2015 Guidance (12/16/15) 2016 Guidance vs Latest 2015 Guidance Revenue ~$12.5B – 12.7B $10.4B – 10.5B ~21% Adj. EPS* ~$13.25 – 13.75 per share $10.23 – 10.33 per share ~31% $6.9 – 7.1B >$5.4B ~30% Adj. EBITDA* * Non-GAAP, for Non-GAAP definition – See December 16, 2015 Presentation: Valeant: An Enduring Engine for Growth, Pages 131 and 132 See Note 1 22 Bridge from 2016 Adjusted EBITDA* to 2016 Debt Paydown (detail to 12/16/15 presentation) (US$M) Adjusted EBITDA* (midpoint) ~$7,000 Cash Interest ~$1,600 Cash Taxes (~5% rate) ~$250 Increase in Working Capital ~$600 Cash Restructuring ~$200 Contingent Consideration/Milestones/Payments (e.g., Sprout, brodalumab) ~$925 Capital Expenditure ~$350 Repayment of outstanding revolver balance (Yearend 2015) plus discretionary cash ~$825 Debt Paydown >$2,250 * Non-GAAP, for Non-GAAP definition – See December 16, 2015 Presentation: Valeant: An Enduring Engine for Growth, Pages 131 and 132 23 Clear short-term priorities Continue to deliver strong performance across businesses Keep organization focused Drive disciplined execution through decentralized model Return dermatology to growth Launch Walgreens Branded Access Program Prepare for Walgreens Branded Generics Access Program Continue growth momentum in Salix Driven by Xifaxan HE and IBS-D Successfully launch key R&D products Focus on debt pay down 24
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