2. 1
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 integration of the Dendreon and Salix businesses, the amount and timing of expected synergies, expected future performance, including
2015 guidance with respect to revenue, Cash EPS, organic growth, our inventory reduction program, and our outlook with respect to performance in
2016, expectations with respect to gross margins, marketing efforts, debt reduction, and restructuring expenses, the timing of and outcome of
regulatory approvals and commercial plans with respect to product candidates. Forward-looking statements may generally be identified by the use
of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,” or
“continue” and variations or similar expressions. These statements are based upon the current expectations and beliefs of management 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 and detailed from time to time in Valeant’s other filings with the Securities and Exchange Commission and the Canadian Securities
Administrators, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on any of these forward-
looking statements. These forward-looking statements speak only as of the date hereof. Valeant 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.
Non-GAAP Information
To supplement the financial measures prepared in accordance with generally accepted accounting principles (GAAP), the Company uses non-
GAAP financial measures that exclude certain items. Management uses non-GAAP financial measures internally for strategic decision making,
forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide
investors with a meaningful, consistent comparison of the Company’s core operating results and trends for the periods presented. 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. The Company has provided preliminary results and guidance with respect to cash earnings per share, adjusted cash flows from operations
and organic product growth rates, which are non-GAAP financial measures. The Company has not provided a reconciliation of these preliminary and
forward-looking non-GAAP financial measures due to the difficulty in forecasting and quantifying the exact amount of the items excluded from the
non-GAAP financial measures that will be included in the comparable GAAP financial measures. Reconciliations of historical non-GAAP financials
can be found at www.valeant.com.
Note 1: The guidance in this presentation is only effective as of the date given,
April 29, 2015, and will not be updated or affirmed unless and until the Company
publicly announces updated or affirmed guidance.
3. 2
1. First Quarter 2015 Results
2. Business Performance
3. Dendreon and Salix Integration
4. Financial Summary and 2015 Guidance
Agenda
4. 3
Continued outperformance of U.S. businesses, driven by recent
product launches, fueled top line and bottom line results
Exceeded Q1 Guidance despite losing $140 million of revenues and $0.12
Cash EPS due to the rising U.S. dollar
Excluding negative impact from foreign exchange and divestiture of
injectable business, revenue increased 27% and Cash EPS increased
50% Y/Y
Strong performance from most business units around the
world helped to fuel 15% same store organic growth in Q1
Third consecutive quarter of organic growth >15%
Salix and Dendreon integrations largely complete
Salix to deliver more than $530 million in synergies and achieve $500
million run rate synergies by the end of Q2
Dendreon to deliver more than $130 million in synergies and achieve 90%
run rate synergies by year-end
Dendreon profitable in Q1 with revenues as expected
Q1 Highlights (1/2)
5. 4
Increasing 2015 Cash EPS guidance to $10.90 - $11.20
Based on outperformance of Legacy Valeant, coupled with contributions
from Salix and Dendreon
Total company organic growth > 10% (same store) Q2 through Q4;
Bausch + Lomb organic growth ~ 10% full year 2015
Reconfirming 20%+ Cash EPS accretion and expectation to
exceed $7.5 billion EBITDA in 2016
Q1 Highlights (2/2)
6. 5
Q1 2015 Q1 2014 Y/Y%
Adjusted
Y/Y%(a),(b)
Total Revenue $2.19 B $1.89 B 16% 27%
Cash EPS $2.36 $1.76 34% 50%
Salix Acquisition Related
Includes ($0.01) impact from incremental shares issued
Excludes ($0.02) impact from cash interest expense for debt issued
prior to close
Q1 2015 Financial Results
a) FX Impact: Revenue -$140 million and Cash EPS -$0.12
b) 2014 includes $53 million in revenue and $0.11 Cash EPS from divested injectable business
7. 6
Same Store Sales – Y/Y growth rates for businesses that have
been owned for one year or more
Q1 2015
Total U.S. 26%
Total Developed 18%
Total Emerging Markets 7%
Total Company 15%
Pro Forma – Y/Y growth rates for entire business, including
businesses that have been acquired within the last year
Q1 2015
Total U.S. 36%
Total Developed 25%
Total Emerging Markets 7%
Total Company 21%
Q1 2015 Organic Growth
8. 7
Country/Region Q1 2015 Product Sales Y/Y%
United States $321 14%
Consumer $111 4%
Rx Pharma $116 32%
Surgical $48 0%
Contact Lens $48 17%
Other Developed Markets $240 -4%
Emerging Markets $184 7%
Total (a) $745 6%
Bausch + Lomb Organic Growth
Other Developed Markets impacted by Japan’s -14% Y/Y due to April 1, 2014 sales
tax increase in Japan, which resulted in incremental Q1 2014 demand
Excluding impact from Japan – Bausch + Lomb grew 8% Y/Y
(a) Excludes Bausch + Lomb generics which are managed and reported with Valeant generics and total company organic growth
9. 8
Top 20 products revenue of $857M in Q1 2015, representing
40% of total revenue
Largest product contributed ~3% of Q1 revenue
Top 10 products contributed 27% of Q1 revenue
Top 20 products, excluding newly acquired products
(Provenge, Isuprel, Nitropress), grew 36% Q1 2015 over Q1
2014
Majority of growth from volume
Once Salix wholesaler inventory levels have normalized,
4-5 Salix products will enter the Top 20
Q1 2015 Top 20 Brands
12. 11
U.S. Dermatology Highlights
All promoted products had positive organic growth
Driven by new product launches, dermatology grew 38% Y/Y
Jublia
Jublia TRxs Up 87% Q/Q resulting from sales force and DTC efforts
New Jublia Tennis Commercial aired April 20th featuring John McEnroe
Jublia 8mL launch planned for early May
#1 among Dermatologists with 50% market share
#1 among Podiatrists with 38% market share
Primary care writers continue to grow
Onexton
January launch; script trends similar to Jublia launch; ~5,000 scripts per week after
14 weeks
First commercial aired April 6
Fully integrated DTC campaign accelerating growth
Retin-A Micro Franchise
Sales up >50% Y/Y
Luzu
New Luzu DTC campaign accelerated weekly TRx to new high
Obagi and Solta
Combined growth of 24% Y/Y
13. 12
Contact Lenses
Growth driven by the success of Biotrue ONEday
Biggest revenue quarter for Biotrue ONEday since launch, growing >100% Y/Y
Biotrue ONEday Toric approved
Bausch + Lomb Ultra continues to be well received by healthcare professionals
and is currently selling to capacity (pilot line only)
Bausch + Lomb Ultra production from first commercial line beginning in May
Ophthalmology Rx
Continued strong double digit growth across multiple brands
Bausch + Lomb Ultra Multifocal and Toric approved
Surgical
Double digit growth for Trulign, enVista, Stellaris/PC and VICTUS procedures Y/Y
Growth offset decline in Excimer laser and conversion from sales to leases of
VICTUS Femtosecond lasers
3 product launches including VICTUS which received 510K clearance on new
software and hardware
Minimal market growth in cataract surgeries Y/Y
U.S. Eye Health Highlights
14. 13
Neuro & Other/Generics
Organic growth driven by Xenazine, Ammonul and Virazole
Consumer
Strong organic revenue growth from CeraVe (40%), Preservision (20%), Occuvite
(15%) and Soothe XP (19%)
Lens care grew 17% Y/Y driven by 24% growth in BioTrue Multipurpose Solutions
Oral Health
High double digit growth driven by strong volume growth for Arestin
Continued additions to the dental product portfolio
Other U.S. Business Highlights
15. 14
Emerging Markets - Europe/Middle East, $212M Revenues, 6%
Y/Y Organic Growth
Strong organic growth in Poland (29%) and the Middle East (26%)
Russia organic growth negative given strong consumer buying in Q4 14 ahead of
retail price increases
Emerging Markets - Asia, $125M Revenues, 10% Y/Y Organic
Growth
Strong organic growth across most markets including Thailand (30%+), China
(17%), S. Korea (15%), and Malaysia (13%)
Emerging Markets - Latin America, $89M Revenues, 7% Y/Y
Organic Growth
Mexico delivered 11% organic growth
ROW Developed, $361M Revenues, -1% Y/Y Organic Growth
Strong performance in Canada and Australia, with 9% and 3% organic growth,
respectively
Japan declined by (10%) Y/Y due to April 1, 2014 sales tax increase which resulted
in incremental Q1 2014 demand
Rest of World Business Highlights
16. 15
Dendreon off to a strong start
Revenue on plan
Profitable in Q1 as a result of restructuring of the business
All synergies identified with total plan of ~ $130 million+ (including
manufacturing)
90% of synergies on a run rate basis to be achieved by year-end
Gross margins in mid-60% by year-end
Focus on new accounts while maintaining support with existing users
Renewed emphasis on urology in addition to oncology
Dendreon Integration
17. 16
Salix Integration (1/3)
Completed acquisition on April 1, 2015
New Leadership team appointed
Bill Bertrand: General Manager, former COO Salix
John Temperato: Head of Sales, previously held senior sales positions at
Salix
Tom Hadley: Head of Marketing, former marketing lead for Jublia and
Luzu
Synergies
All synergies identified, plan to exceed original synergy guidance of $500M
with $530 million in synergies now expected
$500 million run rate synergies to be captured by end of Q2 – remainder by
year-end
All office based employees notified Day 1
Order to cash processes integrated Day 1
18. 17
Recent Salix TRx Trends (2/3)
+19% y/y
Sources: SHS PHAST and Company Data
19. 18
Salix Integration (3/3)
Expanded and refocused sales forces
Maintaining three specialty GI sales forces with some realignment
Expanding Hospital and Federal teams which will also promote select
Valeant products
Creating new sales force to provide greater focus on pain covering Relistor
and Valeant brands
Plan to cover primary care through specialty sales force coupled with
extensive DTC advertising once IBS-D indication is approved
Refocused marketing
Greater focus on DTC and patient engagement across brands
Xifaxan - IBS-D Update
PDUFA date of May 28
In discussion with the FDA on labeling
20. 19
Key R&D Milestones for 2015
Product Category Action Status
EnVista Toric Eye Health File PMA 1H 2015
Additional studies requested
To Be Filed mid- 2016
Luminesse™ (Brimonidine) Eye Health File NDA 1H 2015 Filed NDA in March
Vesneo (glaucoma) Eye Health File NDA 1H 2015 On Track
Lotemax Gel Next Gen Eye Health File NDA 2H 2015 Filing delayed until mid-2016
Ultra Multi Focal Eye Health File PMA 1H 2015 Approved
Ultra Toric Eye Health File PMA 2H 2015 Approved
BioTrue Toric Eye Health File PMA 2H 2015 Approved
IDP-118 (moderate to
severe plaque psoriasis)
Derm Initiate Phase III 1H 2015 Phase III Initiated
IDP – 120 (novel acne
combination )
Derm Initiate Phase II 2H 2015 On Track
Arestin LCM Oral Health File NDA 2H 2015 On Track
Xifaxan (IBS-D Indication) Gastrointestinal PDUFA Date May 28 On Track
23. Geographic breakdown
64%
8%
10%
6%
4%
8%
United States
Emerging Europe, Africa, & Middle East
Asia
Western Europe
Canada / Australia
Latin America
Based on actuals & projected 2016 revenue
Q1 15
64%
20%
8%
4%
6%
10%
19%
49%
12%
9%
22
12%
9%
5%
7%
13%
53%
Q1 14 2016 Est.
9%
7%
3%
4%6%
71%
24. 23
Restructuring and Integration Expenses
Q1 restructuring and integration expenses of $65M
As projected, pre-2015 transactions represented < $25M; Majority related
to Bausch + Lomb Waterford plant
2015 transactions represented $41M in the quarter of which Dendreon was
$35M
Q2 restructuring and integration expenses for pre-2015
transactions expected to be < $10M
Salix and Dendreon
Salix: Restructuring and integration expenses expected to be ~$300M
Significant restructuring accounting charge to occur in Q2 2015, while cash
severance will be paid out over 1-3 years, depending upon employee position
Dendreon: Additional $20M restructuring charge in 2015 (for a total of $55M
or ~40% of synergies)
25. 24
Adjusted cash flow from operations excludes build up of A/R related to
Marathon where we did not purchase A/R
Under the terms of a renegotiated managed care contract, two quarterly
rebate payments made in Q1 2015
Excluding second payment, adjusted cash flow would be $757 million,
or 94% cash conversion
Investment in working capital was $78 million driven largely by an increase
in inventory
Cash Flow from Operations
Q1 2015
Adjusted Net Income $809 million
GAAP Cash Flow from
Operations $491 million
Adjusted Cash Flow from
Operations $708 million
Cash Conversion 88%
26. 25
Post- Salix: $31.2B total debt
Weighted average cost of debt: 5.1%
~ 40% bank / 60% bonds
Revolver currently undrawn
Bonds for Salix acquisition consolidated on Balance Sheet in Q1
even though transaction had not yet closed
~ $10.1 B bonds closed into escrow on March 27th
Proceeds from bonds included in restricted cash
Proceeds from equity included in cash and cash equivalents
Fees and expenses related to Salix debt financing in accrued liabilities
Accounts Receivable DSO* in line with previous years (calculated
using gross sales):
Q1 2014: 72 Days
Q1 2015: 71 Days
* Gross revenue is disclosed in 10K for calculation purposes
Balance Sheet
27. 26
Updated 2015 Guidance (1/2)
Organic growth > 10% (same store) expected Q2 through Q4
Bausch + Lomb organic growth ~10% for full year 2015
Timing of synergy capture
Salix to deliver more than $530 million in synergies and achieve $500
million run rate synergies by the end of Q2
Dendreon to deliver more than $130 million in synergies and achieve
90% of run rate synergies by year-end
Debt and Shares Outstanding
Weighted average cost of debt: ~5.1%
350 million fully diluted shares outstanding Q2 through Q4
New 2015 Previous 2015
Revenues $10.4 - $10.6 billion $9.2 - $9.3 billion
Cash EPS $10.90 - $11.20 per share $10.10 - $10.40 per share
28. 27
Updated 2015 Guidance (2/2)
Salix revenue of ~$1.0 billion
Does not assume IBS-D approval; we will update guidance post approval
Assumes inventory levels reduced to 1.5 months or less by year end
Operating cash flow
Legacy Valeant will continue to target greater than 90% cash conversion
Salix operating cash flow impacted by wholesaler inventory work down program
Will update guidance for operating cash flow when work down program is well under
way
Guidance does not include use of balance sheet
Expect debt paydown and small acquisitions
Q2 Guidance
Revenues: $2.45 - $2.55 billion
Cash EPS: $2.40 - $2.50
Reflects significant inventory work down of Salix products
2016 Outlook
Reconfirm 20%+ Cash EPS accretion assuming IBS-D approval by end of 2015
Expect to exceed $7.5B EBITDA in 2016
