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 closing of pending acquisitions, the integration of the Dendreon and Salix businesses and the amount and timing of expected synergies,
expected future performance, including guidance with respect to revenue, Cash EPS, adjusted cash flow from operations and organic growth, our
inventory reduction program, and expectations with respect to the timing of and outcome of development programs, 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 U.S. generally accepted accounting principles (GAAP), the company uses non-
GAAP financial measures that exclude certain items, such as amortization of inventory step-up, amortization of alliance product assets & property,
plant and equipment step up, stock-based compensation step-up, contingent consideration fair value adjustments, restructuring, integration,
acquisition-related and other costs, In-process research and development, impairments and other charges, ("IPR&D"), legal settlements outside the
ordinary course of business, the impact of currency fluctuations, amortization including intangible asset impairments and other non-cash charges,
amortization and write-down of deferred financing costs, debt discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of debt,
(gain) loss on assets sold/held for sale/impairment, net, (gain) loss on investments, net, and adjusts tax expense to cash taxes. 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.
Note 1: The guidance in this presentation is only effective as of the date given,
July 23, 2015, and will not be updated or affirmed unless and until the Company
publicly announces updated or affirmed guidance.
3. 2
Exceeded top line and bottom line Q2 guidance
Continued outperformance of U.S. businesses, specifically contact lenses,
dental, dermatology, neurology/generics and ophthalmology RX
Strong results in Asia, Australia, Canada, Mexico and Middle East/North
Africa
Fourth consecutive quarter of >15% same store organic growth
Salix off to fast start
Strong Xifaxan TRx uptake following IBS-D approval
NDA submitted for Relistor Oral on June 23rd
Wholesaler inventory reduced from 4-5 months at April 1st close to 3-3.5
months as of June 30th - progress as planned
$500M in run-rate synergies already achieved, $530M by end of year
Dendreon exceeding expectations on revenue and profitability
Achieved $74M in sales
Revenues grew ~18% percent Q2/Q1
Achieved gross margin of ~64% and operating margin of ~40%
Q2 2015 Highlights (1/2)
4. 3
M&A update
Eight tuck-in deals signed or closed so far this year
Annual update of our M&A performance since 2008
Increasing guidance for 2015
Continued outperformance of legacy Valeant and approval of IBS-D
Total company organic growth > 10% (same store) for the
remainder of the year
2015 guidance of $10.7-11.1B revenue, $11.50-$11.80 cash EPS
Q3 guidance of $2.6-2.8B revenue, $2.60-$2.70 cash EPS
Q4 guidance of $3.2-3.4B revenue, $3.98-$4.18 cash EPS
Q2 2015 Highlights (2/2)
See Note 1.
5. 4
Q2 2015 Financial Results
Q2 2015 Q2 2014 Y/Y%
Adjusted
Y/Y% (a)
Total Revenue
$2.7 B
(guidance $2.45 - 2.55)
$2.0 B 34% 27%
Cash EPS
$2.56
(guidance $2.40 – 2.50)
$1.91 34% 43%
a) FX Y/Y Impact: Revenue $173M and Cash EPS ($0.13), Salix impact of $313M and Cash EPS ($0.04)
6. 5
Same Store Sales – Y/Y growth rates for businesses that have
been owned for one year or more
Q2 2015 YTD 2015
Total U.S. 32% 29%
Total Developed 24% 21%
Total Emerging Markets 4% 6%
Total Company 19% 17%
Pro Forma* – Y/Y growth rates for entire business, including
businesses that have been acquired within the last year
Q2 2015 YTD 2015
Total U.S. 21% 27%
Total Developed 18% 21%
Total Emerging Markets 5% 6%
Total Company 15% 18%
Q2 2015 Organic Growth
* Total company pro forma excluding Salix ~20%.
7. 6
Country/Region Q1 2015
Product Sales
Q2 2015
Product Sales
Y/Y% YTD%
United States $321M $354M 10% 12%
Consumer $111M $119M 1% 3%
Rx Pharma $116M $128M 21% 26%
Surgical $48M $56M 1% 0%
Contact Lens $48M $51M 19% 18%
Other Developed
Markets
$240M $261M 4% 0%
Emerging Markets $184M $220M 10% 9%
Total (a) $745M $836M 8% 7%
Bausch + Lomb Organic Growth
(a) Excludes Bausch + Lomb generics which are managed and reported with Valeant generics in total company organic growth
8. 7
Top 20 products revenue of $1.1B in Q2 2015,
representing 40% of total revenue
Xifaxan contributed 5% of Q2 revenue
Jublia now our 2nd largest product, with annual run rate sales of
~$450M
Provenge now our 3rd largest product, with annual run rate sales of
~$300M
Top 10 products contributed 28% of Q2 revenue
Growth of Top 20 products
32% same store basis
Excluding new product acquisitions, approximately half of our
growth came from volume
Q2 2015 Top 20 Brands
11. 10
U.S. Dermatology Outperforming
Jublia
#1 branded product for onychomycosis
Successful 8mL launch in May
29% of TRx’s are 8mL
TRxs up 37% Q2/Q1; up 55% on a 4mL equivalents basis
Onexton
Launched TV ad campaign April 6th
TRx volume at 8K per week and growing
Luzu
TRxs up 55% Q2/Q1
Base business TRxs continue to grow
Solodyn +24% Y/Y
Ziana + 30% Y/Y
Atralin + 28% Y/Y
Elidel +14% Y/Y
Zyclara +54% Y/Y
12. 11
Contact Lenses
Bausch + Lomb ULTRA®
~$9M in net sales
First commercial line operational, with yields tracking to schedule
Second line will commence production in Q4; lines 3&4 in 2016
Lines 5 and 6 approved
Biotrue® ONEday growing 4x category, up 56% Y/Y
Six additional Biotrue® ONEday lines planned
Additional product launches planned
National launch of Biotrue® ONEday for Presbyopia High Add in August
Bausch + Lomb ULTRA® for Presbyopia in Q4
Ophthalmology Rx
Strong growth across promoted brands, driven by Lotemax Franchise and Prolensa
Vesneo 0.024% filed with the FDA
Surgical – continues to gain share as we broaden offering
Continued growth for Stellaris/PC and Victus for both systems and procedures
Crystalens, Trulign, enVista and Monofocals continue to gain share
U.S. Eye Health Continues Strong Growth
13. 12
Neuro & Other/Generics
Continued strong double digit Y/Y growth
Several products now promoted by Salix hospital and pain sales teams (e.g.,
Ammonul, Bupap)
Continued strong performance of Orphan diseases products portfolio (Syprine,
Cuprimine) for treatment of Wilson’s Disease
Consumer
Double digit demand growth for CeraVe, Preservision and BioTrue MultiPurpose
Solutions
Dental
Strong double digit Y/Y growth, driven by Arestin
Rapid uptake of recently acquired Neutrasal for treatment of general dry
mouth/oral mucositis
Other U.S. Business Highlights
14. 13
Strong Organic Growth in Rest of World
China
▪ $72M
▪ 15% Y/Y
Canada
▪ $80M
▪ 7% Y/Y
Middle East/
North Africa
▪ $42M
▪ 18% Y/Y
Russia
▪ $65M
▪ 7% Y/Y
Australia
▪ $48M
▪ 6% Y/Y
Mexico
▪ $59M
▪ 12% Y/Y
South Korea
▪ $15M
▪ 23% Y/Y
South Africa
▪ $15M
▪ 12% Y/Y
Western
Europe
▪ $202M
▪ 5% Y/Y
15. 14
Key R&D Milestones Achieved
Xifaxan for IBS-D indication
Relistor Oral NDA filed
Revenues and EBITA significantly ahead of deal model
IBS-D update
Immediate Xifaxan script growth uptake post-approval
Soft launch immediately after approval
Sales force trained immediately upon approval
Only package insert being promoted at this time
Revamped salesforce compensation model
Wholesaler inventory reduction on plan (3-3.5 months at end of June
30th from 4-5 months at April 1st close)
Salix Off to Fast Start
16. 15
Strong Xifaxan NRx Uptake following IBS-
D Approval
Source: Symphony.
+33% Y/Y since
IBS-D approvalIBS-D approval 5/27/15
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
24-Apr
1-May
8-May
15-May
22-May
29-May
5-Jun
12-Jun
19-Jun
26-Jun
3-Jul
10-Jul
2015 NRx 2014 NRx
+15% Y/Y
through May
17. 16
Results of Salix Pipeline Review
Project Status
Uceris Foam
Ulcerative colitis
Expected to launch in Q4
Relistor (Oral)
Opioid-induced constipation
Filed
Rifaximin EIR
(extended intestinal release)
Crohn’s Disease
In discussions with partner, Alfa
Wassermann
Rifaximin SSD
(soluble solid dispersion)
Early decompensated liver cirrhosis
Continuing to fund
Sans-300
Rheumatoid arthritis
Partner/sell
Ruconest
Prophylactic treatment of hereditary angioedema
Continuing to fund
Tablet Prep
Bowel Purgative
Failed toxicology screen
Cycloset Reformulation
Type 2 diabetes
Continuing to fund
18. 17
BD Update – Eight Deals Closed/Signed
Deal Status Rationale
Amoun
MENA branded generics
Signed Adds to existing business to create ~$500M+
business in MENA region, one of the fastest
growing emerging markets
Humax
Branded generics
Signed Entry into Colombia market
Paragon
Specialty contact lens
Closed Strengthens custom contact lens business with
Ortho-K lenses for myopia control
Commonwealth
Diagnostics
Signed Diagnostic for IBS, addition to GI platform and
platform for future diagnostics
Invado
Dental
Closed Dry mouth addition to dental portfolio
(Neutrasal)
Unilens
Specialty contact lens
Signed Entry into custom soft contact lenses
Acrivet
Animal Health
Closed U.S. and European Animal Health portfolio
Eyegate
Ophthalmic Rx
Closed Late stage clinical ophthalmology product for
anterior uveitis
+26% Y/Y since
IBS-D approval
~$225M revenue
~$60M revenue
19. 18
Amoun at a Glance
Leading local branded generics company in Egypt
Leading brand name with well established brands
~800 sales reps across Egypt
Strong local product development and manufacturing capability
Strong platform for further expansion across Middle East and North
Africa
Adds ~$225M to our existing business in Middle East and North
Africa, one of the fastest growing emerging markets. We
expect our total business to be ~$500M in 2016
Continued double-digit growth expected
Predominately cash pay markets
Strong fundamentals with GDP and population growth
Portfolio focused at the middle class
20. 19
Deal Scorecard Since 2008
Deal activity since 2008
▪ ~140+ acquisitions / licenses / co-promotes
▪ $40B+ in capital deployed
Target high hurdle rates
▪ IRRs of at least 20%
▪ Statutory tax rates
▪ Cash payback period of 6 years or less
Financial discipline
▪ Track top line and EBITA by quarter for every acquisition
▪ Results shared with Valeant Board every quarter; update
provided to investors annually
▪ Senior management compensation tied to past deal
performance
21. 20
M&A Summary (USD)
Large
($1B+)
Mid
($300M -$1B)
Small
(< $300M)
~$5,000
$ Deployed
($M)
~$30,000
• 10 of 11 tracking to 20% IRR or
higher
• ~50 deals in aggregate performing
above 20% IRR
~$2,500
• Biovail, Medicis, B+L, and Salix: all in-
line or significantly ahead of deal model
Deal Performance
22. 21
USD Millions
Cumulative EBITA Cumulative Net Income
USD Millions
Returns on Acquisitions 2008 - Q2 2015
12.4
Achieved
+18%10.5
Deal
Model
7.4
11.8
Deal
Model
Achieved*
+59%
* Includes corporate tax structure
24. 23
Global Business
Unit
6/30/13
Last 12 Months
Y/Y%
(Previous
Ownership)
6/30/15
Last 12 Months
Y/Y%
(Valeant
Ownership)
LTD
Valeant
Ownership
Consumer 5% 5% 6%
Rx Pharma 4% 15% 14%
Surgical 2% 6% 8%
Contact Lens (3%) 8% 6%
U.S Generics (2%) 20% 19%
Total (a) 2% 9% 9%
Bausch + Lomb Organic Growth has Significantly
Improved Under Valeant
(a) U.S. Generics only included in Bausch + Lomb organic growth through 12/31/14 at which time the business was
integrated with the Valeant generics portfolio
25. 24
Key Observations from 140+ deals since 2008 (1/2)
Large deals have delivered the most upsides
Accelerated growth through decentralized operating model (e.g. Bausch +
Lomb: every significant market in the world)
Captured upside from pipeline products that were not built into the deal
model (e.g. Medicis: Luzu, BV Metrogel; Biovail: fenofibrate; Bausch +
Lomb: Ultra, PeroxiClear)
Accelerated growth of core and under-focused products (e.g. Biovail:
Wellbutrin XL, Xenazine; Medicis: Ammonul, Zyclara, Vanos; Bausch +
Lomb: BioTrue ONEday, Lotemax Franchise, Trulign)
Unidentified gems (e.g. Bausch + Lomb: specialty lens)
Consistently exceeded synergy forecast
Provided new platforms for growth
Reinvigorated performance of undermanaged assets in mid-to-small
sized deals
Notable turnarounds (e.g. Carac, Duromine, Elidel, Arestin, Retin-A-
Franchise)
Products taken to new markets (e.g. CeraVe, Obagi, Solta, PharmaSwiss,
Sanitas)
26. 25
Captured unmodeled revenue synergies (e.g., Medicis: alternative
fulfillment; Bausch + Lomb: consumer scale; Salix: Hospital and Federal
account teams)
Retained key organizational talent and expertise:
Salix: Philippe Adams, Bill Bertrand, John Temperato
Bausch + Lomb: Tom Appio, Joe Gordon, Fred Hainsworth, Deb Jorn, Mark
McKenna, Sharon Tonetta, Tracy Valorie, Gaelle Waltinger
Medicis: Erin Browder, Rick Reynolds, Gary Tanner, Dave Wood
Biovail: Tanya Carro, Seana Carson, Alex Matheson
Four deals have not met our IRR hurdle
Neotensil (U.S) - discontinued
Vita Direct (Russia) – trying to resolve
Vital Science (Canada) - divested
PFI (Dr.Lewinn’s) (Australia) - divested
Key Observations from 140+ deals since 2008 (2/2)
28. 27
Valeant
(Ex. Salix) Salix Combined
Total Revenue $2,419M $313M $2,732M
Cost of Goods Sold (% of product sales) 24% 15% 23%
SG&A (% of total revenue) 27% 17% 25%
R&D Expense $56M 25M $81M
Operating Margin (% of total revenue)
(excluding amortization) 47% 61% 49%
Interest/Taxes/Other $249M $185M $434M
Adjusted Earnings $893M $4M $897M
Cash EPS (Contribution) $2.60 ($0.04) $2.56
Fully Diluted Share Count 343M 351M
Disaggregation of Q2 Financial Results
29. 28
Disaggregation of Q2 Adjusted Cash Flow
Valeant
Excl. Salix
Salix Combined
Total
GAAP Cash Flow $714M ($303M) $411M
Add:
Restructuring $41M $42M $83M
Stock Based Comp $4M $168M $172M
Working Capital Related to BD Activity - $96M $96M
Legal Settlements / Tax on Stock Options $11M - $11M
Adjusted Cash Flow $770M $3M $773M
Adjusted Earnings $893M $4M $897M
Cash Conversion 86% 75% 86%
30. 29
Q3 will be about the same as Q2 at ~$300M in sales
Net sales will approach demand as we exit 2015
Impact of Salix Inventory and Drawdown
Actual
Q2
Estimated
Q3
Net Sales (including IBS-D) $313M ~$300M
Inventory Reduction $141M ~$200M
Net Sales Adj. for Inventory Reduction $454M ~$500M
Beginning Months on Hand 4 - 5 3 - 3.5
Ending Months on Hand 3 - 3.5 2 - 2.5
31. 30
Restructuring and Integration Expenses
Q2 restructuring and integration expenses of $153M
Salix - $122M
Additional $175M expected in remainder of 2015
Dendreon - $18M
Minimal remaining for rest of year (<$5M)
Bausch + Lomb - ~$0M (now complete)
All others including Acrivet, Invado, Marathon, Paragon ~$13M
All others <$20M rest of year (excluding new deals)
32. 31
Strong liquidity position
$1.5B undrawn revolver
$958M of cash at end of Q2
Repurchased $50M of Valeant shares from Credit Suisse as part
of a block offer in Q2 at $223 per share
We remain committed to getting leverage to be below 4.0x by end
of 2016
Accounts Receivable DSO* improved versus previous years
(calculated using gross sales):
Q2 2014: 66 Days
Q2 2015: 65 Days
* Gross revenue is disclosed in 10K for calculation purposes
Balance Sheet
33. 32
Updated 2015 Guidance
Organic growth > 10% (same store) expected for second
half of the year
Q3 2015 Q4 2015 New 2015 Previous
2015
Revenues $2.6 - $2.8B $3.2 - $3.4B $10.7 - $11.1B $10.4 - $10.6B
Cash EPS $2.60 - $2.70
per share
$3.98 - $4.18
per share
$11.50 - $11.80
per share
$10.90 - $11.20
per share
Adj. Cash
Flow from
Operations
NA NA >$3.2B >$3.1B
See Note 1.
34. 33
Exchange rates based on current spot rates
Targretin (July) and Xenazine (expected August) genericized
No impact from future acquisitions included in guidance
Signed or closed business development transactions factored into guidance
Amoun assumed to close in Q4
Gross Margins expected to be ~78-80% in Q3/Q4
SG&A spend (as a percentage of revenue) ~23-24% in Q3/Q4
R&D spend ~$375 million for 2015
H2 Cash tax rate expected to be ~5%
Full year Cash Flow Items
Meet 90% cash conversion by end of year
Cap Ex - ~$300M
Depreciation - ~$200 million
Stock Based Comp - ~$100 million
H2 2015 Guidance Assumptions
Debt and Shares Outstanding
Weighted average cost of debt: ~5.1%
~355 million fully diluted shares
outstanding Q3 through Q4
