Valeant Pharmaceutical International, Inc. 2016 J.P. Morgan - - PowerPoint PPT Presentation
Valeant Pharmaceutical International, Inc. 2016 J.P. Morgan Healthcare Conference Howard Schiller Interim CEO Dr. Ari Kellen EVP, Company Group Chairman Robert Rosiello January 13, 2016 EVP, Chief Financial Officer Forward-looking
Valeant Pharmaceutical International, Inc. 2016 J.P. Morgan Healthcare Conference
January 13, 2016 Howard Schiller Interim CEO
EVP, Company Group Chairman Robert Rosiello EVP, Chief Financial Officer
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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
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.
Forward-looking Statements
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.
Howard Schiller Interim CEO
January 13, 2016
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Valeant today
brands around the world
affordable access for physicians and patients Remain committed to our strategy with a relentless focus on execution
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A collection of great brands in a breadth
Valeant 2016 forecast revenues
Total: $12.5 – 12.7 B
~20% ~15% ~10% ~5% ~20% ~20% ~10%
U.S. Gastrointestinal (GI) U.S. Dermatology (Includes Solta and Obagi) Emerging Markets (including Ophthalmology, Dermatology, and GI sales) Ex-U.S. Developed Markets (including Ophthalmology, Dermatology, and GI sales) U.S. Ophthalmology and Eye Care (B+L) U.S. Consumer U.S. Oncology, Dentistry, Women’s Health, Neuro and Other U.S. Revenue: ~70%
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Strong Growth Platforms
Emerging markets (2) U.S. Oncology, Dentistry, Women’s Health, Neuro/Other % 2016 Est. revenue
(1) Including Solta and Obagi (2) Including Ophthalmology, Dermatology, and GI sales
~15%
U.S. Dermatology (1) U.S. Ophthalmology and Eye Care (B+L)
~10%
U.S. Gastrointestinal
~20%
U.S. Consumer
~5% ~20% ~20%
Ex-U.S. developed markets (2)
~10%
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2015 2016 2017 2018 2019 2020
Xenazine Ziana Lotemax Gel Acanya Zyclara Luzu Targretin Zirgan Macugen Solodyn Tiazac (CAD) Atralin Visudyne Deflux Istalol Tasmar Glumetza Solesta Elidel Zegerid Isuprel Moviprep Virazole Nitropress Annual 2015 Sales ~$50 million ~$50 million Products ~$300 million ~$750 million ~$350 million ~$450 million
Potential Exclusivity Risk
Limited risk relative to expected 2016 revenues of $12.5-$12.7B
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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
EVP, Company Group Chairman
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Key facts on our R&D approach
Rx R&D spend as a % of branded Rx sales
▪ 6 NDAs approved in last 3 years ▪ 200+ active US programs ▪ 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
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Valeant R&D at a glance
+ active
US programs
+ +
NDAs approved in last three years
R&D facilities
510K and PMA approvals in last three years
MD, PHD, PharmD, JD and DMD degrees
R&D and quality employees
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How our R&D pipeline was built
We continue to invest in TAs with attractive assets We have acquired new platforms and capabilities in attractive TAs In Dermatology, we have built capabilities from discovery to commercialization Our selection and portfolio de-risking give us an advantage Post-acquisition, we have supplemented the pipeline where required and de-risked where possible We are building similar capabilities in Ophthalmology and GI Internal Inherited In-licensed / purchased Brodalumab
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Early and late assets across TAs
1 Prior to Phase III for Pharma, 2018+ expected launch for others 2 Includes Phase III and FDA submitted products 3 Includes aesthetics, women’s health, and generics
8 4 12 6 4 5 7 22 6 20 3 2 12 1 Opthalmology 7 Contact lenses 9 GI 6 Others3 17 Surgical Dermatology 15 26 Consumer 32
40 early 72 late 112 total
Early1 Late2
Significant active US programs as of Dec. 2015
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US branded and generic drugs pipeline
Ophthalmology Generics Dermatology GI In-house development Women’s health
Early stage (Pre Ph. III) Late stage (Ph. III - submission) Latanoprostene Bunod: OAG IDP-118: Psoriasis SAL-020: HAE IDP-120: Acne IDP-121: Acne SAL-021: RA IDP-125: Actinic keratosis Relistor Oral: Opioid induced constipation IDP-124: Atopic dermatitis IDP-131: Psoriasis SAL-022: Diabetes IDP-126: Acne IDP-122: Psoriasis SAL-024: Crohn’s SAL-023: Cirrhosis BLG023: Anti-infective IDP-127: Anti-fungal IDP-123: Acne Brinzolamide Gx: OAG BLO-020: Inflammation IDP-128: Actinic keratosis VAL-BRO-03: Psoriatic arthritis SPT-201: HSDD BLG020: Disclosing agent IDP-129: Acne Brodalumab: Psoriasis BLG021: Anti-infective IDP-130: Acne BLO-021: Cystoid Macular edema BLG022: Anesthetic EGP-437: Anterior uveitis BLO-022: Post-operative inflammation
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US Devices pipeline
Aesthetics Contact lenses Surgical In-house development
Late stage Early stage BLS-021: Retina BLS-023: Retina BLS-022: Retina BLS-024: Retina BLS-026: Retina BLS-027: Retina BLS-028: Retina BLS-029: Retina BLS-030: Retina BLS-031: Retina BLS-025: Retina BLS-032: OEM SOF-010: Skin resurfacing SOT-010: Fine Lines & wrinkles SOT-011: Fine Lines & wrinkles BLS-002: Cataract BLS-003: Cataract BLS-004: Cataract BLS-005: Retina BLS-006: Cataract BLS-007: Cataract BLS-001: Cataract SOM-010 Vascular Lesions BLC-008: Astigmatism BLC-007: MF BLC-009: Astigmatism BLS-015: Cataract BLS-016: Cataract BLS-017: Therapeutics BLS-018: Retina BLS-019: Retina BLS-020: Retina BLS-014: Refractive BLC-001: SVS BLC-003: SVS/MF/fA BLC-002: SVS BLC-004: Toric BLC-006: SVS BLS-012: Retina BLS-008: Cataract BLS-009: Retina BLS-010: Cataract BLS-011: Cataract BLC-005: SVS/MF BLS-013: Retina
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Select pipeline opportunities
Relistor Oral Latanoprostene Bunod (LBN) Drug1 Indication Expected launch US Prevalence Opioid induced constipation (OIC) with chronic non- cancer pain Reduction of Intraocular pressure in patients with Open Angle Glaucoma (OAG) and Ocular hypertension 2016 (PDUFA Date April 19th) 2016 ((PDUFA Date July 21st) 2017/18 IDP118 Moderate to severe plaque psoriasis ~9.5M ~3.7M ~3.0M
Source: Decision Resources, BioMed Tracker
Brodalumab 2016 Moderate to severe plaque psoriasis ~9.5M
1 Product candidates, not yet approved by the FDA
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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.
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Two distinct programs
▪ Patient access and co-pay
program to ensure affordable access to branded products
▪ 25+ brands across Dermatology,
Ophthalmology Rx, and Addyi
▪ 10% WAC price reduction
(weighted average) across Derm and Ophth Rx
▪ In process of building a
complementary network of independent pharmacies U.S. Branded Access Program (Phase 1 (derm) on Jan 15th)
▪ For selected products, make
branded product available at generic price
▪ Currently Valeant has sub 5%
market-share creating a meaningful volume opportunity U.S. Brand for Generic Program (Expected Mid-2016) Common program features
▪ Products on consignment, Walgreens does not take title ▪ Walgreens to be paid fee-for-service for distribution and fulfillment
services
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Valeant’s new branded access program
▪ Ensure affordable access to Valeant products
that doctors choose to prescribe (for eligible patients)1
▪ 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
2 Robert Rosiello EVP, Chief Financial Officer
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Q4 highlights
even with disruption (retained approximately 80% of dermatology scripts)
Xifaxan script growth and strong script growth in other key products (Relistor, Apriso, Ruconest)
year, despite negative Q4 organic growth
with Walgreens
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Latest 2015 Guidance (12/16/15) 2014 Actual Latest 2015 Guidance vs 2014 Actual
$10.4 - $10.5B $8.29B 26% $10.23 - $10.33 per share $8.36 per share 23% >$2.95B $2.5B 18%
Revenue
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
Latest 2015 guidance vs. 2014 actual
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2016 Guidance Latest 2015 Guidance (12/16/15) 2016 Guidance vs Latest 2015 Guidance ~$12.5B – 12.7B $10.4B – 10.5B ~21% ~$13.25 – 13.75 per share $10.23 – 10.33 per share ~31% $6.9 – 7.1B >$5.4B ~30% Revenue
* Non-GAAP, for Non-GAAP definition – See December 16, 2015 Presentation: Valeant: An Enduring Engine for Growth, Pages 131 and 132 See Note 1
2016 guidance vs. latest 2015 guidance
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Bridge from 2016 Adjusted EBITDA* to 2016 Debt Paydown (detail to 12/16/15 presentation)
(US$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 (Year- end 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
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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