Valeant Pharmaceutical International, Inc. 2016 J.P. Morgan Healthcare Conference - Howard Schiller Dr. Ari Kellen
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
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 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.
1Howard Schiller
Interim CEO
January 13, 2016Valeant 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
3A 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, U.S. Gastrointestinal
Dermatology, and GI sales) (GI)
~10%
~20% U.S.
Revenue:
Emerging Markets ~70%
(including Ophthalmology, ~20%
Dermatology, and GI sales) ~15% U.S. Dermatology
(Includes Solta
and Obagi)
~10%
~20% U.S. Ophthalmology
~5% and Eye Care (B+L)
U.S. Oncology, Dentistry,
Women’s Health, Neuro and Other U.S. Consumer
4Strong Growth Platforms % 2016 Est. revenue
U.S. Gastrointestinal U.S. Dermatology (1) U.S. Ophthalmology
U.S. Consumer
and Eye Care (B+L)
~20% ~15% ~10% ~5%
U.S. Oncology, Dentistry,
Emerging markets (2)
Ex-U.S. developed markets (2) Women’s Health,
Neuro/Other
~20% ~10% ~20%
(1) Including Solta and Obagi
(2) Including Ophthalmology, Dermatology, and GI sales
5Potential Exclusivity Risk
2015 2016 2017 2018 2019 2020
Xenazine Ziana Lotemax Gel Acanya Zyclara Luzu
Targretin Zirgan Macugen Solodyn Tiazac (CAD)
Atralin Visudyne Deflux Istalol
Products Tasmar Glumetza Solesta Elidel
Zegerid Isuprel Moviprep
Virazole
Nitropress
Annual 2015
~$300 million ~$750 million ~$350 million ~$450 million ~$50 million ~$50 million
Sales
Limited risk relative to expected 2016 revenues of $12.5-$12.7B
6How 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
7Dr. 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 ▪ Dermatology Phase II and
sales 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
9Valeant R&D at a glance
6 200 + active
1,000 +
NDAs approved
in last three
years US programs
R&D and quality
employees
13 43 100 +
510K and PMA
R&D
approvals in
facilities
last three years
MD, PHD, PharmD, JD
and DMD degrees
10How our R&D pipeline was built
In-licensed /
Internal Inherited
purchased
In Dermatology, we We have acquired We continue to invest
have built capabilities new platforms and in TAs with attractive
from discovery to capabilities in assets
commercialization attractive TAs
We are building similar Post-acquisition, we Our selection and
capabilities in have supplemented portfolio de-risking
Ophthalmology and GI the pipeline where give us an advantage
required and de-risked
where possible
Brodalumab
11Early and late assets across TAs
Early1 Late2
Significant active US programs as of Dec. 2015
Dermatology 8 7 15
Consumer 4 22 26
Opthalmology 1 6 7
Surgical 12 20 32
Contact lenses 6 3 9
GI 4 2 6
Others3 5 12 17
40 72 112
early late total
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
12US branded and generic
drugs pipeline Dermatology Ophthalmology Generics
GI Women’s health In-house development
Early stage Late stage
(Pre Ph. III) (Ph. III - submission)
Relistor Oral: Opioid
SAL-020: HAE IDP-120: Acne IDP-118: Psoriasis
induced constipation
IDP-125: Actinic
SAL-021: RA IDP-121: Acne SAL-024: Crohn’s
keratosis
IDP-124: Atopic
SAL-022: Diabetes IDP-131: Psoriasis Brinzolamide Gx: OAG
dermatitis
BLG020: Disclosing
SAL-023: Cirrhosis IDP-126: Acne IDP-122: Psoriasis
agent
BLO-020: Inflammation IDP-127: Anti-fungal IDP-123: Acne BLG021: Anti-infective
IDP-128: Actinic VAL-BRO-03: Psoriatic
SPT-201: HSDD BLG022: Anesthetic
keratosis arthritis
IDP-129: Acne Brodalumab: Psoriasis BLG023: Anti-infective
BLO-021: Cystoid
IDP-130: Acne EGP-437: Anterior uveitis
Macular edema
Latanoprostene Bunod: BLO-022: Post-operative
OAG inflammation
13US Devices pipeline Aesthetics
Surgical
Contact lenses
In-house development
Early stage 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
14Select pipeline opportunities
US Expected
Drug1 Indication Prevalence launch
Relistor Oral Opioid induced ~3.7M 2016 (PDUFA
constipation (OIC) Date April 19th)
with chronic non-
cancer pain
Latanoprostene Reduction of ~3.0M 2016 ((PDUFA
Bunod (LBN) Intraocular Date July 21st)
pressure in patients
with Open Angle
Glaucoma (OAG)
and Ocular
hypertension
Brodalumab Moderate to ~9.5M 2016
severe plaque
psoriasis
IDP118 Moderate to ~9.5M 2017/18
severe plaque
psoriasis
1 Product candidates, not yet approved by the FDA
Source: Decision Resources, BioMed Tracker
15Valeant 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
16 beyond the U.S.Two distinct programs
U.S. Branded Access Program U.S. Brand for Generic Program
(Phase 1 (derm) on Jan 15th) (Expected Mid-2016)
▪ Patient access and co-pay ▪ For selected products, make
program to ensure affordable branded product available at
access to branded products generic price
▪ 25+ brands across Dermatology, ▪ Currently Valeant has sub 5%
Ophthalmology Rx, and Addyi market-share creating a meaningful
volume opportunity
▪ 10% WAC price reduction
(weighted average) across Derm
and Ophth Rx
▪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 17Valeant’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
2
▪ 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
18Robert 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
20Latest 2015 guidance vs. 2014 actual
Latest 2015 Latest 2015
Guidance 2014 Actual Guidance vs
(12/16/15) 2014 Actual
Revenue $10.4 - $10.5B $8.29B 26%
Adj. EPS* $10.23 - $10.33 $8.36
23%
per share per share
Adj. Cash
Flow from >$2.95B $2.5B 18%
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
212016 guidance vs. latest 2015 guidance
Latest 2015 2016 Guidance
2016
Guidance vs Latest 2015
Guidance
(12/16/15) Guidance
Revenue ~$12.5B – 12.7B $10.4B – 10.5B ~21%
Adj. EPS* ~$13.25 – 13.75 $10.23 – 10.33
~31%
per share per share
Adj. EBITDA* $6.9 – 7.1B >$5.4B ~30%
* Non-GAAP, for Non-GAAP definition – See December 16, 2015 Presentation:
Valeant: An Enduring Engine for Growth, Pages 131 and 132
See Note 1
22Bridge from 2016 Adjusted EBITDA* to 2016
Debt Paydown (detail to 12/16/15 presentation)
(US$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 ~$925
(e.g., Sprout, brodalumab)
Capital Expenditure ~$350
Repayment of outstanding revolver balance (Year- ~$825
end 2015) plus discretionary cash
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
23Clear 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
24You can also read
