Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Valeant Pharmaceuticals International — Merger or Acquisition (November 2014)
49 slides from Bausch Health Companies's merger presentation, Nov 17, 2014
Slide 1: Filed by Valeant Pharmaceuticals International, Inc. pursuant to Rule 425
Filed by Valeant Pharmaceuticals International, Inc. (Commission File No. 001-14956) pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Valeant Pharmaceuticals International, Inc. Commission File N
Slide 2: ISS Presentation Regarding the Allergan Special Meeting
ISS Presentation Regarding 1November the 14, Allergan 2014 Special Meeting
Slide 3: Forward-Looking Statements
Forward-Looking This are future “intends,” “believes,” expressions. to most Canadian SEC forth removal Valeant’s unpredictable cash our the All these 2circumstances differ not ultimate effects ability impact availability risks forward-looking ability flow communication and in recent forward-looking
Slide 4: Additional Information and Non-GAAP Measures
More Additional This on Square”) registration HOLDERS CAREFULLY statement(s) statement Consent Valeant’s Information September Valeant The Non-GAAP To investors GAAP; accordance non-GAAP financial 3be updated Form supplement exchange additional communication Information has proposal shareholders the
Slide 5: Agenda
I. Executive Agenda II. III. IV. V. VI. 4VII. Objectives Overview Update Allergan’s Conclusion Appendix onSummary ofof Valeant Board Compelling Special Clearly Meeting Transaction and Consistently Failing Shareholders
Slide 6: I. Executive Summary
|. EXECUTIVE SUMMARY VALEANT Pharmaceuticals International, Inc
Slide 7: Executive Summary
Executive We further Valeant’s Allergan?s Repeatedly Instead, “scorched which False Valeant?s Valeant Total Q4 Majority best the The independently Recent agreement In (1) (2) 2014 6(3)all Based See 2014 calculate successful new interests organic likelihood and have improve amendments slide has impro
Slide 8: II. Valeant's Compelling Offer
7II. VALEANT?S COMPELLING OFFER
Slide 9: Sustainable, Robust Offer with Unrivaled Certainty
Sustainable shareholders Unrivaled Robust $2.7Bn+ accretion Compelling or At proration approximately Due certainty We EBITDA Allergan Allergan?s Pershing closing Allows No Valeant All (1) (2) (3) 8level below current See Based substantive financing other calculate to (4)Allergan’s combined analysis
Slide 10: Unrivaled platform for growth in healthcare
value 5Valeant Ophthalmology ~$1.3B Consumer Dermatology ~$1.5B ~$2.8B Neurology/Dental/Other ~$2.4B Aesthetics Emerging ~$3.8B Source: Note: yearcreation Therapeutic market 6-7% 4-6% 11-12% 10-13% + +Allergan IMS, Allergan, Markets Rx EvaluatePharma growth in healthcare area 2014E Anrate revenue un
Slide 11: Bausch + Lomb Acquisition Turnaround
B+LB+L Accelerated Continued Turnaround Increased Benefit Valeant’s Successful Bausch BioTrue PureVision Peroxiclear Expanded On ~$800 Remainder Primarily Cost Great (1) track one topeople million achieve from +acquisition ONEday to year emerging Lomb related scale B+L strength recent of 2achieve ?f
Slide 12: Bausch + Lomb Combined Team Synergies
$Bausch Combined Team US LatAm Canada Asia Europe Global Quality Ops Total Note: 11Millions Corporate Commercial /352 4,890 Supply baseline original R&D 187 611 + 100 3985 Lomb Exit 5904 60 198 23 24% 13% 309 Chain 339 synergy savings 32% 23% run-rate 18% 32% 2014 727 176 145 2,226 154 57% Run annou
Slide 13: Valeant and Allergan Synergy Opportunity
Opportunity Cost Value Corporate Neurology) Leverage ~$1,800 SG&A Country/BU Reduce Re-evaluate Apply ?~$900 R&D (69% combined Continue Rationalize Tax Revenue Acceleration Additional Valeant 12Focus Outsource Synergy synergy reduction Cost Source Valeant million Synergies(40% spending has on millio
Slide 14: Expected Synergies In Line With Precedent Transactions
Expected Combined Biovail Bausch Allergan +Lomb (1) 13 Inclusive 2,625 667 5,800 Savings OpEx($M) 350 of900 2,700(1) $475m ~52% Are ~34%Synergies($M) Inof~47% Line announced With Precedent Allegan Synergies standalone MOE/ OpEx Transactions synergies
Slide 15: Valeant's Management Team Track Record
Valeant’sManagement Valeant 1-Feb-08 $0 $20 $40 $60 $80 $100 $120 $140 USD >2,000% VRX Consistently *Adjusted 14 price Execution 1-Feb-09 forexceeded Valeant/Biovail adjusted 1-Feb-10 Track Team expectations increase Record Performance* 1-Feb-11 merger. in VRX 1-Feb-12 share price 1-Feb-13 (Feb 2008
Slide 16: Valeant's Stock Is Undervalued
Stock misleading Recent 2015 of 2016 organic benefit Capital share Valeant and Peer Current (1) Bristol 15 acquisitions Peer strong group(1) growth buybacks, has Myers of management deployment growth stock is internal Group acquisitions traded currently growth attacks of is average Squibb, per and 1
Slide 17: Understanding VRX Value and Implied Premium
Understanding VRX Income: Shares 2016 Blended Valeant Discounted Implied Premium (1) (2) (3) commenced (4) (5) (6) Valeant Includes Realized Based Discounted $117 net EPS AGN(1) Outstanding Projections stock Allergan $4.1B trading 16 vs. on $14.14 stock Valeant Allergan its synergies unaffected the
Slide 18: Valeant's Current Offer Package
Current Valeant’s created Package Look-through $180 $250 $295 current unaffected Premium Unaffected (1) Notes (2) (3) stock 17 Valeant Based atValeant from offer $131 Value offer share to on P/E closing (4): the 2016 of /value provides per share multiple price 55% .83 combination Allergan PF share V
Slide 19: Compelling Premium Paid
Compelling Premium 26% 55% 114% 153% Paid Transactions($131)(3) During Twelve ($1Bn AV Median 15.0x 20.3x 28.7x 33.6x Precedent Pharmaceutical($131)(3) Transactions P/E (1) Notes (2) $1Bn xillustrative GAAP trading 18 1.38 Allergan Thomson /multiple in LTM and and exchange operating US price Last Mo
Slide 20: Accretion and Reinvestment Opportunity
% Accretion 2013 investment 2016 Reinvestment Allergan vs (1) Notes (3) 19 ~$10 Based EPS—Research EPS (2) EPS shareholders on –$4.77 standalone Allergan 0.83 from Goldman 2016 exchange (3)309% Exchange ~$20 0.83 PFGuidance Models EPS will Allergan Sachs, andreceive of and cash $14.14 as Bank (2) Ca
Slide 21: Allergan CEO deposition on stock value
Even Q David (1) Notes 20–David “So Allergan?s Pyott my Pyott question – “On deposition, CEOthat tohas day, youadmitted page Iis:believe As34ofAllergan?s this the stock February was stock12, fairly was 2014 fairly valued” time valued period (1) atwhen $123 you per share sold your in February stock f
Slide 22: Absent Our Proposal, Allergan Stock Trades Lower
Absent Fair $Current $133 $131 $110 Stock Trading Return (1) Notes (2) (3) (4) (5) (6) to (7) (8) ~20x] $23 21154 acquisition AGN Based Unaffected Per Illustrativ per Value $117 $$153 Price / (5) Bloomberg; 140 130 our share share Look-Through Day High share on of Peers proposal, $on of 2016 Pro 166
Slide 23: III. Allergan's Unwillingness to Engage
III. ALLERGAN?S UNWILLINGNESS TO ENGAGE 22
Slide 24: Allergan's Unwillingness to Engage With Shareholders
Allergan’s Allergan Meanwhile, Immediately Maintained Recent investors Delaware Attempting Meeting Pursuing soliciting Management Refusing offer Refused that During 23 if they amendments this to shareholders “scorched to Even Valeant judge Board allow were time, onerous to engage inadopted solicitin
Slide 25: Instead, Allergan Attacks: Assertions Questioned
Instead, Assertions Questioned without Asserted acquisitions revenue 2014) acquisition Allergan (June organic management Recent value Proclaims transaction, support We least Following 2014, 29, Alleged weak Q4’14 comparable 24 2014): expect the Q3’13 drives 10, Allergan Valeant YOY and growth its un
Slide 26: IV. Valeant's Strong Operating Model
IV. VALEANT?S STRONG OPERATING MODEL 25
Slide 27: Valeant's Exceptional Business Performance
Valeant’s business 2014 Overall 19 GAAP Restructuring Highlights Almost Launched Closed Bausch 8Exceptional On Revenues: Cash Adjusted conversion Raised 26successful of track 3Q EPS EPS: the Cash 2014 2015 5+ every organic model to total acquisitions top 2014 Cash 3Q Lomb 17 of from of for achieve R
Slide 28: Q3 Business Highlights (1/3)
Q3 Source: Dermatology, Strong After Luzu Includes One PreserVision BioTrue (1) 27 U.S. ofTRx only growth the Business Multipurpose PreCision uptake three fastest IRI AREDS $273M for consumption months, continues growing Highlights promoted since 2—#1 Revenues, Solution—Fastest Jublia acquisition OT
Slide 29: Q3 Business Highlights (2/3)
Q3 Source: Ophthalmology Strong Contact Fastest BioTrue revenues (1) 28 U.S.performance growing Lenses, Business ONEday in Independent Q3 2014) Rx, contact $45M and Highlights $118M ofPureVision® Anti-infective/Anti-viral Revenues, lens third Revenues, business (2/3) party82% data. 2 for –57% Q/Q ma
Slide 30: Q3 Business Highlights (3/3)
Q3Victus® Surgical, Greater Number 28 Neuro Dental, Growth Aesthetics, Improved (1) 29 Source: U.S. &$32M growth than driven Business two Other/Generics, $54M sales $32M Market machines 55% player Revenues, driven by force Revenues, growth Revenues(2) Highlights new Scope, ineffectiveness by expecte
Slide 31: Valeant Standalone Projections (1/2)
Q3 Rest FX China Emerging Strong impacted ROW Australian Offset 30 impacts Developed, organic by performance ofby aMarkets-Latin Markets-Europe/Middle Markets-Asia/Africa, organic World decline on capital growth European Business $421M growth in controls across inCanada of Mexico 11% America, Emergi
Slide 32: Valeant Standalone Projections (2/2)
Valeant We 1) 2015/2016 2) Assumes Below Midpoint 2013 $Revenue Cash Growth Adj. 31 Operations 5.8B Acquisition Debt reviewed Cash 2014 EPS shows Standalone Repayment 41% 33% ~$8.2B acquisitions Midpoint $6.24 Flow 2015 high 17% 25% two the Case: single-digit from ~$8.27 2016 ~$9.6B midpoint cases:
Slide 33: Outlook: Projected Revenue (1/4)
Valeant 2013 Debt Net Acquisition Acquisitions Revenue $5.8B Cash Growth Adj. 32 Operations Debt Cash Repayment 2014 EPSStandalone 41% 33% $5.8B ~$8.2B $17.0B $6.24 Flow 2015 Case ~$6.3B 11% 21% 23% 29% ~$8.2B from ~$8.27 2016 ~$10.1B Case ~$15.4B 9% 21% 39% 36% Projections ~$11.3B $1.8B ~$9.1B ~$10
Slide 34: Outlook: Projected Revenue (2/4)
Outlook Projected Revenue 2014 United M) Dermatology Base New/recent Jublia: Luzu, ($85M), Generic Targretin Carac Ziana 5IDP-118 Consumer Consistent 21$4Opthalmology ~ and 2015 with incremental 2016 Brimonidine Not Latanoprostene Includes 33 90 50 0% $1030 25-30% 15-20% 2016 included 2014 business
Slide 35: Outlook: Projected Revenue (3/4)
Outlook Projected Revenue 2014 United Contact and Surgical Continued Neuro Generics Dental recent Trend Aesthetics Includes 34 2016 ($line sales & ~States M) Lenses for ~impact $2015 Other Xenazine accelerates Projected growth $~ 135 force 2015 225 $ 160 (%) ~/~of ~15% $expansion and in of $1,510 10
Slide 36: Outlook (4/4)
Outlook Projected Revenue 2014 Other Western Current ~$1,725 Japan Australia Return Canada Emerging EMENA Asia ~$575 Africa Latin *Includes Includes /($M)* America Developed South ~10-15% growth to generic growth Europe Europe/Japan for ~3-5% impact Growth ~Australia/Canada historic Projected Market
Slide 37: Q4 Business Updates
Outlook Gross 75% 76% 2015: SG&A ~$200—250M R&D 5Cash 36– 6% 2015 2016 Taxes 23-24% Margin Adjusted forimprovement Reflects 2015 as annual Net percentage and impact Income 2016 spend initiatives, of(4/4) of cost revenue, improved declining mix and in 2016 declining Xenazine revenue
Slide 38: Valeant's Growth Model Drivers
Q4 business Valeant Jublia: Dermatology: Key Onexton On-track B+L: Continued Ex-US: 37 promoted 7,400 isPDUFA for on strong updates double-digit TRx/week track brands date organic to deliver including: November asgrowth ofanother theSolodyn, with week 30, partially strong 2014 strong ended Luzu, off
Slide 39: A Combination Would Improve R&D Productivity
Valeant’s growth Valeant?s Great Decisions by A Committed “inputs” Lean Decentralized “International” Durable accelerated High-growth Therapeutic physician-patient Capital Relentless shareholder Shareholder compensation Major Stock (ValueAct) returns (1) Note Square different centralized Total cost
Slide 40: New Product Launches in 2014
A combination R&D Despite Q: 80% its Allergan’s reformulations reformulation, to, Allergan?s Refocus Reduce Valeant?s of Valeant Conducts Invest: Partner: External Termination OR 75% 10% or Allergan (1) Notes (2) 39 capital are labs “What all Outcomes Davis noofproductivity, the partnered external h
Slide 41: Valeant Late-Stage Product Launches
new 2014 Key Jublia Luzu Retin-A Onexton PureVision Victus 40 Onsetproduct Biotrue Ultra Fragmentation Micro Trulign Launches 2 launches Multi Multi .08 Soothe Peroxiclear Focal in 2014 XP Focal CeraVe Baby
Slide 42: V. Why Success at the Special Meeting Is Imperative
Valeant Product Cataract Cirle EnVista navigations Brimonidine Vesneo Post-Operative Lotemax Ultra Pain Powers IDP-118 Emerade Gummy Ocuvite vitamin SA CeraVe Cream, Source: Cleanser, 3D Multi Anti-Itch Eye Consumer late Valeant Category Toric Gummy formulation and Derm Navigation Allergy GelFocal,
Slide 43: Proposals and Removal of Directors
V. WHY SUCCESS AT THE SPECIAL MEETING IS IMPERATIVE 42
Slide 44: Allergan's Response Has Been Inadequate
Approval Proposals Removal Encourage those CEO meeting, Michael shareholder Rights information Board pressure Allergan?s 43 offer and relating declassification toGallagher, from but of act Chairman of are the current Board without 6and the were by prudent to of shareholders independent written Persh
Slide 45: Allergan's Refusal to Engage
Replacement Allergans Did weak1 the In higher “This recalcitrant corporate including to those Allergan structure costs Despite “You inadequate.” via level management intrinsic (1) Note 44 shareholder response ISS only Chairman the not through only have rights.” obstructive than Lead repurchase repor
Slide 46: Allergan CEO Statements on Shareholder Value
Replacement Even with message “In opportunity evaluate stockholders the offer.” Allergan?s over David campaign pursue Non-management “I affirmative Timothy director, [management] (1) Note 45 don’t Proctor only requests considering management onerous after Pyott –diligence think clear Allergan respon
Slide 47: VI. Conclusion
Replacement In value perspectives David Only “[V]ery “[T]he acquisition. that would on to but the claiming of shareholders fathom, situation. however, them. –paths, 46David Jack be the an our invested only company. also the intended ceased acquisition…. destroying … face thereby Pyott otherwise son
Slide 48: Conclusion: Vote FOR Removal of Directors
VI. CONCLUSION 47 VALEANT Pharmaceuticals International, J. tne.
Slide 49: Now value Valeant’s
Now value Valeant’s 114% 2016 significant Allergan In Allergan’s We (1) Notes (2) (3) (4) 48 all company Premium Based Source: See askis EPS likelihood of premium(1) slide the for our still shareholders to offer on vs. current value atime Allergan?s be offer 16 vote to 2016 refuses ~$10 compelled pr
Valeant Pharmaceuticals International — Merger or Acquisition (November 2014) on 6ix