Valeant Pharmaceuticals International Inc
Valeant Pharmaceuticals International — Merger or Acquisition (December 2008)
14 slides from Valeant Pharmaceuticals International's merger presentation, Dec 10, 2008
Slide 1: Valeant's Acquisition of Dow Pharmaceutical Sciences, Inc.
Valeant's Acquisition of Dow Pharmaceutical Sciences, Inc.
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements, including, but not limited to, statements regarding the future growth in Valeant's dermatology franchise, the impact of the Dow Pharmaceutical Sciences, Inc. acquisition on Valeant's business and the results of operati
Slide 3: Our Strategy - March 27, 2008
Our Strategy - March 27, 2008 Focus business US, Canada, Mexico & very limited others - no longer global Neurology/ Dermatology Prescription and OTC brands Maximize pipeline Partner to realize full potential of key assets Ongoing internal development capability In-licensing in Neurology/ Dermatology
Slide 4: Summary of Acquisition
Summary of Acquisition Dow Pharmaceutical Privately held dermatology specialist Three business components: Proprietary products and pipeline Service business generating fees and royalties FDA approved product ready to be launched 2008 revenue of ~$45 million ~$20 million in royalties & ~$25 million
Slide 5: Acquisition Rationale
Acquisition Rationale Builds unmatched expertise in dermatology for Valeant Strong synergies with current portfolio Attractive pipeline and formulation capabilities Immediately creates a top-tier U.S. Dermatology Co. Positive financial impact - accretive to pro forma GAAP & Cash EPS in 2009
Slide 6: Dow Product and Pipeline Review
Dow Product and Pipeline Review Source: Dow Pharmaceutical Sciences Royalties Ziana (Medicis) MetroGel (Galderma) Desonate (Skin Medica) Clobex (Galderma) Atralin (Coria) Proprietary Launches Acanya (Acne) - already approved, to be launched in Q1 2009 Peak revenue estimate $70+ million Proprietary P
Slide 7: Acanya
Acanya(tm) Topical prescription treatment for acne Less irritation Acanya has ~$70+ million annual market potential FDA approved 4Q 2008 Planned launch 1Q 2009 Significant commercialization synergies with Atralin(tm) Daytime vs. nighttime use Protected by formulation and method of use patents throug
Slide 8: Dow Services Business
Will continue to be led by Gordon Dow ~$25 million revenues in 2008, ~20% operating margin Portion of capacity used for internal development Enriches intellectual capital One of the top dermatology Rx formulation providers in the world Dow Services Business
Slide 9: Dow Financial Profile
Dow Financial Profile Acanya(tm) FDA approval October 2008 Expected to be launched 1Q 2009 Royalty ~$20 million in out-licensed products Expected to be stable for next decade with potential to grow Services Business ~$25 million with 20% operating margins Development Spend ~$25 million annually Deve
Slide 10: Synergies and Tax
Synergies and Tax Core R&D savings ~$10 million annually G&A, Facilities consolidation & non-core R&D savings ~$10 million annually Off shore IP for tax planning purposes
Slide 11: Financial Impact
Financial Impact Valuation metrics Price/ 2009 EBITDA = ~11x Price/ 2010 EBITDA = ~6x 2009 P&L Increases revenue by ~$60 million Maintain net (VRX/Dow) R&D spending at ~$50M million With cost synergies - accretive to 2009 earnings 2009 Cash EPS guidance of $1.35 - $1.60 per share Balance Sheet Redee
Slide 12: 2008 - Upgrading Our Portfolio & Balance Sheet
2008 - Upgrading Our Portfolio & Balance Sheet 1 Includes cash & marketable securities 2 Proceeds from Infergen, AsiaPacific, Argentina, WEEMEA (Western & Eastern Europe, Middle East & Africa) 3 $250 million initial purchase price less $8 million cash on balance sheet of Dow at close 4 Does not incl
Slide 13: 2009 Pro Forma Impact of Improved Portfolio & Restructuring - Cash EPS
2007 2008E 2009E 0.83 0.7 1.48 2007 2008E 2009E 0.33 0.3 1.13 Pro Forma Cash EPS from Continuing Operations Pro Forma Cash EPS from Continuing Operations, excluding Ribavirin royalties $1.35 - $1.60 $1.00 - $1.25 Cash EPS is calculated as net income from continuing operations excluding amortization
Slide 14: Looking Forward
Looking Forward Remain focused on dermatology & neurology with reduced geographic footprint Remain focused on improving cash flows from continuing operations Continue to upgrade portfolio with higher growth, higher margin assets Continue to partner pipeline assets Deploy cash with continual mix of p
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