Valeant Pharmaceuticals International Inc
Valeant Pharmaceuticals International — Q2 2010 Earnings Presentation
25 slides from Valeant Pharmaceuticals International's earnings presentation, Aug 2, 2010
Slide 1: Second Quarter 2010 Financial Results Conference Call
Second Quarter 2010 Financial Results Conference Call August 2, 2010
Slide 2: Forward-looking Statements
Forward-looking Statements Forward-looking Statements Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements regarding our performance and growth in 2010 and guidance with respect to expected product growth and adjusted non-G
Slide 3: Additional Information
Additional Information Additional Information In connection with the proposed merger, Biovail has filed with the SEC a Registration Statement on Form S-4 that includes a preliminary joint proxy statement of Valeant and Biovail that also constitutes a prospectus of Biovail. Valeant and Biovail will m
Slide 4: Agenda
Agenda 1. Second Quarter Results and Full Year Outlook 2. Progress against our strategic priorities for 2010 3. Operations report 4. CFO’s Report 5. Integration Update
Slide 5: Strong Product Sales Growth
Strong Product Sales Growth 43% 39% 35% 32% 33% 31% 20% 19% 2Q10 YTD Specialty Pharma Branded Branded Total Product Product Sales Generics — L.A. Generics — EU Sales 4
Slide 6: 2Q 2010 Commercial Acquisitions
2Q 2010 Commercial Acquisitions $ in millions Reported Estimated Sales 2Q Name Close Date Price Annual Sales 2010 Delta, Brazil April 7, 2010 $28 $19 $3 Blaufarma, Poland* April 19, 2010 $28 $8 $1 Bunker, Brazil April 20, 2010 $56 $28 $4 Vital Science, Canada May 19, 2010 $11 $10 $1 Aton Pharma, U.S
Slide 7: Adjusted Non-GAAP (Cash) EPS Bridge Q2 2009 to Q2 2010
Adjusted Non-GAAP (Cash) EPS Bridge Q2 2009 to Q2 2010 $1.00 $0.90 $0.05 $0.09 $0.80 $0.04 $0.05 $0.17 $0.03 $0.69 $0.70 $0.10 $0.60 $0.52 $0.50 $0.40 Base business growth, cost $0.30 reduction, and IDP 111 drove increased earnings $0.20 $0.10 $0.00 Cash EPS Q2 Base Business Reduced IDP-111 Profit G
Slide 8: 2010 Product Sales Growth
2010 Product Sales Growth FY 2010 FY 2010 1H10 Guidance Guidance Actual as of 1/8/2010 Current View Key Drivers U.S. Derm 16% 15% — 20% 30% — 35% Acanya, Atralin, CeraVe U.S. Neuro 37% <5% decline 25% — 35% Diastat decline from generic competition offset by organic growth from remaining brands plus
Slide 9: 2010 Organic Growth
2010 Organic Growth FY 2010 FY 2010 1H10 Guidance Guidance Actual as of 1/8/2010 Current View U.S. Derm 8% >10% 10% — 12% U.S. Neuro 27% < (-5%) 0% — 10% Canada 8% >10% 10% — 15% Changes Australia (-12%) >10% (-5%) — (-10%) Branded Generics — Latin America 2% >10% 15% — 25% Branded Generics — Europe
Slide 10: Strategic Initiatives for 2010
Strategic Initiatives for 2010 1. Grow worldwide Derm business to $500 million in 2010 and partner Derm pipeline Current Valeant Derm business YE run rate ~$450 million With Zovirax, run rate is over $600 million 2. Make significant progress on ezogabine / retigabine modified release (MR) formulatio
Slide 11: Strategic Initiatives for 2010
Strategic Initiatives for 2010 4. Build LA & EU Branded Generics businesses to a combined $500 million in 2010 Current YE run rate ~$500 million Includes full year effect of Brazil acquisitions 5. Over deliver on past acquisitions Annual analysis at 3Q10 conference call 6. Improve Cash Flow from Ope
Slide 12: Operations Update
Operations Update Rajiv De Silva
Slide 13: Acanya and Atralin Continue to Show Substantial Prescription Volume Growth
Acanya and Atralin Both Continue to Show Substantial Prescription Volume Growth 24,000 Acanya Atralin 21,000 18,000 15,000 12,000 9,000 6,000 3,000 0 Jan-09 Feb-09Mar-09 Apr-09 May-09Jun-09 Jul-09 Aug-09Sep-09 Oct-09 Nov-09Dec-09Jan-10 Feb-10Mar-10 Apr-10 May-10Jun-10 Source: Wolters-Kluwer; Data fo
Slide 14: Acanya and Atralin Also Show Substantial Market Share Growth
Acanya and Atralin Also Continue to Show Substantial Market Share Growth Atralin Acanya TRxs 20% 15% 10% 5% 0% Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Source: Wolters-Kluwer; Data for Dermatologists only; Acanya ma
Slide 15: Valeant Market Share Approaching Leadership Among Fixed BPO/Clindamycin Combos
Valeant Market Share Approaching Leadership Among Fixed BPO/Clindamycin Combos Acanya/Gen. BPO-Clinda Benzaclin Duac CS 60% 50% 40% 30% 20% 10% 0% Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Source: Wolters-Kluwer; Dat
Slide 16: CeraVe Continues Outstanding Growth Trajectory
CeraVe Continues Outstanding Growth Trajectory 99% All three core SKU’s in top 3 CeraVe PM successfully 45% launched in January 2010 Two new SKUs planned to launch in August 2010 Growth Growth ‘09 vs. ‘08 1H ‘10 vs. 1H ‘09 CeraVe AM (30 SPF) CeraVe Foaming Cleanser 15
Slide 17: Diastat Lifecycle Management
Diastat Lifecycle Management Anticipated Strategy Pricing Plan to decrease Wholesale Acquisition Cost (WAC) by a minimum of 25% upon generic entry Medicaid accounts Goal of maintaining 30-50% of Medicaid unit share Substantial discounts to match generic price Commercial Plans Goal of maintaining 20-
Slide 18: 2010 Specialty Pharmaceuticals Product Launches
2010 Specialty Pharmaceuticals Product Launches Country Launched 1H Projected Launches 2H U.S. 11 10 Canada* 0 14 Australia* 7 23 Total 18 47 2H Product Launch Highlights • U.S.: Hissyfit, Kinerase Rx Skin Lightener • Canada: Onsolis, Dr. Renaud Acne Line • Australia: Dr. Lewinns and Dermaveen line
Slide 19: CFO Report
CFO Report Peter Bloitt
Slide 20: Financial Overview
Financial Overview Q2 2009 Q2 2010 Product Sales $167m $219m Total Revenue $192m $256m Cost of Goods Sold % 26% 28% SG&A % 36% 33% R&D Expense $9m $12m Non-GAAP Operating Margin* 38% 41% Interest Expense, net $8m $20m Adjusted (Cash) EPS $0.52 $0.69 *Excludes currency impact, amortization, amortizat
Slide 21: Continued Strong Cash Flow and Margin Performance
Continued Strong Cash Flow and Margin Performance Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Non-GAAP Operating Margin (1) 34% 38% 40% 41% 41% 41% Adjusted Cash Flow From (2) Operations $51m $55m $65m $55m $69m $62m (1) Excludes currency impact, amortization, amortization of inventory step-up,
Slide 22: 2009-2010 Adjusted Non-GAAP (Cash) EPS
2009 — 2010 Adjusted Non-GAAP (Cash) EPS • Full year 2009 = $2.21 • Full year 2010 as of: Exceeded • 5/3/10 = $2.65 — $2.90 expectations • 8/2/10 = $2.80 — $3.05 $0.69 $0.67 $0.64 $0.58 $0.52 $0.46 1Q09A 1Q10A 2Q09A 2Q10A 3Q09A 3Q10 4Q09A 4Q10 Merger with Biovail expected to close in 2010 Guidance o
Slide 23: Integration Update
Integration Update J. Michael Pearson
Slide 24: Integration Planning Well Underway
Integration Planning Well Underway Kick-off meeting held in early July 12 work streams identified: 1. Corporate 7. Facilities 2. U.S. Operations 8. Business Development 3. Research & Development 9. Financial Baselining 4. Canada Commercial 10. Deal Close 5. Tax 11. Communications / Talent / HR 6. Ma
Slide 25: Second Quarter 2010 Financial Results Conference Call
Second Quarter 2010 Financial Results Conference Call August 2, 2010
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