We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bausch Health Cos | NYSE:VRX | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 23.40 | 0.00 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the Quarterly Period Ended March 31, 2018
|
|
OR
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
to
|
British Columbia, Canada
(State or other jurisdiction of incorporation or organization) |
98-0448205
(I.R.S. Employer Identification No.) |
2150 St. Elzéar Blvd. West, Laval, Québec
(Address of principal executive offices) |
H7L 4A8
(Zip Code) |
Part I.
|
Financial Information
|
|
Item 1.
|
Consolidated
Financial Statements (unaudited)
|
|
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Part II
.
|
Other Information
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
•
|
the expense, timing and outcome of legal and governmental proceedings, investigations and information requests relating to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices (including with respect to our former relationship with Philidor Rx Services, LLC ("Philidor")), including pending investigations by the U.S. Attorney's Office for the District of Massachusetts and the U.S. Attorney's Office for the Southern District of New York, the pending investigations by the U.S. Securities and Exchange Commission (the “SEC”) of the Company, the request for documents and information received by the Company from the Autorité des marchés financiers (the “AMF”) (the Company’s principal securities regulator in Canada), a number of pending putative securities class action litigations in the U.S. (including related opt-out actions) and Canada and purported class actions under the federal RICO statute and other claims, investigations or proceedings that may be initiated or that may be asserted;
|
•
|
potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of management time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm on our Company, products and business that may result from the past and ongoing public scrutiny of our distribution, marketing, pricing, disclosure and accounting practices and from our former relationship with Philidor, including any claims, proceedings, investigations and liabilities we may face as a result of any alleged wrongdoing by Philidor and/or its management and/or employees;
|
•
|
the past and ongoing scrutiny of our business practices including with respect to pricing (including the investigations by the U.S. Attorney's Offices for the District of Massachusetts and the Southern District of New York) and any pricing controls or price adjustments that may be sought or imposed on our products as a result thereof;
|
•
|
pricing decisions that we have implemented, or may in the future elect to implement, whether as a result of recent scrutiny or otherwise, such as the Patient Access and Pricing Committee’s commitment that the average annual price increase for our branded prescription pharmaceutical products will be set at no greater than single digits and below the 5-year weighted average of the increases within the branded biopharmaceutical industry or any future pricing actions we may take following review by our Patient Access and Pricing Committee (which is responsible for the pricing of our drugs);
|
•
|
legislative or policy efforts, including those that may be introduced and passed by the U.S. Congress, designed to reduce patient out-of-pocket costs for medicines, which could result in new mandatory rebates and discounts or other pricing restrictions, controls or regulations (including mandatory price reductions);
|
•
|
ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic audits by the U.S. Food and Drug Administration (the "FDA") and the results thereof;
|
•
|
actions by the FDA or other regulatory authorities with respect to our products or facilities;
|
•
|
our substantial debt (and potential additional future indebtedness) and current and future debt service obligations, our ability to reduce our outstanding debt levels and the resulting impact on our financial condition, cash flows and results of operations;
|
•
|
our ability to meet the financial and other covenants contained in our Credit Agreement, indentures and other current or future debt agreements and the limitations, restrictions and prohibitions such covenants impose or may impose on the way we conduct our business, including prohibitions on incurring additional debt if certain financial covenants are not met, limitations on the amount of additional debt we are able to incur where not prohibited, and restrictions on our ability to make certain investments and other restricted payments;
|
•
|
any default under the terms of our senior notes indentures or Credit Agreement and our ability, if any, to cure or obtain waivers of such default;
|
•
|
any delay in the filing of any future financial statements or other filings and any default under the terms of our senior notes indentures or Credit Agreement as a result of such delays;
|
•
|
any downgrade by rating agencies in our credit ratings, which may impact, among other things, our ability to raise debt and the cost of capital for additional debt issuances;
|
•
|
any reductions in, or changes in the assumptions used in, our forecasts for fiscal year 2018 or beyond, which could lead to, among other things: (i) a failure to meet the financial and/or other covenants contained in our Credit Agreement and/or indentures and/or (ii) impairment in the goodwill associated with certain of our reporting units or impairment charges related to certain of our products or other intangible assets, which impairments could be material;
|
•
|
changes in the assumptions used in connection with our impairment analyses or assessments, which would lead to a change in such impairment analyses and assessments and which could result in an impairment in the goodwill associated with any of our reporting units or impairment charges related to certain of our products or other intangible assets;
|
•
|
any additional divestitures of our assets or businesses and our ability to successfully complete any such divestitures on commercially reasonable terms and on a timely basis, or at all, and the impact of any such divestitures on our Company, including the reduction in the size or scope of our business or market share, loss of revenue, any loss on sale, including any resultant write-downs of goodwill, or any adverse tax consequences suffered as a result of any such divestitures;
|
•
|
our shift in focus to much lower business development activity through acquisitions for the foreseeable future, including as a result of the restrictions imposed by our Credit Agreement that restrict us from, among other things, making acquisitions over an aggregate threshold (subject to certain exceptions) and from incurring debt to finance such acquisitions, until we achieve a specified leverage ratio;
|
•
|
the uncertainties associated with the acquisition and launch of new products, including, but not limited to, our ability to provide the time, resources, expertise and costs required for the commercial launch of new products, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing, which could lead to material impairment charges;
|
•
|
our ability to retain, motivate and recruit executives and other key employees, including subsequent to retention payments being paid out and as a result of the reputational challenges we face and may continue to face;
|
•
|
our ability to implement effective succession planning for our executives and key employees;
|
•
|
factors impacting our ability to achieve anticipated growth in our Ortho Dermatologics business, including approval of pending and pipeline products (and the timing of such approvals), expected geographic expansion, changes in estimates on market potential for dermatology products and continued investment in and success of our sales force;
|
•
|
factors impacting our ability to achieve anticipated revenues for our Significant Seven products, including the approval of pending products in the Significant Seven (and the timing of such approvals), changes in anticipated marketing spend on such products and launch of competing products;
|
•
|
the challenges and difficulties associated with managing a large complex business, which has, in the past, grown rapidly;
|
•
|
our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
|
•
|
our ability to effectively operate, stabilize and grow our businesses in light of the challenges that the Company currently faces, including with respect to its substantial debt, pending investigations and legal proceedings, scrutiny of our pricing, distribution and other practices, reputational harm and limitations on the way we conduct business imposed by the covenants in our Credit Agreement, indentures and the agreements governing our other indebtedness;
|
•
|
the extent to which our products are reimbursed by government authorities, pharmacy benefit managers ("PBMs") and other third party payors; the impact our distribution, pricing and other practices (including as it relates to our current relationship with Walgreen Co. ("Walgreens")) may have on the decisions of such government authorities, PBMs and other third party payors to reimburse our products; and the impact of obtaining or maintaining such reimbursement on the price and sales of our products;
|
•
|
the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price and sales of our products in connection therewith;
|
•
|
our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
|
•
|
the actions of our third party partners or service providers of research, development, manufacturing, marketing, distribution or other services, including their compliance with applicable laws and contracts, which actions may be beyond our control or influence, and the impact of such actions on our Company, including the impact to the Company of our former relationship with Philidor and any alleged legal or contractual non-compliance by Philidor;
|
•
|
the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering and operating in new and different geographic markets (including the challenges created by new and different regulatory regimes in such countries and the need to comply with applicable anti-bribery and economic sanctions laws and regulations);
|
•
|
adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in certain of the countries in which we do business;
|
•
|
our ability to obtain, maintain and license sufficient intellectual property rights over our products and enforce and defend against challenges to such intellectual property;
|
•
|
the introduction of generic, biosimilar or other competitors of our branded products and other products, including the introduction of products that compete against our products that do not have patent or data exclusivity rights;
|
•
|
if permitted under our Credit Agreement, and to the extent we elect to resume business development activities through acquisitions, our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis and the difficulties, challenges, time and resources associated with the integration of acquired companies, businesses and products;
|
•
|
the expense, timing and outcome of pending or future legal and governmental proceedings, arbitrations, investigations, subpoenas, tax and other regulatory audits, reviews and regulatory proceedings against us or relating to us and settlements thereof;
|
•
|
our ability to obtain components, raw materials or finished products supplied by third parties (some of which may be single-sourced) and other manufacturing and related supply difficulties, interruptions and delays;
|
•
|
the disruption of delivery of our products and the routine flow of manufactured goods;
|
•
|
economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
|
•
|
interest rate risks associated with our floating rate debt borrowings;
|
•
|
our ability to effectively distribute our products and the effectiveness and success of our distribution arrangements, including the impact of our arrangements with Walgreens;
|
•
|
the success of our fulfillment arrangements with Walgreens, including market acceptance of, or market reaction to, such arrangements (including by customers, doctors, patients, PBMs, third party payors and governmental agencies), the continued compliance of such arrangements with applicable laws, and our ability to successfully negotiate any improvements to our arrangements with Walgreens;
|
•
|
our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements;
|
•
|
the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or recalls or withdrawals of products from the market;
|
•
|
the mandatory or voluntary recall or withdrawal of our products from the market and the costs associated therewith;
|
•
|
the availability of, and our ability to obtain and maintain, adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third party insurance or self-insurance;
|
•
|
the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the FDA, Health Canada and similar agencies in other countries, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
|
•
|
the results of continuing safety and efficacy studies by industry and government agencies;
|
•
|
the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as other factors impacting the commercial success of our products, which could lead to material impairment charges;
|
•
|
the results of management reviews of our research and development portfolio (including following the receipt of clinical results or feedback from the FDA or other regulatory authorities), which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
|
•
|
our ability to negotiate the terms of or obtain court approval for the settlement of certain legal and regulatory proceedings;
|
•
|
the seasonality of sales of certain of our products;
|
•
|
declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;
|
•
|
compliance by the Company or our third party partners and service providers (over whom we may have limited influence), or the failure of our Company or these third parties to comply, with health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and business practices (including with respect to pricing), worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act and the Canadian Corruption of Foreign Public Officials Act), worldwide economic sanctions and/or export laws, worldwide environmental laws and regulation and privacy and security regulations;
|
•
|
the impacts of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Health Care Reform Act”) and potential amendment thereof and other legislative and
|
•
|
the impact of any changes in or reforms to the legislation, laws, rules, regulation and guidance that apply to the Company and its business and products or the enactment of any new or proposed legislation, laws, rules, regulations or guidance that will impact or apply to the Company or its businesses or products;
|
•
|
the impact of changes in federal laws and policy under consideration by the Trump administration and Congress, including the effect that such changes will have on fiscal and tax policies, the potential revision of all or portions of the Health Care Reform Act, international trade agreements and policies and policy efforts designed to reduce patient out-of-pocket costs for medicines (which could result in new mandatory rebates and discounts or other pricing restrictions);
|
•
|
illegal distribution or sale of counterfeit versions of our products;
|
•
|
interruptions, breakdowns or breaches in our information technology systems; and.
|
•
|
risks in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 28, 2018, and risks detailed from time to time in our other filings with the SEC and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing.
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
909
|
|
|
$
|
720
|
|
Restricted cash
|
—
|
|
|
77
|
|
||
Trade receivables, net
|
1,940
|
|
|
2,130
|
|
||
Inventories, net
|
1,042
|
|
|
1,048
|
|
||
Prepaid expenses and other current assets
|
833
|
|
|
771
|
|
||
Total current assets
|
4,724
|
|
|
4,746
|
|
||
Property, plant and equipment, net
|
1,411
|
|
|
1,403
|
|
||
Intangible assets, net
|
14,464
|
|
|
15,211
|
|
||
Goodwill
|
13,432
|
|
|
15,593
|
|
||
Deferred tax assets, net
|
1,660
|
|
|
433
|
|
||
Other non-current assets
|
107
|
|
|
111
|
|
||
Total assets
|
$
|
35,798
|
|
|
$
|
37,497
|
|
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
428
|
|
|
$
|
365
|
|
Accrued and other current liabilities
|
3,560
|
|
|
3,694
|
|
||
Current portion of long-term debt and other
|
2
|
|
|
209
|
|
||
Total current liabilities
|
3,990
|
|
|
4,268
|
|
||
Acquisition-related contingent consideration
|
320
|
|
|
344
|
|
||
Non-current portion of long-term debt
|
25,266
|
|
|
25,235
|
|
||
Deferred tax liabilities, net
|
1,139
|
|
|
1,180
|
|
||
Other non-current liabilities
|
560
|
|
|
526
|
|
||
Total liabilities
|
31,275
|
|
|
31,553
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Common shares, no par value, unlimited shares authorized, 349,219,074 and 348,708,567 issued and outstanding at March 31, 2018 and December 31, 2017, respectively
|
10,103
|
|
|
10,090
|
|
||
Additional paid-in capital
|
382
|
|
|
380
|
|
||
Accumulated deficit
|
(4,209
|
)
|
|
(2,725
|
)
|
||
Accumulated other comprehensive loss
|
(1,852
|
)
|
|
(1,896
|
)
|
||
Total Valeant Pharmaceuticals International, Inc. shareholders’ equity
|
4,424
|
|
|
5,849
|
|
||
Noncontrolling interest
|
99
|
|
|
95
|
|
||
Total equity
|
4,523
|
|
|
5,944
|
|
||
Total liabilities and equity
|
$
|
35,798
|
|
|
$
|
37,497
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Revenues
|
|
|
|
||||
Product sales
|
$
|
1,965
|
|
|
$
|
2,076
|
|
Other revenues
|
30
|
|
|
33
|
|
||
|
1,995
|
|
|
2,109
|
|
||
Expenses
|
|
|
|
||||
Cost of goods sold (excluding amortization and impairments of intangible assets)
|
560
|
|
|
584
|
|
||
Cost of other revenues
|
13
|
|
|
12
|
|
||
Selling, general and administrative
|
591
|
|
|
661
|
|
||
Research and development
|
92
|
|
|
96
|
|
||
Amortization of intangible assets
|
743
|
|
|
635
|
|
||
Goodwill impairments
|
2,213
|
|
|
—
|
|
||
Asset impairments
|
44
|
|
|
138
|
|
||
Restructuring and integration costs
|
6
|
|
|
18
|
|
||
Acquired in-process research and development costs
|
1
|
|
|
4
|
|
||
Acquisition-related contingent consideration
|
2
|
|
|
(10
|
)
|
||
Other expense (income), net
|
11
|
|
|
(240
|
)
|
||
|
4,276
|
|
|
1,898
|
|
||
Operating (loss) income
|
(2,281
|
)
|
|
211
|
|
||
Interest income
|
3
|
|
|
3
|
|
||
Interest expense
|
(416
|
)
|
|
(474
|
)
|
||
Loss on extinguishment of debt
|
(27
|
)
|
|
(64
|
)
|
||
Foreign exchange and other
|
27
|
|
|
29
|
|
||
Loss before benefit from income taxes
|
(2,694
|
)
|
|
(295
|
)
|
||
Benefit from income taxes
|
(3
|
)
|
|
(924
|
)
|
||
Net (loss) income
|
(2,691
|
)
|
|
629
|
|
||
Less: Net income attributable to noncontrolling interest
|
2
|
|
|
1
|
|
||
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc.
|
$
|
(2,693
|
)
|
|
$
|
628
|
|
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.:
|
|
|
|
||||
Basic
|
$
|
(7.68
|
)
|
|
$
|
1.80
|
|
Diluted
|
$
|
(7.68
|
)
|
|
$
|
1.79
|
|
|
|
|
|
||||
Weighted-average common shares
|
|
|
|
||||
Basic
|
350.7
|
|
|
349.8
|
|
||
Diluted
|
350.7
|
|
|
350.5
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net (loss) income
|
$
|
(2,691
|
)
|
|
$
|
629
|
|
Other comprehensive income
|
|
|
|
||||
Foreign currency translation adjustment
|
(46
|
)
|
|
90
|
|
||
Pension and postretirement benefit plan adjustments, net of income taxes
|
—
|
|
|
(1
|
)
|
||
Other comprehensive income
|
(46
|
)
|
|
89
|
|
||
Comprehensive (loss) income
|
(2,737
|
)
|
|
718
|
|
||
Less: Comprehensive loss attributable to noncontrolling interest
|
(2
|
)
|
|
(1
|
)
|
||
Comprehensive (loss) income attributable to Valeant Pharmaceuticals International, Inc.
|
$
|
(2,735
|
)
|
|
$
|
719
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net (loss) income
|
$
|
(2,691
|
)
|
|
$
|
629
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization of intangible assets
|
786
|
|
|
674
|
|
||
Amortization and write-off of debt discounts and debt issuance costs
|
23
|
|
|
43
|
|
||
Asset impairments
|
44
|
|
|
138
|
|
||
Gain on disposals of assets and businesses, net
|
—
|
|
|
(317
|
)
|
||
Acquisition-related contingent consideration
|
2
|
|
|
(10
|
)
|
||
Allowances for losses on trade receivable and inventories
|
17
|
|
|
24
|
|
||
Deferred income taxes
|
(40
|
)
|
|
(954
|
)
|
||
Additions to accrued legal settlements
|
11
|
|
|
76
|
|
||
Payments of accrued legal settlements
|
(170
|
)
|
|
—
|
|
||
Goodwill impairment
|
2,213
|
|
|
—
|
|
||
Share-based compensation
|
21
|
|
|
28
|
|
||
Foreign exchange gain
|
(25
|
)
|
|
(31
|
)
|
||
Loss on extinguishment of debt
|
27
|
|
|
64
|
|
||
Other
|
(3
|
)
|
|
(2
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade receivables
|
204
|
|
|
432
|
|
||
Inventories
|
—
|
|
|
(38
|
)
|
||
Prepaid expenses and other current assets
|
(70
|
)
|
|
2
|
|
||
Accounts payable, accrued and other liabilities
|
89
|
|
|
196
|
|
||
Net cash provided by operating activities
|
438
|
|
|
954
|
|
||
|
|
|
|
||||
Cash Flows From Investing Activities
|
|
|
|
||||
Acquisition of businesses, net of cash acquired
|
5
|
|
|
—
|
|
||
Acquisition of intangible assets and other assets
|
(14
|
)
|
|
(131
|
)
|
||
Purchases of property, plant and equipment
|
(33
|
)
|
|
(38
|
)
|
||
Proceeds from sale of marketable securities
|
2
|
|
|
—
|
|
||
Proceeds from sale of assets and businesses, net of costs to sell
|
(8
|
)
|
|
1,317
|
|
||
Net cash (used in) provided by investing activities
|
(48
|
)
|
|
1,148
|
|
||
|
|
|
|
||||
Cash Flows From Financing Activities
|
|
|
|
||||
Issuance of long-term debt, net of discount
|
1,481
|
|
|
6,234
|
|
||
Repayments of long-term debt
|
(1,731
|
)
|
|
(7,619
|
)
|
||
Repayments of short-term debt
|
(1
|
)
|
|
(1
|
)
|
||
Payment of employee withholding tax upon vesting of share-based awards
|
(5
|
)
|
|
—
|
|
||
Payments of contingent consideration
|
(11
|
)
|
|
(8
|
)
|
||
Payments of financing costs
|
(20
|
)
|
|
(38
|
)
|
||
Other
|
(1
|
)
|
|
(10
|
)
|
||
Net cash used in financing activities
|
(288
|
)
|
|
(1,442
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
10
|
|
|
8
|
|
||
Net increase in cash and cash equivalents
|
112
|
|
|
668
|
|
||
Cash and cash equivalents and restricted cash, beginning of period
|
797
|
|
|
542
|
|
||
Cash and cash equivalents, end of period
|
$
|
909
|
|
|
$
|
1,210
|
|
1.
|
DESCRIPTION OF BUSINESS
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
3.
|
REVENUE RECOGNITION
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||
(in millions)
|
|
Discounts
and
Allowances
|
|
Returns
|
|
Rebates
|
|
Chargebacks
|
|
Distribution
Fees
|
|
Total
|
||||||||||||
Reserve balance, January 1, 2018
|
|
$
|
167
|
|
|
$
|
863
|
|
|
$
|
1,094
|
|
|
$
|
274
|
|
|
$
|
148
|
|
|
$
|
2,546
|
|
Current year provision
|
|
184
|
|
|
88
|
|
|
635
|
|
|
477
|
|
|
48
|
|
|
1,432
|
|
||||||
Payments or credits
|
|
(199
|
)
|
|
(75
|
)
|
|
(620
|
)
|
|
(474
|
)
|
|
(81
|
)
|
|
(1,449
|
)
|
||||||
Reserve balance, March 31, 2018
|
|
$
|
152
|
|
|
$
|
876
|
|
|
$
|
1,109
|
|
|
$
|
277
|
|
|
$
|
115
|
|
|
$
|
2,529
|
|
4.
|
DIVESTITURES
|
5.
|
RESTRUCTURING AND INTEGRATION COSTS
|
6.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
(in millions)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
|
$
|
361
|
|
|
$
|
326
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
265
|
|
|
$
|
230
|
|
|
$
|
35
|
|
|
$
|
—
|
|
Restricted cash
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Acquisition-related contingent consideration
|
|
$
|
(378
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(378
|
)
|
|
$
|
(387
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(387
|
)
|
7.
|
INVENTORIES
|
(in millions)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Raw materials
|
|
$
|
290
|
|
|
$
|
276
|
|
Work in process
|
|
134
|
|
|
146
|
|
||
Finished goods
|
|
618
|
|
|
626
|
|
||
|
|
$
|
1,042
|
|
|
$
|
1,048
|
|
8.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in millions)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
and
Impairments
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
and
Impairments
|
|
Net
Carrying
Amount
|
||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product brands
|
|
$
|
20,973
|
|
|
$
|
(9,984
|
)
|
|
$
|
10,989
|
|
|
$
|
20,913
|
|
|
$
|
(9,281
|
)
|
|
$
|
11,632
|
|
Corporate brands
|
|
938
|
|
|
(212
|
)
|
|
726
|
|
|
933
|
|
|
(179
|
)
|
|
754
|
|
||||||
Product rights/patents
|
|
3,307
|
|
|
(2,396
|
)
|
|
911
|
|
|
3,310
|
|
|
(2,346
|
)
|
|
964
|
|
||||||
Partner relationships
|
|
183
|
|
|
(176
|
)
|
|
7
|
|
|
179
|
|
|
(169
|
)
|
|
10
|
|
||||||
Technology and other
|
|
214
|
|
|
(165
|
)
|
|
49
|
|
|
214
|
|
|
(147
|
)
|
|
67
|
|
||||||
Total finite-lived intangible assets
|
|
25,615
|
|
|
(12,933
|
)
|
|
12,682
|
|
|
25,549
|
|
|
(12,122
|
)
|
|
13,427
|
|
||||||
Acquired IPR&D not in service
|
|
84
|
|
|
—
|
|
|
84
|
|
|
86
|
|
|
—
|
|
|
86
|
|
||||||
Bausch + Lomb Trademark
|
|
1,698
|
|
|
—
|
|
|
1,698
|
|
|
1,698
|
|
|
—
|
|
|
1,698
|
|
||||||
|
|
$
|
27,397
|
|
|
$
|
(12,933
|
)
|
|
$
|
14,464
|
|
|
$
|
27,333
|
|
|
$
|
(12,122
|
)
|
|
$
|
15,211
|
|
(in millions)
|
|
Bausch + Lomb/ International
|
|
Branded Rx
|
|
U.S. Diversified Products
|
|
Total
|
||||||||
Balance, December 31, 2016
|
|
$
|
5,499
|
|
|
$
|
7,265
|
|
|
$
|
3,030
|
|
|
$
|
15,794
|
|
Realignment of segment goodwill
|
|
264
|
|
|
(264
|
)
|
|
—
|
|
|
—
|
|
||||
Balance, January 1, 2017
|
|
5,763
|
|
|
7,001
|
|
|
3,030
|
|
|
15,794
|
|
||||
Goodwill reclassified to assets held for sale and subsequently disposed
|
|
(30
|
)
|
|
(61
|
)
|
|
(84
|
)
|
|
(175
|
)
|
||||
Impairment
|
|
—
|
|
|
(312
|
)
|
|
—
|
|
|
(312
|
)
|
||||
Foreign exchange and other
|
|
283
|
|
|
3
|
|
|
—
|
|
|
286
|
|
||||
Balance, December 31, 2017
|
|
6,016
|
|
|
6,631
|
|
|
2,946
|
|
|
15,593
|
|
||||
Impairment
|
|
—
|
|
|
(2,213
|
)
|
|
—
|
|
|
(2,213
|
)
|
||||
Realignment of Global Solta reporting unit goodwill
|
|
(82
|
)
|
|
115
|
|
|
(33
|
)
|
|
—
|
|
||||
Goodwill reclassified to assets held for sale
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Foreign exchange and other
|
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
||||
Balance, March 31, 2018
|
|
$
|
5,986
|
|
|
$
|
4,533
|
|
|
$
|
2,913
|
|
|
$
|
13,432
|
|
9.
|
ACCRUED AND OTHER CURRENT LIABILITIES
|
(in millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Product rebates
|
|
$
|
1,109
|
|
|
$
|
1,094
|
|
Product returns
|
|
876
|
|
|
863
|
|
||
Interest
|
|
366
|
|
|
324
|
|
||
Employee compensation and benefit costs
|
|
231
|
|
|
259
|
|
||
Income taxes payable
|
|
190
|
|
|
202
|
|
||
Other
|
|
788
|
|
|
952
|
|
||
|
|
$
|
3,560
|
|
|
$
|
3,694
|
|
10.
|
FINANCING ARRANGEMENTS
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
|
Maturity
|
|
Principal Amount
|
|
Net of Discounts and Issuance Costs
|
|
Principal Amount
|
|
Net of Discounts and Issuance Costs
|
||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revolving Credit Facility
|
|
April 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Revolving Credit Facility
|
|
April 2020
|
|
250
|
|
|
250
|
|
|
250
|
|
|
250
|
|
||||
Series F Tranche B Term Loan Facility
|
|
April 2022
|
|
3,315
|
|
|
3,225
|
|
|
3,521
|
|
|
3,420
|
|
||||
Senior Secured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
6.50% Secured Notes
|
|
March 2022
|
|
1,250
|
|
|
1,236
|
|
|
1,250
|
|
|
1,235
|
|
||||
7.00% Secured Notes
|
|
March 2024
|
|
2,000
|
|
|
1,976
|
|
|
2,000
|
|
|
1,975
|
|
||||
5.50% Secured Notes
|
|
November 2025
|
|
1,750
|
|
|
1,729
|
|
|
1,750
|
|
|
1,729
|
|
||||
Senior Unsecured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
5.375%
|
|
March 2020
|
|
691
|
|
|
688
|
|
|
1,708
|
|
|
1,699
|
|
||||
7.00%
|
|
October 2020
|
|
—
|
|
|
—
|
|
|
71
|
|
|
71
|
|
||||
6.375%
|
|
October 2020
|
|
296
|
|
|
294
|
|
|
661
|
|
|
656
|
|
||||
7.50%
|
|
July 2021
|
|
1,625
|
|
|
1,616
|
|
|
1,625
|
|
|
1,615
|
|
||||
6.75%
|
|
August 2021
|
|
578
|
|
|
575
|
|
|
650
|
|
|
648
|
|
||||
5.625%
|
|
December 2021
|
|
900
|
|
|
896
|
|
|
900
|
|
|
896
|
|
||||
7.25%
|
|
July 2022
|
|
550
|
|
|
545
|
|
|
550
|
|
|
545
|
|
||||
5.50%
|
|
March 2023
|
|
1,000
|
|
|
994
|
|
|
1,000
|
|
|
993
|
|
||||
5.875%
|
|
May 2023
|
|
3,250
|
|
|
3,226
|
|
|
3,250
|
|
|
3,224
|
|
||||
4.50% euro-denominated debt
|
|
May 2023
|
|
1,848
|
|
|
1,835
|
|
|
1,801
|
|
|
1,787
|
|
||||
6.125%
|
|
April 2025
|
|
3,250
|
|
|
3,223
|
|
|
3,250
|
|
|
3,222
|
|
||||
9.00%
|
|
December 2025
|
|
1,500
|
|
|
1,466
|
|
|
1,500
|
|
|
1,464
|
|
||||
9.25%
|
|
April 2026
|
|
1,500
|
|
|
1,480
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
Various
|
|
14
|
|
|
14
|
|
|
15
|
|
|
15
|
|
||||
Total long-term debt and other
|
|
|
|
$
|
25,567
|
|
|
25,268
|
|
|
$
|
25,752
|
|
|
25,444
|
|
||
Less: Current portion of long-term debt and other
|
|
|
|
2
|
|
|
|
|
|
209
|
|
|||||||
Non-current portion of long-term debt
|
|
|
|
|
|
$
|
25,266
|
|
|
|
|
|
$
|
25,235
|
|
11.
|
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS
|
|
|
Pension Benefit Plans
|
|
Postretirement
Benefit
Plan
|
||||||||||||||||||||
|
U.S. Plan
|
|
Non-U.S. Plans
|
|
||||||||||||||||||||
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
2
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Expected return on plan assets
|
|
(4
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Net periodic (benefit) cost
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
12.
|
SHARE-BASED COMPENSATION
|
|
|
Three Months Ended
March 31, |
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Stock options
|
|
$
|
5
|
|
|
$
|
5
|
|
RSUs
|
|
16
|
|
|
23
|
|
||
|
|
$
|
21
|
|
|
$
|
28
|
|
|
|
|
|
|
||||
Research and development expenses
|
|
$
|
2
|
|
|
$
|
2
|
|
Selling, general and administrative expenses
|
|
19
|
|
|
26
|
|
||
|
|
$
|
21
|
|
|
$
|
28
|
|
13.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
(in millions)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Foreign currency translation adjustments
|
|
$
|
(1,833
|
)
|
|
$
|
(1,877
|
)
|
Pension and postretirement benefit plan adjustments, net of tax
|
|
(19
|
)
|
|
(19
|
)
|
||
|
|
$
|
(1,852
|
)
|
|
$
|
(1,896
|
)
|
14.
|
RESEARCH AND DEVELOPMENT
|
|
|
Three Months Ended
March 31, |
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Product related research and development
|
|
$
|
83
|
|
|
$
|
86
|
|
Quality assurance
|
|
9
|
|
|
10
|
|
||
|
|
$
|
92
|
|
|
$
|
96
|
|
15.
|
OTHER EXPENSE (INCOME), NET
|
|
|
Three Months Ended
March 31, |
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Gain on the Skincare Sale (Note 4)
|
|
$
|
—
|
|
|
$
|
(319
|
)
|
Net gain on other sales of assets
|
|
—
|
|
|
2
|
|
||
Litigation and other matters
|
|
11
|
|
|
76
|
|
||
Other, net
|
|
—
|
|
|
1
|
|
||
|
|
$
|
11
|
|
|
$
|
(240
|
)
|
16.
|
INCOME TAXES
|
17.
|
(LOSS) EARNINGS PER SHARE
|
|
|
Three Months Ended
March 31, |
||||||
(in millions, except per share amounts)
|
|
2018
|
|
2017
|
||||
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc.
|
|
$
|
(2,693
|
)
|
|
$
|
628
|
|
|
|
|
|
|
||||
Basic weighted-average number of common shares outstanding
|
|
350.7
|
|
|
349.8
|
|
||
Diluted effect of stock options, RSUs and other
|
|
—
|
|
|
0.7
|
|
||
Diluted weighted-average number of common shares outstanding
|
|
350.7
|
|
|
350.5
|
|
||
|
|
|
|
|
||||
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.:
|
|
|
|
|
||||
Basic
|
|
$
|
(7.68
|
)
|
|
$
|
1.80
|
|
Diluted
|
|
$
|
(7.68
|
)
|
|
$
|
1.79
|
|
(in millions)
|
|
|
Basic weighted-average number of common shares outstanding
|
350.7
|
|
Diluted effect of stock options, RSUs and other
|
2.5
|
|
Diluted weighted-average number of common shares outstanding
|
353.2
|
|
18.
|
LEGAL PROCEEDINGS
|
19.
|
SEGMENT INFORMATION
|
•
|
The Bausch + Lomb/International segment
consists of: (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products, primarily comprised of Bausch + Lomb products, with a focus on the Vision Care, Surgical, Consumer and Ophthalmology Rx products and (ii) with the exception of sales of Solta products, sales in Canada, Europe, Asia, Latin America, Africa and the Middle East of branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products, and Bausch + Lomb products.
|
•
|
The Branded Rx segment
consists of: (i) sales in the U.S. of Salix products (gastrointestinal products), (ii) sales in the U.S. of Ortho Dermatologics (dermatological products), (iii) global sales of Solta products and (iv) sales in the U.S. of dentistry products.
|
•
|
The U.S. Diversified Products segment
consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neurology and certain other therapeutic classes and (ii) generic products.
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Bausch + Lomb/International
|
$
|
1,103
|
|
|
$
|
1,134
|
|
Branded Rx
|
593
|
|
|
629
|
|
||
U.S. Diversified Products
|
299
|
|
|
346
|
|
||
|
$
|
1,995
|
|
|
$
|
2,109
|
|
|
|
|
|
||||
Segment profits:
|
|
|
|
||||
Bausch + Lomb/International
|
$
|
297
|
|
|
$
|
326
|
|
Branded Rx
|
331
|
|
|
330
|
|
||
U.S. Diversified Products
|
225
|
|
|
267
|
|
||
|
853
|
|
|
923
|
|
||
Corporate
|
(114
|
)
|
|
(167
|
)
|
||
Amortization of intangible assets
|
(743
|
)
|
|
(635
|
)
|
||
Goodwill impairments
|
(2,213
|
)
|
|
—
|
|
||
Asset impairments
|
(44
|
)
|
|
(138
|
)
|
||
Restructuring and integration costs
|
(6
|
)
|
|
(18
|
)
|
||
Acquired in-process research and development costs
|
(1
|
)
|
|
(4
|
)
|
||
Acquisition-related contingent consideration
|
(2
|
)
|
|
10
|
|
||
Other (expense) income, net
|
(11
|
)
|
|
240
|
|
||
Operating (loss) income
|
(2,281
|
)
|
|
211
|
|
||
Interest income
|
3
|
|
|
3
|
|
||
Interest expense
|
(416
|
)
|
|
(474
|
)
|
||
Loss on extinguishment of debt
|
(27
|
)
|
|
(64
|
)
|
||
Foreign exchange and other
|
27
|
|
|
29
|
|
||
Loss before benefit from income taxes
|
$
|
(2,694
|
)
|
|
$
|
(295
|
)
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||||||||||
(in millions)
|
Bausch + Lomb/ International
|
|
Branded Rx
|
|
U.S. Diversified Products
|
|
Total
|
|
Bausch + Lomb/ International
|
|
Branded Rx
|
|
U.S. Diversified Products
|
|
Total
|
||||||||||||||||
Pharmaceuticals
|
$
|
203
|
|
|
$
|
557
|
|
|
$
|
206
|
|
|
$
|
966
|
|
|
$
|
229
|
|
|
$
|
595
|
|
|
$
|
258
|
|
|
$
|
1,082
|
|
Devices
|
363
|
|
|
29
|
|
|
—
|
|
|
392
|
|
|
322
|
|
|
23
|
|
|
—
|
|
|
345
|
|
||||||||
OTC
|
326
|
|
|
—
|
|
|
—
|
|
|
326
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
376
|
|
||||||||
Branded and Other Generics
|
191
|
|
|
—
|
|
|
90
|
|
|
281
|
|
|
189
|
|
|
—
|
|
|
85
|
|
|
274
|
|
||||||||
Other revenues
|
20
|
|
|
7
|
|
|
3
|
|
|
30
|
|
|
18
|
|
|
11
|
|
|
3
|
|
|
32
|
|
||||||||
|
$
|
1,103
|
|
|
$
|
593
|
|
|
$
|
299
|
|
|
$
|
1,995
|
|
|
$
|
1,134
|
|
|
$
|
629
|
|
|
$
|
346
|
|
|
$
|
2,109
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
U.S. and Puerto Rico
|
$
|
1,176
|
|
|
$
|
1,295
|
|
China
|
84
|
|
|
68
|
|
||
Canada
|
77
|
|
|
79
|
|
||
Poland
|
63
|
|
|
51
|
|
||
France
|
55
|
|
|
48
|
|
||
Japan
|
51
|
|
|
51
|
|
||
Germany
|
50
|
|
|
42
|
|
||
Egypt
|
45
|
|
|
32
|
|
||
Mexico
|
43
|
|
|
38
|
|
||
Russia
|
28
|
|
|
44
|
|
||
United Kingdom
|
27
|
|
|
25
|
|
||
Italy
|
22
|
|
|
18
|
|
||
Spain
|
21
|
|
|
17
|
|
||
Brazil
|
20
|
|
|
27
|
|
||
Other
|
233
|
|
|
274
|
|
||
|
$
|
1,995
|
|
|
$
|
2,109
|
|
|
Three Months Ended March 31,
|
||
(in millions)
|
2018
|
|
2017
|
McKesson Corporation (including McKesson Specialty)
|
18%
|
|
20%
|
AmerisourceBergen Corporation
|
18%
|
|
13%
|
Cardinal Health, Inc.
|
11%
|
|
14%
|
(in millions)
|
March 31,
2018 |
|
December 31,
2017 (1) |
||||
Assets:
|
|
|
|
||||
Bausch + Lomb/International
|
$
|
14,662
|
|
|
$
|
14,351
|
|
Branded Rx
|
15,506
|
|
|
17,761
|
|
||
U.S. Diversified Products
|
4,919
|
|
|
4,712
|
|
||
|
35,087
|
|
|
36,824
|
|
||
Corporate
|
711
|
|
|
673
|
|
||
Total assets
|
$
|
35,798
|
|
|
$
|
37,497
|
|
20.
|
SUBSEQUENT EVENTS
|
•
|
The Bausch + Lomb/International segment
consists of: (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products, primarily comprised of Bausch + Lomb products, with a focus on the Vision Care, Surgical, Consumer and Ophthalmology Rx products and (ii) with the exception of sales of Solta products, sales in Canada, Europe, Asia, Latin America, Africa and the Middle East of branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products, and Bausch + Lomb products.
|
•
|
The Branded Rx segment
consists of: (i) sales in the U.S. of Salix products (gastrointestinal products), (ii) sales in the U.S. of Ortho Dermatologics (dermatological products), (iii) global sales of Solta products and (iv) sales in the U.S. of dentistry products.
|
•
|
The U.S. Diversified Products segment
consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neurology and certain other therapeutic classes and (ii) generic products.
|
•
|
Dermatology - Duobrii™ (provisional name), under development as Internal Development Project ("IDP") 118, is the first and only topical lotion that contains a unique combination of halobetasol propionate and tazarotene for the treatment of moderate-to-severe plaque psoriasis in adults. Halobetasol propionate and tazarotene are each approved to treat plaque psoriasis when used separately, but are limited in duration of use. Halobetasol propionate may be used for up to two weeks and tazarotene may be limited due to irritation. Based on existing data from clinical studies, the combination of these ingredients in Duobrii™ with a dual mechanism of action, potentially allows for expanded duration of use, with reduced adverse events. On November 2, 2017, we announced that the FDA accepted for review our New Drug Application (“NDA”) for Duobrii™ and set a Prescription Drug User Fee Act (“PDUFA”) action date of June 18, 2018.
|
•
|
Dermatology - Bryhali™ (provisional name), under development as IDP-122, is a novel product that contains a unique, lower concentration of halobetasol propionate for the treatment of moderate-to-severe psoriasis. Halobetasol propionate is approved to treat plaque psoriasis, but is limited in duration of use. Based on existing data from clinical studies, this novel formulation potentially allows for expanded duration of use. On February 14, 2018, we announced that the FDA accepted for review our NDA for Bryhali™ (provisional name) and set a PDUFA action date of October 5, 2018.
|
•
|
Dermatology - On
February 27, 2018, we announced that we entered into an exclusive license agreement with Kaken Pharmaceutical Co., Ltd. to develop and commercialize products containing a new chemical entity, KP-470, for the topical treatment of psoriasis. KP-470 is a tumor necrosis factor-alpha converting enzyme inhibitor. Early proof of concept studies are planned for the second half of 2018. If approved by the FDA, KP-470 could represent a novel drug with an alternative mechanism of action in the topical treatment of psoriasis.
|
•
|
Bausch + Lomb - Bausch + Lomb ULTRA
®
for Astigmatism is a monthly planned replacement contact lens for astigmatic patients. The Bausch + Lomb ULTRA
®
for Astigmatism lens was developed using the proprietary MoistureSeal
®
technology. In addition, the Bausch + Lomb ULTRA
®
for Astigmatism lens integrates an OpticAlign™ design engineered for lens stability and to promote a successful wearing experience for the astigmatic patient. We launched this product and the extended power range for this product in 2017.
|
•
|
Dermatology - On July 27, 2017, we launched Siliq™ in the U.S. Siliq™ is an IL-17 receptor blocker monoclonal antibody biologic for treatment of moderate-to-severe plaque psoriasis, which we estimate to be an over $5,000 million market in the U.S. The FDA approved the Biologics License Application (“BLA”) for Siliq™ injection for subcutaneous use for the treatment of moderate-to-severe plaque psoriasis in adult patients who are candidates for systemic therapy or phototherapy and have failed to respond or have lost response to other systemic therapies. Siliq™ has a Black Box Warning for the risks in patients with a history of suicidal thoughts or behavior and was approved with a Risk Evaluation and Mitigation Strategy involving a one-time enrollment for physicians and one-time informed consent for patients.
|
•
|
Bausch + Lomb - Vyzulta™ (latanoprostene bunod ophthalmic solution, 0.024%) is an intraocular pressure lowering single-agent eye drop dosed once daily for patients with open angle glaucoma or ocular hypertension and was launched in December 2017.
|
•
|
Dermatology - IDP-126 is an acne product with a fixed combination of benzoyl peroxide, clindamycin phosphate and adapalene, currently in Phase 2 testing.
|
•
|
Bausch + Lomb - Lumify™ (brimonidine tartrate ophthalmic solution, 0.025%) is an OTC eye drop developed as an ocular redness reliever. Lumify™ was approved by the FDA in December 2017 and launched in May 2018.
|
•
|
Gastrointestinal - A new formulation of rifaximin, which we acquired as part of the Salix Acquisition, is in progress.
|
•
|
Dermatology - Altreno™ (provisional name) is the first lotion (rather than a gel or cream) product containing tretinoin for the treatment of acne. The FDA has accepted for review our NDA for Altreno™ and set a PDUFA action date of August 27, 2018.
|
•
|
Dermatology - IDP-120 is an acne product with a fixed combination of mutually incompatible ingredients; benzoyl peroxide and tretinoin. We plan to begin Phase 3 testing of this product in the second half of 2018.
|
•
|
Dermatology - IDP-123 is an acne product containing lower concentration of tazarotene in a lotion form to help reduce irritation while keeping efficacy, currently in Phase 3 testing.
|
•
|
Dermatology - IDP-124 is a topical lotion product being designed to treat moderate to severe atopic dermatitis, with pimecrolimus. We plan to begin Phase 3 testing of this product in the second quarter of 2018.
|
•
|
Gastrointestinal - On May 7, 2018, we announced that the FDA approved Plenvu
®
, a novel, lower-volume polyethylene glycol-based bowel preparation that has been developed to help provide complete bowel cleansing, with an additional focus on the ascending colon. Plenvu
®
was licensed to Salix in August 2016 by Norgine B.V.
|
•
|
Bausch + Lomb - In April 2017, we launched our Stellaris Elite™ Vision Enhancement System. The Stellaris Elite™ Vision Enhancement System is our next generation phacoemulsification cataract platform, which offers new innovations, as well as the opportunity to add upgrades and enhancements every one to two years. Stellaris Elite™ is the first phacoemulsification platform on the market to offer Adaptive Fluidics™, which combines aspiration control with predictive infusion management to create a responsive and controlled surgical environment for efficient cataract lens removal.
|
•
|
Bausch + Lomb - Vitesse
®
is a hypersonic vitrectomy system for the removal of the vitreous humor gel that fills the eye cavity to provide better access to the retina and allow for a variety of repairs, including the removal of scar tissue, laser repair of retinal detachments and treatment of macular holes. Available exclusively on the Stellaris Elite system, Vitesse
®
liquefies tissue in a highly-localized zone at the edge of the port to increase the level of surgical control and precision to vitrectomies. We launched this product on a limited basis in October 2017.
|
•
|
Dermatology - Next Generation Thermage FLX
TM
is a fourth-generation non-invasive treatment option using a radiofrequency platform designed to optimize key functional characteristics, expand clinical indication set and improve patient outcomes. On September 22, 2017, we received 510(k) clearance from the FDA and launched this product on a limited basis as part of our Solta business.
|
•
|
Bausch + Lomb - On May 1, 2018 we received Premarket Approval from the FDA for 7-day extended wear for our Bausch + Lomb ULTRA
®
monthly planned replacement contact lenses.
|
•
|
Bausch + Lomb - Biotrue
®
ONEday for Astigmatism is a daily disposable contact lens for astigmatic patients. The Biotrue
®
ONEday lenses incorporates Surface Active Technology
TM
to provide a dehydration barrier. The Biotrue
®
ONEday for Astigmatism also includes evolved peri-ballast geometry to deliver stability and comfort for the astigmatic patient. We launched this product in December 2016 and launched the complete extended power range in 2017.
|
•
|
Bausch + Lomb - Bausch + Lomb ULTRA
®
for Presbyopia is a monthly planned replacement contact lens for presbyopic patients. The Bausch + Lomb ULTRA
®
for Presbyopia lens was developed using the proprietary MoistureSeal
®
technology. In addition, the Bausch + Lomb ULTRA
®
for Presbyopia lens integrates a 3 zone progressive design for near, intermediate and distance vision. We launched expanded parameters of this product throughout 2017.
|
•
|
Bausch + Lomb - We are developing a new Ophthalmic Viscosurgical Device product, with a formulation to protect corneal endothelium during Phaco emulsification process during a cataract surgery and to help chamber maintenance and lubrication during interocular lens delivery. In April 2018, we initiated an investigative device exemption (“IDE”) study for this product.
|
•
|
Dermatology - Traser™ is an energy-based platform device with significant versatility and power capabilities to address various dermatological conditions, including vascular and pigmented lesions. We are planning to launch this product in the second half of 2019 as part of our Solta business.
|
•
|
Bausch + Lomb - Loteprednol Gel 0.38% is a new formulation for the treatment of post-operative ocular inflammation and pain with lower drug concentration and less frequent dosing. We have completed Phase III testing and filed an NDA with the FDA for this product in April 2018.
|
•
|
Bausch + Lomb - enVista
®
Trifocal intraocular lens is an innovative lens design and we expect to initiate an IDE study for this product in the first half of 2018.
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
|
Maturity
|
|
Principal Amount
|
|
Net of Discounts and Issuance Costs
|
|
Principal Amount
|
|
Net of Discounts and Issuance Costs
|
||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revolving Credit Facility
|
|
April 2020
|
|
$
|
250
|
|
|
$
|
250
|
|
|
$
|
250
|
|
|
$
|
250
|
|
Series F Tranche B Term Loan Facility
|
|
April 2022
|
|
3,315
|
|
|
3,225
|
|
|
3,521
|
|
|
3,420
|
|
||||
Senior Secured Notes
|
|
March 2022 through November 2025
|
|
5,000
|
|
|
4,941
|
|
|
5,000
|
|
|
4,939
|
|
||||
Senior Unsecured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
5.375%
|
|
March 2020
|
|
691
|
|
|
688
|
|
|
1,708
|
|
|
1,699
|
|
||||
7.00%
|
|
October 2020
|
|
—
|
|
|
—
|
|
|
71
|
|
|
71
|
|
||||
6.375%
|
|
October 2020
|
|
296
|
|
|
294
|
|
|
661
|
|
|
656
|
|
||||
9.25%
|
|
April 2026
|
|
1,500
|
|
|
1,480
|
|
|
—
|
|
|
—
|
|
||||
All other Senior Unsecured Notes
|
|
July 2021 through December 2025
|
|
14,501
|
|
|
14,376
|
|
|
14,526
|
|
|
14,394
|
|
||||
Other
|
|
Various
|
|
14
|
|
|
14
|
|
|
15
|
|
|
15
|
|
||||
Total long-term debt and other
|
|
|
|
$
|
25,567
|
|
|
$
|
25,268
|
|
|
$
|
25,752
|
|
|
$
|
25,444
|
|
(in millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Remainder of 2018
|
|
$
|
2
|
|
|
$
|
209
|
|
2019
|
|
—
|
|
|
—
|
|
||
2020
|
|
1,237
|
|
|
2,690
|
|
||
2021
|
|
3,103
|
|
|
3,175
|
|
||
2022
|
|
5,115
|
|
|
5,115
|
|
||
2023
|
|
6,098
|
|
|
6,051
|
|
||
Thereafter
|
|
10,012
|
|
|
8,512
|
|
||
Gross maturities
|
|
$
|
25,567
|
|
|
$
|
25,752
|
|
|
|
Three Months Ended March 31,
|
||||||||||
(in millions, except per share data)
|
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
|
$
|
1,995
|
|
|
$
|
2,109
|
|
|
$
|
(114
|
)
|
Operating (loss) income
|
|
$
|
(2,281
|
)
|
|
$
|
211
|
|
|
$
|
(2,492
|
)
|
Loss before benefit from income taxes
|
|
$
|
(2,694
|
)
|
|
$
|
(295
|
)
|
|
$
|
(2,399
|
)
|
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc.
|
|
$
|
(2,693
|
)
|
|
$
|
628
|
|
|
$
|
(3,321
|
)
|
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(7.68
|
)
|
|
$
|
1.80
|
|
|
$
|
(9.48
|
)
|
Diluted
|
|
$
|
(7.68
|
)
|
|
$
|
1.79
|
|
|
$
|
(9.47
|
)
|
•
|
a decrease
in contribution (Product sales revenue less Cost of goods sold, excluding amortization and impairments of intangible assets) of
$87 million
. The
decrease
was primarily driven by
the impact of 2017 divestitures and discontinuations
, partially offset by: (i) the favorable
effect of foreign currencies
and (ii) improved average realized pricing, primarily in our GI business;
|
•
|
a decrease
in Selling, general, and administrative (“SG&A”) expenses of
$70 million
primarily attributable to: (i)
the impact of 2017 divestitures and discontinuations
and (ii) lower expenses associated with our existing businesses, partially offset by the unfavorable
effect of foreign currencies
;
|
•
|
a decrease
in
Research and development
of
$4 million
as we removed projects related to 2017 divestitures and discontinuances and rebalanced our portfolio to better align with our long-term plans and focus on core businesses;
|
•
|
an increase
in
Amortization of intangible assets
of
$108 million
driven by higher amortization as a result of management's revisions to its estimates of remaining useful lives of certain products and the Salix brand name in 2017 to reflect changes in assumptions, partially offset by lower amortization as a result of impairments to intangible assets during 2017 and
the impact of 2017 divestitures and discontinuations
;
|
•
|
Goodwill impairments
of
$2,213 million
to the goodwill of our Salix and Ortho Dermatologics reporting units were recognized upon adopting new accounting guidance at January 1, 2018;
|
•
|
a decrease
in
Asset impairments
of
$94 million
as a result of significant impairments in 2017 recognized in connection with our 2017 divestitures and discontinuances; and
|
•
|
a decrease
in Other income of
$251 million
. The
decrease
was primarily attributable to the Gain on the Skincare Sale of $319 million in 2017 partially offset by lower charges in 2018 for
Litigation and other matters
.
|
|
Three Months Ended March 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
|
|
|
|
|
||||||
Product sales
|
$
|
1,965
|
|
|
$
|
2,076
|
|
|
$
|
(111
|
)
|
Other revenues
|
30
|
|
|
33
|
|
|
(3
|
)
|
|||
|
1,995
|
|
|
2,109
|
|
|
(114
|
)
|
|||
Expenses
|
|
|
|
|
|
||||||
Cost of goods sold (excluding amortization and impairments of intangible assets)
|
560
|
|
|
584
|
|
|
(24
|
)
|
|||
Cost of other revenues
|
13
|
|
|
12
|
|
|
1
|
|
|||
Selling, general and administrative
|
591
|
|
|
661
|
|
|
(70
|
)
|
|||
Research and development
|
92
|
|
|
96
|
|
|
(4
|
)
|
|||
Amortization of intangible assets
|
743
|
|
|
635
|
|
|
108
|
|
|||
Goodwill impairments
|
2,213
|
|
|
—
|
|
|
2,213
|
|
|||
Asset impairments
|
44
|
|
|
138
|
|
|
(94
|
)
|
|||
Restructuring and integration costs
|
6
|
|
|
18
|
|
|
(12
|
)
|
|||
Acquired in-process research and development costs
|
1
|
|
|
4
|
|
|
(3
|
)
|
|||
Acquisition-related contingent consideration
|
2
|
|
|
(10
|
)
|
|
12
|
|
|||
Other expense (income), net
|
11
|
|
|
(240
|
)
|
|
251
|
|
|||
|
4,276
|
|
|
1,898
|
|
|
2,378
|
|
|||
Operating (loss) income
|
(2,281
|
)
|
|
211
|
|
|
(2,492
|
)
|
|||
Interest income
|
3
|
|
|
3
|
|
|
—
|
|
|||
Interest expense
|
(416
|
)
|
|
(474
|
)
|
|
58
|
|
|||
Loss on extinguishment of debt
|
(27
|
)
|
|
(64
|
)
|
|
37
|
|
|||
Foreign exchange and other
|
27
|
|
|
29
|
|
|
(2
|
)
|
|||
Loss before benefit from income taxes
|
(2,694
|
)
|
|
(295
|
)
|
|
(2,399
|
)
|
|||
Benefit from income taxes
|
(3
|
)
|
|
(924
|
)
|
|
921
|
|
|||
Net (loss) income
|
(2,691
|
)
|
|
629
|
|
|
(3,320
|
)
|
|||
Less: Net income attributable to noncontrolling interest
|
2
|
|
|
1
|
|
|
1
|
|
|||
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc.
|
$
|
(2,693
|
)
|
|
$
|
628
|
|
|
$
|
(3,321
|
)
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
(in millions)
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
||||||
Gross product sales
|
|
$
|
3,397
|
|
|
100
|
%
|
|
$
|
3,586
|
|
|
100
|
%
|
Provisions to reduce gross product sales to net product sales
|
|
|
|
|
|
|
|
|
||||||
Discounts and allowances
|
|
184
|
|
|
5
|
%
|
|
203
|
|
|
6
|
%
|
||
Returns
|
|
88
|
|
|
3
|
%
|
|
108
|
|
|
3
|
%
|
||
Rebates
|
|
635
|
|
|
19
|
%
|
|
611
|
|
|
17
|
%
|
||
Chargebacks
|
|
477
|
|
|
14
|
%
|
|
512
|
|
|
14
|
%
|
||
Distribution fees
|
|
48
|
|
|
1
|
%
|
|
76
|
|
|
2
|
%
|
||
Total provisions
|
|
1,432
|
|
|
42
|
%
|
|
1,510
|
|
|
42
|
%
|
||
Net product sales
|
|
1,965
|
|
|
58
|
%
|
|
2,076
|
|
|
58
|
%
|
||
Other revenues
|
|
30
|
|
|
|
|
33
|
|
|
|
||||
Revenues
|
|
$
|
1,995
|
|
|
|
|
$
|
2,109
|
|
|
|
•
|
discounts and allowances as a percentage of product sales were higher primarily due to lower discount and allowances rates for Zegerid
®
AG and Isuprel
®
partially offset by the launch of Diastat
®
AG and higher sales of Xenazine
®
AG and Migranal
®
AG, which experienced higher discount and allowance rates;
|
•
|
returns as a percentage of gross product sales was unchanged as higher return rates for products such as Glumetza
®
SLX and higher volumes of Xifaxan
®
were offset by decreases from lower sales and return rates associated with certain products, primarily Nitropress
®
, which was impacted by multiple generics in 2017;
|
•
|
rebates as a percentage of product sales were higher due to increased sales of products that carry higher contractual rebates and co-pay assistance programs, including the impact of incremental rebates from contractual price increase limitations. The comparisons were impacted primarily by higher provisions for rebates and the co-pay assistance programs for promoted products, such as Xifaxan
®
, Apriso
®
, Uceris
®
and Retin-A
®
. These increases were offset by decreases in rebates for Solodyn
®
, Jublia
®
, Carac
®
, Glumetza
®
and other products as generic competition caused a decline in volume year over year;
|
•
|
chargebacks as a percentage of gross product sales was unchanged as increases in chargebacks due to higher sales of certain generic products, such as Targretin
®
AG, Diastat
®
AG and Xenazine
®
AG, and certain branded drugs, such as Nifedical™ and Wellbutrin
®
, were offset by decreases in chargebacks associated with: (i) better management of contractual terms of certain non-retail classes of trade products, such as Glumetza
®
SLX, Isuprel
®
, Zegerid
®
, Apriso
®
and Xifaxan
®
and other drugs due to generic competition, (ii) chargebacks in 2017 associated with Provenge
®
which was divested with the Dendreon Sale on June 28, 2017 and (iii) lower utilization by the U.S. government of certain products such as Minocin
®
; and
|
•
|
a decrease in distribution service fees as a percentage of gross product sales due in part to higher offsetting price appreciation credits and better contract terms with our distributors. Price appreciation credits are offset against the
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Gain on the Skincare Sale
|
|
$
|
—
|
|
|
$
|
(319
|
)
|
Net gain on other sales of assets
|
|
—
|
|
|
2
|
|
||
Litigation and other matters
|
|
11
|
|
|
76
|
|
||
Other, net
|
|
—
|
|
|
1
|
|
||
|
|
$
|
11
|
|
|
$
|
(240
|
)
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|||||||||||||||
(in millions)
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
|||||||||
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Bausch + Lomb/International
|
|
$
|
1,103
|
|
|
55
|
%
|
|
$
|
1,134
|
|
|
54
|
%
|
|
$
|
(31
|
)
|
|
(3
|
)%
|
Branded Rx
|
|
593
|
|
|
30
|
%
|
|
629
|
|
|
30
|
%
|
|
(36
|
)
|
|
(6
|
)%
|
|||
U.S. Diversified Products
|
|
299
|
|
|
15
|
%
|
|
346
|
|
|
16
|
%
|
|
(47
|
)
|
|
(14
|
)%
|
|||
Total revenues
|
|
$
|
1,995
|
|
|
100
|
%
|
|
$
|
2,109
|
|
|
100
|
%
|
|
$
|
(114
|
)
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Segment Profits / Segment Profit Margins
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Bausch + Lomb/International
|
|
$
|
297
|
|
|
27
|
%
|
|
$
|
326
|
|
|
29
|
%
|
|
$
|
(29
|
)
|
|
(9
|
)%
|
Branded Rx
|
|
331
|
|
|
56
|
%
|
|
330
|
|
|
52
|
%
|
|
1
|
|
|
< 1%
|
|
|||
U.S. Diversified Products
|
|
225
|
|
|
75
|
%
|
|
267
|
|
|
77
|
%
|
|
(42
|
)
|
|
(16
|
)%
|
|||
Total segment profits
|
|
$
|
853
|
|
|
43
|
%
|
|
$
|
923
|
|
|
44
|
%
|
|
$
|
(70
|
)
|
|
(8
|
)%
|
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
|
|
Change in
Organic Revenue
|
|||||||||||||||||||||||||
|
|
Revenue
as
Reported
|
|
Changes in Exchange Rates
|
|
Organic Revenue
(Non-GAAP)
|
|
Revenue
as
Reported
|
|
Divested Revenues
|
|
Organic Revenue
(Non-GAAP)
|
|
||||||||||||||||||
(in millions)
|
|
Amount
|
|
Pct.
|
|||||||||||||||||||||||||||
Bausch + Lomb/International
|
|
$
|
1,103
|
|
|
$
|
(65
|
)
|
|
$
|
1,038
|
|
|
$
|
1,134
|
|
|
$
|
(113
|
)
|
|
$
|
1,021
|
|
|
$
|
17
|
|
|
2
|
%
|
Branded Rx
|
|
593
|
|
|
(1
|
)
|
|
592
|
|
|
629
|
|
|
(83
|
)
|
|
546
|
|
|
46
|
|
|
8
|
%
|
|||||||
U.S. Diversified Products
|
|
299
|
|
|
—
|
|
|
299
|
|
|
346
|
|
|
(18
|
)
|
|
328
|
|
|
(29
|
)
|
|
(9
|
)%
|
|||||||
Total
|
|
$
|
1,995
|
|
|
$
|
(66
|
)
|
|
$
|
1,929
|
|
|
$
|
2,109
|
|
|
$
|
(214
|
)
|
|
$
|
1,895
|
|
|
$
|
34
|
|
|
2
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|||||||||||||||
(in millions)
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
|||||||||
Wellbutrin
®
|
|
$
|
62
|
|
|
21
|
%
|
|
$
|
49
|
|
|
14
|
%
|
|
$
|
13
|
|
|
27
|
%
|
Syprine
®
|
|
18
|
|
|
6
|
%
|
|
20
|
|
|
6
|
%
|
|
(2
|
)
|
|
(10
|
)%
|
|||
Isuprel
®
|
|
17
|
|
|
6
|
%
|
|
38
|
|
|
11
|
%
|
|
(21
|
)
|
|
(55
|
)%
|
|||
Cuprimine
®
|
|
16
|
|
|
5
|
%
|
|
20
|
|
|
6
|
%
|
|
(4
|
)
|
|
(20
|
)%
|
|||
Mephyton
®
|
|
14
|
|
|
5
|
%
|
|
17
|
|
|
5
|
%
|
|
(3
|
)
|
|
(18
|
)%
|
|||
Xenazine
®
US
|
|
14
|
|
|
5
|
%
|
|
29
|
|
|
8
|
%
|
|
(15
|
)
|
|
(52
|
)%
|
|||
Ativan
®
|
|
13
|
|
|
4
|
%
|
|
17
|
|
|
5
|
%
|
|
(4
|
)
|
|
(24
|
)%
|
|||
Aplenzin
®
|
|
12
|
|
|
4
|
%
|
|
8
|
|
|
2
|
%
|
|
4
|
|
|
50
|
%
|
|||
Migranal
®
AG
|
|
10
|
|
|
3
|
%
|
|
12
|
|
|
3
|
%
|
|
(2
|
)
|
|
(17
|
)%
|
|||
Diastat AG
®
|
|
7
|
|
|
2
|
%
|
|
—
|
|
|
—
|
%
|
|
7
|
|
|
—
|
%
|
|||
Other product revenues
|
|
113
|
|
|
38
|
%
|
|
132
|
|
|
39
|
%
|
|
(19
|
)
|
|
(14
|
)%
|
|||
Other revenues
|
|
3
|
|
|
1
|
%
|
|
4
|
|
|
1
|
%
|
|
(1
|
)
|
|
(25
|
)%
|
|||
Total U.S. Diversified Products revenues
|
|
$
|
299
|
|
|
100
|
%
|
|
$
|
346
|
|
|
100
|
%
|
|
$
|
(47
|
)
|
|
(14
|
)%
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
|
||||||
(in millions)
|
|
Amount
|
|
Amount
|
|
Change
|
||||||
Net (loss) income
|
|
$
|
(2,691
|
)
|
|
$
|
629
|
|
|
$
|
(3,320
|
)
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities
|
|
2,906
|
|
|
(267
|
)
|
|
3,173
|
|
|||
Changes in operating assets and liabilities
|
|
223
|
|
|
592
|
|
|
(369
|
)
|
|||
Net cash provided by operating activities
|
|
438
|
|
|
954
|
|
|
(516
|
)
|
|||
Net cash (used in) provided by investing activities
|
|
(48
|
)
|
|
1,148
|
|
|
(1,196
|
)
|
|||
Net cash used in financing activities
|
|
(288
|
)
|
|
(1,442
|
)
|
|
1,154
|
|
|||
Effect of exchange rate on cash and cash equivalents
|
|
10
|
|
|
8
|
|
|
2
|
|
|||
Net increase in cash and cash equivalents
|
|
112
|
|
|
668
|
|
|
(556
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
|
797
|
|
|
542
|
|
|
255
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
909
|
|
|
$
|
1,210
|
|
|
$
|
(301
|
)
|
(in millions)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Remainder of 2018
|
|
$
|
2
|
|
|
$
|
209
|
|
2019
|
|
—
|
|
|
—
|
|
||
2020
|
|
1,237
|
|
|
2,690
|
|
||
2021
|
|
3,103
|
|
|
3,175
|
|
||
2022
|
|
5,115
|
|
|
5,115
|
|
||
2023
|
|
6,098
|
|
|
6,051
|
|
||
Thereafter
|
|
10,012
|
|
|
8,512
|
|
||
Gross maturities
|
|
$
|
25,567
|
|
|
$
|
25,752
|
|
Rating Agency
|
|
Corporate Rating
|
|
Senior Secured Rating
|
|
Senior Unsecured Rating
|
|
Outlook
|
Moody’s
|
|
B3
|
|
Ba3
|
|
Caa1
|
|
Stable
|
Standard & Poor’s
|
|
B
|
|
BB-
|
|
B-
|
|
Stable
|
Fitch
|
|
B-
|
|
BB-
|
|
B-
|
|
Stable
|
•
|
Debt service
—We expect to make interest payments of approximately $1,300 million during the remainder of 2018.
As a result of prepayments and a series of refinancing transactions, we have substantially eliminated any further scheduled mandatory long-term debt repayments through March 2020, providing us with additional liquidity and greater flexibility to execute our business plans.
We may elect to make additional principal payments under certain circumstances. Further, in the ordinary course of business, we may borrow and repay amounts under our Revolving Credit Facility to meet business needs;
|
•
|
Capital expenditures
—We expect to make payments of approximately
$220 million
for property, plant and equipment during the remainder of 2018;
|
•
|
Contingent consideration payments
—We expect to make contingent consideration and other approval/sales-based milestone payments of approximately $100 million during the remainder of 2018;
|
•
|
Restructuring and integration payments
—We expect to make payments of $25 million during the remainder of 2018 for employee separation costs and lease termination obligations associated with restructuring and integration actions we have taken through
March 31, 2018
; and
|
•
|
Benefit obligations
—We expect to make payments under our pension and postretirement obligations of $14 million during the remainder of 2018.
|
(in millions)
|
|
Total
|
|
Remainder of 2018
|
|
2019
|
|
2020 and 2021
|
|
2022 and 2023
|
|
Thereafter
|
||||||||||||
Long-term debt obligations, including interest
|
|
$
|
34,967
|
|
|
$
|
1,260
|
|
|
$
|
1,644
|
|
|
$
|
7,541
|
|
|
$
|
13,260
|
|
|
$
|
11,262
|
|
•
|
the expense, timing and outcome of legal and governmental proceedings, investigations and information requests relating to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices (including with respect to our former relationship with Philidor Rx Services, LLC ("Philidor")), including pending investigations by the U.S. Attorney's Office for the District of Massachusetts and the U.S. Attorney's Office for the Southern District of New York, the pending investigations by the U.S. Securities and Exchange Commission (the “SEC”) of the Company, the request for documents and information received by the Company from the Autorité des marchés financiers (the “AMF”) (the Company’s principal securities regulator in Canada), a number of pending putative securities class action litigations in the U.S. (including related opt-out actions) and Canada and purported class actions under the federal RICO statute and other claims, investigations or proceedings that may be initiated or that may be asserted;
|
•
|
potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of management time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm on our Company, products and business that may result from the past and ongoing public scrutiny of our distribution, marketing, pricing, disclosure and accounting practices and from our former relationship with Philidor, including any claims, proceedings, investigations and liabilities we may face as a result of any alleged wrongdoing by Philidor and/or its management and/or employees;
|
•
|
the past and ongoing scrutiny of our business practices including with respect to pricing (including the investigations by the U.S. Attorney's Offices for the District of Massachusetts and the Southern District of New York) and any pricing controls or price adjustments that may be sought or imposed on our products as a result thereof;
|
•
|
pricing decisions that we have implemented, or may in the future elect to implement, whether as a result of recent scrutiny or otherwise, such as the Patient Access and Pricing Committee’s commitment that the average annual price increase for our branded prescription pharmaceutical products will be set at no greater than single digits and below the 5-year weighted average of the increases within the branded biopharmaceutical industry or any future pricing actions we may take following review by our Patient Access and Pricing Committee (which is responsible for the pricing of our drugs);
|
•
|
legislative or policy efforts, including those that may be introduced and passed by the U.S. Congress, designed to reduce patient out-of-pocket costs for medicines, which could result in new mandatory rebates and discounts or other pricing restrictions, controls or regulations (including mandatory price reductions);
|
•
|
ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic audits by the U.S. Food and Drug Administration (the "FDA") and the results thereof;
|
•
|
actions by the FDA or other regulatory authorities with respect to our products or facilities;
|
•
|
our substantial debt (and potential additional future indebtedness) and current and future debt service obligations, our ability to reduce our outstanding debt levels and the resulting impact on our financial condition, cash flows and results of operations;
|
•
|
our ability to meet the financial and other covenants contained in our Credit Agreement, indentures and other current or future debt agreements and the limitations, restrictions and prohibitions such covenants impose or may impose on the way we conduct our business, including prohibitions on incurring additional debt if certain financial covenants are not met, limitations on the amount of additional debt we are able to incur where not prohibited, and restrictions on our ability to make certain investments and other restricted payments;
|
•
|
any default under the terms of our senior notes indentures or Credit Agreement and our ability, if any, to cure or obtain waivers of such default;
|
•
|
any delay in the filing of any future financial statements or other filings and any default under the terms of our senior notes indentures or Credit Agreement as a result of such delays;
|
•
|
any downgrade by rating agencies in our credit ratings, which may impact, among other things, our ability to raise debt and the cost of capital for additional debt issuances;
|
•
|
any reductions in, or changes in the assumptions used in, our forecasts for fiscal year 2018 or beyond, which could lead to, among other things: (i) a failure to meet the financial and/or other covenants contained in our Credit Agreement and/or indentures and/or (ii) impairment in the goodwill associated with certain of our reporting units or impairment charges related to certain of our products or other intangible assets, which impairments could be material;
|
•
|
changes in the assumptions used in connection with our impairment analyses or assessments, which would lead to a change in such impairment analyses and assessments and which could result in an impairment in the goodwill associated with any of our reporting units or impairment charges related to certain of our products or other intangible assets;
|
•
|
any additional divestitures of our assets or businesses and our ability to successfully complete any such divestitures on commercially reasonable terms and on a timely basis, or at all, and the impact of any such divestitures on our Company, including the reduction in the size or scope of our business or market share, loss of revenue, any loss on sale, including any resultant write-downs of goodwill, or any adverse tax consequences suffered as a result of any such divestitures;
|
•
|
our shift in focus to much lower business development activity through acquisitions for the foreseeable future, including as a result of the restrictions imposed by our Credit Agreement that restrict us from, among other things, making acquisitions over an aggregate threshold (subject to certain exceptions) and from incurring debt to finance such acquisitions, until we achieve a specified leverage ratio;
|
•
|
the uncertainties associated with the acquisition and launch of new products, including, but not limited to, our ability to provide the time, resources, expertise and costs required for the commercial launch of new products, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing, which could lead to material impairment charges;
|
•
|
our ability to retain, motivate and recruit executives and other key employees, including subsequent to retention payments being paid out and as a result of the reputational challenges we face and may continue to face;
|
•
|
our ability to implement effective succession planning for our executives and key employees;
|
•
|
factors impacting our ability to achieve anticipated growth in our Ortho Dermatologics business, including approval of pending and pipeline products (and the timing of such approvals), expected geographic expansion, changes in estimates on market potential for dermatology products and continued investment in and success of our sales force;
|
•
|
factors impacting our ability to achieve anticipated revenues for our Significant Seven products, including the approval of pending products in the Significant Seven (and the timing of such approvals), changes in anticipated marketing spend on such products and launch of competing products;
|
•
|
the challenges and difficulties associated with managing a large complex business, which has, in the past, grown rapidly;
|
•
|
our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
|
•
|
our ability to effectively operate, stabilize and grow our businesses in light of the challenges that the Company currently faces, including with respect to its substantial debt, pending investigations and legal proceedings, scrutiny of our pricing, distribution and other practices, reputational harm and limitations on the way we conduct business imposed by the covenants in our Credit Agreement, indentures and the agreements governing our other indebtedness;
|
•
|
the extent to which our products are reimbursed by government authorities, pharmacy benefit managers ("PBMs") and other third party payors; the impact our distribution, pricing and other practices (including as it relates to our current relationship with Walgreen Co. ("Walgreens")) may have on the decisions of such government authorities, PBMs and other third party payors to reimburse our products; and the impact of obtaining or maintaining such reimbursement on the price and sales of our products;
|
•
|
the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price and sales of our products in connection therewith;
|
•
|
our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
|
•
|
the actions of our third party partners or service providers of research, development, manufacturing, marketing, distribution or other services, including their compliance with applicable laws and contracts, which actions may be beyond our control or influence, and the impact of such actions on our Company, including the impact to the Company of our former relationship with Philidor and any alleged legal or contractual non-compliance by Philidor;
|
•
|
the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering and operating in new and different geographic markets (including the challenges created by new and different regulatory regimes in such countries and the need to comply with applicable anti-bribery and economic sanctions laws and regulations);
|
•
|
adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in certain of the countries in which we do business;
|
•
|
our ability to obtain, maintain and license sufficient intellectual property rights over our products and enforce and defend against challenges to such intellectual property;
|
•
|
the introduction of generic, biosimilar or other competitors of our branded products and other products, including the introduction of products that compete against our products that do not have patent or data exclusivity rights;
|
•
|
if permitted under our Credit Agreement, and to the extent we elect to resume business development activities through acquisitions, our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis and the difficulties, challenges, time and resources associated with the integration of acquired companies, businesses and products;
|
•
|
the expense, timing and outcome of pending or future legal and governmental proceedings, arbitrations, investigations, subpoenas, tax and other regulatory audits, reviews and regulatory proceedings against us or relating to us and settlements thereof;
|
•
|
our ability to obtain components, raw materials or finished products supplied by third parties (some of which may be single-sourced) and other manufacturing and related supply difficulties, interruptions and delays;
|
•
|
the disruption of delivery of our products and the routine flow of manufactured goods;
|
•
|
economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
|
•
|
interest rate risks associated with our floating rate debt borrowings;
|
•
|
our ability to effectively distribute our products and the effectiveness and success of our distribution arrangements, including the impact of our arrangements with Walgreens;
|
•
|
the success of our fulfillment arrangements with Walgreens, including market acceptance of, or market reaction to, such arrangements (including by customers, doctors, patients, PBMs, third party payors and governmental agencies), the continued compliance of such arrangements with applicable laws, and our ability to successfully negotiate any improvements to our arrangements with Walgreens;
|
•
|
our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements;
|
•
|
the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or recalls or withdrawals of products from the market;
|
•
|
the mandatory or voluntary recall or withdrawal of our products from the market and the costs associated therewith;
|
•
|
the availability of, and our ability to obtain and maintain, adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third party insurance or self-insurance;
|
•
|
the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the FDA, Health Canada and similar agencies in other countries, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
|
•
|
the results of continuing safety and efficacy studies by industry and government agencies;
|
•
|
the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as other factors impacting the commercial success of our products, which could lead to material impairment charges;
|
•
|
the results of management reviews of our research and development portfolio (including following the receipt of clinical results or feedback from the FDA or other regulatory authorities), which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
|
•
|
our ability to negotiate the terms of or obtain court approval for the settlement of certain legal and regulatory proceedings;
|
•
|
the seasonality of sales of certain of our products;
|
•
|
declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;
|
•
|
compliance by the Company or our third party partners and service providers (over whom we may have limited influence), or the failure of our Company or these third parties to comply, with health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and business practices (including with respect to pricing), worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act and the Canadian Corruption of Foreign Public Officials Act), worldwide economic sanctions and/or export laws, worldwide environmental laws and regulation and privacy and security regulations;
|
•
|
the impacts of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Health Care Reform Act”) and potential amendment thereof and other legislative and regulatory health care reforms in the countries in which we operate, including with respect to recent government inquiries on pricing;
|
•
|
the impact of any changes in or reforms to the legislation, laws, rules, regulation and guidance that apply to the Company and its business and products or the enactment of any new or proposed legislation, laws, rules, regulations or guidance that will impact or apply to the Company or its businesses or products;
|
•
|
the impact of changes in federal laws and policy under consideration by the Trump administration and Congress, including the effect that such changes will have on fiscal and tax policies, the potential revision of all or portions of the Health Care Reform Act, international trade agreements and policies and policy efforts designed to reduce patient out-of-pocket costs for medicines (which could result in new mandatory rebates and discounts or other pricing restrictions);
|
•
|
illegal distribution or sale of counterfeit versions of our products;
|
•
|
interruptions, breakdowns or breaches in our information technology systems; and
|
•
|
risks in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 28, 2018, and risks detailed from time to time in our other filings with the SEC and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
Valeant Pharmaceuticals International, Inc.
(Registrant) |
|
|
Date: May 8, 2018
|
/s/ JOSEPH C. PAPA
|
|
Joseph C. Papa
Chief Executive Officer (Principal Executive Officer and Chairman of the Board) |
|
|
|
|
Date: May 8, 2018
|
/s/ PAUL S. HERENDEEN
|
|
Paul S. Herendeen
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
†
|
Management contract or compensatory plan or arrangement.
|
1 Year Valeant Pharma Chart |
1 Month Valeant Pharma Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions