Q3 2022 Bausch Health Companies Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the Bausch Health third quarter 2022 earnings call.
At this time, all participants have been placed on a listen only mode and we will open the floor for your questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host Christina Cheng Senior Vice President Investor Relations and communications at Dosshouse Ma'am the floor is yours.
Thanks, Matt Good morning, and welcome to our third quarter 2022 earnings conference call participating.
Participating in today's call are Thomas J, <unk>, Chief Executive Officer of Bausch Health, and Tom <unk> Chief Financial Officer.
Before we begin I'd like to remind you that our presentation. Today contains forward looking information we ask you to take a moment to read the forward looking statements at the beginning of this presentation.
Our actual results may vary materially from these expressed or implied in our forward looking statements and you should not place undue reliance on any forward looking statements.
Please refer to our SEC filings and filings with the Canadian Securities administrators for list. Some of the factors that could cause our actual results to differ materially from expectations.
These non-GAAP financial measures to help investors understand our ongoing business performance.
non-GAAP financial measures may not be comparable to similarly, titled measures used by other companies and should be considered along with but not as an alternative to measures calculated in accordance with GAAP.
You will find reconciliations to non-GAAP measures in the appendix of this presentation, which is available on <unk> Investor Relations website.
Finally, the financial guidance in this presentation is effective as of today only we do not undertake any obligation to update guidance.
Our discussion today will focus on Bausch pharma in Solta. However, we will briefly comment on Boston launch results announced yesterday.
We will refer to year over year comparisons with the same period last year unless otherwise noted.
With that it's my pleasure to turn the call over to our CEO Thomas <unk>.
Thank you Christina and welcome to those of you joining our call today.
Let me start with the four points on slide six that I want you to take away from this quarter.
First we are encouraged with the sequential sales improvement for Bausch pharma and sold through this quarter.
Second we created value during difficult market conditions with a very successful exchange offer that reduce debt principal by two 5 billion.
Third we continue to evaluate potential options to maximize value, including proving our improving our balance sheet and evaluating all factors related to the future distribution of Bausch and lomb.
Fourth we continue to vigorously defend our intellectual property and as I facts in patent litigation.
Let me now take you through some specifics.
First on slide seven I am pleased to report that we are making progress on our key priorities in each of our business segments.
Salix, we are activating patients and caregivers through targeted commercial strategies, which are starting to drive results with facts and script growth running positive during the last eight weeks of the quarter. Other key promoter brand also saw increased scripts led by double digit growth.
For Relistor, and <unk> and mid single digit growth for true.
Salix had a 3% organic revenue increase in Q3, improving from the minus 2% during the first six months of the year.
We continue to intensify our focus on near term initiatives to improve the diagnosis and treatment of Gi and <unk> disease.
In international we continue to grow key markets, such as Poland, Mexico, and Canada with existing brands and new products. The international business posted a 10% organic growth following a healthy 5% increase during the first half of the year.
In Solta medical sales grew organically, 4% with strong gains in our international business. Following a slow first half given the ongoing COVID-19 lockdowns in China.
In diversified products.
EBITA margins remained stable although sales for this segment declined by 17% on an organic basis Julia continues to benefit from our direct to consumer investments and script growth was 34%.
Preston drove a 9% increase in our dentistry business.
Second we took significant step forward in reducing our outstanding debt.
After completing an open market repurchase program in the second quarter, which retired $481 million in long term debt at a significant discount we executed a very successful debt exchange this quarter that further reduce debt principal by two points.
$5 billion with minimal cash outlay. This brings our year to date debt reduction to approximately $3 3 billion.
I want to thank the teams both internally and externally who worked tirelessly through the summer to complete this very successful transaction.
We made significant progress in strengthening our financial position this quarter, we reduced our leverage pushed back our near term debt maturities and generated savings in annual interest costs.
Third we continue to evaluate potential options to maximize stakeholder value. This includes ongoing focus on our balance sheet and liquidity. We continue to believe that the separation of Bausch and lomb makes strategic sense and we will thoughtfully.
Evaluate all factors related to the P&L separation.
In the meantime, we expect that continued focus on commercial execution will improve our operating results and reinforced a solid foundation for our future.
Lastly, let me provide a brief update on our <unk> patent litigation, we filed our appeal with the U S Court of Appeals for the Federal Circuit and expect the process to take approximately 12 to 18 months.
We will not provide any further comments on patent litigation at this time.
With that I'll turn the call over to Tom <unk> will provide further details on our third quarter performance and outlook for the remainder of the year Tom.
Thanks, Tom.
Hello, everyone and thanks for joining us my comments today will refer to organic growth in adjusted results, let's start with slide nine.
We are encouraged with the progress we made this quarter.
With consolidated third quarter revenues of $2 billion up 2% on an organic basis over the same quarter last year.
This represents an important inflection from the first half of the year, which was flat on an organic basis.
But pharma and Solta third quarter revenues were $1 1 billion improving from the 4% decline through the first half of the year to a minus 1% on an organic basis this quarter.
This quarter three out of four businesses posted organic growth, notably Salix International and Solta.
Let me discuss each segment segment in greater detail as shown on slides 10 and 11.
Salix revenues were $544 million, an increase of 3% versus the third quarter last year, an improvement from the 2% decline in the first half of this year.
So FX and revenue was up 4% from the third quarter of last year Trs growth was flat, but ended the quarter with a positive trend.
Increased demand was partially offset by an estimated $13 million reduction of inventory at the retail level.
We're also pleased with the performance of true Lance Relistor and plan view with double digit increases in sales and Trs growth of 6%, 22%, 23% respectively.
International revenues were $250 million, an increase of 10% on an organic basis compared with the third quarter of last year, driven by strong performance in Canada, and Europe and double digit growth in a number of key brands.
Total medical revenues of $72 million increased 4% on an organic basis. This quarter driven by strong results in the Asia Pacific region, as China recovers from the Covid Lockdowns.
Diversified products revenues were $238 million down.
Down 17% on an organic basis compared with the third quarter of last year.
Revenues from neurology decreased 15%, primarily due to lower demand for well butyrin and a decline in COVID-19 related demand for certain products offset by a 16% increase in our plans and revenue.
As Tom noted earlier Julia continues to benefit from our marketing investments in dentistry arrest and was up 10% and we saw lower sales from legacy products and generics.
Lastly on slide 12.
<unk> revenues were $942 million up 5% organically compared with the third quarter of 2021 with organic growth across all P&L segments led by the surgical segment.
Turning to the P&L for the quarter on slide 15.
I will first refer to results on a consolidated basis, and then provide some additional color for the performance of <unk> pharma in Solta.
Third quarter consolidated adjusted gross margin was 71, 5% 90 basis points lower compared with the third quarter last year driven by the impact of inflation. This compares to a 30 basis point decline through the first half of the year.
At <unk> pharma and sold adjusted gross margin was approximately 81% and flat versus the prior year.
Our long term contractual agreements are providing some cost stability. This year despite increases in energy and distribution costs. We do however, expect greater pressure on our cost of goods next year as our contracts renew.
Consolidated adjusted operating expenses for the third quarter was $758 million, an increase of $37 million or 5% with higher R&D and G&A expenses.
<unk> yesterday reported an increase of $26 million in operating expenses.
Consolidated R&D expense increased 10%.
And represented six 5% of net sales compared with five 7% in the third quarter last year as we continue to invest in R&D priorities.
The increase in consolidated G&A costs reflects the impact of the separation and the costs to stand up two public companies.
We will continue to manage our costs prudently.
Third quarter consolidated adjusted EBITDA attributable to <unk> health was $766 million, a decrease of 13% versus last year.
<unk> pharma in Solta segment profit was $660 million.
A decrease of 5% versus last year, driven by the decline in revenue, which includes $25 million, primarily from the Amun divestiture and $27 million from the impact of foreign exchange.
On a consolidated basis third quarter adjusted EBITDA margin was 37, 4% down 450 basis points compared with last year's 41, 9%.
As a reminder, adjusted EBITDA margin for both pharma and Solta approximates in the low $50 range and for Boston lump approximates in the 20% range.
A few words about cash flow, excluding legacy legal settlements separation costs cash provided by our Moon and third party fees related to our recently completed debt exchange adjust.
Adjusted cash flow from operations on a consolidated basis was $9 million.
Versus $382 million last year.
Primarily due to operating results and the timing of working capital movements cash flow in the quarter also included advanced payments of accrued interest on debt that was exchanged of approximately $100 million that ordinarily would have been paid after Q3.
Year to date adjusted cash flow from operations for both pharma and Solta was $297 million.
And we expect adjusted cash flow for the full year of $600 million.
While cash flow has been lumpy this year due to timing the business continues to be highly cash generative.
Our GAAP cash flow on slide 14 included a payment of $1 2 billion.
Out of the restricted cash balance related to a previous settlement of the legacy U S Securities litigation.
Now, let's turn to our balance sheet on slide 16.
As Tom mentioned, we made significant strides in deleveraging our balance sheet this quarter.
This was accomplished through a successful debt exchange offer that reduced our outstanding principle by $2 5 billion of debt with minimal cash outlay.
The exchange offer closed on September 30th.
Total of $5 $6 billion of previously issued senior unsecured notes.
Were exchanged for $2 $1 billion of new secured senior secured notes of Bausch health and $1 billion of new senior secured notes of a wholly owned unrestricted subsidiary that holds approximately 38, 6% of outstanding shares of Boston lump.
The successful debt exchange offer.
Also reduced our 25 to 26 debt maturities by $1 3 billion, which you can see in slide 17.
We expect the transaction to reduce our interest cost by approximately $65 million annually going forward.
You will note that the gain on extinguishment of debt of approximately $570 million.
Is much smaller than the net reduction in our debt principal of $2 5 billion.
Certain GAAP accounting guidance applicable to the exchange.
<unk> and the recording of an approximately $1 $8 billion premium on the newly issued debt. This premium will be amortized to effectively reduce GAAP interest expense over the remaining life of the new bonds. Please find additional details in our Form 10-Q.
As you can see on slide 18 total debt, excluding Boston lump is $17 1 billion.
Which consists of $16 1 billion of restricted debt issued by Bosch pharma.
And $1 billion of senior secured notes issued by the newly created unrestricted subsidiary.
Excluding P&L debt approximately 85% of our debt is fixed or 70% on a consolidated basis and we have no maturities until 2025.
Bush health and its restricted subsidiaries continue to hold the majority of the shares of Boston Lager, which itself remains a restricted subsidiary.
We're focused on improving the company's balance sheet and unlocking stakeholder value.
We've identified potential options that we believe could advance these objectives unrestricting BNS is a potential component of one or more of these possible strategies. We're.
We're continuing to carefully and thoughtfully evaluate all such strategies. However.
However, we cannot comment further on any speculation regarding future transactions.
I will now discuss our outlook for the remainder of 2022, which you can find on slides 20 and 21.
Our guidance for both pharma and Solta remains unchanged with full year revenues of $4 three to 442 billion.
Which is down 3% to flat on an organic basis.
Full year adjusted EBITDA is expected to range between $2 two eight to $2 three 4 billion.
Our previous assumptions are unchanged with the exception of adjusted tax rate, which is now expected to be a little higher at 17% up from 15% previously.
While we expect FX to continue to be a headwind we are maintaining our previously disclosed disclosed guidance for the full year.
As you heard yesterday, Boston lump has reduced its full year revenue outlook by $50 million to $3 seven to $3 $75 billion driven.
Driven by FX and full year, adjusted EBITDA by 25 million to.
Two $715 million to $755 million.
As a result, we are updating our consolidated guidance for revenues of eight to $8 $1 7 billion.
And adjusted EBITDA of $2 $99 billion to $3.09 billion for the full year 2022.
Our expectation for consolidated organic growth of flat to up 2% is unchanged for the full year.
I'll now hand, the call back to Tom Mathew for concluding remarks.
Thank you Tom.
As I said since becoming CEO we have.
<unk>, one driving sales and EBITDA growth.
Two focusing on operating rigor behind R&D and business development.
Three developing a high performance results oriented culture and for creating value through strategic alternatives.
We have made solid progress this quarter our strategy is starting to produce results for bausch <unk> and solta with three out of our four segments posting organic growth and a very successful debt exchange offer that has created additional flexibility to invest in innovation.
<unk>.
We have also made good progress in research and development, which I'd like to touch on briefly today.
We continue to invest strategically in R&D to advance our clinical and regulatory programs in Gi herpetology and other key areas.
One of our new formulations of Rifaximin gain regulatory alignment with various global health authorities on two pivotal phase III trials are Red Sea program could bring a much needed treatment to patients living with liver cirrhosis to prevent their first episode of overt hepatic.
<unk> and Cephalopoda OAG.
This is a much larger patient population in patients being treated with the current formulation of Rifaximin for OAG.
This would be this product would be a global franchise for Solta first salix.
Findings published in our second liver trends report this past quarter highlighted the urgent needs in this area. Our research finds that 81% of the respondents believe preventing the re occurrence of liver disease symptoms is extremely important and yet.
1% of primary care physician survey, we're uncomfortable treating OA.
We will continue to increase our efforts to educate medical practitioners improve both the diagnosis of AG and patient adherence. We expect the recent approval of the new ICD 10 code for AG will support the continued reimbursement for and access to.
Treatment of this life threatening condition.
In conclusion.
We will continue to drive growth profitability and improve our balance sheet.
We will continue continue to vigorously defend our intellectual property and address patient needs with faxing.
We will continue to evaluate potential options to maximize value for all our stakeholders.
I'd like to thank the Bausch health team for all their hard work focus and dedication in driving performance and building a results oriented culture.
As I have stated before we are a resilient team.
<unk> working with a sense of urgency and ownership and we will remain focused as we execute with excellence to drive performance.
With that we will now take any questions you have operator, please open the line for Q and a.
Yes.
Certainly ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time.
We do ask about posting a question. Please pick up your handset if you're listening on speaker phone to provide optimum sound quality we.
We do ask that all Q&A participants please limit to one question and one follow up.
Once again, if you have any questions or comments. Please press star one on your phone.
Your first question is coming from Gary Nachman from BMO capital markets. Your line is live.
Great. Thanks, good morning.
First maybe you could talk at a high level what are the different options you might have related to the distribution of P&L is it all related to achieving the appropriately the appropriate leverage target have those targets changed at all how you're thinking about them and without visibility on as the facts and appeal at this point.
Can you actually still do the distribution can you affect that.
And then secondly, just a follow up just.
Maybe you could talk at all.
So at a high level, just the status of potential divestitures.
Are you close to anything do you feel like discussions have progressed and maybe what the timeframe is for us to hear about something on that front.
Okay, Gary Thanks.
I'll do is I'll, let Tom.
Tom that it could take the first part and then I'll answer the second part Tom.
Yes, Hi, Gerry good morning, Thanks for your question.
Look in terms of options, we continue to consider all options as you mentioned.
Criteria being whats going to create value for all our stakeholders.
And so we're focused on that and then also what would position the company for long term success.
<unk> seen already.
This year that we've been quite thoughtful and the steps we have taken and we're going to continue to be thoughtful with each action in which each step that we're going to take and so.
We're not going to comment on this call on individual actions.
We are considering everything.
And taking each step pretty thoughtfully.
That's all we can say about next steps vis vis distribution are unrestricted or anything else.
That front.
Yes, Gary on the question on divestitures I can.
<unk> team continues to look at the assets that we have globally.
And seeing.
What we have what we can do.
So it's something that we're reviewing constantly and then of course, we have a lot of valuable assets.
And.
There was a divestiture would have to be at a premium price.
But thats something that we continue to look at because if if we were able to divest some assets. We do have some things that we're very interested in from.
From an investment standpoint or paying down debt.
Next question.
Yeah.
Your next question is coming from Georgia, Youre done off from Cowen Your line is live.
Thank you so much for taking our question.
So we have one and I guess a follow up.
Just on a follow up on the previous question can you confirm that at this point you've satisfied all the debt requirements to allow for the spin.
And what is your updated thinking on the previously guided optimal leverage ratios.
And then just as a follow up.
Do you have do we have any updates on the citizens petition.
And if you can.
Talk about what those bioequivalence.
Guidance might look like is are there any examples.
The FDA has required.
From other for other generic products in a specific <unk>.
Similar product specific guidance.
Okay, So Georgia.
I'll, let Tom take the first part and I'll take the second part.
George Thanks.
In terms of criteria for a spin.
As we've said before there are certain leverage targets that the company is that we've set for ourselves as well as various regulatory and other approvals and steps that we've got to take so we are considering all of those.
And not just.
Leverage Doug it's obviously the debt exchange is made of.
It's nice progress as Tom said and I've said in our prepared remarks.
But at this point, we have no further.
No further comments on whether or not we're closer to a spin.
Regarding the second part of the question regarding the citizen's petition.
Right now the <unk>.
Grant granted vouchers petition in part and intends to revise the facts.
Product specific guidance, but as of right now have not issued the actual guidance yet.
Next question.
Thank you. Your next question is coming from David <unk> from Piper Sandler Your line is live.
Hey, guys. This is isaac on for David. Thanks, So much for taking our questions two for me.
So on XI fashion.
We saw a defensive approval for Allergan generic of the 200 milligram strength.
Or two ago.
And it looks like the agency went ahead with their decision without updating the draft guidance.
How does that.
Dynamic alter your thinking.
About a potential label carve out for the <unk> indication and then as a follow up.
Just one on.
Commercially.
What is your ability to invest more.
<unk>.
Given the state of the capital structure.
Should we at this point, thanks, guys, thanks, and as a largely mature asset.
Just manage and maximize the cash flows out of thanks.
Thanks, so much.
Okay I'll take those I'll take those two questions.
Firstly.
On the 200 milligram.
I can't speculate on this time regarding regarding that question.
I would say is let's just talk about the facts and what I believe.
And the team believes we have we have great assets here in two very important.
<unk> if you take a look at the incidence of.
These diseases.
Nearly half a lot of area for growth.
And if I take just take a look from an Ibs D perspective.
Two 5 million patients or diagnosis diagnosed with Ibs D, but only 140000.
Treated with second line medication legs that facts.
So there is a lot of area there to grow we are investing.
This year and next year. Our plan is to continue to put more investment behind this franchise when we take a look at AG.
Our analytics indicates that theres about 193000 patients potentially have.
And only 50000 are treated with a fax and which is a standard of care and the only approved medication.
In this indication so I believe there is a lot of space there to continue to grow this franchise.
And we put extra investment.
These are facts.
Vaccine franchise for 2022, and we are expecting to increase that investment in 2023.
So I think there is.
As we look at it this is a really core franchise for us that we can continue to grow.
Next question.
Yes.
Thank you. Your next question is coming from whomever robot from Evercore. Your line is live.
Hi, guys alright, Thanks for taking my question a couple of quick ones if I may.
<unk> you mentioned, you're evaluating numerous options to maximizing shareholder value could sold that'll be on the table and then also if you could remind us if a shareholder approvals needed for <unk> to go through and be able to you. Thank you.
Hey, Omar Thanks for the question Okay. So.
Of course, the total franchise I believe.
Again, another great asset that we have.
As.
Now that again with the part of the Bausch health family of assets gives us a global footprint around the world.
I think this is an asset that we can continue to grow.
Continue to invest in but keep all options open.
But again.
As I stated previously.
The type of.
Actions that we would take with our assets would have to be especially in asset like solta at a premium price.
So again, we're always we are open to looking at different things, but we believe this asset can really grow for us and really be part of the Bausch health family. So Tom you want to take the second part of the question regarding shareholder approval.
Yes, hi, humor, yes, indeed shareholder approval is required for the for the spin.
Spin.
Next question.
Certainly your next question is coming from Annabel <unk> from Stifel. Your line is live.
Hi, This is Jack calling in for Annabel, Thanks for taking our question.
So you touched on H E briefly but would you be able to provide any additional color on any update for some of the other rifaximin programs and which of the several you up going might have the potential to offer a future offset to that tax and revenue.
Yes, Jeff as I said in my prepared remarks.
When I look at the Red Sea program I think that this is an area where this is a much larger patient population.
And so this indication.
And the work that's going on here.
What is a large much larger pool. So we believe that this.
This program can really be.
Really growth driver for us in the future of course, we.
Have to wait and see on the data, but the Red Sea program is a high priority for us and we really believe in it.
Next question.
Certainly your next question is coming from Greg Fraser from Truest Securities. Your line is live.
Alright, Thanks for taking the question on the P&L spin or the IRS is viewed in the remaining legacy legal cases that could influence the process I guess do you need visibility on those in order to move forward and then on working capital can you just comment further on the quarter you mentioned the changes in working capital embedded cash flow from ops any additional color there would be helpful. Thank you.
Okay.
Hi, Greg Tom <unk> here.
I'll take both so on the working capital it's nothing unusual really then.
That goes beyond what because that most companies, it's hard to predict and have an even cash flow pattern throughout the year and we've just had.
Just working capital movements, moving cash in and out of the quarter and so Q2 and Q3.
Being particularly low.
As you know.
And so this year, we're going to end up with is it a barbell at year, where we had pretty nice cash flow in Q1, and then we expect Q4.
To be pretty strong as well.
Sure.
And then on the legacy.
You mentioned you meant the IRS litigation correct Greg.
So when you hire.
And our next shareholder lawsuits that still remain.
Yes.
Like I said.
At the beginning in terms also said we are evaluating all the factors and then evaluating all the options and trying to very carefully step forward.
And take actions and steps that that are in the best interest and beneficial for the company as well as all stakeholders. So all of these factors kind of play into that decision, making process as they have been really frankly for the last few years.
Next question.
Certainly your next question is coming from Douglas <unk> from RBC capital markets. Your line is live.
Thank you and good morning to question number one can you talk about turnover at the company and how things are looking from that perspective, and then secondly for Tom when we think about the debt covenant construct and Werent. The holdco sits which is out.
Decided that.
Leverage ratios would appear to be below.
Or at the six five to $6 seven.
Could you elaborate on how youre viewing the billion dollars thats held within the Holdco.
Sure.
Yes.
Hey, Douglas I'll take the I'll take the first part and then Tom will take the second one.
If we take a look at.
Since the IPO of P&L.
There's been a lot of.
Now are separated between vouched pharma and Solta and and of course, then <unk>. So we're seeing a stabilization and of course as you know with with.
What has taken place globally from a workforce perspective, there are some movements around but right now we are seeing it pretty stable in that regard other than some spikes here and there.
<unk> you want to take the second part Yeah, Hi, good morning.
Let me just take your <unk>. The second part of your question pieces. So I think first just around the covenant credit agreements.
The the that the $1 billion that is that that whole call level.
That is an unrestricted subsidiary and so I don't want to get into trouble with my legal team here for us try and attempt to interpret agreements, but I can tell you briefly that that that.
That that is not part of our.
Would not count.
In the covenants basically on any any leverage ratios that we are calculating in accordance with the covenants on the 6.5% to $6 seven I'll remind you that that was a <unk>.
Company target.
A leverage ratio that we had set out for ourselves.
To ensure that the remaining company.
Is financially strong.
And so we have never said in the winter. It said, how that's going to be calculated and I don't.
Well I don't want to.
Speculate on whether we are at that level or not.
The the that the $1 billion is that of the consolidated company.
And that just leave it at that.
And the next question.
Thank you. Your next question is coming from <unk> from J P. Morgan.
Your line is live.
How're you doing thanks for taking my question. So I have two one.
Note in the past that you would consider all options as it relates to the spin do any of these options include just not moving forward with a spin or are you at the point, where the spin is happening and it's just about market timing and meeting covenant requirements and my follow up as in relation to the requirements. You are below the leveraged target I believe you're at or near.
Your interest coverage target.
And then as it relates to that 50% equity that your own what's holding you back from Unrestricting that is at the litigation does that have to do with the Canadian approval process anything with the solvency opinions.
Can you just walk us through just what's remaining and what's holding you back and then and constructing that 50% spinoffs.
Will it moved to the unrestricted sub that you created back in August . Thank you.
Okay, <unk> I will take the first part Tom will take the second part so the first part of your question. So.
You know what I said in my prepared remarks, we continue to evaluate all relevant factors and considerations regarding the bausch and lomb distribution.
This includes looking it of course.
As a fax and Pat Pat.
Patent situation and we're focused on doing everything we can.
To continue improving the company's balance sheet and liquidity so.
Again, we have identified.
Potential options on path that we believe could reach the objectives we.
We still think the spin off make strategic sense, but we were considering everything given.
The situation that we have today, Tom you want to take the second part.
Yeah, Hi ratio I think Tom sort of addressed the second part of your question as well.
The Unrestricting is just a step.
Viewed as some end in itself, it's a step towards.
Overall strategic path here too.
Two words, the separation of the company and so.
In doing that in in in deciding to Unrestrict or not we are as Tom said looking at all the options, they're trying to be very thoughtful about each step, we're taking and we haven't unrestricted biennale yet.
I'll leave it at that.
Next question.
Thank you. Our last question is coming from Jason Gregory from Bank of America Securities. Your line is live.
Hi, This is cheat on for Jason Thanks for taking our questions.
So may be on side effects and wondering if you can elaborate on the price had fallen dynamic. This order I think coming out of Covid IPF deal with a little slower to pick up. Some wondering if you can talk about the underlying growth dynamics between the IBSA <unk> indications and I guess on Salta.
Can you talk a little elaborate a bit more on the Coke dynamics you, 4% organic growth do you think is set minutes returned to more normalized growth and if not when might you expect this happening to return to a more normalized Grove I.
I hate to squeeze that last one and I know you can't talk a lot more about what you have done what you already have with the distribution, but I'm curious <unk> previous talk about potential timing for spin and I'm wondering do you guys have an internal estimate what that time like mind. Thank you.
So let's break this question down.
So I'll take the one on Solta first when when you look at the growth.
When we look at Asia pack, which is a big part of our business.
Asia Pac returns to normal post COVID-19.
With the Lockdowns.
In China somewhat.
Coming back.
To to normalize levels.
Again this growth dynamic I think this business can get back on the trajectory.
Of a good growth we have a lot of areas, where we can continue to invest in driving the vehicle.
Clearly we do have.
In China regulatory Ah.
Hurdles that we have to overcome which.
Is ongoing work but.
But as we look at what this business what it can do around the world globally, we see really good.
Things ahead, we look at our European business, clearly COVID-19 impacted our investments there on our build out of Solta. So that has there was a really great opportunity to accelerate.
That build out that that we we had planned for but was was delayed due to COVID-19. So from a solta perspective. This is a really great asset we have great products.
And we have some really.
Good work going on different as we continue to.
In this area, but I'll do is I'll pass the next the second part of the question to Tom <unk>.
Regarding the distribution timing and fax an underlying performance.
Yeah, I'll start with distribution timing.
Yeah, I I as we've said several times on this call, we not really going to comment on our next steps.
I'll leave it at that.
Onsite faxon and Unsay looks in particular, just to remind us of our growth organic growth for the for.
For the quarter was 3% and.
And that was predominantly price.
That's coming through.
Look pricing actions at the beginning of the year and seeing.
Most of that stick, which is great on the volume side as I mentioned, we've seen an uptick in.
In prescription growth in the back half of the quarter.
Rex growth for the full quarter was was basically flat, but we've we're excited by the growth that we saw in the last part of the quarter that was coming across both indications.
And but that growth and was offset by a drop in in or at least we're seeing we think a drop in retail inventory of about $13 million, which I mentioned in my comments and so volume growth.
Was negative.
Negative during the quarter.
Okay. So we don't have any more questions. So we'll we'll end the conference call here, what I'd like to say, thank you very much to everybody who joined today.
Really appreciate the time that you took to spend with us and look forward to continuing the dialogue as we move forward with building.
And growing this company. Thank you.
Thank you ladies and gentlemen. This concludes today's event you may disconnect at this time and have a wonderful day.