Q1 2023 Bausch Health Companies Inc Earnings Call
Speaker 1: I.
Speaker 2: Greetings welcome to the Bosch Health first quarter 2020 three earnings call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference.
Speaker 2: please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Mark Mako, Investor Relations. You may begin.
Speaker 3: Thank you, Holly. Good morning and welcome to Bausch Health's first quarter 2023 earnings conference call. This is Mark Mako, Investor Relations for Bausch Health. Participating in today's call are Thomas Appio, Chief Executive Officer of Bausch Health and Tom Vadakith, Chief Financial Officer.
Speaker 3: Before we begin, I'd like to remind you that our presentation today contains forward-looking information. We would ask you to take a moment to read the forward-looking statements at the beginning of the slides that accompany this presentation as they contain important information.
Speaker 3: Our actual results may vary materially from those expressed or implied in our forward-looking statements, and you should not place undue reliance on any forward-looking statements.
Speaker 3: Please refer to our SEC filings and filings with the Canadian Securities Administrators for a list of some of the factors that could cause our actual results to differ materially from our expectations.
Speaker 3: We use non-GAAP financial measures to help investors understand our ongoing business performance.
Speaker 3: 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 our non-GAAP measures in the appendix of the slides that accompany this presentation.
Speaker 3: which are available on Bausch Health's Investor Relations website.
Speaker 3: Finally, the financial guidance in this presentation is effective as of today only. Would you not undertake any obligation to update guidance?
Speaker 3: Our discussion today will focus on Bausch Health, excluding BNL. However, we will briefly comment on Bausch and Lomb's results announced yesterday. We will refer to year-over-year comparisons with the same period last year, unless otherwise noted. For the benefit of those who may be listening to the replay or archived webcast.
Speaker 3: This call was held and recorded on May 4, 2023. With that, it is my pleasure to turn the call over to our CEO , Thomas Saffeio. Tom? Thank you, Mark, and welcome to those of you joining the call this morning.
Speaker 4: It has been almost a year since I took over a CEO of Bowshelf.
Speaker 4: While our business faces challenges, we have some great franchises and we are continuing to balance the constraints of a tough balance sheet with the need to continue to invest and grow the business and the pipeline.
Speaker 4: With the IPO of Bausch & Lomb in May last year, we assembled a seasoned, resilient executive leadership team with a track record of hard work, dedication, and accountability.
Speaker 4: While we've had some bumps in the road, we have accomplished a lot in the last year, and we are hopeful and realistic for the future of our company.
Speaker 4: powering up the potential, and creating a great health care company.
Speaker 4: The team and I have been able to focus on improving the remaining Bausch Health businesses.
Speaker 4: Firstly,
Speaker 4: through operational excellence and focused investments.
Speaker 4: and key businesses that have growth opportunities such as Salix, SOTA, Dentistry, and International Business. Starting in the back half of 2022 and continuing this year, we are increasing our investments in sales, marketing, and R&D to accelerate growth in Salix.
Speaker 4: I will touch more on this in a few minutes when we take a closer look at the performance of the business segment.
Speaker 4: Our international business consists of a branded generic business in the EMEA and Latin America and a branded business in Canada.
Speaker 4: Taking together, this business is a profitable and growing business.
Speaker 4: To maintain sustainable long-term growth, we have to continue to bring in new products into the portfolio.
Speaker 4: as we have done historically through business development and licensing deals, which in this space are not typical, specifically capital intensive.
Speaker 4: Our neurology, dermatology, and generic business operate in the challenging space.
Speaker 4: Together, over 70% of the revenue from these businesses are from products that lost their exclusivity and are subject to generic competition, which continues to put pressure on both volumes in pricing.
Speaker 4: Our approach has been to manage these businesses for optimal profits and cash generation. We have a great platform and a talented team and we will continue to review opportunities to add to the portfolio.
Speaker 4: Secondly, we have intensified our focus and operating rigor behind R&D and business development, which is critical to the success and health of our company.
Speaker 4: We are accelerating certain aspects of our planned R&D effort, and Tom Vadikath will discuss this shortly in his commentary on the financial performance.
Speaker 4: Let me share several pipeline developments which you can see on slide 7.
Speaker 4: For amycilamod, the Phase II trial is progressing and is expected to be completed in the second half of this year. Amycilamod is a new oral S1P receptor modulator which targets the treatment of mild to moderate ulcerative colitis.
Speaker 4: Turning to Rifaximin, we are focused on developing novel formulations to address unmet medical needs. We are accelerating our investments related to RED-C program, which stands for reduction of early decompensation in cirrhosis.
Speaker 4: This is a global program and the treatment is targeted at preventing the first occurrence of hepatic encephalopathy, which we call HE, for patients with early decompensation cirrhosis. Two global phase three studies are currently underway with clinical trial sites expected to be open in more than 15 countries by the end of Q3 and the enrollment is on track. We have completed scientific advisory meetings with the medical...
Speaker 4: with Canada and with Europe and Canada submissions planned in 2024 and Asia-Pacific in 2025.
Speaker 4: We are also working on the next generation VASER LIBO system that is planned to be released in late 2024 and on future features for Thermage FLX as well as additional security measures to prevent the use of counterfeit tips. In dermatology
Speaker 4: Adding to our established acne portfolio, the FDA has accepted our new drug application for IDP126 with an October 20, 2023 pedophadate. If approved by the FDA, IDP126 would be a first-in-class triple combination treatment for acne vulgaris.
Speaker 4: Additionally, our submission in Canada is planned for the second quarter of this year.
Speaker 4: We are actively looking for business development opportunities for our US and international businesses that will synergize with our current capabilities and also looking at new therapeutic areas.
Speaker 4: We are proud of our R&D team and the work they have done to progress our pipeline and we will continue to focus on obtaining approvals for these products.
Speaker 4: And now let me turn to the first quarter.
Speaker 4: Turning to slide 8, I am pleased with the first quarter of the year. We delivered a solid performance in line with our expectations.
Speaker 4: Total reported revenues declined by 2% and organic revenues were flat compared with the prior quarter for Bausch Health, excluding B&L. I am pleased to share that for three out of our four business segments, Salix, International, and Solta,
Speaker 4: grew versus last year on both a reported and organic basis. Let's take a closer look at the first quarter performance of our business segment as shown.
Speaker 4: On slide 9.
Speaker 4: Starting with Salix.
Speaker 4: with increased demand and encouraging Zifaction Script Growth across all channels. We are very pleased with the performance of the Salem Express in this quarter.
Speaker 4: Xifaxan is a fantastic option for healthcare providers for their patients, and we have increased our marketing investments in Xifaxan for both of our approved indications, IBSD and HE. The increased investments in targeted consumer activation is currently in the range of $2.5
Speaker 4: We have also expanded our institutional sales footprint by 40%.
Speaker 4: The increased sales force allows us to engage with new integrated delivery networks, their associated hospitals and clinics, and to continue to educate new healthcare providers on the importance of initiating therapy for AT patients to reduce the risk of reoccurrence and re-hospitalization.
Speaker 4: We expect these efforts will help drive future growth.
Speaker 4: We are implementing AI-enabled solutions to improve our commercial engagement. These solutions leverage artificial intelligence and machine learning to help our commercial teams optimize their interactions with physicians and direct efforts to the right opportunities at the right time.
Speaker 4: AI has the potential to significantly improve how we interact with our customers and meaningful expand the number of patients getting on the right treatment.
Speaker 4: As part of our continued investment and to improve AGA and IBSD patient care, we are implementing an advanced analytical driven medical approach. This approach leverages multi-channel medical engagement, including a meaningful expansion of our specialized
Speaker 4: medical field team to prove care for thousands of H.A. and IBSD patients.
Speaker 4: It will help us educate physicians to address the largest patient care gaps and track the positive impact on patient lives over time.
Speaker 4: It will help us execute, educate physicians to address the largest patient care gaps and track the positive impact on patient lives over time. Turning to International.
Speaker 4: Sales grew 5% on an organic basis and 1% on a reported basis with organic growth in all three regions. Key markets such as Poland and Canada, so are double-digit growth through the period. In Europe , our sales and marketing teams are driving growth through HCP, education, and enhanced digital engagements.
Speaker 4: And in Canada, we are driving growth of our promoter brands while focusing on the launch of re-altras. Sulta grew organically by 6% in the quarter with strong customer demand in Asia-Pacific markets excluding China.
Speaker 4: We are cautiously optimistic for the remainder of the year for return to growth in China following the lifted of the COVID restrictions.
Speaker 4: In the US, we are focusing on growth drivers, which will include expanding DTC campaigns and building top and sales marketing teams.
Speaker 4: As I said before, Sulta is a great business for BHC with our global footprint and our product mix between capital equipment and consumables, within 70% of Sulta's revenues are for consumables, which gives us together a good platform for future growth.
Speaker 4: Turning to dentistry, which is part of our diversified segment, we delivered 4% organic growth for the quarter. We have refocused our commercial effort on our core product, Arrestin, an antibiotic used in the combination with scaling and root planing procedures to treat patients with adult periodontist.
Speaker 4: The period of the market treatment market is expected to reach $12.2 billion by 2031 up $7.6 billion in 2021. With this market, we are driving demand with the private practice dentist segment, which is the largest portion of the market.
Speaker 4: and the Corp. DSO dentists, which is the fastest growing segment.
Speaker 4: In diversified, sales for this segment decreased by 21% on an organic and reported basis in the quarter with declines in neurology, dermatology, and generics. We are striving to stabilize the business in our promoted and non-promoted products within this segment.
Speaker 4: This year we intend to make additional investments in the marketing and advertising of a plenzin and expand our consumer awareness campaign for Julia, which both saw increased scripts.
Speaker 4: This year we intend to make additional investments in the marketing and advertising of a plenzin and expand our consumer awareness campaign for Julia, which both saw increased scripts.
Speaker 4: Again, I am pleased with the performance in the first quarter, which was in line with our expectations. We are reiterating our guidance for Bouch Health, excluding B-D-L for this year, and as always we may committed to delivering long-term value for stakeholders.
Speaker 4: Let me take a few minutes to talk about some key priorities.
Speaker 4: The process of delivering our balance sheet is ongoing and in the first quarter of 2023 for Bouch Health excluding B&L we reduced our debt by approximately 100 million including revolver repayments.
Speaker 4: We have made significant progress in delivering our balance sheet over the past year, reducing debt since the B&L IPO by $3.3 billion, and we will continue to effectively manage and enhance our capital structure.
Speaker 4: With regard to the Granite Trust, as you know, we've reached the tentative settlement with the IRS during the first quarter, and we expect final resolution of this matter later this year.
Speaker 4: Regarding the Zifax and proceedings as a reminder, the court's current decision prevents nor which is an and from receiving final FDA approval until October 2029.
Speaker 4: Norwich advised the court that it has sought to remove the AT indication from its ANDA and has filed a motion to modify the judgment to permit the FDA to approve their ANDA before 2029. We have opposed this motion and await decision from the court. Lastly, it is Plastic Friday.
Speaker 4: We continue to believe the separation of Baush and Long makes strategic sense.
Speaker 4: with the end goal of having two independent, strong, financially stable companies.
Speaker 4: With that, I will turn the call over to Tom Vadakath, who will provide further details on our quarter performance. Tom?
Speaker 4: Thanks Tom, hello everyone and thanks for joining us. My comments today will refer to organic growth and adjusted results.
Speaker 4: We closed the quarter with consolidated first quarter revenues for Bosch Health of $1.9 billion, up 4% on an organic basis over the same quarter last year.
Speaker 4: First quarter revenues for Bosch Health, excluding B&L, were $1 billion and flat on an organic basis with growth in our salex, international and solar businesses.
Speaker 4: Let me discuss each segment in greater detail as shown on slide 11. First quarter SALIX revenues increased 7% to $496 million.
Speaker 4: This increase was largely due to higher demand for Sypax and 550 true lands and relish store coupled with relatively favorable changes in channel inventory this quarter for Sypax and 550 in true lands.
Speaker 5: in comparison with the channel inventory changes in the prior year. Staff accent revenue grew 7% in the quarter and overall demand grew 4%. In the first quarter we continued to see an uptick in non-retail demand at institutions such as hospitals and outpatient clinics.
Speaker 5: increasing our market share. We also saw a slight increase in demand from long-term care facilities, but we believe the shift in the HE patient journey post-COVID with patients going directly home from the hospital rather than to a long-term care or step-down facility is ongoing.
Speaker 5: and we are keeping a close eye on this trend. As Tom said, we've increased our investments in salex during the quarter and we plan to invest further in the remainder of 2023.
Speaker 5: We're also pleased with the sales performance of Rellestor and Trulance, which posted increases of 29% and 19% driven by total script growth of 22% and 10% respectively in the first quarter versus the prior year.
Speaker 5: International revenues were $247 million, an increase of 5% on an organic basis during the first quarter, led by strong growth in Canada and Poland of 11% and 15% respectively.
Speaker 5: We also saw double-digit growth in a number of key brands. Sold to medical revenues of $73 million increased 6% on an organic basis in the first quarter. Our Asia-Pacific business grew 7% with strong demand, despite a sales decline in China.
Speaker 5: due to the effects of COVID-related government restrictions in the early part of the first quarter, immediately following the opening up of the market from COVID.
Speaker 5: Including China, the region grew 35%.
Speaker 5: In the US, sales were slightly down, driven by lower volumes. We are continuing the expansion of our DTC campaign in the US and the expansion of sales teams in Europe .
Speaker 5: Diversified revenues were $197.
Speaker 5: $1 million, down 21% on an organic basis in the first quarter. For neurology, lowered sales were mainly driven by lower demand for well-buterin, as well as net pricing pressure on Applensin, although Applensin's script growth remained positive at 4%. In dermatology, juvenile sales were impacted in parts of the
Speaker 5: which had sales growth of 5% in the quarter. We continue to expect challenging market conditions in the neurology, dermatology, and generic businesses for the balance of the year and remain focused on stabilizing this part of our portfolio. Lastly on slide 12, Bosch and Lomb revenues were $931 million up.
Speaker 5: performance of Bosch Health, excluding BNL. The first quarter consolidated adjusted gross margin was 70.1%, 120 basis points lower compared with the prior year. At Bosch Health, excluding BNL, the adjusted gross margin for the first quarter was approximately 79.3%.
Speaker 5: product mix, and pockets of supply challenges.
Speaker 5: Consolidated, adjusted operating expenses for the first quarter were $834 million, an increase of $129 million or 18% with higher SG&A and R&D expenses.
Speaker 5: For Bosch Health, excluding B&L, operating expenses increased by approximately $76 million, while B&L reported an increase of $53 million in operating expenses.
Speaker 5: Selling and marketing increased for Bosch Health, excluding B&L, due to the investments we are making in the salex sales force, go to market channels and increased advertising and promotional activity.
Speaker 5: The increase in consolidated adjusted GNA costs reflects the impact of the separation and the costs to stand up to public companies. Adjusted GNA for Bosch Health excluding B&L increased by $29 million, driven by the favorable impact in the prior year of a settlement we received.
Speaker 5: relating to a contractual dispute and TSA fees received from BNL in Q1 2022.
Speaker 5: We're in the process of separating BNL's IT infrastructure from the rest of the company and continue to make significant progress reducing our reliance on transition services.
Speaker 5: Also of note, in our farmer business, we successfully migrated our US and Ireland operations to a new enterprise resource planning or ERP platform, meaning that all major markets are on dedicated systems. The consolidated R&D expense increased 13%.
Speaker 5: and represented 7% of net sales flat compared with the first quarter of last year. For Bosch Health, excluding B&L, R&D expenses increased by approximately $16 million.
Speaker 5: primarily for SALIX due to the focus on our clinical programs and regulatory activities to support our mid- and late-stage product development. First quarter consolidated adjusted EBITDA was $605 million, which includes $17 million of adjusted EBITDA attributable to the BNL minority interest.
Speaker 5: This was a decrease of 18% versus last year. For Bosch Health, excluding B&L, adjusted EBITDA was $462 million, a decrease of 18% from last year, reflecting the factors previously described. On a consolidated basis, the first quarter adjusted EBITDA margin was 32.30.2% compared to the first quarter.
Speaker 5: last year significantly impacted our gap interest expense, lowering it by $74 million this quarter. As you may recall, a substantial portion of the interest on the newly issued debt has been recorded on the balance sheet as a premium, which will be reduced as interest payments are made.
Speaker 5: Contractual interest cost for the quarter based on principal balances was approximately $381 million on a consolidated basis and $330 million for Bosch Health excluding B&L.
Speaker 5: Turning to cash flow, adjusted cash flow from operations on a consolidated basis in the first quarter was $70 million versus $325 million last year.
Speaker 5: For Bosch Health, excluding B&L, the adjusted cash flow from operations was $94 million, which was in line with our expectations. Adjusted cash flow includes adjustments for the payment of separation costs, business transformation costs, and also includes payments of the full contractual interest.
Speaker 5: This quarter's cash flow was affected by the unfavorable timing of certain working capital movements.
Speaker 5: as well as higher interest payments due to the lumpiness of interest coupon payments.
Speaker 5: Now let's turn to our balance sheet on slide 16. As Tom mentioned earlier, the process of de-levering our balance sheet is ongoing. And in the first quarter of 2023, we reduced our debt for Bosch Health, excluding B&L, by $105 million, including Revolver repayments. As slides 17 and 18 show,heat
Total debt for Bosch Health excluding Bosch and Lom at the end of the quarter was $16.5 billion, which consisted of $15.5 billion of restricted debt issued by Bosch Health excluding VNL.
And $1 billion of senior secured notes issued by the unrestricted subsidiary created in the third quarter of last year.
excluding B&L debt approximately 85% of our debt is fixed.
Approximately 70% of the company's debt on a consolidated basis is fixed.
Our 2023 guidance for Bosch Health excluding BNL is unchanged and can be viewed on slide 20.
For Bosch Health, excluding BNL, we continue to expect revenues in the range of $4.45 to $4.6 billion, representing growth of 2 to 5% on an organic basis. Full year adjusted EBITDA for Bosch Health, excluding BNL, is still expected to be $2.3 to $2.4 billion.
As a reminder, our EBITDA expectations reflect increased investments versus last year. We continue to invest in sales and marketing activities to drive growth in our key brands in our salex, international and solar medical segments. These investments include expanding our salex institutional sales put. We continue to invest in sales and marketing activities to drive growth in our salex.
Salesforce footprint, the first DTC marketing campaign for HE, and exciting campaigns as we launch products like Realtors and Eusseris in Canada. We expect to see the benefit of this spending later in 2023 and into 2024. As Tom mentioned earlier,
We are pleased with the progress we are making on our product pipeline, and our EBITDA expectations also reflect increased R&D spending to maintain this progress through the rest of the year.
The performance for Bosch Health, excluding BNL, in the first quarter was in line with our expectations.
As I mentioned in our call last quarter, the first quarter of the year is typically weaker than the subsequent three quarters due to the annual resetting of health insurance deductibles in the United States, which impacts the patient out-of-pocket cost.
While we don't provide guidance by quarter, our expectations are for stronger growth in quarters 2 through 4 relative to the first quarter, when we also anticipate the benefits from our sales and marketing investments will start to materialize.
Moving below EBITDA.
Our full year effective non-GAAP tax rate is expected to be approximately 15%.
We expect our contractual interest cost to remain unchanged at approximately $1.3 billion. Lastly, we continue to expect Bosch Health, excluding B&L, to generate approximately $625 million in adjusted operating cash flow.
As I said earlier, adjusted cash flow includes adjustments for the payment of separation costs, the payment of the full contractual interest, and also includes estimated cash tax payments, inclusive of the tentative granite trust settlement.
I'll now hand the call back to Tom. Thank you, Tom. In summary, we are building on the momentum from the second half of 2022.
As we continue to focus on our core businesses, driving growth through operational excellence and our new high performance results oriented culture.
We will make investments in key businesses that have growth opportunities such as Salix, Solta, Dentistry, and the International Business.
We continue to invest in our R&D pipeline, including our global development programs for Red Sea, as well as the continued development of Amis Olamad.
Our mid and late stage R&D pipeline is active and exciting, and we are looking forward to sharing more details.
When I took over as CEO , I told you I wanted to create a fit-for-purpose company and we will continue on that journey, looking to simplify our business, invest wisely, and grow profitably.
We will also improve our capital structure and have already made significant progress in de-levering the balance sheet. Together with this gives us the ability to better focus and invest in our core business. I want to thank the Global Bausch Health team for all their resilience and motivation and support.
working each day to build our special company, driving performance through hard work and accountability, powering up our potential, elevating people's lives each and every day that use our great products. On behalf of Bless America, our Grave
of the entire BHC team. I thank you all today for your interest in and support of Vowshell.
With that, we will now take questions. Operator, please open the line for Q&A. Certainly. At this time, we will be conducting a question-and-answer session.
If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
for participants using speaker equipment and may be necessary to pick up your hands set before pressing the star keys. One moment while we pull for questions.
Your first question for today is coming from Glenn Stantangelo at Jeffries.
Oh yeah, thanks in the morning. Thanks for taking the question. Hey Tom, I just want to follow up on your comments regarding the separation of Bowshen mom. You seem to suggest it still makes sense. Could you maybe give us a sense, but what are the big hurdles that you need to climb over in order to be able to execute the spin and.
In particular, there's been a lot of questions around this life-axing litigation, if that's sort of a gating factor to ultimately get a solvency opinion, which will pave the way for the spin. So if you could just let us know what pieces need to be in place, given that the leverage seems to already be in the acceptable range. Sure, Glenn. Thanks for the question.
So, as you know, we continue to evaluate potential options to maximize stakeholder value. So, as I said in my prepared remarks, we believe the separation of Bowshenlong makes strategic sense, and we remain focused on creating two-storen companies. What I would say is, also, we are evaluating all the relevant factors and continue to
that we can, as we look at, some of the things that need to come together for us. But what I would say is I turn it over to Tom, you know, when we just kind of talk about, you know, what some of the things that we still need to do.
Yeah, thanks Tom. I think, you know, I don't know if I have much to add. We...
We have committed to creating two financially strong viable companies. We continue to work on the balance sheet and the BHC side, both management teams you heard yesterday from Brent and Sam, and today you heard from Tom and I. We are focused on driving these businesses, improving performance, growing revenue.
And we have not given a time frame, as you know, Glenn. And that remains the case. We're not going to put a forecast out there. But at the right time, we will separate both themes and both points, believe that the right thing to do is to separate. It will allow the two management teams to focus on.
kind of pure play companies. And so we'll move towards that goal.
Okay, maybe... Go ahead, Tom. Sorry. Yes. You know, we are continuing to carefully and thoughtfully evaluate all such strategies, you know, and we'll proceed with evaluating these strategies in the best interest of all stakeholders. Okay, thanks. Tom, maybe if I could just ask a quick follow-up question.
So, in your remarks, you seem to suggest that we should that this should be the low point of the year, but sort of given your guidance, it looks like the ramp is pretty steep in the back half of the year as a result of that. I'm just curious if there's anything else that I'm missing.
Thanks. Yeah, we re-entreated our guidance plan as you noted and feel pretty good about it. Q1 is typically lower on the top line.
I'll mention a couple of things. Last year, we had a number of...
net pricing adjustments, so basically not the pricing that we were taking in the market, but net pricing adjustments in the gross to net area that perhaps exaggerates the year on your performance data.
And then in addition to that, we are making investments, as you noted, in the first quarter that we didn't have last year as we were lapping a quarter with pretty low investments.
So we feel pretty good. We think these investments will drive the growth that we're expecting in Quarters 2 through 4. I don't want to give you specific guidance for Quarters, but we obviously do expect an uplifting of performance in order to get back to revenue going up 2 to 5 percent and
and EBITDA growing 2% year on year. Okay, thanks for the comments. Okay, operator, next question. Your next question for today is coming from Douglas Meme at RBC Capital Markets.
Thank you. Tom, what I would like to start off with is just a fact. After last year of flat prescriptions, we are starting to see some growth. Perhaps you can tell us what is working there. If you think there is going to be an acceleration in the year-over-year growth that you are seeing, or if you are going to start to look at some of the Kernan frustrating problems in fighting stream, you want to see what is going to increase the growth part, and that is it for the last 10pin Pavilion collected. The data that we have is army at the White House. And then we're going to struggle a little bit. And then we'll talk about the
is a 2% growth figure that went to use on the drug. Okay Doug, thanks. So clearly we are really happy about the performance of our sales business and Zyfax and growth. As I said, in my prepared remarks, 7% growth in the quarter, overall demand increase of 4%, you know, increases.
in non-retail demand at institutions, including hospitals and outpatient clinics. So really all good signs. Encouraging, you know, Xifax and Script Growth, you know, in all the channels. So this is really something that we have been looking at and following very closely.
What I would say is, as I said, and I had lengthy in my prepared remarks of all the things that we are doing in the Salix franchise and Xifax, and we are investing in our field force, as I talked about artificial intelligence and the machine learning, we think we can...
investments we're making in our medical affairs team. We think there is a large unmet need. You know, Xifax is a great product in two indications for IBSD and HE, and we think there is a great unmet need. And with the investments that we're making in our medical team.
to go out and talk to doctors and educate them on these diseases will really provide great care to patients for the future. So we are really looking forward as we launch these programs. And we started some of it in the back half.
to continue to grow this franchise and we're really excited about it.
Okay good and just related to that of course I think everyone's curious
The timing of the court's decision as it relates to the skinny label, do you have any better information on that? I know at one point you were thinking it could be back in Q4 and that obviously changed, but is everyone still thinking it could come this quarter or do you have some revised information?
You know, as I said in my prepared remarks, we're still waiting a court's decision on the motion, and I don't have anything, no changes or updates at this time.
You know, as I said in my prepared remarks, we're still waiting a court's decision on the motion and I don't have anything, no changes or updates at this time, other than what I had in my prepared remarks.
Okay, perfect. Operator, next question. Your next question is coming from David Amsellem at Piper Sandler. Hey, thanks. So, I wanted to ask about longer term.
that picture and softnessy. And that's, I guess, some context of a lot of maturedies in the middle of part of the decade. And the fact that we need to inherit our competition for the facts in 2018 and beyond. So I just wanted to give a rain on how you think about solvency.
and ultimately how you can get the capital structure to a more stable place. Thank you.
But I would just maybe comment on it in a couple of ways. One, Tom has reiterated today that when we're thinking about separating the companies, one of our focus areas is to create two strong financially viable companies.
And hopefully, and we would not separate unless we believe that that was the case. So hopefully that speaks for itself. You've seen us in action for about a year on both sides with both companies. We've improved operating performance. We're making investments in growth that will go towards assuring the long term.
viability of the company and we have been fairly agile, I would say, in dealing with our balance sheet. We have reduced that since the IPO for this company by 3.3 billion dollars. And so, you know, we're going to continue to work on all of those fronts and keep improving the prospects of this company. I mean, that's why Tom is here.
is going to use accessibility.
Yeah, I mean, I can't comment on details. Of course, the company is highly cash generative as we go forward. And then as you know, and this applies to all companies, you know, you don't expect to pay every single dollar if you're dead down, you will at some point refinance what we have to make sure is that you know, our
And that will all go into the mix when the time comes to deal with those maturities.
Yeah, David, just to add to that, you know, that's why in my prepared remarks, I went through the R&D pipeline. As I said, you know, we are excited about it. We're looking forward to getting more data as things come through, but we have some really unique news, I think, it's up to all of us to learn a little bit more about R&D.
interesting projects ongoing in R&D that we're going to will help us for our long-term growth.
projects ongoing in R&D that we're going to will help us for our long-term growth. Okay, operator, next question.
Your next question for today is coming from Jason Gerberry at Bank of America. Hey, good morning, guys. This is Chi on for Jason. Thanks for taking our questions. So, thank you for providing an update on the current litigation..
the timeline for companies' operation. And I follow up with that. Thank you. Okay, Chi, I'll take that question. So, you know, we are pleased that the significant portion of the claims were dismissed at this early stage. So that's firstly, second, you know, we remain confident in our position in this litigation with respect.
to the remaining allegations. You know, begun this, you know, we do not intend to comment on any ongoing litigation at this time. All right. You know, at the end, we want to again reemphasize, you know, to, you know, two strong companies. That is our goal.
Yeah, to follow up. Yeah, thanks. So I think the second question is, what is your understanding of where the food industry or beauty of the board is going to be? But it is a Canadian law. If it is Canada, does it mean that the duty isn't clearly to shareholders like in the case in the US? And how does that factor into the separation process, if at all? Thanks.
Okay, let me see, you know, just to take a look at it and see. You know, what I'd say is, you know, in terms of that, you know, we cannot, you know, we're not provide legal, you know, advice, you know, on this call. So, I can't really make any comments.
further to that. Okay. Operator, next question.
We have reached the end of the question in the answer session and I will now turn the call over to Tom at PO for closing remarks.
Okay, well what I would say is, as I said, I am really pleased with performance in the first quarter. And we are looking forward to powering up our potential and delivering long-term value for stakeholders.
I would, you know, thank everybody for joining today, and we look forward to, you know, having future discussions on our company. So have a great day, and we'll talk to you soon. Thank you.
This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.