Q1 2024 Bausch Health Co Inc Earnings Call

May 2, 2024

Greetings and welcome to the Bausch Health first quarter 2024 earnings call.

Operator: Greetings. Welcome to the Bausch Health First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I would now like to turn the conference over to your host, Garen Sarafian, Investor Relations at Bausch. You may begin.

At this time all participants are in a listen only mode.

A question and answer session will follow the formal presentation.

Please note this conference is being recorded.

I would now like to turn the conference over to your host Garen Sarafian Investor Relations at Bausch you may begin.

Garen Sarafian: Good morning, and welcome to Bausch Health first quarter 2024 earnings Conference call.

Garen Sarafian: Good morning, and welcome to Bausch Health's first quarter 2024 earnings conference call. Participating in today's call are Thomas Appio, Chief Executive Officer of Bausch Health, and John Barresi, Interim Chief Financial Officer.

Garen Sarafian: Dissipating in today's call are Thomas <unk>, Chief Executive Officer of Bausch Health, and John <unk> interim Chief Financial Officer.

Garen Serafian: 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 disclaimer at the beginning of the slides that accompany this presentation, as it contains important information. 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 such forward-looking statement. Please refer to our SEC filings and filings with the Canadian Securities Administrators for a list of some of the risk factors that could cause our actual results to differ materially from our expectations.

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 disclaimer at the beginning of the slides that accompany this presentation, as it contains important information. 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 such forward-looking statement. Please refer to our SEC filings and filings with the Canadian Securities Administrators for a list of some of the risk factors that could cause our actual results to differ materially from our expectations.

Garen Sarafian: Before we begin I'd like to remind you that our presentation today contains forward looking information.

Garen Sarafian: We ask you to take a moment to read the forward looking statements disclaimer at the beginning of the slides that accompany this presentation as it contains important information.

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.

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 such forward-looking statement. Please refer to our SEC filings and filings with the Canadian Securities Administrators for a list of some of the risk factors that could cause our actual results to differ materially from our expectations.

Garen Sarafian: Please refer to our SEC filings and filings with the Canadian Securities administrators for a list of some of the risk factors that could cause our actual results to differ materially from our expectations.

Garen Serafian: We use 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 our non-GAAP measures in the appendix of the slides that accompany this presentation, which are available on Bausch Health's Investor Relations website. Finally, the financial guidance in this presentation is effective as of today only. We do not undertake any obligation to update the guidance.

We use 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 our non-GAAP measures in the appendix of the slides that accompany this presentation, which are available on Bausch Health's Investor Relations website.

Garen Sarafian: We use 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 our non-GAAP measures in the appendix of the slides that accompany this presentation, which are available on Bausch Health's Investor Relations website. Finally, the financial guidance in this presentation is effective as of today only. We do not undertake any obligation to update the guidance.

Garen Sarafian: You will find reconciliations to our non-GAAP measures in the appendix of the slides that accompany this presentation, which are available on Bausch health Investor Relations website.

Garen Sarafian: Finally, the financial guidance in this presentation is effective as of today only.

Finally, the financial guidance in this presentation is effective as of today only. We do not undertake any obligation to update the guidance.

Garen Sarafian: We do not undertake any obligation to update guidance.

Garen Serafian: Our discussion today, Thursday, May 2nd, will focus on Bausch Health, excluding Bausch and Lomb. 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. With that, it is my pleasure to turn the call over to our CEO, Thomas Appio. Tom?

Garen Sarafian: Our discussion today Thursday may 2nd will focus on Bausch health, excluding Boston loan. However, we will briefly comment on Boston <unk> results announced yesterday.

Garen Sarafian: We will refer to year over year comparisons with the same period last year unless otherwise noted.

Garen Sarafian: With that it is my pleasure to turn the call over to our CEO Thomas <unk> Tom.

Thomas Appio: Thank you, and welcome to those of you joining the call this morning. We started 2024 on strong footing, building on the momentum we established last year while maintaining our focus on operational excellence and our patient-centered mentality. We delivered another quarter of growth, making our fourth consecutive quarter of year-over-year growth in both revenue and adjusted EBITDA. For the first quarter of 2024, revenues for Bausch Health, excluding B&L, were $1.05 billion, up $41 million, or 4% on a reported basis and 5% on an organic basis.

Thomas: Thank you and welcome to those of you joining the call. This morning, we started 2024 on strong footing building on the momentum we have established last year, while maintaining our focus on operational excellence and our patient centered mentality.

Thomas: We delivered another quarter of growth, making our fourth consecutive quarter of year over year growth in both revenue and adjusted EBITDA.

Thomas: For the first quarter of 2024 revenues for Bausch health, excluding P&L, where 1.05 billion up $41 million or 4% on a reported basis and 5% on an organic basis.

Thomas Appio: For the first quarter of 2024, revenues for Bausch Health, excluding B&L, were $1.05 billion, up $41 million, or 4% on a reported basis and 5% on an organic basis. All segments delivered revenue growth on both a reported and organic basis when compared to the first quarter of 2023 led by Solta with 23% organic growth. Adjusted EBITDA for Bausch Health, excluding B&L, was $504 million, an increase of approximately 9% compared to the prior year.

Thomas Appio: All segments delivered revenue growth on both a reported and organic basis when compared to the first quarter of 2023 led by Solta with 23% organic growth. Adjusted EBITDA for Bausch Health, excluding B&L, was $504 million, an increase of approximately 9% compared to the prior year.

Thomas: All segments delivered revenue growth on both a reported and organic basis when compared to the first quarter of 2023 led by Solta with 23% organic growth.

Thomas: Adjusted EBITA for Bausch health, excluding <unk> was $504 million, an increase of approximately 9% compared to the prior year.

Thomas: We also continued to make progress on our key R&D initiatives during the quarter in line with our established timing goals.

Thomas Appio: We also continue to make progress on our key R&D initiatives during the quarter in line with our established timing goals. First, for AMISELIMOD, in April, we met with the FDA for an end of phase II meeting and a phase III planning meeting for mild to severe ulcerative colitis, UC. In addition, we were also pleased for AMISELIMOD to have been accepted for a podium presentation at Digestive Week on May 19. Second, we completed enrollment for our second global phase three trial for Red Sea in late April, which is slightly ahead of our goal of completion by the end of the first half of 2024.

Thomas: First for <unk> in April we met with the FDA for an end of phase II meeting and our phase III planning meeting for mild to severe ulcerative colitis you see in.

Thomas: In addition, we were also pleased for <unk> to have been accepted for podium presentation at digestive week on may 19th.

Thomas Appio: Second, we completed enrollment for our second global phase three trial for RED-C in late April, which is slightly ahead of our goal of completion by the end of the first half of 2024. And third, we are pursuing approval of CABTREO for Canada and anticipate this could occur in the second half of the year. Overall, we continue to feel good about the progress we have made on our R&D pipeline and are progressing according to the timelines we shared in February.

Thomas: Second we completed enrollment for our second global Phase III trial for Red Sea in late April which is slightly ahead of our goal of completion by the end of the first half of 2024.

Thomas Appio: And third, we are pursuing approval of CABTREO for Canada and anticipate this could occur in the second half of the year. Overall, we continue to feel good about the progress we have made on our R&D pipeline and are progressing according to the timelines we shared in February. Turning to our litigation with Norwich, on April 11, 2024, the U.S. Court of Appeals for the Federal Circuit affirmed the U.S. District Court of Delaware's August 10, 2022 judgment and also the May 17, 2023 decision that had denied Norwich Pharmaceuticals' motion for modification of the court's final order. We are pleased that the Federal Circuit maintained the judgment preventing the approval of Norwich's ANDA for XIFAXAN until October 2029.

And third, we are pursuing approval of CABTREO for Canada and anticipate this could occur in the second half of the year. Overall, we continue to feel good about the progress we have made on our R&D pipeline and are progressing according to the timelines we shared in February.

Thomas: Third we are pursuing approval of cab trio for Canada and anticipate this could occur in the second half of the year.

Thomas: Overall, we continue to feel good about the progress we have made on our R&D pipeline and are progressing according to the timelines that we shared in February.

Thomas: Turning to our litigation with Norwich on April 11th 2020 for the U S Court of Appeals for the Federal Circuit affirmed the U S District Court of Delaware August 10th 2022 judgment and also the May 17th 2023 decision.

Thomas Appio: Turning to our litigation with Norwich, on April 11, 2024, the U.S. Court of Appeals for the Federal Circuit affirmed the U.S. District Court of Delaware's August 10, 2022 judgment and also the May 17, 2023 decision that had denied Norwich Pharmaceuticals' motion for modification of the court's final order. We are pleased that the Federal Circuit maintained the judgment preventing the approval of Norwich's ANDA for XIFAXAN until October 2029.

That had denied Norwich pharmaceuticals motion for modification of the Court's final order. We are pleased that the federal circuit maintain the judgment, preventing the approval of Norwich and foresight Faxon until October 22009.

Thomas: On April 5th 2024, we filed a patent lawsuit against and Neil Pharmaceuticals. Following the receipt of a notice of paragraph four certification, stating that amnio had submitted an NDA to the FDA seeking approval to market a generic version of <unk>.

Thomas Appio: On April 5th, 2024, we filed a patent lawsuit against Amnil Pharmaceuticals following the receipt of a Notice of Paragraph 4 certification stating that Amnil had submitted an ANDA to the FDA seeking approval to market a generic version of XIFAXAN. This action formally initiates the litigation process under the Hatch-Waxman Act and triggers a 30-month stay of any potential FDA approval for Amnil and us. As a leader in gastroenterology health, we continue to vigorously defend our intellectual property and are committed to advocating for the safety of patients who have benefited from continued access to XIFAXAN.

Thomas: The facts in.

Thomas: This action formally initiated the litigation process under the Hatch Waxman Act and triggers a 30 months stay of any potential FDA approval for our meals and.

Thomas Appio: As a leader in gastroenterology health, we continue to vigorously defend our intellectual property and are committed to advocating for the safety of patients who have benefited from continued access to XIFAXAN. We look forward to continuing to serve our patients, as every patient deserves better health outcomes and the chance to make the most of life.

Thomas: As a leader in Gastroenterology health, we continue to vigorously defend our intellectual property and are committed to advocating for the safety of patients who have benefited from continued access to the facts and we look forward to continuing to serve our patients at every patient deserves better health outcomes.

Thomas Appio: We look forward to continuing to serve our patients, as every patient deserves better health outcomes and the chance to make the most of life. On the Granite Trust matter, we continue to expect the settlement with the IRS to be finalized in the coming months.

We look forward to continuing to serve our patients, as every patient deserves better health outcomes and the chance to make the most of life.

Thomas: And the chance to make the most of life.

Thomas Appio: On the Granite Trust matter, we continue to expect the settlement with the IRS to be finalized in the coming months. As we have previously indicated, the anticipated outcome of the settlement does not have a material impact on the company's results or cash flows. We continue to focus on our balance sheet and liquidity and ended the first quarter with approximately $1.5 billion of liquidity. In Q1, we repaid over $300 million of debt, including $250 million of bonds with 2025 and 2026 maturities, as noted on our year-end call.

Thomas: On the granite Trust matter, we continue to expect the settlement with the IRS to be finalized in the coming months as we have previously indicated the anticipated outcome of the settlement does not have material impact on the company's results or cash flows.

Thomas Appio: As we have previously indicated, the anticipated outcome of the settlement does not have a material impact on the company's results or cash flows. We continue to focus on our balance sheet and liquidity and ended the first quarter with approximately $1.5 billion of liquidity. In Q1, we repaid over $300 million of debt, including $250 million of bonds with 2025 and 2026 maturities, as noted on our year-end call.

Thomas: We continue to focus on our balance sheet and linked <unk> and ended the first quarter with approximately $1 5 billion of liquidity in Q1, we repaid over $300 million of debt, including the $250 million of bonds with 2025, and 2026 maturities as <unk>.

Thomas: Noted on our year end call.

Thomas Appio: Turning now to the potential full separation of Bausch and Lomb. The full separation of Bausch and Lomb continues to be a strategic priority. We continue to evaluate strategies regarding the potential full separation, with the objective of ensuring that any transaction results in two appropriately capitalized companies. The outcome at the Court of Appeals in the Norwich matter represents a significant milestone toward the full separation of B&L. Any decision regarding if and when a separation occurs for its structure will be based on and subject to an assessment of all relevant factors and circumstances.

Thomas: Turning now to the potential full separation of Bausch <unk> lomb.

The full separation of Bausch and Lomb continues to be a strategic priority. We continue to evaluate strategies regarding the potential full separation with the objective of ensuring that any transaction result in to appropriately capitalized companies.

Thomas: The outcome at the quarter of appeals in the Norwich matter represents a significant milestone toward the full separation of <unk> any decision regarding if and when a separation occurs or its structure will be based on and subject to an assessment of all.

Thomas Appio: The outcome at the Court of Appeals in the Norwich matter represents a significant milestone toward the full separation of B&L. Any decision regarding if and when a separation occurs for its structure will be based on and subject to an assessment of all relevant factors and circumstances. Any potential separation will also be subject to shareholder and other applicable approval.

Thomas: Relevant factors and circumstances.

Thomas Appio: Any potential separation will also be subject to shareholder and other applicable approval. Turning now to an overview of our segment performance for the quarter, starting on slide 8. Salix revenue grew slightly year over year, with reported growth of 1% and organic growth of 2%, driven by XIFAXAN and RELASTOR, offset by net pricing pressure for TRULANCE and certain non-promoted products. During the quarter, we continued to see an increase in demand for our key products: XIFAXAN, RELASTOR, and TRULANCE, with TRX growth of 3%, 3%, and 9% respectively.

Any potential separation will also be subject to shareholder and other applicable approval.

Thomas: Any potential separation will also be subject to shareholder and other applicable approvals.

Turning now to an overview of our segment performance for the quarter, starting on slide 8. SALIX revenue grew slightly year over year, with reported growth of 1% and organic growth of 2%, driven by XIFAXAN and RELASTOR, offset by net pricing pressure for TRULANCE and certain non-promoted products. During the quarter, we continued to see an increase in demand for our key products: XIFAXAN, RELASTOR, and TRULANCE, with TRX growth of 3%, 3%, and 9% respectively.

Thomas Appio: Turning now to an overview of our segment performance for the quarter, starting on slide 8. SALIX revenue grew slightly year over year, with reported growth of 1% and organic growth of 2%, driven by XIFAXAN and RELASTOR, offset by net pricing pressure for TRULANCE and certain non-promoted products. During the quarter, we continued to see an increase in demand for our key products: XIFAXAN, RELASTOR, and TRULANCE, with TRX growth of 3%, 3%, and 9% respectively. Overall, XIFAXAN revenues grew 8% over the first quarter of last year, reinforcing our strategy of continuing to make investments primarily in AI-enabled sales tools and DTC advertising, which we expect will drive further growth in this important franchise this year.

Thomas: Turning now to an overview of our segment performance for the quarter starting on slide eight.

Thomas: Salix revenue grew slightly year over year with reported growth of 1% and organic growth of 2% driven by XI faxon, and Relistor offset by net pricing pressure for true lands and certain non promoted products during the quarter. We continue.

During the quarter, we continued to see an increase in demand for our key products: XIFAXAN, RELASTOR, and TRULANCE, with TRX growth of 3%, 3%, and 9% respectively.

Thomas: To see an increase in demand for our key products XI Faxon, Relistor true ads with T Rx growth of 3%, 3% and 9% respectively.

Thomas Appio: Overall, XIFAXAN revenues grew 8% over the first quarter of last year, reinforcing our strategy of continuing to make investments primarily in AI-enabled sales tools and DTC advertising, which we expect will drive further growth in this important franchise this year. Turning to international, we saw solid year-over-year revenue growth during the first quarter, with reported growth of 7% and organic growth of 2%. Organic growth was led by Canada, where we saw strong performance from Contrave in the quarter.

Overall, XIFAXAN revenues grew 8% over the first quarter of last year, reinforcing our strategy of continuing to make investments primarily in AI-enabled sales tools and DTC advertising, which we expect will drive further growth in this important franchise this year.

Overall, <unk> facts and revenues grew 8% over the first quarter of last year reinforcing our strategy of continuing to make investments primarily in AI enabled sales tools DTC advertising, which we expect will drive further growth in this important.

Thomas: <unk> franchise this year.

Thomas Appio: Turning to international, we saw solid year-over-year revenue growth during the first quarter, with reported growth of 7% and organic growth of 2%. Organic growth was led by Canada, where we saw strong performance from Contrave in the quarter. We have begun investing in DTC marketing for this product to build on this momentum. We were also pleased to receive our first public health plan listing for Usiris, Aerosol, Foam, in Canada. Across the segment, we are also focused on driving long-term growth through investment in our promoted products and ongoing business development efforts.

Thomas: Turning to international we saw solid year over year revenue growth during the first quarter with reported growth of 7% and organic growth of 2%.

Thomas: Organic growth was led by Canada, where we saw a strong performance from contract in the quarter, we have begun investing in DTC marketing for this product to build on this momentum.

Thomas Appio: We have begun investing in DTC marketing for this product to build on this momentum. We were also pleased to receive our first public health plan listing for Usiris, Aerosol, Foam, in Canada. Across the segment, we are also focused on driving long-term growth through investment in our promoted products and ongoing business development efforts. In Solta Medical, revenues increased by 21% on a reported basis and 23% on an organic basis, led by Asia Pacific.

We have begun investing in DTC marketing for this product to build on this momentum. We were also pleased to receive our first public health plan listing for Usiris, Aerosol, Foam, in Canada. Across the segment, we are also focused on driving long-term growth through investment in our promoted products and ongoing business development efforts.

Thomas: We were also pleased to receive our first public health plan listing for Ya Cerus aerosols foam in Canada.

Thomas: Across the segment. We are also focused on driving long term growth through investments in our promoted products and ongoing business development efforts.

Thomas: In Solta medical revenues increased by 21% on a reported and 23% on organic basis led by Asia Pacific.

Thomas Appio: In Solta Medical, revenues increased by 21% on a reported basis and 23% on an organic basis, led by Asia Pacific. Importantly, we are pleased to see the U.S. return to growth, posting 14 percent year-over-year growth in revenue. We remain highly focused on maintaining momentum in Asia, with Thermage SLX now approved as a medical device in China, and on driving growth in the U.S. and EMEA markets, where we believe there is meaningful opportunity.

Thomas Appio: Importantly, we are pleased to see the U.S. return to growth, posting 14 percent year-over-year growth in revenue. We remain highly focused on maintaining momentum in Asia, with Thermage SLX now approved as a medical device in China, and on driving growth in the U.S. and EMEA markets, where we believe there is meaningful opportunity. In Diversified, we delivered a solid quarter with 3% reported and 6% organic growth over the prior year.

Importantly, we are pleased to see the U.S. return to growth, posting 14 percent year-over-year growth in revenue. We remain highly focused on maintaining momentum in Asia, with Thermage SLX now approved as a medical device in China, and on driving growth in the U.S. and EMEA markets, where we believe there is meaningful opportunity.

Thomas: Importantly, we are pleased to see the U S returned to growth posting 14% year over year growth in revenue, we remain highly focused on maintaining momentum in Asia with <unk> now approved as a medical device in China and on driving growth in the U S.

Thomas: And EMEA markets, where we believe there is meaningful opportunity.

Thomas: In diversified we delivered a solid quarter with 3% reported and 6% organic growth over the prior year. This was led by dermatology business as we discussed on our year end call cab trio launched in the U S. In late January and early script volume.

Thomas Appio: In Diversified, we delivered a solid quarter with 3% reported and 6% organic growth over the prior year. This was led by the dermatology business. As we discussed on our year-end call, CABTREO launched in the U.S. in late January, and early script volume has been encouraging. We expect the new product to be a more significant contributor to the dermatology business over the remainder of the year. Neurology revenues grew slightly as we continued to capitalize on opportunities in the market created by competitor supply constraints.

Thomas Appio: This was led by the dermatology business. As we discussed on our year-end call, CABTREO launched in the U.S. in late January, and early script volume has been encouraging. We expect the new product to be a more significant contributor to the dermatology business over the remainder of the year. Neurology revenues grew slightly as we continued to capitalize on opportunities in the market created by competitor supply constraints.

Thomas: Has been encouraging we expect the new product to be a more significant contributor to the dermatology business over the remainder of the year.

Thomas: Neurology revenues grew slightly as we continued to capitalize on opportunities in the market created by competitor supply constraints.

Thomas Appio: While we did see volume declines in Wellbutrin and Aplenzan as expected, improved net pricing led to higher sales of these products, reinforcing our strategy in managing script profitability. This growth was offset by continued pressures on our generics business and a slight decline in our dentistry business, where we expect our investments will lead to consistent growth through the remainder of 2024. Overall, we continue to focus on managing this mature portfolio of products for profitability and cash generation in a challenging, competitive, and pricing environment, while looking for opportunities to make targeted investments where appropriate. Turning to the latest developments in our R&D pipeline, on slide 9. Starting with our GI pipeline, as you will recall,

While we did see volume declines in Wellbutrin and Aplenzan as expected, improved net pricing led to higher sales of these products, reinforcing our strategy in managing script profitability. This growth was offset by continued pressures on our generics business and a slight decline in our dentistry business, where we expect our investments will lead to consistent growth through the remainder of 2024. Overall, we continue to focus on managing this mature portfolio of products for profitability and cash generation in a challenging, competitive, and pricing environment, while looking for opportunities to make targeted investments where appropriate.

Thomas: While we did see volume declines in well <unk> and our plans and as expected improved net pricing led to higher sales of these products reinforcing our strategy and managing script profitability.

Thomas: This growth was offset by continued pressures on our generics business and a slight decline in our dentistry business, where we expect our investments will lead to consistent growth through the remainder of 2024.

Thomas Appio: Overall, we continue to focus on managing this mature portfolio of products for profitability and cash generation in a challenging, competitive, and pricing environment, while looking for opportunities to make targeted investments where appropriate.

Thomas: Overall, we continue to focus on managing this mature portfolio of products for profitability and cash generation and a challenging competitive and pricing environment, while looking for opportunities to make targeted investments where appropriate.

Thomas Appio: Turning to the latest developments in our R&D pipeline, on slide 9. Starting with our GI pipeline, as you will recall, in December, we announced positive top-line results from our Phase II study evaluating AMESILIMOD, an S1P antagonist for the treatment of UC. We held a Phase III planning meeting with the FDA in April and expect to meet with the international authorities including EMEA and Japan later this year.

Thomas: Turning to the latest developments in our R&D pipeline on slide nine.

Thomas Appio: in December, we announced positive top-line results from our Phase II study evaluating AMESILIMOD, an S1P antagonist for the treatment of UC. We held a Phase III planning meeting with the FDA in April and expect to meet with the international authorities including EMEA and Japan later this year. In the meantime, we are pleased that AMESILIMOD has been selected for a podium presentation on May 19th at Digestive Disease Week's annual conference, one of the largest and most prestigious events for gastroenterology professionals.

in December, we announced positive top-line results from our Phase II study evaluating AMESILIMOD, an S1P antagonist for the treatment of UC. We held a Phase III planning meeting with the FDA in April and expect to meet with the international authorities including EMEA and Japan later this year.

Thomas: Starting with our GI pipeline as you will recall.

Thomas: In December we announced positive topline results from our phase two study evaluating <unk> and F. <unk> antagonist for the treatment of UC, we held our phase III planning meeting with the FDA in April and expect to meet with the international authorities, including in EMEA.

Thomas Appio: In the meantime, we are pleased that AMESILIMOD has been selected for a podium presentation on May 19th at Digestive Disease Week's annual conference, one of the largest and most prestigious events for gastroenterology professionals. We continue to move forward with planning for a Phase II program for Crohn's disease and expect to initiate that by the end of the year.

Thomas: And Japan later this year.

Thomas: In the meantime, we are pleased that <unk> has been selected for a podium presentation on may 19th at digestive disease week annual conference one of the largest and most prestigious events for gastroenterology professionals.

Thomas Appio: We continue to move forward with planning for a Phase II program for Crohn's disease and expect to initiate that by the end of the year. Now, turning to our Red Sea program with Rifaximin for Reduction of Early Decompensation in Cirrhosis,

We continue to move forward with planning for a Phase II program for Crohn's disease and expect to initiate that by the end of the year.

Thomas: We continue to move forward with planning for our Phase III program for Crohn's disease, and expect to initiate that by the end of the year.

Turning to our Red Sea program with Rifaximin for reduction of early decompensation in cirrhosis, our global program focused on assessing the efficacy of our Rifaximin SSD formulation versus placebo to delay the occurrence of hepatic encephalopathy related.

Thomas Appio: Now, turning to our RED-C program with Rifaximin for Reduction of Early Decompensation in Cirrhosis, our global program focused on assessing the efficacy of our Rifaximin SSD formulation versus placebo to delay the occurrence of hempatic encephalopathy-related hospitalization. Both global phase three trials for this program are underway. Enrollment for the first trial, as previously mentioned, completed in December 2023, and the enrollment for the second trial completed in April of 2024, which was ahead of our goal for the first half of 2024. Together, these studies are expected to include over 1,000 patients across North America, Europe, and Asia Pacific.

Thomas Appio: our global program focused on assessing the efficacy of our Rifaximin SSD formulation versus placebo to delay the occurrence of hempatic encephalopathy-related hospitalization. Both global phase three trials for this program are underway. Enrollment for the first trial, as previously mentioned, completed in December 2023, and the enrollment for the second trial completed in April of 2024, which was ahead of our goal for the first half of 2024. Together, these studies are expected to include over 1,000 patients across North America, Europe, and Asia Pacific.

Thomas: <unk>.

Thomas: Both global Phase III trials for this program are underway enrollment for the first trial as previously mentioned completed in December 2023, and the enrollment for the second trial completed in April of 2024, which was ahead of our goal for the first half of 2024.

Thomas: Together. These studies are expected to include over 1000 patients across North America, Europe and Asia Pacific.

Thomas Appio: Turning now to our aesthetics pipeline, we are pleased to have Thermage FLX and the TR4 return pad available to customers in China as of the second quarter, following the approval by the National Medical Products Administration in January 2024. We plan to file an FDA submission for our next generation Fraxel NQ2, a fractionated laser device for skin resurfacing, and anticipate approval could be received in the second half of this year. Finally, our program for clear and brilliant touch, a fractionated laser device for skin rejuvenation continues to advance. We have received approvals in Australia and New Zealand this year, representing our first approvals outside of the United States, and remain on track for regulatory submissions in 2024 in Europe, Canada, and other Asia Pacific markets.

Turning now to our aesthetics pipeline, we are pleased to have Thermage FLX and the TR4 return pad available to customers in China as of the second quarter, following the approval by the National Medical Products Administration in January 2024. We plan to file an FDA submission for our next generation Fraxel NQ2, a fractionated laser device for skin resurfacing, and anticipate approval could be received in the second half of this year.

Thomas: Turning now to our aesthetics pipeline. We are pleased to have their Mas F. L X and the T. R for return path available to customers in China as of the second quarter. Following the approval by the National Medical products Administration in January 2024.

Thomas: We plan to file an FDA submission for our next generation Frac. So in Q2, a fractionated laser device for skin resurfacing and anticipate approval could be received in the second half of this year.

Finally, our program for clear and brilliant touch, a fractionated laser device for skin rejuvenation continues to advance. We have received approvals in Australia and New Zealand this year, representing our first approvals outside of the United States, and remain on track for regulatory submissions in 2024 in Europe, Canada, and other Asia Pacific markets.

Thomas: Finally, our program for clear and brilliant touch a fractionated laser device for skin rejuvenation continues to advance we have received approvals in Australia and New Zealand this year, representing our first approvals outside of the United States and remain on track for regulatory submissions in 2010.

Thomas: Four in Europe, Canada, and other Asia Pacific markets.

Thomas: We feel good about the progress we are making on these key R&D initiatives and we remain focused on our pipeline of new market authorization and next generation products as we continue to grow this global durable portfolio of aesthetics products.

Thomas Appio: We feel good about the progress we are making on these key R&D initiatives, and we remain focused on our pipeline of new market authorizations and next-generation products as we continue to grow this global, durable portfolio of aesthetics products. As a leadership team, we are committed to driving growth by leveraging our existing assets, making targeted investments and executing with commercial excellence while continuing to progress our pipeline, all with a patient-centered mentality. With that, I will turn the call over to John Barresi, who will provide further details on our first quarter performance. John?

We feel good about the progress we are making on these key R&D initiatives, and we remain focused on our pipeline of new market authorizations and next-generation products as we continue to grow this global, durable portfolio of aesthetics products. As a leadership team, we are committed to driving growth by leveraging our existing assets, making targeted investments and executing with commercial excellence while continuing to progress our pipeline, all with a patient-centered mentality. With that, I will turn the call over to John Barresi, who will provide further details on our first quarter performance. John?

Thomas: As a leadership team, we are committed to driving growth by leveraging our existing assets.

As a leadership team, we are committed to driving growth by leveraging our existing assets, making targeted investments and executing with commercial excellence while continuing to progress our pipeline, all with a patient-centered mentality. With that, I will turn the call over to John Barresi, who will provide further details on our first quarter performance. John?

Targeted investments and executing with commercial excellence.

Thomas: While continuing to progress our pipeline all with a patient centered mentality with that I will turn the call over to John <unk>, who will provide further details on the first quarter performance John.

John Barresi: Thanks, Tom. Hello, everyone and thanks for joining us. We closed the first quarter with consolidated revenues for Bausch Health of $2.15 billion, up 11% on a reported basis and 8% on an organic basis over the same quarter last year. First quarter revenues for Bausch Health, excluding B&L were $1.05 billion, up 4% on a reported basis and 5% on an organic basis over the same quarter last year, with strong growth in Solta and low to mid-single digit reported in organic growth in our other segments. Turning to segment revenue performance, starting on slide 12, with SALIX.

John: Thanks, Tom Hello, everyone and thanks for joining us.

John: We closed the first quarter with consolidated revenues for Bausch health, a 215 billion.

John: Up 11% on a reported basis and 8% on an organic basis over the same quarter last year.

John: First quarter revenues for Bausch health, excluding <unk> were $1.05 billion.

John: Up 4% on a reported basis and 5% on an organic basis over the same quarter last year with strong growth in solta and low to mid single digit reported inorganic growth in our other segments.

John: Turning to segment revenue performance, starting on slide 12 with Salix.

John Barresi: Turning to segment revenue performance, starting on slide 12, with SALIX. First quarter SALIX revenues increased $3 million on a reported basis to $499 million, driven by TRX growth in our key products, including XIFAXAN 550, RELASTOR and TRULANCE. Revenues grew $12 million on an organic basis, reflecting the impact of divestitures and discontinuations of certain non-promoted products.

John Barresi: First quarter SALIX revenues increased $3 million on a reported basis to $499 million, driven by TRX growth in our key products, including XIFAXAN 550, RELASTOR and TRULANCE. Revenues grew $12 million on an organic basis, reflecting the impact of divestitures and discontinuations of certain non-promoted products. XIFAXAN continued to represent over 80% of SALIX segment revenues this quarter and saw strong growth in underlying demand. XIFAXAN revenues in Q1 increased 8% compared to the prior year period.

First quarter SALIX revenues increased $3 million on a reported basis to $499 million, driven by TRX growth in our key products, including XIFAXAN 550, RELASTOR and TRULANCE. Revenues grew $12 million on an organic basis, reflecting the impact of divestitures and discontinuations of certain non-promoted products.

John: First quarter, Salix revenues increased $3 million on a reported basis to $499 million driven by <unk> growth in our key products, including <unk> and $5 50, Relistor and true Lance.

John: Revenues grew $12 million on an organic basis, reflecting the impact of divestitures and discontinuation of certain non promoted products.

John Barresi: XIFAXAN continued to represent over 80% of SALIX segment revenues this quarter and saw strong growth in underlying demand. XIFAXAN revenues in Q1 increased 8% compared to the prior year period. Retail prescriptions grew 3% in Q1 versus the prior year. We saw another quarter of solid growth in TRX for IBSD and the long-term care channel for HE. Extended units grew 4%, which included double-digit growth in non-retail units attributable to outpatient clinics.

John: <unk> continued to represent over 80% of sale of segment revenues this quarter and saw strong growth in underlying demand. So FX in revenues in Q1 increased 8% compared to the prior year period retail prescriptions grew 3% in Q1 versus the prior year, we saw another quarter of solid growth in Trs for Ibs D.

John Barresi: Retail prescriptions grew 3% in Q1 versus the prior year. We saw another quarter of solid growth in TRX for IBSD and the long-term care channel for HE. Extended units grew 4%, which included double-digit growth in non-retail units attributable to outpatient clinics. RELASTOR delivered 10% growth over the prior year period with solid TRX growth of 3% and a benefit from favorable net pricing relative to Q1 of the prior year. TRULANCE revenues declined 7% year over year as solid TRX growth of 9% compared to Q1 of last year was offset by net pricing pressure.

Retail prescriptions grew 3% in Q1 versus the prior year. We saw another quarter of solid growth in TRX for IBSD and the long-term care channel for HE. Extended units grew 4%, which included double-digit growth in non-retail units attributable to outpatient clinics.

John: And the long term care channel for H E extended units grew 4%, which included double digit growth in non retail units attributable to outpatient clinics.

John Barresi: RELASTOR delivered 10% growth over the prior year period with solid TRX growth of 3% and a benefit from favorable net pricing relative to Q1 of the prior year. TRULANCE revenues declined 7% year over year as solid TRX growth of 9% compared to Q1 of last year was offset by net pricing pressure. We also continued to experience meaningful net pricing pressure in our non-promoted portfolio in this segment.

John: Relistor delivered 10% growth over the prior year period with solid <unk> growth of 3% and a benefit from favorable net pricing relative to Q1 of the prior year.

John: <unk> revenues declined 7% year over year as solid <unk> growth of 9% compared to Q1 of last year was offset by net pricing pressure.

John: We also continued to experience meaningful net pricing pressure in our non promoted portfolio in this segment.

John Barresi: We also continued to experience meaningful net pricing pressure in our non-promoted portfolio in this segment. International revenues were $265 million during the quarter, an increase of 7% on a reported basis and 2% on an organic basis compared to the prior year period. Organic growth was led by Canada, while LATAM and EMEA were flat on an organic basis.

We also continued to experience meaningful net pricing pressure in our non-promoted portfolio in this segment.

John: International revenues were $265 million during the quarter, an increase of 7% on a reported basis and 2% on an organic basis compared to the prior year period.

John Barresi: International revenues were $265 million during the quarter, an increase of 7% on a reported basis and 2% on an organic basis compared to the prior year period. Organic growth was led by Canada, while LATAM and EMEA were flat on an organic basis. On an organic basis, LATAM was impacted by the timing of government purchases with private channel sales slowing growth, while in EMEA, growth in key promoted products was offset by the effects of competition on certain of our non-promoted products.

John: Organic growth was led by Canada, while Latam and EMEA were flat.

John: Organic basis, Latam was impacted by the timing of government purchases with private channel sales selling growth while in EMEA growth in key promoted products was offset by the effects of competition on certain of our non promoted products.

John Barresi: On an organic basis, LATAM was impacted by the timing of government purchases with private channel sales slowing growth, while in EMEA, growth in key promoted products was offset by the effects of competition on certain of our non-promoted products. Solta medical revenues were $88 million during the first quarter, an increase of 21% on a reported basis and 23% on an organic basis over the prior year period. Solta's growth was led by China and South Korea and, to a lesser degree, by the remainder of Asia-Pacific.

On an organic basis, LATAM was impacted by the timing of government purchases with private channel sales slowing growth, while in EMEA, growth in key promoted products was offset by the effects of competition on certain of our non-promoted products.

John Barresi: Solta Medical revenues were $88 million during the first quarter, an increase of 21% on a reported basis and 23% on an organic basis over the prior year period. Solta's growth was led by China and South Korea and, to a lesser degree, by the remainder of Asia-Pacific. Importantly, the U.S. returned to growth this quarter with a 14% increase in revenues over the prior year, and we are continuing to invest in our salesforce and related tools to drive sustainable growth in this key market.

John: Total medical revenues were $88 million during the first quarter, an increase of 21% on a reported basis and 23% on an organic basis over the prior year period.

<unk> growth was led by China, and South Korea and to a lesser degree the remainder of Asia Pacific.

John Barresi: Importantly, the U.S. returned to growth this quarter with a 14% increase in revenues over the prior year, and we are continuing to invest in our salesforce and related tools to drive sustainable growth in this key market. Diversified revenues were $202 million during the first quarter, an increase of 3% on a reported basis and 6% on an organic basis compared to the prior year period. In dermatology, revenue grew by 16% on a reported basis and 25% on an organic basis in the quarter over the prior year period as we continued to focus on returning this business to consistent growth. Growth in the quarter benefited from favorable net pricing comparisons quarter over quarter, which we expect will moderate for the remainder of the year, while volumes for our non-promoted products continue to be pressured.

John: Importantly, the U S returned to growth this quarter with a 14% increase in revenues over the prior year and we are continuing to invest in our sales force and related tools to drive sustainable growth in this key market.

John Barresi: Diversified revenues were $202 million during the first quarter, an increase of 3% on a reported basis and 6% on an organic basis compared to the prior year period. In dermatology, revenue grew by 16% on a reported basis and 25% on an organic basis in the quarter over the prior year period as we continued to focus on returning this business to consistent growth. Growth in the quarter benefited from favorable net pricing comparisons quarter over quarter, which we expect will moderate for the remainder of the year, while volumes for our non-promoted products continue to be pressured.

John: Diversified revenues were $202 million during the first quarter, an increase of 3% on a reported basis and 6% on an organic basis compared to the prior year period and.

John: In dermatology revenue grew by 16% on a reported basis and 25% on an organic basis in the quarter over the prior year period as we continued to focus on returning this business to consistent growth.

John Barresi: Growth in the quarter benefited from favorable net pricing comparisons quarter over quarter, which we expect will moderate for the remainder of the year, while volumes for our non-promoted products continue to be pressured. As Tom noted, we are pleased with the early response in the market to CABTREO since its late January launch and expect it to become a more meaningful driver of growth in our dermatology business as the year progresses.

Growth in the quarter benefited from favorable net pricing comparisons quarter over quarter, which we expect will moderate for the remainder of the year, while volumes for our non-promoted products continue to be pressured.

John: Growth in the quarter benefited from favorable net pricing comparisons quarter over quarter, which we expect will moderate for the remainder of the year while volumes for our non promoted products continued to be pressured.

John Barresi: As Tom noted, we are pleased with the early response in the market to CABTREO since its late January launch and expect it to become a more meaningful driver of growth in our dermatology business as the year progresses. Neurology revenues grew slightly, posting a 1% increase year-over-year as we continued to benefit from competitor supply disruptions, although not at the same levels that we saw in Q4 of 2023, while Buterin and Applenzen revenues grew despite lower volumes as we continue to execute our strategies to improve overall profitability in this business.

John: As Tom noted we're pleased with the early response in the market to cab trio since late January launch and expect it to become a more meaningful driver of growth in our dermatology business as the year progresses.

John Barresi: Neurology revenues grew slightly, posting a 1% increase year-over-year as we continued to benefit from competitor supply disruptions, although not at the same levels that we saw in Q4 of 2023, while Buterin and Applenzen revenues grew despite lower volumes as we continue to execute our strategies to improve overall profitability in this business. While dentistry revenues declined modestly in the quarter compared to Q1 of last year, we continue to invest in this durable business for the long term and expect the investments we are making in the sales team and related tools to return this business to growth through the remainder of 2024.

Neurology revenues grew slightly, posting a 1% increase year-over-year as we continued to benefit from competitor supply disruptions, although not at the same levels that we saw in Q4 of 2023, while Buterin and Applenzen revenues grew despite lower volumes as we continue to execute our strategies to improve overall profitability in this business.

John: Neurology revenues grew slightly posting a 1% increase year over year as we continued to benefit from competitor supply disruptions, although not at the same levels that we saw in Q4 of 2023 will.

John: <unk> and our plans and revenues grew despite lower volumes as we continue to execute our strategies to improve overall profitability in this business.

John Barresi: While dentistry revenues declined modestly in the quarter compared to Q1 of last year, we continue to invest in this durable business for the long term and expect the investments we are making in the sales team and related tools to return this business to growth through the remainder of 2024.

John: While dentistry revenues declined modestly in the quarter compared to Q1 of last year, we continue to invest in this durable business for the long term and expect the investments we are making in the sales team and related tools to return this business to growth through the remainder of 2024.

John: As shown on slide 16 fashion loan revenues were $1 $1 billion during the first quarter up 18% on a reported basis and 11% on an organic basis compared to the prior year with growth across all <unk> loan segments key product franchises and geographies.

John Barresi: As shown on slide 16, Bausch & Lomb revenues were $1.1 billion during the first quarter, up 18% on a reported basis and 11% on an organic basis compared to the prior year with growth across all Baush & Lomb segments, key product franchises and geographies. Turning to the first quarter P&L on slides 18 and 19, first quarter consolidated adjusted gross margin was 71.2%, 110 basis points higher compared with the prior year. For Bausch Health, excluding B&L, adjusted gross margin for the first quarter was 79.5%, approximately 20 basis points higher than last year's first quarter.

John Barresi: Turning to the first quarter P&L on slides 18 and 19, first quarter consolidated adjusted gross margin was 71.2%, 110 basis points higher compared with the prior year. For Bausch Health, excluding B&L, adjusted gross margin for the first quarter was 79.5%, approximately 20 basis points higher than last year's first quarter.

John: Turning to the first quarter P&L on slides 18, and 19 first quarter consolidated adjusted gross margin was 71, 2% 110 basis points higher compared with the prior year.

John Barresi: At B&L, adjusted gross margin was 63.2% for Q1 of '24, compared to 60.0% for Q1 of 2023, driven primarily by product mix, including the impact of Zydra. Consolidated adjusted operating expenses for the first quarter were $916 million, an increase of $82 million. For Bausch Health, excluding B&L, adjusted operating expenses decreased by approximately $16 million compared to the first quarter of 2023. Higher A&P, driven by investments in the dermatology and dentistry businesses and R&D, were offset by lower G&A expenses as we continue to focus on cost management. We expect A&P increases to moderate over the course of the year as we begin to annualize our investments in selling and marketing for SALIX.

John: For Bausch health, excluding <unk> adjusted gross margin for the first quarter was 79, 5% approximately 20 basis points higher than last year's first quarter at <unk>. Adjusted gross margin was 63, 2% for Q1 of <unk> 24, compared to 60.0% for Q1 of 2023, driven primarily by product mix.

John: Including the impact of <unk>.

John: Consolidated adjusted operating expenses for the first quarter were $916 million, an increase of $82 million.

John Barresi: Higher A&P, driven by investments in the dermatology and dentistry businesses and R&D, were offset by lower G&A expenses as we continue to focus on cost management. We expect A&P increases to moderate over the course of the year as we begin to annualize our investments in selling and marketing for SALIX.

John: For Bausch health, excluding P&L adjusted operating expenses decreased by approximately $16 million compared to the first quarter of 2023 higher A&P driven by investments in the dermatology in dentistry businesses and R&D were offset by lower G&A expenses as we continue to focus on cost management, we expect A&P increases to modern.

Over the course of the year as we begin to annualize our investments in selling and marketing for Salix.

John: P&L reported an increase of $98 million and adjusted operating expenses due primarily to increased selling and A&P driven by the addition of <unk> and product launches, including <unk>.

John Barresi: B&L reported an increase of $98 million in adjusted operating expenses due primarily to increased selling in A&P, driven by the addition of Zydra and product launches, including Maibo. Consolidated adjusted R&D expense for the quarter was $150 million, an increase of 5% compared to the prior year and represented 7% of product sales compared with 7.4% for the prior year period. For Bausch Health, excluding B&L, R&D expenses of $69 million increased by approximately $2 million for the first quarter as compared to the same quarter last year. This increase is in line with our expectations as we continue to invest in our GI anesthetics pipeline.

John: Consolidated adjusted R&D expense for the quarter was $150 million, an increase of 5% compared to the prior year and represented 7% of product sales compared with seven 4% for the prior year period.

John Barresi: For Bausch Health, excluding B&L, R&D expenses of $69 million increased by approximately $2 million for the first quarter as compared to the same quarter last year. This increase is in line with our expectations as we continue to invest in our GI anesthetics pipeline. First quarter consolidated adjusted EBITDA attributable to Bausch Health was $665 million, an increase of $77 million or 13%. Adjusted EBITDA for Bausch Health, excluding B&L, was $504 million for the quarter, a 9% increase from $462 million in the first quarter of 2023.

John: For Bausch health, excluding P&L R&D expenses of $69 million increased by approximately $2 million for the first quarter as compared to the same quarter last year. This increase is in line with our expectations as we continue to invest in our Gi anesthetics pipeline.

John: First quarter consolidated adjusted EBITDA attributable to Bausch health was $665 million, an increase of $77 million or 13%.

John Barresi: First quarter consolidated adjusted EBITDA attributable to Bausch Health was $665 million, an increase of $77 million or 13%. Adjusted EBITDA for Bausch Health, excluding B&L, was $504 million for the quarter, a 9% increase from $462 million in the first quarter of 2023. Turning to cash flow, on a consolidated basis, Bausch Health generated $211 million of operating cash flow and $181 million of adjusted operating cash flow in the first quarter. For Bausch Health, excluding B&L, adjusted operating cash flow was $133 million for the first quarter compared to adjusted operating cash flow of $94 million for the first quarter of 2023, with the changes primarily reflecting improved business performance.

First quarter consolidated adjusted EBITDA attributable to Bausch Health was $665 million, an increase of $77 million or 13%. Adjusted EBITDA for Bausch Health, excluding B&L, was $504 million for the quarter, a 9% increase from $462 million in the first quarter of 2023. Turning to cash flow, on a consolidated basis, Bausch Health generated $211 million of operating cash flow and $181 million of adjusted operating cash flow in the first quarter. For Bausch Health, excluding B&L, adjusted operating cash flow was $133 million for the first quarter compared to adjusted operating cash flow of $94 million for the first quarter of 2023, with the changes primarily reflecting improved business performance.

John: Adjusted EBITDA for Bausch health, excluding P&L was $504 million for the quarter, a 9% increase from $462 million in the first quarter of 2023.

John Barresi: Turning to cash flow, on a consolidated basis, Bausch Health generated $211 million of operating cash flow and $181 million of adjusted operating cash flow in the first quarter. For Bausch Health, excluding B&L, adjusted operating cash flow was $133 million for the first quarter compared to adjusted operating cash flow of $94 million for the first quarter of 2023, with the changes primarily reflecting improved business performance.

John: Turning to cash flow.

John: On a consolidated basis, Bausch health generated $211 million of operating cash flow and $181 million of adjusted operating cash flow in the first quarter.

For Bausch Health, excluding B&L, adjusted operating cash flow was $133 million for the first quarter compared to adjusted operating cash flow of $94 million for the first quarter of 2023, with the changes primarily reflecting improved business performance.

John: For Bausch health, excluding P&L adjusted operating cash flow was $133 million for the first quarter compared to adjusted operating cash flow of $94 million for the first quarter of 2023 with the changes primarily reflecting improved business performance.

John Barresi: As we've discussed in prior quarters, as a result of the accounting treatment for the senior notes issued as part of our 2022 debt exchange, a portion of our cash interest payments are classified as financing cash flows. Adjusted cash flow includes payments of the full contractual interest as well as adjustments for the payment of separation costs, business transformation costs, and litigation and other matters net of insurance proceeds. Now, let's turn to our balance sheet on slide 19.

John: As we've discussed in prior quarters as a result of the accounting treatment for the senior notes issued as part of our 2022 debt exchange a portion of our cash interest payments are classified as financing cash flows adjust.

John: Adjusted cash flow includes payments of the full contractual interest as well as adjustments for the payment of separation costs business transformation costs and litigation and other matters net of insurance proceeds.

John Barresi: Now, let's turn to our balance sheet on slide 19. We continued to prioritize liquidity management and the delevering of our balance sheet. In the first quarter, we reduced our debt for Bausch Health excluding B&L by $307 million, while debt net of cash decreased by $110 million. We continue to evaluate alternatives to reduce our overall leverage while also focusing on our maturity profile. As we discussed on the year-end earnings call, in January 2024, we retired $250 million in principal value of 2025 and 2026 maturities through open market repurchases, capturing approximately $12 million of discounts in the process.

John: Now, let's turn to our balance sheet on slide 19.

John Barresi: We continued to prioritize liquidity management and the delevering of our balance sheet. In the first quarter, we reduced our debt for Bausch Health excluding B&L by $307 million, while debt net of cash decreased by $110 million. We continue to evaluate alternatives to reduce our overall leverage while also focusing on our maturity profile. As we discussed on the year-end earnings call, in January 2024, we retired $250 million in principal value of 2025 and 2026 maturities through open market repurchases, capturing approximately $12 million of discounts in the process.

John: We continue to prioritize liquidity management and the Delevering of our balance sheet in the first quarter, we reduced our debt for Bausch health, excluding P&L by $307 million, while debt net of cash decreased by $110 million.

John Barresi: We also repaid $56 million of additional debt consisting of mandatory term loan amortization and repaying a portion of our AR facility. At the end of the first quarter, Bausch Health, excluding B&L, had $325 million outstanding under our AR facility and had no outstanding borrowings and approximately $950 million of availability under our revolving credit facility. As shown on slides 20 and 21, total debt for Bausch Health, excluding Bausch and Lohm, at the end of the quarter was $16.1 billion, which consisted of approximately $14.8 billion of restricted debt issued by Bausch Health, excluding B&L, and approximately $1.3 billion of unrestricted debt, which includes the $1 billion of senior secured notes issued by the unrestricted subsidiary created in the third quarter of 2022, and the $325 million drawn under our AR facility.

John: We continue to evaluate alternatives to reduce our overall leverage while also focusing on our maturity profile as we discussed on the year end earnings call. In January 2024, we retired $250 million in principal value of 2025, and 2026 maturities through open market repurchases, capturing approximately $12 million of dish.

John: In the process, we also repaid $56 million of additional debt consisting of mandatory term loan amortization and repaying a portion of our AR facility.

John Barresi: As shown on slides 20 and 21, total debt for Bausch Health, excluding Bausch and Lomb, at the end of the quarter was $16.1 billion, which consisted of approximately $14.8 billion of restricted debt issued by Bausch Health, excluding B&L, and approximately $1.3 billion of unrestricted debt, which includes the $1 billion of senior secured notes issued by the unrestricted subsidiary created in the third quarter of 2022, and the $325 million drawn under our AR facility.

John: At the end of the first quarter Bausch health, excluding P&L had $325 million outstanding under our facility and had no outstanding borrowings and approximately $950 million of availability under our revolving credit facility.

John: As shown on slides 20, and 21 total debt for Bausch health, excluding <unk> loans at the end of the quarter was $16 1 billion.

John: Which consisted of approximately $14 8 billion of restricted debt issued by Bausch health, excluding <unk> and approximately $1 3 billion of unrestricted debt, which includes the $1 billion of senior secured notes issued by the restricted subsidiary created in the third quarter of 2022, and the 325 million.

John: Drawn under our facility.

John Barresi: Excluding B&L debt, approximately 85% of our debt is fixed, and approximately 70% of the company's debt on a consolidated basis is fixed. We ended the quarter with approximately $1.5 billion of liquidity, which included approximately $431 million of cash and $950 million of availability under our revolving credit facility. We are focused on strengthening our balance sheet, including evaluating and utilizing, as appropriate, various tools and strategies based on the provisions of our existing debt agreements, along with our existing liquidity, to manage both our maturity profile and our overall leverage.

John: Excluding BNS debt approximately 85% of our debt is fixed and approximately 70% of the company's debt on a consolidated basis is fixed.

John: We ended the quarter with approximately $1 $5 billion of liquidity, which includes approximately $431 million of cash and $950 million of availability under our revolving credit facility.

John: We are focused on strengthening our balance sheet, including evaluating and utilizing as appropriate various tools and strategies based on the provisions of our existing debt agreements along with our existing liquidity to manage both our maturity profile and our overall leverage.

John Barresi: Turning to guidance, we are maintaining our guidance for the full year 2024. For Bausch Health, excluding B&L, we continue to expect revenue of $4.7 to $4.85 billion with organic growth of 2% to 5% along with adjusted EBITDA of $2.36 billion to $2.46 billion and adjusted operating cash flow in a range of approximately $775 to $825 million. I'll now hand the call back to Tom.

John: Turning to guidance, we are maintaining our guidance for the full year 2024 for Bausch health. Excluding P&L. We continue to expect revenue of $4 7 million to $4 85 billion with organic growth of 2% to 5%.

John: Along with adjusted EBITDA of $2 $36 billion to $2 $4 6 billion.

John: And adjusted operating cash flow in a range of approximately $775 to $825 million.

John: I'll now hand, the call back to Tom.

Thank you John.

Thomas Appio: Thank you, John. We continue to build on our strong global portfolio of businesses and remain highly focused on delivering against the objectives we laid out last quarter, including driving a results-oriented culture of accountability, delivering on our revenue, adjusted EBITDA, and adjusted operating cash flow commitments, executing with operational excellence and a cost-focused mindset across the enterprise, intensifying our focus and operating rigor behind R&D and business development, and continuing to evaluate strategic alternatives, achieving the full separation of B&L remains a priority.

Tom: We continue to build on our strong global portfolio of businesses and remain highly focused on delivering against the objectives, we laid out last quarter, including <unk>.

Tom: Driving a results oriented culture of accountability delivering on our revenue adjusted EBITDA and adjusted operating cash flow commitments.

Tom: Executing with operational excellence and cost focused mindset across the enterprise.

Tom: Intensifying, our focus and operating rigor behind R&D and business development and continuing to evaluate strategic alternatives achieving the full separation of <unk> remains a priority.

Thomas Appio: These priorities help support our ambition of being a globally integrated healthcare company trusted and valued by patients, healthcare providers, employees, and investors as we relentlessly drive to deliver better health outcomes. I would also, once again, like to extend my thanks to the entire Bausch Health team for their hard work. They have worked tirelessly and are all in to position our business for the long term. Every patient deserves better health and the chance to make the most of life.

Tom: These priorities helped support our ambition of being a globally integrated healthcare company trusted and valued by patients healthcare providers and <unk>.

Tom: <unk> and investors as we relentlessly drive to deliver better health outcomes.

Thomas Appio: I would also, once again, like to extend my thanks to the entire Bausch Health team for their hard work. They have worked tirelessly and are all in to position our business for the long term. Every patient deserves better health and the chance to make the most of life. This drives us on with urgency and efficiency to deliver the products patients need most to enrich their lives. On behalf of the entire Bausch Health team, I thank you for your interest in and support of our company. With that, we will now take questions. Operator, please open the line for Q&A.

Tom: I would also once again like to extend my thanks to the entire Bausch health team for their hard work.

Tom: They have worked tirelessly and our all in to position our business for the long term.

Tom: Every patient deserves better health and the chance to make the most of life. This drives us on with urgency and efficiency to deliver the products patients need most to enrich their lives.

Thomas Appio: This drives us on with urgency and efficiency to deliver the products patients need most to enrich their lives. On behalf of the entire Bausch Health team, I thank you for your interest in and support of our company. With that, we will now take questions. Operator, please open the line for Q&A.

This drives us on with urgency and efficiency to deliver the products patients need most to enrich their lives.

On behalf of the entire Bausch Health team, I thank you for your interest in and support of our company. With that, we will now take questions. Operator, please open the line for Q&A.

Speaker Change: On behalf of the entire Bausch health team I. Thank you for your interest in and support of our company.

Speaker Change: With that we will now take questions operator, please open the line for Q&A.

Speaker Change: Certainly everyone. At this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.

Operator: Certainly. Everyone, at this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while you are posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star 1 on your phone. Your first question is coming from Glen Santangelo from Jeffries. Your line is live.

Speaker Change: We do ask what posing your question. Please pickup your handset if you're listening on speaker phone to provide optimum sound quality.

Speaker Change: Once again, if you have any questions or comments. Please press star one on your phone.

Speaker Change: Your first question is coming from Glen Santangelo from Jefferies. Your line is live yes, yes. Thanks for taking my question Hey, just a couple quick ones for me you reiterated a number of times that you remain committed to the full separation and you highlighted sort of the Norwich decision as being a significant milestone.

Glen Santangelo: Yeah, thanks for taking my question. Hey, Tom, just a couple quick ones for me. You reiterated a number of times that you remain committed to the full separation, and you highlighted the sort of Norwich decision as being a significant milestone. What other milestones or major milestones might exist? And then as you think about the strategies for a full separation, in your mind, is the tax-free spin still the way to go, or are there other strategies that you might be evaluating? And then maybe I'll just add a quick follow-up on the balance sheet.

Speaker Change: What are the milestones or major milestones might exist and then as you think about.

Glen Santangelo: The strategies for our full separation is it in your mind is the tax free spin still the way to go or are there or are there other strategies that you might be evaluating and then maybe I just had a quick follow up on the balance sheet.

Speaker Change: Okay. Thanks.

Thomas Appio: Okay, Glenn, thanks for the question. Clearly, of course, the Norwich Appeal decision is an important milestone. So we are really happy about that and really pleased with the outcome. But as you know, there are many factors here that we need to consider. So, as we take a look at it, really the timing of the potential distribution, the most fundamental point is making sure that we have two appropriately capitalized companies.

Speaker Change: Thanks for the question.

Speaker Change: Clearly of course.

Speaker Change: The Norwich appeal decision is an important milestone so we're really.

Speaker Change: Happy about that.

Speaker Change: <unk>.

Speaker Change: Pleased with the outcome.

Speaker Change: But as you know, there's there's multi factors here that.

Speaker Change: We need to consider so.

Speaker Change: As we take a look at it.

Speaker Change: Really the timing of the potential distribution.

Speaker Change: The most fundamental point is making sure that we have to.

Speaker Change: Propylene capitalized companies.

Speaker Change: As we look at it.

Thomas Appio: So, as we look at it, as you know, there are moving parts when it comes to our balance sheet, when it comes to other things in terms of litigation or what have you. So really kind of thoughtfully going through it and progressing through what needs to be done. What I would say is, when we look at it, making sure when we take a look at the full separation, it is a priority for us. As you can see, on our priorities for 2024, it is a key priority for the full separation of B&L. And basically, as we've talked about before, making sure totally in line with [inaudible].

Speaker Change: As you know there's moving parts when it comes to our balance sheet. When it comes to other things in terms of litigation or what have you so really.

Speaker Change: Not fully going through it and progressing through.

Speaker Change: What what needs to be done.

Speaker Change: What I would say is is when we look at it.

Speaker Change: Making sure.

Speaker Change: When we take a look at the full separation.

Speaker Change: Is a priority for us as you as you can see.

Speaker Change: Our priorities for 2024.

Speaker Change: It is a key priority to the full separation of <unk>.

Speaker Change: And basically as we've talked about before.

Speaker Change: Making sure again totally in line with appropriately capitalized to companies.

Glen Santagelo: And Tom, maybe just to follow up on that point on the balance sheet, when you think about the leverage on [inaudible], we've gotten a lot of pushback from investors, highlighting the leverage related to the [inaudible]. How do you think about what the appropriate level ratio might be? You haven't commented in a while on any of those leverage targets. It seems you remain committed towards using various tools and strategies to kind of maybe work that debt level down. Any sort of thoughts on how we should think about that for the balance of the year?

Speaker Change: And Tom maybe just a follow up on that point on the balance sheet. When you think about the leverage on remain co. We've gotten a lot of pushback from investors you know highlighting the leverage related to the.

Tom: Remain called post the spin.

Tom: About what the appropriate leverage ratio might be I mean, you haven't sort of commented in awhile on any of those leverage targets, but it seems you remain committed towards using various tools and strategies as you put it to kind of maybe worked at that level down so any sort of thoughts on how we should think.

Tom: That through the balance of the year.

Thomas Appio: What I'll do is let me just take the first point on that, and then I'll give it to John. But overall, as you saw this quarter and the last four consecutive quarters, one of my key focus is really driving growth and driving performance. Of course, that always helps us be able to continue to retire debt. So we have a really healthy business globally. And as you saw in the results for this quarter, both in the U.S. and internationally, the business is growing and growing broadly. You saw the performance of Solta, we really feel really great about the performance and the return to growth in the U.S. of growth. So the business is healthy and doing well, and a diverse portfolio of products. And then clearly, we're executing on our R&D pipeline and investing appropriately. So as we look at all those things, we're positioning ourselves as we look at our balance sheet and what we can do. I'll hand it over to John to speak specifically about the balance sheet.

Tom: Yes.

Speaker Change: What I'll do is let me just take the first point of that and then I'll give it to John but overall as you saw this quarter in the last four consecutive quarters. My focus one of my key focus is really driving growth driving performance of course that always helps us be able to continue.

Speaker Change: You to retire debt. So we have a really healthy business globally and as you saw the.

Speaker Change: The results for this quarter.

John: Both in the U S and internationally the business is growing and growing broadly you saw the.

John: And the performance of Solta, we really feel really great about the performance and the return to the performance in the U S of growth. So we have a really the business is healthy and doing well diverse portfolio of products.

Thomas Appio: we really feel really great about the performance and the return to growth in the U.S. of growth. So the business is healthy and doing well, and a diverse portfolio of products. And then clearly, we're executing on our R&D pipeline and investing appropriately. So as we look at all those things, we're positioning ourselves as we look at our balance sheet and what we can do. I'll hand it over to John to speak specifically about the balance sheet.

John: And then clearly we are.

John: Executing on our R&D pipeline and investing appropriately so as we look at all those things.

John: We're positioning ourselves as we look at our balance sheet and what we can do I'll hand, it over to John to speak specifically on the on the balance sheet.

John Barresi: Hey, Glen, it's John. Thanks for the question. Yeah, to the point of, how do we think about a leverage target, I think it comes back to what Tom said a minute ago, right? Fundamentally, we're focused on two appropriately capitalized companies, and I think there's no one binary point measure for that. It's really about balancing our leverage with our maturity profile, and as we've said, we're very focused on managing both of those effectively. We have a lot of tools at our disposal. As Tom said, we're focused on growing the business, and it's a very cash-generative business. We're guiding to $775 to $825 million of adjusted operating cash flow this year. We have a really broad, diverse footprint, both product-wise and geographically, and we think there's value in that. We're working on the pipeline, as you heard in Tom's prepared remarks earlier, and we'll use all of the tools that we have available, whether that's to do open market repurchases. We've done debt exchanges in the past. We've done asset sales in the past. We have the BLCO stake of approximately 8% at our disposal, and $1.5 billion of liquidity. So it doesn't directly answer your question of a point target, but those are all the things we think about as we think about managing both the maturity profile and leverage.

John: <unk> John Thanks for the thanks for the question yet to the point of how do we think about our leverage target I think it comes back to what Tom said a minute ago rate fundamentally we're focused on to appropriately capitalized companies and I think that there is no one binary point measure for that it's really about balance.

John: Seeing our leverage with our maturity profile and as we've said, we're very focused on managing both of those effectively we have a lot of tools at our disposal as Tom said, we're focused on growing the business and it's a very cash generative business, we are guiding to 775% to $25 million of adjusted operating cash flow. This year, we have a really broad.

John Barresi: We have a lot of tools at our disposal. As Tom said, we're focused on growing the business, and it's a very cash-generative business. We're guiding to $775 to $825 million of adjusted operating cash flow this year. We have a really broad, diverse footprint, both product-wise and geographically, and we think there's value in that.

John: <unk> footprint, both product wise and geographically and we think there's value in that.

Glenn Santangelo: We're working on the pipeline, as you heard in Tom's prepared remarks earlier, and we'll use all of the tools that we have available, whether that's to do open market repurchases. We've done debt exchanges in the past. We've done asset sales in the past. We have the BLCO stake of approximately 8% at our disposal, and $1.5 billion of liquidity. So it doesn't directly answer your question of a point target, but those are all the things we think about as we think about managing both the maturity profile and leverage.

John: We're working on the pipeline as you heard in Tom's prepared remarks earlier.

John: And we will use all of the tools that we have available whether thats to do open market repurchases, we've done debt exchanges in the past we've done asset sales in the past we have the <unk> stake of approximately 8% at our disposal and $1 five of liquidity. So.

John: It doesn't directly answer your question or a point target, but those are all the things we think about as we think about managing the both the maturity profile and leverage.

Glen Santangelo: Okay, thanks for all the details.

Operator: Thank you. Your next question is coming from Michael Nedelcovych from TD Cowen. Your line is live.

Speaker Change: Okay. Thanks for all the details.

Speaker Change: Thank you. Your next question is coming from Michael Dell Kovich from TD Cowen Your line is live.

Operator: Thank you. Your next question is coming from Michael Nadelka.

Speaker Change: Great. Thank you for the question.

Michael Nedelcovych: Great. Thank you for the question. As has been noted, I think this is the first time, at least in the recent past that management has explicitly connected the outlook for XIFAXAN to the likelihood of completing the full separation of Bausch and Lomb. That begs the question of when XIFAXAN's outlook will be secure. If we just consider the annual challenge and take the 30-month stay at face value, that would mean persistent uncertainty until almost 2027, which puts us right at the doorstep of full generic competition for XIFAXAN. So, I'm wondering, how will it be possible to complete the Bausch and Lomb separation under those circumstances?

Speaker Change: Yes.

Speaker Change: I noted I think this is the first time at least in the recent past that management has explicitly connected the outlook for Zika vaccine to the likelihood of completing the full separation of Bausch <unk> lomb.

Speaker Change: Begs the question of when dice vaccines outlook will be secure if we just consider that and Neil challenge and take the 30 month stay at face value that would mean persistent uncertainty until almost 2027, which puts us right at the doorstep of full generic competition for <unk>. So I'm wondering how will it be possible.

Speaker Change: To complete the Bausch and lomb separation under those circumstances.

Speaker Change: Yes, Michael Thanks for the question.

Thomas Appio: Yeah, Michael, thanks for the question. I'm glad you asked it because I've seen a lot of things going back and forth in the press regarding Admio. So firstly, I just want to make sure we're clear that Zyfaxan is a huge product. Everybody looks at it. They're interested in it because the performance is great. And it continues to perform and grow. You saw the quarter where we wound up with the highest TRXs on record, an all-time high.

Thomas Appio: Yeah, Michael, thanks for the question. I'm glad you asked it because I've seen a lot of things going back and forth in the press regarding Amneal. So firstly, I just want to make sure we're clear that XIFAXAN is a huge product, everybody looks at it, they're interested in it because the performance is great and it continues to perform and grow. You saw the quarter where we wound up with the highest TRXs on record, all-time high. So it's doing well, and it's growing and the investments we're making behind it.

Michael: I'm glad you asked it because.

Speaker Change: A lot of.

Michael: Things are going back and forth.

Michael: In the press regarding at Neal So firstly I just want to make sure we're clear as that.

Michael: <unk> is a is a huge product everybody looks at it they're interested in it the performance is great and it's.

Michael: It continues to perform and grow you saw the quarter, where we wound up with highest T. Rx is on record all time high so it's doing well.

Thomas Appio: So it's doing well and it's growing and the investments we're making behind it. So paragraph four, the Amnil issue was not unexpected.

So it's doing well and it's growing and the investments we're making behind it.

Michael: And it's growing and the investments, we're making behind it so paragraph fours.

Thomas Appio: So paragraph four, the Amneal issue was not unexpected. What I think the most important thing here is, number one, the patents at issue here are not the same that were in the Norwich case. So there's new patents and we have a legal team, I am really in a great position to have such an outstanding legal team who is looking at it and working on it really, really hard. So the Amneal issue, as we look at it, there are many patents there to consider as we work it through. So I cannot speculate, again, on what the strategy will be. But clearly, it wasn't that it was a surprise, and we have a team that's working on it. So I don't really see that as we move forward as a situation that we're going to continue. Again, we'll probably see, we could see others but the time frame that it has, we're going to work it real hard.

Michael: The amnio issue was not unexpected.

Thomas Appio: What I think the most important thing here is, number one, the patents at issue here are not the same that were in the Norwich case. So there are new patents and we have a legal team, I am really in a great position to have such an outstanding legal team who is looking at it and working on it really, really hard.

Michael: What I think the most important thing here is number one is that and the patents at issue here are not the same.

Michael: We are in.

Michael: The Norwich case, so theres new patents. So this is.

Michael: And we have a legal team.

Michael: And really in a great position.

Michael: To have such an outstanding legal team, who is looking at it and working on it really really hard so.

Thomas Appio: So the Amneal issue, as we look at it, there are many patents there to consider as we work it through. So I cannot speculate, again, on what the strategy will be. But clearly, it wasn't that it was a surprise, and we have a team that's working on it. So I don't really see that as we move forward as a situation that we're going to continue. Again, we'll probably see, we could see others but the time frame that it has, we're going to work it real hard.

Michael: Neil issue as we look at it.

Michael: Many patents there to consider as we work it through so I cannot speculate.

Michael: Again on what the strategy will be but clearly.

Michael: It wasn't that it was a surprise.

Thomas Appio: And we have a team that's working on it. So I don't really see that as we move forward as a situation that we're going to continue. Again, we'll probably see it. We could see others. But the time frame that it has, we're going to work it real hard.

Michael: We have a team that's working on it so I don't really see that.

Michael: As we move forward as.

Michael: A situation that we're going to continue.

Michael: We'll probably see we could see others, but.

Michael: Timeframe that it has.

Speaker Change: We're going to work it real hard.

Speaker Change: Okay.

Speaker Change: Sure.

Thomas Appio: May I ask a follow up? Sure. Are you preparing for Norwich to file a new ANDA just for the IBS syndication? You suggested you may see others just now. And is there anything in your settlement with the other generic companies that would prevent them from doing the same thing?

May I ask a follow up? Sure.

Michael Nedelcovych: May I ask a follow up? Sure.

Michael Nedelcovych: May I ask a follow up?

Speaker Change: Are you are you preparing for Norwich to file a new and just for the Ibs indication. You suggested you may see others, just now and is there anything in your settlement with the other generic companies that would prevent them from doing the same thing.

Thomas Appio: Sure.

Michael Nedelcovych: Are you preparing for Norwich to file a new ANDA just for the IBS indication? You suggested you may see others just now. And is there anything in your settlement with the other generics companies that would prevent them from doing the same thing?

Thomas Addio: Yeah, so right now, as you know, we just got the ruling, the affirmation of the denial of the motion that Norwich is off the market until October of 2029. This is a large milestone for us. I can't speculate what Norwich will do in the coming weeks or months. What I would say is we feel we have a great legal team who's looking at it and monitoring it, and we'll see how it works out. Great. Thank you.

Thomas Appio: Yeah, so right now, as you know, we just got the ruling, the affirmation of the denial of the motion that Norwich is off the market until October of 2029. This is a large milestone for us. I can't speculate what Norwich will do in the coming weeks or months. What I would say is we feel we have a great legal team who's looking at it and monitoring it, and we'll see how it works out.

Michael: Yes, so right now.

Michael: As you know, we just got the ruling.

Michael: Formation of the denial of the motion.

Michael: Norwich is off the market until October of 2029. This is a.

Michael: Large milestone for us I can't speculate what Norwich will do.

Michael: In.

Michael: In the coming weeks or months, what I would say is is we feel we have a great legal team who's who is looking at it and monitoring it and we'll see how it works out.

Michael: Yeah.

Speaker Change: Great. Thank you.

Michael Nedelcovych: Great. Thank you.

Speaker Change: Thank you. Your next question is coming from Douglas <unk> from RBC capital markets. Your line is live.

Operator: Thank you. Your next question is coming from Douglas Miehm from RBC Capital Markets. Your line is live.

Douglas: Thank you.

Douglas Miehm: Thank you. First question, just in the past the company has discussed whether or not in its approach to the distribution or the separation you would comment on whether it potentially would be a return of capital or a butterfly. Is there anything that you can update us on as to the potential approach that the company may take in the event that you do pursue the separation?

Douglas: First question just in the past the company has discussed.

Douglas: Whether or not in its approach to.

Douglas: The distribution or the separation.

Douglas: You would comment on weather potentially would be a return of capital or butterfly is there anything that you can update us on as to the potential approach that the company may take in the event the.

Douglas: You do pursue the separation.

Speaker Change: Yeah, Doug Thanks for the question.

Thomas Appio: Yeah, Doug, thanks for the question. Yes, we have talked about that in the past. At this point, no decision has been made. What I would say is we still are focused on making sure it's deemed tax-free to shareholders, so continuing to keep all options open and evaluating it as we progress.

Speaker Change: Yes, we have talked about that in the past.

Thomas Appio: You know, at this point, you know, no decision has been made. What I would say is, you know, we still are focused on making sure it's deemed tax-free to shareholders. So continuing to keep all options open and evaluating it as we progress.

Speaker Change: At this point no decision.

Speaker Change: <unk> has been made what I would say is we still are.

Speaker Change: Our focused on.

Speaker Change: Making sure.

Speaker Change: Deemed a tax free to.

Speaker Change: Shareholders, so continuing to keep all options open.

Speaker Change: And are evaluating it as we progress.

Douglas Miehm: Okay. And then second thing, just maybe you could give an update on the stock drop situation. I know you've been trying to resolve that, but we are getting close to a court date, I believe, on part of that. And then finally, I know this is really not that important or material, but why is the IRS situation taking so long relative to when you thought you might be able to resolve that? Thank you.

Speaker Change: Okay.

Speaker Change: And then second thing just.

Speaker Change: Maybe you could.

Speaker Change: You have an update on the stock drops situation I know you've been trying to resolve that part we are getting close to right.

Speaker Change: Dana I believe.

Speaker Change: Part of that and then finally.

Speaker Change: I know this is really not that important or material, but why is the IRS situation, taking so long relative to when you thought you may be able to resolve that thank you.

Dana: Yeah, Doug.

Thomas Addio: Yeah, Doug, the IRS of course is moving slowly. I'll ask John to take that, and then I'll come back to your question on the opt-outs. Hey, Doug, yeah, I think we'd love to have the settlement official and behind us as well. We're working that with the IRS as expeditiously as we can.

Thomas Appio: Yeah, Doug, the IRS of course is moving slowly. I'll ask John to take that, and then I'll come back to your question on the opt-outs.

Dana: The IRS.

Speaker Change: Of course as.

Speaker Change: Is moving slow I'll turn I'll ask John to take that and then I'll come back to your question on the <unk>.

John Barresi: Hey, Doug, yeah, I think we'd love to have the settlement official and behind us as well. We're working that with the IRS as expeditiously as we can. It's a really complicated matter, as we've disclosed in the past, and we currently still expect that the settlement will not have a material impact on our results or on our cash flows. It's a matter of getting through the process, I think, at this point.

John: Hey, Doug.

Speaker Change: I think.

John: We love to have the settlement official and behind Us as well, we're working that with with.

John: With the IRS as expeditiously as we can it's a really complicated.

John Barresi: It's a really complicated matter, as we've disclosed in the past, and we currently still expect that the settlement will not have a material impact on our results or on our cash flows. It's a matter of getting through the process, I think, at this point. Yeah, and then I'll just take the first part of your question regarding the opt-outs. We consistently knew that at some point, we're going to have a trial date. The team, again, as I pointed out earlier, the legal team has been working on this. As you know, we settled the class action we had, we've also settled 16 out of 37 opt-out actions have either been settled or dismissed.

It's a really complicated matter, as we've disclosed in the past, and we currently still expect that the settlement will not have a material impact on our results or on our cash flows. It's a matter of getting through the process, I think, at this point.

John: The matter is we've disclosed in the past and.

John: We currently still expect that the settlement will not have a material impact on our results or on our cash flows.

John: It's a matter of getting through the process I think at this point.

Speaker Change: Yes, and then I'll just take the second the first part of your question regarding the opt outs we've consistently.

Thomas Addio: Yeah, and then I'll just take the first part of your question regarding the opt-outs. We consistently knew that at some point, we're going to have a trial date. The team, again, as I pointed out earlier, the legal team has been working on this. As you know, we settled the class action we had, we've also settled 16 out of 37 opt-out actions have either been settled or dismissed. The total remaining opt-out actions are pending, or 21. What I would say is we have had success on summary judgment on some of the claims that have been narrowed, and we'll continue to work on them. We have what I would say is a strong litigation team very focused on this, and we'll see how it progresses as we move closer to a trial date. Okay, thank you.

Thomas Appio: Yeah, and then I'll just take the first part of your question regarding the opt-outs. We consistently knew that at some point, we're going to have a trial date. The team, again, as I pointed out earlier, the legal team has been working on this. As you know, we settled the class action we had, we've also settled 16 out of 37 opt-out actions have either been settled or dismissed. The total remaining opt-out actions are pending, or 21. What I would say is we have had success on summary judgment on some of the claims that have been narrowed, and we'll continue to work on them. We have what I would say is a strong litigation team very focused on this, and we'll see how it progresses as we move closer to a trial date.

Speaker Change: Consistently knew that at some point, we're going to have a trial date.

Speaker Change: The team again as I pointed out earlier the legal team has been working on this as you know we settled the class. We had we've also settled 16 out of 37 opt out actions.

Speaker Change: Has either been settled or dismissed.

John Barresi: The total remaining opt-out actions are pending, or 21. What I would say is we have had success on summary judgment on some of the claims that have been narrowed, and we'll continue to work on them. We have what I would say is a strong litigation team very focused on this, and we'll see how it progresses as we move closer to a trial date.

Speaker Change: Total remaining opt out actions are pending or 'twenty, one what I would say is we have had.

Speaker Change: Success on summary judgment on some of the claims have been narrowed.

Speaker Change: And we will continue to work on it.

Speaker Change: And we have what I would say is a strong.

Speaker Change: Litigation team very focused on this.

Speaker Change: And we'll see how it progresses.

Speaker Change: We move to <unk>.

Speaker Change: Most are to a trial date.

Speaker Change: Okay. Thank you.

Douglas Miehm: Okay, thank you.

Speaker Change: Thank you. Your next question is coming from Uber rocket from Evercore. Your line is live.

Operator: Thank you. Your next question is coming from Umer Raffat from Evercore. Your line is live.

Umer Raffat: Hi guys, thanks so much for taking my question. Maybe a couple here, if I may. First, is there any regulatory body, U.S. or ex-U.S., or a creditor that needs clarity on XIFAXAN within the 24 months post-separation? Is that an important gating factor for potential investors? That's point number one. And number two, for some of your debt liabilities coming up in '25 or so, what are the plans? Are you intending to go down a very aggressive path? And then, finally, do you envision any possible scenario where the spin has to be held off completely to take care of the amount of debt, as well as the XIFAXAN situation? Thank you very much.

Uber rocket: Hi, guys. Thanks, so much for taking my question, maybe a couple of here. If I may 1st is there any regulatory body U S or ex U S or a creditor that needs clarity on is that facts and within the 24 months post separation is that an important gating factor for potential investors. That's point number one and number two four for somebody or.

Umer Raffat: First, is there any regulatory body, U.S. or ex-U.S., or a creditor that needs clarity on Xifax within the 24 months post-separation? Is that an important gating factor for potential investors? That's point number one. And number two, for some of your debt liabilities coming up in 25 or so, what are the plans? Are you intending to go down a very aggressive path? And then, finally, do you imagine any possible scenario where the spin has to be held off completely to take care of the amount of debt, as well as the Xifax situation?

Uber rocket: That liability is coming up in 'twenty five or so what are the plans are you intending to go down.

Uber rocket: Aggressive path and then finally do you envision any possible scenario, where the spend has to be held off completely or to take care of the amount of debt as well as FX and situations. Thank you very much.

Speaker Change: Yes, <unk> thanks for the question questions.

Speaker Change: Right now let me just give the debt.

Uber rocket: Issue too John maybe he can comment on that.

John: Yes, <unk> I think we're.

John: Certainly focus on our 'twenty five 'twenty six all of our maturities really in our leverage around <unk> 25, and 26 I'll go back to what I said in one of the earlier questions right. We have a number of tools at our disposal, we have $1 5 billion of liquidity.

John: We have the ability to generate significant cash flow.

John: A very cash generative business and we have the broad portfolio that we have with a number of valuable assets, including.

John: <unk> the stake of the <unk> that we can distribute.

John: While staying above that tax free.

John: Distribution threshold and so we're looking at all of those as ways to manage manage our maturities.

John: Beyond that I won't I won't comment on any specific things that we may do other than to say we've done a combination of all of these things in the past <unk> debt exchanges asset sales and we will continue to look at all of those levers.

John: Yes, I'll take the first point of your question I'm not aware of any specific facts in.

John: Regulatory body in the U S or ex U S. What I would say is that I've said, many times is really making sure we have to appropriately.

John: Capitalized companies.

John: And to the last part of your question is our priority is the full separation of P&L. So.

John: As we work through it as I said earlier.

John: On my prepared remarks and to earlier questions is really there is a progression as we work it through.

John: And we will keep everyone updated as we work work it but I really appreciate the question. Thank you.

John: Okay.

John: Thank you. Your next question is coming from Chi Fong from Bank of America. Your line is live.

Umer Raffat: Thank you very much.

Chi Fong: Hey, Good morning. This is chi on for Jason Thanks.

Thomas Addio: Yeah, Umer, thanks for the question. Right now, I'll just give the debt issue to John. Maybe he can comment on that.

Chi Fong: Thanks for taking our questions.

Chi Fong: I guess on the first one now that you've secured the Norwich ruling has the company be in discussion with claimants and a fraudulent conveyance matter perpetual settlement.

Chi Fong: And I have a couple of follow ups after that.

Chi Fong: Yes.

John Barresi: Yeah, Umer, I think we're certainly focused on our '25, '26, all are really in our leverage, our '25 and '26. I'll go back to what I said in one of the earlier questions, right. We have a number of tools at our disposal. For example, we have $1.5 billion of liquidity. We have the ability to generate significant cash flow in a very cash-generative business. And we have the broad portfolio that we have with a number of valuable assets, including the stake in BLCO that we can distribute while staying above that tax-free distribution threshold. And so we're looking at all of those as ways to manage our maturities.

Speaker Change: Basically I can't comment.

Speaker Change: <unk>.

Speaker Change: Have we been in discussions.

Speaker Change: You can't really.

Speaker Change: Discuss that at this time, but again, we are always open to.

Speaker Change: Discussions.

Speaker Change: And looking at the options you had a follow up question.

Speaker Change: Yeah, a couple of follow up one on the first one is on SG&A. So.

Speaker Change: We look at <unk>, the spend ratio looks a little high Nme's thirties, I'm wondering if there is any one Q seasonality truck drive D ratio higher than usual or it's.

Speaker Change: If not how do you see that SG&A spend ratio evolving in the coming years.

Speaker Change: Yes, Sherri looking consolidated.

Sherri: Yeah consolidate it yes.

Speaker Change: Yes, so I think.

Speaker Change: <unk> spoke a little bit to this yesterday as well there has been a significant.

Sherri: A&P investment on the <unk> side supporting both side dress and some of their product launches like <unk> and that is that is on a consolidated basis I think the biggest driver there.

Sherri: Okay got it and my last one is on the pipeline.

Sherri: MSL them up were there any sort of pricing points of feedback from the end of phase II meeting.

Sherri: And as you come off this FDA meeting understood that you still have discussions with international agencies, but do you have any early thoughts on phase III strategy as you look to capture the entire spectrum of mild to moderate you would see and then I think you had mentioned that youre still considering a phase II trial in Crohns.

Sherri: I'm curious if the recent phase III trial of phase III failure, Osama <unk> alter your thinking about <unk>.

Sherri: Investment in Crohn's there. Thanks.

Speaker Change: Yes. Thank.

John Barresi: We have a number of tools at our disposal. For example, we have $1.5 billion of liquidity. We have the ability to generate significant cash flow in a very cash-generative business. And we have the broad portfolio that we have with a number of valuable assets, including the stake in BLCO that we can distribute while staying above that tax-free distribution threshold. And so we're looking at all of those as ways to manage our maturities.

Speaker Change: Thank you for the question on the business and the pipeline I really appreciate that.

Speaker Change: As you know.

Speaker Change: Really focused on the pipeline red.

Speaker Change: Red Sea.

Speaker Change: We had <unk>.

Speaker Change: Fully enrolled these two trials and really are really interested in getting them completed when we look at Omnicell Ahmad.

Speaker Change: We are really happy that we were accepted on the podium at EDW, which is coming up later this month.

Speaker Change: Presenting our data.

Speaker Change: In our press release, we were really pleased with the with the data that we had on our phase two very large phase II trial.

Speaker Change: Our strategy here is.

Speaker Change: Meeting with the FDA, It went well and where we're progressing on this.

Speaker Change: From a UC perspective, when we look at it we see this market very large.

Speaker Change: And we think we have a product that can compete here very nicely. So really by the time, we're ready to launch we're probably looking between the home market of $7 billion to $8 billion. So.

Speaker Change: Really a great growth driver for us.

Speaker Change: In the back half of the decade.

Speaker Change: Looking at the phase III trial, hoping to get that up and running.

Speaker Change: Later, this year or the beginning of 2025.

Speaker Change: On Crohn's again as you know this is a real large market, we would really love to be participating here. We think we have based on our data what we've seen.

Speaker Change: Out of the UC trial.

Speaker Change: That we were going to run a phase two.

Speaker Change: Plan a phase two.

Speaker Change: Moderate to severe in CD.

Speaker Change: And.

Speaker Change: Again over $19 billion market.

Speaker Change: We think we have a drug that can compete now of course, yes, you mentioned.

Speaker Change: That.

Speaker Change: The failures of <unk> in Crohn's, but when we look at this trials in phase two.

Speaker Change: And how we're going to structure. It we think we can.

Speaker Change: Have some success.

Speaker Change: Thank you for the question appreciate the question on the pipeline.

Speaker Change: Thank you. Your next question is coming from David <unk> from Piper Sandler Your line is live.

David: Hey, Thanks, So just a couple of questions.

David: Long term focused.

David: Questions.

David: In terms of.

David: Your Rifaximin business.

Speaker Change: How are you thinking about.

Speaker Change: Erosion of the franchise once you do see.

Speaker Change: Generic competition Materializing, I guess, what I'm trying to get at is what are your expectations surrounding the next generation rifaximin product as a means of.

Speaker Change: Cushioning some of the impact of generic competition.

Speaker Change: Number one and then number two and I know you alluded to it on the prior question, but on them or sell them on do you have a sense.

Speaker Change: Based on your own market research, how you're thinking about the sales potential here in the context of an increasingly crowded market with other agents that have.

Speaker Change: Novel mechanisms such as the <unk>, how do you think about.

Speaker Change: Sales potential.

Speaker Change: Or perhaps sell them out to the extent that you commercialize it.

Speaker Change: Okay.

John Barresi: Beyond that, I won't, you know, comment on any specific things that we may do, other than to say we've done a combination of all of these things in the past, OMRs, debt exchanges, asset sales, and we'll continue to look at all of those levers.

Speaker Change: David.

David: So firstly again, thanks for the question on the pipeline I'm really glad that questions are on the pipeline in our business today.

David: The Red Sea.

Speaker Change: As I look at this program when.

Speaker Change: When I took over as CEO, one of the things I worked with our.

Speaker Change: Our head of R&D has to really accelerate this trial.

Speaker Change: You mentioned.

Speaker Change: With the XI facts and going off patent how do we fill that gap.

Speaker Change: When we look at where we're going to get to a timing of launch for Red Sea.

Speaker Change: We're progressing it and we're really trying to execute with excellence to get there.

Speaker Change: Prior to.

Speaker Change: XI faxing going off patent.

Speaker Change: <unk>.

Speaker Change: And also I'd like to point out here is we have this is a global program. We have global rights. This is a new formulation. So this really opens us up.

Speaker Change: As you know Salix.

Speaker Change: Long history in the U S in gastroenterology and liver.

Speaker Change: Now this really gives us a platform globally with Red say, if we just kind of put some numbers around it just when we look at the just in the in the U S alone again this is a prevention.

Speaker Change: This is going towards prevention. So the pool is much larger.

Speaker Change: That we can we can look to in the U S. So if you just say the cirrhotic patients in the U S. Today were around 800 800000, and then if you take out the patients that have <unk> too.

Speaker Change: Today, given that its prevention now youre at about $6 50.

Speaker Change: 600 5600 K.

Speaker Change: And if you look at facts and today you have 100, and so you have over 150000 HCA, we're treating only 25% of that so if you look at the pool that we have to.

Speaker Change: Patients on a prevention and then that's just in the U S. If you then model that out to the two international markets and building a gi liver portfolio.

Speaker Change: In the international space as we talked about our international business is we've got we have really great platforms around the world.

Speaker Change: And I see a great opportunity here.

Speaker Change: We of course, you need the data.

Speaker Change: But.

Speaker Change: It's really exciting what we're on the Red Sea when we take a look at your second question is.

Speaker Change: As I talked about Omnicell mod.

Speaker Change: I'm really excited about it as well.

Speaker Change: Looking forward to getting into our phase three.

Speaker Change: Phase III program.

Speaker Change: And again.

Speaker Change: Yes.

Speaker Change: The R&D team real focus because we know we were losing <unk>, so where can we close these gaps.

Speaker Change: One of them is with Red say another.

Speaker Change: Can be with <unk>, what I would say also is.

Speaker Change: Our BD team I think one of the things that we have done over the last two years, we have built a really strong BD team and so therefore, we are looking.

Speaker Change: To be able to find some assets that we can bring in to slot into our businesses in the United States and in international that can close that gap as well. So this is a real priority for us and that's why you see it.

Speaker Change: In our priorities of how to.

Speaker Change: Really accelerate the pipeline, but also from a BD perspective, we have screened a number of assets.

Speaker Change: And we have to be we have to be really.

Speaker Change: Pedantic about it to make sure that we bring in the right asset.

Speaker Change: And making sure from does it fit what is the cost and also remember.

Speaker Change: One of R.

Speaker Change: Our pillars is making sure that that.

Speaker Change: Quality.

Speaker Change: The quality of the products. So as we do diligence, we're making sure that the products that we can bring into this company are high quality.

Speaker Change: Continue to build a great pharmaceutical company, but thank you for the question really appreciate it.

Speaker Change: Thank you. Your next question is coming from <unk> <unk> from <unk> Securities. Your line is live.

Speaker Change: Good morning. Thank you for taking my questions I actually do have a couple of follow ups on that.

Speaker Change: Pipeline. So on your <unk> program with enrollment in both trials now complete can you handicap a timeline for top line results in low would you disclose data from one study are both together and is there a possibility you will release preliminary data and then secondarily on <unk> trio.

Speaker Change: Any initial feedback from prescribers.

Speaker Change: Regarding the trends that you're seeing and then how sizeable ultimately this market within the category and also your plans for launching into Canada. Once approved and then third on Thermage, what does the market strategy to go to market strategy in China, and how big is the opportunity there for you in that product launch. Thank you.

Speaker Change: Thanks for the question.

Speaker Change: So.

Thomas Appio: Yeah, Umer, I'll take the first part of your question. I'm not aware of any specific XIFAXAN regulatory body in the U.S. or ex-U.S. What I would say is that I've said many times is really making sure we have two appropriately capitalized companies.

Thomas Appio: And the last part of your question is our priority is the full separation of B&L. So as we work through it, as I said earlier in my prepared remarks to earlier questions, there's really a progression as we work it through, and we'll keep everyone updated as we go but I really appreciate the question. Thank you.

Speaker Change: I'll take the first one on Red Sea.

Speaker Change: Again trying to make sure that we have red sea.

Speaker Change: Prior to the loss of some facts and would be key.

Speaker Change: Right now hoping.

Speaker Change: We get.

Speaker Change: Data.

Speaker Change: In late 2025 early 'twenty six.

Speaker Change: And we will see again, making sure that that trial is on track.

Speaker Change: To deliver and then of course.

Speaker Change: Being able to file it and get it registered not only in the U S, but around the world. So.

Speaker Change: That's where I see the timeframe really comes down to making sure that again going back to the previous question on filling our gap and knowing <unk>.

Speaker Change: Is going.

Speaker Change: <unk> is going to be going generic in 2028 tab trio, we're excited about it.

Speaker Change: Loved the product the R&D team has done a wonderful job here, we think it's.

Speaker Change: A great product for acne.

Speaker Change: The team is really all in and focus on driving this if I just look at the script growth.

Speaker Change: It's ahead of our goal that we had set.

Speaker Change: Again of a crowded space, but really this is a great product and the feedback.

Speaker Change: Our customers and patients has been really strong.

Speaker Change: I'd say also is it's in the early stages.

Speaker Change: We launched it and then.

Speaker Change: We actually launched that ahead of having samples so were.

Speaker Change: Really excited now that we have we have the samples coming on we also have the DTC campaign that will happen.

Speaker Change: Coming up in the next few months. So this is really a focus for our derm business and the R&D team has done an outstanding job here of bringing a great product to the market for patients.

Speaker Change: <unk> in China again.

Speaker Change: I am real excited.

Speaker Change: You know I lived in China for many years so.

Speaker Change: This market extremely well think we have an outstanding opportunity as you saw the performance of our business.

Speaker Change: This quarter has been was outstanding led by China led by.

Speaker Change: Asia Pacific as well, we are looking at our strategies on <unk> I would say, we just had the launch meeting last week.

Speaker Change: And it went extremely well.

Speaker Change: Our strategy here is is Ah.

Speaker Change: If you if you look at the opportunities.

Speaker Change: In China today.

Speaker Change: You hear a lot about the economics of China.

Speaker Change: In terms of post Covid.

Speaker Change: You hear a lot about the property market, but if you look at the patients that we target and you look at the.

Speaker Change: Even though in China.

Speaker Change: Covid had an impact but there was also a lot of savings that took place. So the so there weren't traveling werent doing many things. So there we see that our patient population has.

Speaker Change: The opportunity and the economics to use our products and what you see also in China, you see that.

Speaker Change: <unk>.

Speaker Change: <unk> treatments are very very popular Solta has a great name and I know, we have a great brand. So now having it approved.

Speaker Change: By the NFPA.

Speaker Change: As the first RF device to be approved we think we have a great opportunity. We're building our team in fact I'm going to be in China. In the next couple of weeks to talk to the team make sure.

Speaker Change: We have the strategies in place and then executing those strategies accordingly, but I lived there for many years. So I'm really confident we're going to have a real successful business in China.

Speaker Change: And piggybacking on it we already do but we're just going to grow more on that.

Speaker Change: Thank you for the question.

Speaker Change: Thank you we've reached the end of the question and answer session I will now hand, the conference back to Chief Executive Officer, Thomas <unk> for closing remarks. Please go ahead.

Operator: Thank you. Your next question is coming from Chi Fong from Bank of America. Your line is live.

Chi Fong: Hey, good morning. This is Chi for Jason Gerberry at BofA. Thanks for taking our questions. I guess on the first one, now that you secured the Norwich ruling, has the company been in discussion with claimants in the fraudulent conveyance matter about a potential settlement? And I have a couple of follow-ups after this.

Thomas: Yes, what I would just trying to say to everyone on the call I really appreciate everyones questions today.

Chi Fong: Thanks for taking our questions. I guess on the first one, now that you secured the Norwich ruling, has the company been in discussion with claimants in the fraudulent conveyance matter about a potential settlement? And I have a couple of follow-ups after this.

Thomas Appio: Yeah, Chi, basically, and I can't comment on whether we've been in discussions. You know, can't really discuss that at this time. But again, we're always open to discussions and looking at the options. Did you have a follow up question?

Thomas: And really making sure that we're looking at the performance of our business.

Thomas: And what the pipeline is and what the future can be so I really thank everyone for joining today.

Chi Fong: Yeah, a couple of follow-up. The first one is on SG&A. So, we look at 1Q, and the spend ratio looks a little high in the mid-30s. I'm wondering if there's any 1Q seasonality to drive the ratio higher than usual, or if not, how do you see that SG&A spend ratio evolving in the coming years? Are looking to consolidate it?

Thomas: As I've said many times, we had a solid Q1 fourth consecutive quarter of growth really want to build on this momentum in Q2 I would also say is the team here at Bausch health is all in we know what we need to do.

Thomas Appio: Yeah, Chi, are looking consolidated?

Thomas Addio: Yeah, consolidated. Yeah, so I think BLCO spoke a little bit about this yesterday as well. There has been a significant A&P investment on the BLCO side supporting both Zydra and some of their product launches, like Maibo. And that is, I think, on a consolidated basis I think the biggest driver there.

Chi Fong: Yeah, consolidated.

Thomas Appio: Yeah, so I think BLCO spoke a little bit to this yesterday as well. There has been a significant A&P investment on the BLCO side supporting both XIIDRA and some of their product launches, like MIEBO. And that is on a consolidated basis I think the biggest driver there.

Chi Fong: Okay, got it. And my last one is on the pipeline on MSL. Were there any surprising points of feedback from the interface to the meeting? And as you come out of this FDA meeting, understood that you still have discussions with international agencies, but do you have any early thoughts on your Phase III strategy as you look to capture the entire spectrum of [inaudible]. And then I think you have mentioned that you're still considering a Phase II trial in Crohn's. I'm curious. Did the recent Phase III trial of--Phase III failure of Ozanimod in Crohn's, also you're thinking about continued investment in Crohn's there? Thanks.

Chi Fong: Your phase 3 strategy as you look to capture the entire spectrum of. Model models you see, and then I think you have mentioned that you're still considering a phase 2 trial in Chrome. I'm curious. Did the recent phase 2 trial of. Phase 3 failure of Osama in Chrome also you're thinking about continuing investment in Chrome there? Thanks.

Thomas Appio: Yeah, Chi, thank you for the question on the business and the pipeline. I really appreciate that. As you know, we're really focused on the pipeline, RED-C, as we had fully enrolled these two trials and really are really interested in getting them completed. When we look at AMISELIMOD, we are really happy that we were accepted on the podium at DDW, which is coming up later this month, and presenting our data, as you know in our press release, we were really pleased with the data that we had on our Phase II, very large Phase II trial. Our strategy here is you know the meeting with the FDA, it went well, and we're progressing on this. From a UC perspective, when we look at it, we see this market very large, and we think we have a product that can compete here very nicely. So you know really, by the time we're ready to launch, we're probably looking between a market of $7-8 billion. So really a great growth driver for us in the back half of the decade. Looking at the Phase III trial, hoping to get that up and running later this year or the beginning of 2025. On Crohn's, again, as you know, this is a really large market. We would really love to be participating here. We think we have, based on our data, what we've seen out of the UC trial, that we're going to run a Phase II, plan a Phase II moderate to severe in CD. Again, this is an over $19 billion market, and we think we have a drug that can compete.

Thomas Appio: As you know, we're really focused on the pipeline, Red Sea, as we have fully enrolled these two trials and are really interested in getting them completed. When we look at Amicillimod, we are really happy that we were accepted onto the podium at DDW, which is coming up later this month, and presenting our data. In our press release, we were really pleased with the data that we had on our Phase 2, a very large Phase 2 trial. Our strategy here is to meet with the FDA. It went well, and we're progressing on this.

Thomas Appio: From a UC perspective, when we look at it, we see this market is very large, and we think we have a product that can compete here very nicely. By the time we're ready to launch, we're probably looking at a market of $7 billion to $8 billion, really a great growth driver for us in the back half of the decade. Looking at the Phase III trial, hoping to get that up and running later this year or the beginning of 2025. On Crohn's, again, as you know, this is a really large market. We would really love to be participating here. We think we have, based on our data, what we've seen out of the UC trial, that we're going to run a Phase II, plan a Phase II moderate to severe in CD. Again, this is an over $19 billion market, and we think we have a drug that can compete.

Thomas Appio: Looking at the Phase III trial, hoping to get that up and running later this year or the beginning of 2025. On Crohn's, again, as you know, this is a really large market. We would really love to be participating here. We think we have, based on our data, what we've seen out of the UC trial, that we're going to run a Phase II, plan a Phase II moderate to severe in CD. Again, this is an over $19 billion market, and we think we have a drug that can compete. Now, of course, yes, you mentioned the failures of S1Ps in Crohn's, but when we look at this trial in Phase II and how we're going to structure it, we think we can have some success. Thank you for the question. I really appreciate the question on the pipeline.

Thomas Appio: Looking at the Phase III trial, hoping to get that up and running later this year or the beginning of 2025.

Thomas Appio: On Crohn's, again, as you know, this is a real large market. We would really love to be participating here. We think we have, based on our data, what we've seen out of the UC trial, that we're going to run a Phase II, plan a Phase II moderate to severe in CD. And again, over $19 billion market, and we think we have a drug that can compete. Now, of course, yes, you mentioned the failures of S1Ps in Crohn's, but when we look at this trial in Phase II and how we're going to structure it, we think we can have some success. Thank you for the question, though, really appreciate the question on the pipeline.

Thomas Appio: Now, of course, yes, you mentioned the failures of S1Ps in Crohn's, but when we look at this trial in Phase II and how we're going to structure it, we think we can have some success. Thank you for the question. I really appreciate the question on the pipeline.

Operator: Thank you. Your next question is coming from David Amsellem on behalf of Piper Sandler. Your line is live.

David Amsellem: Hey, thanks. So just a couple of questions, long-term focused questions. In terms of your Rifaximin business, how are you thinking about erosion of the franchise once you do see generic competition materialize? And I guess what I'm trying to get at is, what are your expectations surrounding the next generation Rifaximin product as a means of cushioning some of the impact of generic competition? So that's number one. Then number two, and I know you alluded to it on the prior question, but on AMISELIMOD, did you have a sense, based on your own market research, on how you're thinking about the sales potential here in an increasingly crowded market with other agents that have novel mechanisms, such as the TL1As. How do you think about sales potential for AMISELIMOD to the extent that you commercialize it? Thanks.

Thomas Appio: Hi David. So, firstly, again, thanks for the question on the pipeline. I'm really glad the questions are about the pipeline and the business today. RED-C, as I look at this program, when I took over as CEO, one of the things I worked with our head of R&D is to really accelerate this trial. Clearly, you mentioned with XIFAXAN going off patent, how do we fill that gap? When we look at where we're going to get to and the timing of launch for RED-C, we're progressing it, and we're really trying to execute with excellence to get there prior to XIFAXAN going off patent. And also, I'd like to point out here, we have--this is a global program, we have global rights. This is a new formulation, so this really opens us up. As you know, SALIX has a long history in the US in gastroenterology and liver. Now this really gives us a platform globally with RED-C. If we just kind of put some numbers around it, just when we look at the, just in the U.S. alone, again, this is a prevention, this is going towards prevention, so the pool is much larger that we can look to in the US. So if you just say the cirrhotic patients in the US today, around 800,000, and then if you take out the patients that have HE today, given that it's prevention, now you're at about 650K, 600K.

Thomas Appio: And also, I'd like to point out here, we have--this is a global program, we have global rights. This is a new formulation, so this really opens us up. As you know, SALIX has a long history in the US in gastroenterology and liver. Now this really gives us a platform globally with RED-C. If we just kind of put some numbers around it, just when we look at the, just in the U.S. alone, again, this is a prevention, this is going towards prevention, so the pool is much larger that we can look to in the US. So if you just say the cirrhotic patients in the US today, around 800,000, and then if you take out the patients that have HE today, given that it's prevention, now you're at about 650K, 600K. And if you look at XIFAXAN today, you have over 150,000 in HE, you know, we're treating only 25% of that. So you look at the pool that we have of patients on a prevention, and then that's just in the US. If you then model that out to international markets and build a GI liver portfolio in the international space, as we talked about, our international business, we have really great platforms around the world. And I see a great opportunity here. Of course, you need the data, but it's really exciting what we're doing in the Red Sea.

Thomas Appio: As you know, SALIX has a long history in the U.S. in gastroenterology and liver. Now this really gives us a platform globally with Red Sea. If we just kind of put some numbers around it, just in the U.S. alone, again, this is going towards prevention, so the pool is much larger that we can look at in the U.S. If you just say the cirrhotic patients in the U.S. today, around 800,000, and then if you take out the patients that have HE today, given that it's prevention, now you're at about 650,000,

Thomas Appio: And if you look at XIFAXAN today, you have over 150,000 in HE and we're treating only 25% of that. So you look at the pool that we have of patients for prevention, and then that's just in the U.S. If you then model that out to international markets and build a GI liver portfolio in the international space, as we talked about, our international business, we have really great platforms around the world. And I see a great opportunity here. Of course, you need the data, but it's really exciting what we're doing in the Red Sea.

Thomas Appio: So you look at the pool that we have of patients on a prevention, and then that's just in the US. If you then model that out to international markets and build a GI-liver portfolio in the international space, as we talked about, our international business is, we have really great platforms around the world, and I see a great opportunity here, you know, as we--of course, you need the data, but it's really exciting what we're on the RED-C. When we take a look at your second question, as I talked about AMISELIMOD, I'm really excited about it as well, looking forward to getting into our phase III program, the R&D team, the real focus, because we know we're losing XIFAXAN, so where can we close these gaps? One of them is with Red Sea, another can be with AMISELIMOD.

Thomas Appio: When we take a look at your second question, as I talked about AMISELIMOD, I'm really excited about it as well, looking forward to getting into our phase III program, the R&D team, the real focus, because we know we're losing XIFAXAN, so where can we close these gaps? One of them is with Red Sea, another can be with AMISELIMOD.

Thomas Appio: When we take a look at your second question, as I talked about AMISELIMOD, I'm really excited about it as well, looking forward to getting into our Phase III program. And again, the R&D team, real focus, because we know we're losing XIFAXAN, so where can we close these gaps? One of them is with RED-C, another can be with AMISELIMOD. What I would say also is, you know, our BD team. I think one of the things we have done over the last two years, we have built a really strong BD team. And so therefore, we are looking to be able to find some assets that we can bring in to slot into our businesses in the United States and in international that can close the gap as well. So this is a real priority for us. That's why you see it in our priorities of how to really accelerate the pipeline, but also from a business development perspective Also, one of our pillars is making sure that the quality of the product as we do due diligence, we're making sure that the products that we can bring into this company are high quality and continue to build a great pharmaceutical company. Thank you for the question. I really appreciate it.

Thomas Appio: we have screened a number of assets, and we have to be really pedantic about it to make sure that we bring in the right asset and make sure, does it fit? What is the cost? Also, one of our pillars is making sure that the quality of the product as we do due diligence, we're making sure that the products that we can bring into this company are high quality and continue to build a great pharmaceutical company. Thank you for the question. I really appreciate it.

we have screened a number of assets, and we have to be really pedantic about it to make sure that we bring in the right asset and make sure, does it fit? What is the cost? What I would also say about our BD team, I think one of the things that we have done over the last two years is built a really strong BD team. Therefore, we are looking to be able to find some assets that we can bring in to slot into our businesses in the United States and abroad that can close the gap as well. This is a real priority for us. That's why you see it in our priorities of how to really accelerate the pipeline, but also from a business development perspective Also, one of our pillars is making sure that the quality of the product as we do due diligence, we're making sure that the products that we can bring into this company are high quality and continue to build a great pharmaceutical company. Thank you for the question. I really appreciate it.

Thomas Appio: What I would also say about our BD team, I think one of the things that we have done over the last two years is built a really strong BD team. Therefore, we are looking to be able to find some assets that we can bring in to slot into our businesses in the United States and abroad that can close the gap as well. This is a real priority for us. That's why you see it in our priorities of how to really accelerate the pipeline, but also from a business development perspective

Thomas: And really making sure we execute with excellence so.

Also, one of our pillars is making sure that the quality of the product as we do due diligence, we're making sure that the products that we can bring into this company are high quality and continue to build a great pharmaceutical company. Thank you for the question. I really appreciate it.

Thomas Appio: So this is a real priority for us. That's why you see it in our priorities of how to really accelerate the pipeline, but also from a BD perspective. We have screened a number of assets, and we have to be really pedantic about it to make sure that we bring in the right asset and making sure from, does it fit? What is the cost? And also remember, you know, one of our one of our pillars is making sure that quality, the quality of the product as we do due diligence, we're making sure that the products that we can bring into this company are high quality and continue to build a great pharmaceutical company. Thank you for the question, really appreciate it.

Thomas: Making sure you saw the priorities what our priorities are delivering our commitments and continuing to position this company for the future.

Operator: Thank you. Your next question is coming from Leszek Sulewski from Truist Securities. Your line is live.

Leszek Sulewski: Good morning. Thank you for taking my questions. I actually do have a couple follow-ups on the pipeline. So, on your RED-C program, with enrollment on both trials now complete, can you handicap a timeline for top-line results, and what would you disclose data from one study or both together, and is there a possibility you would release preliminary data? And then, secondarily, on CABTREO, is there any initial feedback from prescribers regarding the trends that you've seen and how sizable, ultimately, is this market within the category, and also your plans for launching it into Canada once approved? And then, thirdly, on Thermage, what is the market strategy to-- or go-to-market strategy in China, and how big is the opportunity there for you in that product launch? Thank you.

Thomas Appio: Les, thanks for the question. So I'll take the first one on RED-C. Again, trying to make sure that we have RED-C prior to the loss of XIFAXAN would be key. You know, right now, hoping that we get data in late 2025, early '26, and we'll see, again, making sure that that trial is on track and can deliver. And then, of course, being able to file it and get it registered not only in the US but around the world. So that's where I see the timeframe, really comes down to making sure that, again, going back to the previous question, on filling our gap and knowing XIFAXAN is going to be going generic in 2028.

Thomas Appio: You know, right now, you know, hoping that we get data, you know, in late 2025, early 2026. And we'll see, you know, again, making sure that that trial is on track and can be delivered. And then, of course, you know, being able to file it and get it registered not only in the U.S. but around the world.

Thomas Appio: So that's where I see the timeframe really coming down to making sure that, again, going back to the previous question on filling our gap and knowing XIFAXAN is going to be generic in 2028. CABTREO, we're excited about it, we love the product. The R&D team has done a wonderful job here. We think it's a great product for acne. The team is really all in and focused on driving this.

So that's where I see the timeframe really coming down to making sure that, again, going back to the previous question on filling our gap and knowing XIFAXAN is going to be generic in 2028.

Thomas Appio: CABTREO, we're excited about it, we love the product, the R&D team has done a wonderful job here. We think it's a great product for acne. The team is really all in and focused on driving this. If I just look at the script growth, it's ahead of our goal that we had set. Again, a crowded space, but really this is a great product. And the feedback from our customers and patients has been really strong. What I would say also is, it's in the early stages. We launched it, and then we actually launched it ahead of having samples, so we're really excited now that we have samples coming on. We also have the DTC campaign that will happen coming up in the next few months. So this is really a focus for our derm business, and the R&D team has done an outstanding job here of bringing a great product to the market for patients.

Thomas Appio: If I just look at the script growth, it's ahead of our goal that we had set. Again, a crowded space, but really this is a great product. And the feedback from our customers and patients has been really strong. What I would also say is, it's in the early stages. We launched it, and then we actually launched it ahead of having samples. So we're really excited now that we have samples coming in. We also have the DTC campaign that will happen coming up in the next few months. So this is really a focus for our derm business, and the R&D team has done an outstanding job here of bringing a great product to the market for patients.

Thomas Appio: We launched it, and then we actually launched it ahead of having samples. So we're really excited now that we have samples coming in. We also have the DTC campaign that will happen coming up in the next few months.

Thomas Appio: So this is really a focus for our derm business, and the R&D team has done an outstanding job here of bringing a great product to the market for patients. Thermage FLX in China. Again, I am really excited.

So this is really a focus for our derm business, and the R&D team has done an outstanding job here of bringing a great product to the market for patients.

Thomas Appio: Thermage FLX in China. Again, I am real excited. As you know, I lived in China for many years, so know this market extremely well. I think we have an outstanding opportunity. As you saw, the performance of our business this quarter has been, was outstanding, led by China, led by Asia Pacific as well. We are looking at our strategies on Thermage. I would say we just had the launch meeting last week, and it went extremely well. Our strategy here is, again, if you look at the opportunities in China today, and you hear a lot about the economics of China, you know, in terms of post-COVID, you hear a lot about the property market. But if you look at the patients that we target, and you look at the--even though in China, COVID had an impact, but there was also a lot of savings that took place, so they weren't traveling, weren't doing many things. So we see that our patient population has the opportunity and the economics to use our products.

Thomas Appio: As you know, I lived in China for many years, so I know this market extremely well. I think we have an outstanding opportunity. As you saw, the performance of our business this quarter has been outstanding, led by China, and led by Asia Pacific as well. We are looking at our strategies for Thermage. I would say we just had the launch meeting last week, and it went extremely well.

Speaker Change: And what I lastly, I'd like to say as we look forward to keeping you all updated and really thank you for your interest in and support of our company really appreciate it and have a great day.

Thomas Appio: Our strategy here is, again, if you look at the opportunities in China today, and you hear a lot about the economy of China in terms of post-COVID, you hear a lot about the property market. But if you look at the patients that we target, and you look at the – even though in China COVID had an impact, but there was also a lot of savings that took place so they weren't traveling and weren't doing many things. So we see that our patient population has the opportunity and the economics to use our products.

Thomas Appio: So we see that our patient population has the opportunity and the economics to use our products. And also, in China, you see that non-invasive treatments are very, very popular. Sulta has a great name in China. We have a great brand. So now having it approved by the NMPA as the first RF device to be approved, we think we have a great opportunity.

So we see that our patient population has the opportunity and the economics to use our products.

Thomas Appio: And what you see also in China, you see that non-invasive treatments are very, very popular. Solta has a great name in China; we have a great brand. So now having it approved by the NMPA as the first RF device to be approved, we think we have a great opportunity, we're building our team. In fact, I'm going to be in China in the next couple of weeks to talk to the team, make sure we have the strategies in place, and then executing those strategies accordingly. But I lived there for many years, so I'm really confident we are going to have a real successful business in China. And I'm piggybacking on it--we already do, but we're just going to grow more on that. Thank you for the question.

Thomas Appio: We're building our team. In fact, I'm going to be in China in the next couple of weeks to talk to the team, make sure we have the strategies in place, and then execute those strategies accordingly. But I lived there for many years, so I'm really confident we are going to have a really successful business in China. And I'm piggybacking on it. We already do, but we're just going to grow more on that.

Thomas Appio: Yeah, what I would just try to say to everyone on the call is that I really appreciate everyone's questions today, really making sure that we're looking at the performance of our business and what the pipeline is, and what the future can be. So I really thank everyone for joining us today.

Operator: Thank you. We've reached the end of the question and answer session. I'll now hand the conference back to Chief Executive Officer Thomas Appio for closing remarks. Please go ahead.

Thomas Appio: Yeah, what I would just try to say to everyone on the call: I really appreciate everyone's questions today, really making sure that we're looking at the performance of our business and what the pipeline is, and what the future can be. So I really thank everyone for joining today. As I said many times, we had a solid Q1--fourth consecutive quarter of growth. I really want to build on this momentum in Q2. I would also say is the team here at Bausch Health is all in. We know what we need to do and really making sure we execute with excellence. So making sure you saw the priorities, what our priorities are, delivering on our commitments, and continuing to position this company for the future.

Thomas Appio: And what I lastly I'd like to say is we look forward to keeping you all updated and really thank you for your interest in and the support of our company. Really appreciate it, and have a great day.

Speaker Change: Thank you everyone. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.

Operator: Thank you everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.

Speaker Change: Okay.

Q1 2024 Bausch Health Co Inc Earnings Call

Request a DemoDemo

BHC

Bausch Health Companies

Earnings