VALEANT PHARMACEUTICALS INTL (VRX) …VALEANT PHARMACEUTICALS INTL (VRX) Earnings Report: Q3 2014 Conference Call Transcript The following VALEANT PHARMACEUTICALS INTL conference call

CompanyName:ValeantPharmaceut icalsInternat ionalIncCompanyTicker:VRXSector:HealthCare

Industry:DrugsEventDescription:Q32014 EarningsCall

©2014TheStreet,Inc.AllRightsReserved Page1of 28

VALEANTPHARMACEUTICALSINTL(VRX)EarningsReport:Q32014ConferenceCallTranscriptThefollowingVALEANTPHARMACEUTICALSINTLconferencecalltookplaceonOctober20,2014,08:00AMET.Thisisatranscriptofthatearningscall:

CompanyPart icipants

LaurieLittle;ValeantPharmaceuticalsInternational;IRHeadJ.MichaelPearson;ValeantPharmaceuticalsInternational;Chairman,CEOHowardSchiller;ValeantPharmaceuticalsInternational;CFOAriKellen;ValeantPharmaceuticalsInternational;Co-Chairman

OtherPart icipants

AndrewFinkelstein;SusquehannaFinancialGroup;AnalystChrisSchott;JPMorgan;AnalystAlexArfaei;BMOCapitalMarkets;AnalystDavidSteinberg;JefferiesLLC;AnalystSachinShah;AlbertFried;AnalystAnnabelSamimy;StifelNicolaus;AnalystLouiseChen;GuggenheimPartners;AnalystTimChang;CRTCapital;AnalystDavidRisinger;MorganStanley;AnalystGaryNachman;GoldmanSachs;AnalystUmerRaffat;ISIGroup;AnalystGreggGilbert;DeutscheBank;AnalystRaghuramSelvaraju;AEGISCapital;AnalystAlanRidgeway;ParadigmCapital;AnalystMarcGoodman;UBS;AnalystTonyReiner;ImperialCapital;Analyst

MANAGEMENTDISCUSSIONSECTION

Operator:

Goodmorning.MynameisKeithandIwillbeyourconferenceoperatortoday.Atthistime,I’dliketowelcomeeveryonetotheValeantThirdQuarter2014Earningsconferencecall.

Alllineshavebeenplacedonmutetopreventanybackgroundnoise.Afterthespeakers’remarks,therewillbeaquestionandanswersession.Ifyou’dliketoaskaquestionduringthistime,simplypressstarandthenumberoneonyourtelephonekeypad.Ifyou’dliketowithdrawyourquestion,pressthepoundkey.Thankyou.

LaurieLittle,HeadofInvestorRelations,youmaybeginyourconference.

LaurieLit t le (IRHead):

Thankyou,Keith.Goodmorning,everyone,andwelcometoValeant’sThirdQuarter2014FinancialResultsconferencecall.




PresentingonthecalltodayareJ.MichaelPearson,ChairmanandChiefExecutiveOfficer,andHowardSchiller,ChiefFinancialOfficer.

Inaddition,Dr.AriKellan,thecompanyco-chairman,willbeavailableforquestions.Inadditiontoalivewebcast,acopyoftoday’slivepresentationwillbefoundonourwebsiteundertheInvestorRelationssection.

Beforewebegin,ourpresentationtodaycontainsforward-lookinginformation.Wewouldaskthatyoutakeamomenttoreadtheforward-lookingstatementlegendatthebeginningofourpresentationasitcontainssomeimportantinformation.

Inaddition,thiscommunicationdoesnotconstituteanoffertobuyorasolicitationofanoffertosellanysecurity.ThiscommunicationrelatestotheexchangeofferwhichValeanthasmadetoouraccountsharestockholders.

TheexchangeoffersbeingmadepursuanttoatenderofferstatementonScheduleT.O.includingtheoperativeexchange,theletterelectionandtransmittalandotherrelatedoffermaterials,andaregistrationstatementonFormS4filedbythe--byValeantwiththeSEConJune18,2014andwiththeCFAasmany--aseachmaybeamendedfromtime-to-time.

Thesematerialscontainimportantinformationincludingthetermsandconditionsoftheoffer.Inaddition,ValeanthasfiledapreliminaryproxystatementwiththeSEConJune24,2014,asmaybeamendedfromtime-to-time.

PershingSquareCapitalManagementhasfiledadefinitivesolicitationstatementwiththeSEConJuly11,2014,andapreliminaryproxystatementonJuly23,2014,andValeantandPershingSquaremayfile1ormoreadditionalproxystatementsorotherdocumentswiththeSEC.Thiscommunicationisnotasubstituteforanyproxystatement,registrationstatement,prospectus,oranyotherdocumentValeant,PershingSquareand/orAllerganhavefiledormayfilewiththeSECinconnectionwiththe[Perez]transaction.

InvestorsandsecurityholdersofValeantandAllerganareurgedtoreadthetenderofferstatement,registrationstatementandanyotherdocumentsfiledwiththeSECcarefullyintheirentiretyifandwhentheybecomeavailableastheywillcontainimportantinformationaboutthosetransactions.

AnindependentproxystatementwillbemailedtostockholdersofAllerganand/orValeantasapplicable.Investorsandsecurityholdersmayobtainfreecopiesofthetenderofferstatement,registrationstatementandotherdocumentsfiledwiththeSECbyValeantand/orPershingSquarethroughthewebsiteandmaintainedbytheSECatSEC.gov.

InformationregardingthenamesandinterestsinAllerganandValeant,ofValeantandpersonsrelatedtoValeantwhomaybedeemedparticipantsinanysolicitationofAllerganorValeantshareholders,inrespecttotheValeantproposalforabusinesscombinationwithAllerganisavailableintheadditionaldefinitiveproxysolicitingmaterialsinrespectofAllerganfiledwiththeSECbyValeantonApril21,2014,andMay28,2014.

TheinformationregardingthenamesandinterestsinAllerganandValeantandPershingSquareandpersonsrelatedtoPershingSquarewhomaybedeemedparticipantsatanysolicitationsofAllerganorValeantshareholdersinrespectofaValeantproposalforabusinesscombinationwithAllerganisavailableinadditionaldefinitivepropertysolicitingmaterialinrespectofAllerganfiledwiththeSECbyPershingSquare.

Theadditionaldefinitiveproxysolicitingmaterialreferredtothis--inthisparagraphcanbeobtainedfreeofchargefromthesourcesindicatedabove.

Finally,inaddition,thispresentationcontainsnon-GAAPfinancialmeasures.Formoreinformationabout




non-GAAPfinancialmeasures,pleaserefertoslidenumber2.Non-GAAPreconciliationscanbefoundinthepressreleaseissuedearliertodayandpostedonourwebsite.

Andwiththat,IamgladtoturnthecallovertoJ.MichaelPearson.

J.MichaelPearson(Chairman,CEO):

Thankyou,Lori.Goodmorning,everyone,andthankyouforjoiningusforourThirdQuarterEarningscall.WearepleasedtoreportanexceptionallystrongQ3.Onourcalltoday,Iwillreviewourresults,highlightthekeydriversofoursuccessfulperformanceacrossourbusinesses,andupdateyouonrecentandnear-termproductlaunches.

Howardwillthenprovideanupdateonourfinancialperformance,anupdateonourB&Lintegrationandourexpectationsfortheremainderof2014.Finally,wewillprovideyouabriefupdateonourofferforAllergan.Afterourremarks,Howard,AriKellanandIwillbeavailableforQ&A.

Forthequarter,ourtotalrevenuewas$2.1billion,anincreaseof33%overtheprioryear.Thisisoursecondbestrevenuequarterever.OurcashEPSwas$2.11,anincreaseof48%overtheprioryearandwellinexcessofourguidance.

Ouradjustedcashflowfromoperationsforthequarterwas$771million,anincreaseof89%overtheprioryear.GAAPcashflowfromoperationswas$619million,a207%increaseovertheprioryear.

Thisquarter’sexceptionallystrongcashflowgenerated--generationresultedinacashconversionof107%ofadjustedcashnetincome.

Greatexecutionbyouremployeesaroundtheworldledtoexceptionalresultsthisquarter.Ourresultsarewithinorabovethehighendofourguidanceforallkeymetrics.Oursamestore’sorganicgrowthforthetotalcompany,includingthefullimpactofgenericsexceededourearlyreadofthequarter.

Bausch&Lombcontinueditsoutstandingperformanceandachieveddouble-digitorganicgrowthinlinewithourguidanceforthesecondhalfof2014.Ourrevenuesareatthehighendofourguidanceevenwiththenegative$31millionFXimpactandourcashEPSsignificantlyexceededguidanceevenwithanegativeFXimpactof4cents.

Adjustedcashflowfromoperations,a$771million,significantlyexceededourguidanceof90%cashconversion.Ourrestructuringchargescontinuetodecreaseandwe’rebelowourexpectationsasweneartheendoftheB&Lintegration.

Turningtoorganicgrowth,ouroverallsame-storecompanyorganicgrowthincludingallgenericswas19%forthequarter.IfwehadexcludedgenericsinQ3,ourtotalcompanysame-storeorganicgrowthwouldhavebeen3%higheror22%.

InQ2,ourtotalsamestore’sorganicgrowthwithgenericswas4%andwithoutgenericswas10%,adifferentialof6%.Thedifferentialnarrowedasthegenericimpact[Sovirus],Retin-AMicroandBenzaClinhaveannualizedandarelargelybehindusintheUSandduetotheinclusionofBausch&Lombandoursame-storeorganicgrowthcalculationsfromAugust5thonward.

TheimpactofgenericentranceinQ4’13forboth[Venice]andWellbutrinXLinCanadahavenotyetanalyzedandareincludedinourQ3organicgrowthandourQ4organicgrowthguidance.VeniceandWellbutrinXLinCanadawillbothannualizeattheendoftheyear.

AllofourregionscontributetothestrongtotalcompanyorganicgrowthwithourUSbusinessat29%,ourtotaldevelopedmarketbusinessat22%andourmergingmarketbusinessat12%same-storeorganicgrowth.




Oursame-storeorganicgrowththroughthefirst3quartersof2014year-to-dateis11%.Weexpectcontinuedstrong,double-digitsame-storeorganicgrowthinthefourthquarter,butcertainlyreducedfromthe19%weachievedthisquarter,andtherefore,weexpectdouble-digitorganicgrowthforthefull-year2014.

B&Lcontinuesitsstrongperformancedelivering12%organicgrowthinQ3adjustedonlyforFX.ThereisnoadjustmentforthediscontinuationofBROMDAY.B&L’sthirdquarterrevenuesin2012,2013and2014hasbeenconsistentatapproximately24to25%ofB&L’sannualrevenues.

UnderValeant’sownership,B&Lhasgrownatacompoundannualgrowthrateof10%.Weexpectthistrendtocontinueinthefourthquarter.Ourbusinessesbroadlyperformedwellbeyondourexpectationsthisquarter.

TheturnaroundofourbasedermatologybusinesscoupledwithanumberofstronglaunchesincludingJublia,Luzuand[Ram.08]wasthestrongestoutperformer.NeurologyexceededforecastprimarilyduetothegrowthofXenazine,WellbutrinXLandourorphanproducts.

Inaddition,anumberofoursmallerbusinessesincludingdental,theUSgenericsandObagiperformedwellabovetheirforecastedgrowth.OuremergingmarketsandB&Lalsocontributedstrongdouble-digitgrowth.

Importantly,forthetotalcompany,moreofourgrowthwasfromvolumethanprice.Aspromised,wearecontinuingtoshowrevenueforthequarterandyear-to-dateforourtop20products,aswellas,theprimarygrowthdriverofeitherpriceorvolumeforeachproduct.

All20ofourproductsgrew--top20productsgrewthisquarter.Seventeenofourtop20productsareat--arethesameasthesecondquarter.Newadditionstothetop20productsthisquarterincludetheRetin-Afranchise,whichincludesRam.08,[CarzemZDAG]andZ iana.

Theproducts,whicharenolongerinthetop20thisquarter,include[Thermotips],Acanya,aswellastheexcimerlaser.

Year-to-daterevenueforourtop20productsare$1.8billionrepresenting31%ofourtotalrevenue.Thesamepercentageoftotalrevenueasthesecondquarter.Intotal,ourtop20productsgrew32%inthethirdquarteryear-over-yearand16%year-to-dateoverthelastyearwithapproximately50%ofthegrowthcomingthroughvolume.

All20ofourlargestproductsshowedgrowthinthethirdquarteryear-over-year.Jubliaiscurrentlyour28thlargestproductdemonstratingastrongstartsincelaunchandweexpectittobeatop20productnextquarter.

Noproductrepresentsgreaterthan3.5%ofourtotalrevenuesthisquarter,whichagain,demonstratesthediversificationofourbusiness.Ourmixofthetop20productsincludesR.X.products,OTCanddevices.

Theseproductscontinuetodemonstratethedurabilityanddiversityofourportfolio.HighlightsforourUSbusinessandtherestoftheworldarecontainedinthenextfourslides.WehaveexpandedourdisclosureinTable3ofourpresstabletoincludeadditionaldataforourUSbusinesses.

RevenueingrowthnumbersforthistableareactualanddonotincludesalesforBausch&LombbeforeAugust5thin2013.Revenuesforourdermatologybusinessincludingarecentprecisionacquisitiongrew33%quarter-over-quarter.

Theturnaroundofourdermatologybusinessiscontinuing.Newleadershiphasbroughtstabilitytothesalesforceandithasledtoinnovativenewmarketingapproachesthatareworkingwell.Thishasresultedinmarketshareandrevenuegainsacrosstheportfolioincludinglaunchproducts.




Elidel,Acanya,ZycleraandZ ianahaveallgainedmarketsharesincethebeginningof2014.Elidelhashadanexceptionalyearincreasingmarketsharefrom45%to52%andhasovertakenProtopicasthe--astheleaderinthiscategory.

Afteryearsofdecline,Zolidinemarketsharesstabilized.Onthenewproductside,bothJubliaandLuzuquicklygainedsharewithJubliareaching7%scriptshareofthetotalonicomicosismarketbothbrandedandgenerics,andLuzuacceleratingitsscriptureto13%ofthebrandedtopicalanti-fungalmarket.

Inaddition,quarter-over-quarterresultgrowthforallourdermatologypromotedbrandswasover40%.Ourconsumerbusinessgrew43%quarter-over-quarter.OurconsumerhealthcarebusinessasreportedbyIRIisoneofthefastestgrowingOTChealthcarecompaniesintheUSthisyear.

KeyconsumergrowthbrandsincludeCeraVe,PreCision,OcuviteandBiotruemultipurposesolutions.Ourprescriptionophthalmologyrevenuesgrew57%quarter-over-quarter.

Ourcorebrands,[Forlenza]andtheLotemaxfranchisecontinuetogrowandarecomplimentedbythestrongperformanceof[Bezafantz],[Silet]and[Zurgan].

Revenuesforourtotal--ourcontactlensbusinessgrew82%quarter-over-quarter.Accordingtothirdpartydata,thebusinesshasexpandeditsUSmarketsharefrom7%toover10%sinceouracquisitionofB&L.

BiotrueONEdayandPureVision2forPresbyopiacontinuetocapturemarketshare.Ournewlens,Bausch&LombUltra,whilenotasignificantcontributortorevenuestodayasit’sstillisonlybeingproducedonourprivateline,hasreceivedverypositivereviewsfromeyecareprofessionalsandwillbeanimportantnewproductinourlensfranchise.

Oursurgicalbusinesscontinueditsstrongperformancewith74%quarter-over-quarterrevenuegrowth.WecontinuetoimproveourmarketpositionatIOLs.Accordingtomarketscopedata,wearenowthenumber2playersintheposteriorchamberIOLmarketintheUS

Aswecontinuetofurtherinvestinthisbusiness,keyproductsthatwillcontinuetodrivegrowthwillincludethe[Invista]andTrueLineIOLsandourVictusandSolarisequipmentplatforms.

Revenuegrowthof40%forourneuroandotherportfoliowasdrivenbypromotedbrandsincludingXenazine,WellbutrinXLandDesipramineCuprimine.Ourgenericfastbusinessbenefittedbothfromportfolioexpansionandcompetitorstockouts.

NewcustomersandstrongearlyperformanceoflaunchedproductssuchasOnset,alocalanesthetic,continuetodriveourgentlebusinessresultinga20%quarter-over-quarterrevenuegrowth.

Finally,inanesthetics,Obagidemonstratedexcellentquarter-over-quarterorganicgrowthof21%asaresultofimprovedsalesforceeffectiveness.

Now,turningtotherestoftheworld.OuremergingmarketsinCentralandEasternEuropeandtheMiddleEastcontinuetodemonstratestrongperformancewith36%quarter-over-quarterrevenuegrowth.

EvenwithasignificantFXimpactthisquarter,anegative$18millioninrevenues.Russia,UkraineandCIScontinuetheirstrongperformance,demonstrating20%organicgrowth.RevenuesforouremergingmarketbusinessinAsiaandAfricagrew66%quarter-over-quarter.

China’s11%proformaorganicgrowthwasfromprimarilybythelensfranchise.OuriNova,SouthEastAsia/SouthAfricabusinessproformaorganicgrowthwas18%.InLatinAmerica,quarter-over-quarterrevenuegrowthwas13%.

Thestrongorganicgrowthof12%forMexicowasoffsetbythecontinuedeconomicslowdowninBraziland




ArgentinaandimportrestrictionsinArgentina.Inaddition,ourexportbusinesswasnegativelyimpactedbycapitalcontrolsinVenezuela.

Therestoftheworld’sdevelopedmarketsgrew29%quarter-over-quarter.Australiabenefittedthisquarterfromastrongcoughandcoldseason,whichcontributedtoits15%same-storeorganicgrowthrate.

OurWesternEuropeanbusinessgrewmid-singledigitorganically.ThisgrowthwasoffsetbyadeclineintheCanadianbusiness,whichisprimarilyduetoWellbutrinXLbeinggenericizedaswellasforeignexchange.

WeareofftoagreatstartinboththeUSandCanadapostthelaunchofJubliainJuly.JubliascripttrendsintheUSarecurrentlyreigningat5,831scriptsperweekthroughtheweekended--endingOctober10th.

Canada,monthlyscripttrendsarecurrently5,462scriptspermonththroughthemonthendSeptember,animpressive18%marketshareafteronlythreemonths.ThisperformanceincreasesourconfidenceinourabilitytosignificantlyexceedourestimatesforJubliaof$150millionrevenuein2015and$300millionofrevenuein2016.WecontinuetobelievethatJubliawilllikelybecomeourlargestproduct.

WeareinvestinginthegrowthatJubliathroughacomprehensivemarketingcampaignandanexpandedsalesforce.InthefirsthalfofthethirdquarterpriortotheFDAreviewofourpromotionalmaterials,wewereonlyabletosellJubliausingthepackagedinsert.

Inthesecondhalfofthethirdquarter,webegantherolloutofourprintanddigitalcampaignstobothphysiciansandconsumers.Ourresultsto-datearepriortoourplannedTVadvertising,whichtheFDAcompleteditsreviewoflastweek.

Weplantobeon-airbymid-November.Ourinitialsalesfindhaveincludedacontractedprimarycaresalesforce.AfterassessingtheeffectivenessofthesalesforceattheendofQ3,wehavedecidedtoshiftthisspendtoadditionaldermatologyrepresentativesandconsumeradvertising.

BetweentheUSandCanada,wehaveapproximately175salesrepresentativesconsistingofbothpodiatryanddermatologyrepresentativessellingtoJublia.Luzuuptakecontinuestogrowsincelaunchwithcurrentscriptvolumeaccountingfor13%ofthebrandedtopicalanti-fungalmarket.

Luzuhasbrokenthe1,300prescriptionperweeklevelfortheweekendingOctober10th.LuzuperformancehasbenefittedfromtheexpandedcoveragetobothdermatologyandpodiatrythroughthesamesalesforcethatisalsosellingJublia.

Retin-AMicroPump.08uptakehasexceededexpectationssinceitslaunchinearlyJuly.Afteronly15weeks,wehaveexceeded1,400prescriptionsperweek.Retin-Aisthemostwidelyrecognizedbrandnameindermatology.

TheentireRetin-Afranchise,includingourgenericsbrand,isgrowingstrongly.Inour2015outlook,bothRetin-AMicro.08andAnnexinwereexpectedtogenerate$35millioninrevenues.

WenowexpectRetin-AMicro.08togenerate$35milliononitsownin2014--2015,thusprovidingtheadditionalupsideforour2015outlook.OtherrecentlylaunchedproductsintheUSarealsocontributingtoourcurrentandexpectedcontributetoourfuturebusiness.

BiotrueONEdaylenscontinuestoaccelerate.Forthesecondquarterinarow,itgrew90--itgrewover90%peryear.Bausch&LombUltra,arecentlyintroducedlens,iscurrentlysellingtocapacityonaprivateline.

WhileUltraonlycontributedlessthan$5millioninrevenuetoourcurrentquarter,weexpectthistoincreasesignificantlywhencommercialquantitiesareavailablefromourfirstinstalledcommerciallineinthesecond




quarterof2015.

Thedouble-digitorganicgrowthofoursurgicalbusinessisbenefittingfromthesuccessfullaunchoftheTrueLinetoWorkIOL.Inaddition,withtheapprovaloftheVictuslensfragmentationindication,weexpecttoplace28Victusmachinesin2014,twiceasmanyasin2013,whichwouldpositionusforpull-throughsalesofIOLsandotherconsumablesinfutureyears.

Inourconsumerbusiness,wecontinuetopromoteandgainpositionrecommendationsforour2014launches,theCeraVe,partoftheextended--continuedextensionofthebrand,[ProxyClear],asuperiorhydrogenperoxide-basedlenscleanerandSootheXP,adryeyeproduct.

Inadditiontotheproductsalreadylaunched,wehavearichpipelineofnear-termlauncheswithsignificantcommercialpotential.Consistentwithourbusinessmodel,theseproductshavebeen--havebeensourcedbothinternallyandexternally.

Ourexpectednear-termUSRXlaunchesincludeAnnexin,[Beznio],andLotemaxNextGeneration.Annexin,anewcombinationacneproduct,wasdevelopedinternally.WehaveaFIDUFAdateofNovember30thandexpecttolaunchinearly2015.

Werecentlyannouncedpositivephase3resultsforBeznio,anovelNatriumoxidedonatingglaucomaproducttotreatintraocularpressureforpatientswithglaucomaorocularhypertension.WeexpecttofiletheNDAinthefirsthalfof2015.

Asareminder,BezniobeatXalataninapreviousphase2study.LotemaxNextGeneration,whichalsoreceivedpositivephase3results,willallowustoextendthelifeoftheLotemaxfranchise.

WearealsoveryexcitedaboutthepotentialforEmerade,anadrenalineauto-injectoranaphylaxis.AfterlaunchinginselectedEuropeanmarketsinthefirsthalfof2014,weareofftoastrongstartinGermany--inEuropewithmorethan20%marketshareintheU.K.andSwedenandapproximately6%marketshareinGermanywherewejustlaunchedamonthago.

EmeradeiscurrentlyundergoingstabilitytrialsintheUSWecontinuetoextendtheCeraVebrandswithvariousplannedlaunchedincludingaCeraVehydratingcleansingbar,whichlocksinmoisturethreetimeslongerthantheleadingcleansingbar,Dove,andsixtimeslongerthantheCetaphilbar.

WewillalsobeextendingtheOcuvitebrandwiththeintroductionofgummies,thefastest-growingvitaminsegmentinthefirstquarterof2015.Werecentlycompletedaphase3studyforoureye-whiteningpositioneddispenseproduct,Brimonidine.WeareplanningourNDAsubmissioninthefirstquarterof2015.

Sinceoursecondquarterearningscall,wesignedorclosedseveraltransactionsincludingChroma,[Zeracom]andseveralothersthatwehighlightedlastquarter.WerecentlysignedadealtoacquiretheworldwiderightstoChroma'sophthalmicandorthopedicportfolio.

Chroma'spartconsistsprimarilyof[viscal]elasticsandIOLswithexistingsalesconcentratedinWesternEurope.WeareveryexcitedtobringtheseproductstoothermarketsincludingtheUS,Asiaandelsewherearoundtheworld.

Asanotheradditiontooursurgicalportfolio,wecompletedatransactionwithZeracom,whichisbasedinTurkey.ZeracomprovidesusalowerpricepointIOLinEurope.Aquickupdateontransactionsthatwehighlightedlastquarterarenowclosed.

Thesetransactionswillallcontributetofurtherpenetrationandattractiveinternationalmarkets.P.T.[ArmaxinDelpharma]and[Medpharma]willprovideimportantonthegroundpresenceinIndonesiaandtheMiddleEastrespectively.



©2014TheStreet,Inc.AllRightsReserved Page8 of 28

[Vescon],basedinSouthKorea,presentsusaglobalopportunitytoexpandourcontactlensbusinessthroughtheirfullrangeofbothclearandcoloreyeandlower-endlensincludingadaily[sky-high]lens.

Withthis,IwillnowturnthecallovertoHoward.

HowardSchiller(CFO):

Thankyou,Mike.WeareveryexcitedtoreportexceptionalQ3resultsacrossallofourkeybusinesses.Ourrevenuewasagaininexcessof$2billionwithourUSandemergingmarketbusinessescontributingstrongdouble-digitsame-storeorganicgrowth.

Inaddition,whilewehaverecentlyhadanumberofsuccessfullaunches,theyaddedonly3%toourorganicgrowththisquarter.TheseproductsandtheotherproductsMikejustreviewedasnear-termlaunchesareexpectedtocontributesignificantlytoorganicgrowthin2015and2016.

Ourimpressiverevenuegrowthat33%andcashEPSgrowthof48%inQ3wereoffofastrongQ32013.Ifyourecall,Q3oflastyearwasaverygoodquarter,butwesufferedfromthegenerizationofZovirax,RamandBenzaClinwhencomparingthatquartertoQ32012.

Inaddition,Q32012wasparticularlystronggiventhatwesoldapproximately$90millionofZoviraxfollowingastock-outinQ2of2012.

Ourcostofgoodssoldimprovedinthethirdquarterprimarilyduetoproductmixresultinginimprovedgrossmarginsof74%ofsales.We’reexpectingasimilargrossmargininthefourthquartersubjecttoforeignexchangemovements.

WhileSG&Apercentageimprovedeachquarterthisyear,SG&Aremainsabovehistoricallevelsasexpectedat24%ofsalesprimarilyduetocostsassociatedwiththeirnumerouslaunchproducts.

Excludingtheselaunchcosts,ourSG&Awould’vebeenlessthan22%ofsales.ThetableonthispageshowschangeandforeignexchangespotratessinceourJuly31stearningscall.ThecurrencyorderisbasedonthefinancialimpactofcurrencymovementversusourQ3guidancegivenonJuly31st.

MostofthemovementincurrenciesoccurredinSeptember,asthedollarsignificantlystrengthenedversusmostcurrenciesaroundtheworld.ThenegativeimpactinourthirdquarterrevenueandcashEPSrelativetoourJuly31stguidancewas$31millionand$0.04ofearningspershare.

WewereabletoabsorballofthisimpactandstillgeneraterevenueattheupperendofourguidanceanddelivercashEPSaboveourguidance.Lookingforwardtoourfourthquarteratcurrentrates,thenegativeimpacttorevenuesandcashEPSwouldbeapproximately$53millionandapproximately$0.06pershare.

Obviously,ourresultswillbeimpactedeitherupordownwithfurthermovementsinFXrates.Aswehavediscussedpreviously,wecontinuetolookforopportunitiestoproduceproductslocallyinordertocreatemoreofanaturalhedgeandreducethebottomlineimpactofcurrencyswings.

Aswediscussedatoursecondquarterearningsconferencecall,giventhatwehavepassedtheone-yearanniversaryofBausch&Lombandwehavenotdoneanysignificantlargetransactions,weexpectedarestructuringintegrationchargestodeclinesignificantlyinthesecondhalfoftheyear.

Thisquarter,ourrestructuringintegrationchargesdeclinedfrom$143millionQ2to$63millioninQ3,lessthanourguidanceof$70million.Therestructuringintegrationchargesincludedchargesofapproximately$3millionfordealscompletedinQ3forour[Mexindo]pharmaand[Bestcon],whichwerenotincludedinourJulyestimatesduetotheuncertaintyoftimingforclose.

Weexpectafurtherreductioninourfourthquarterrestructuringchargestolessthan$50millionandinthe




firstquarter2015tolessthan$25million.

Thisquarter,ourGAAPandadjustedcashflowfromoperationsarethehighestinValeant’shistory.Aswe’vesaidinthepast,we’reextremelyfocusedonconvertingthemaximumamountofnetincometocashflow.

Ouradjustedcashflowfromoperationsthisquarterwas$771millionresultingin107%cashconversionforthequarterand97%cashconversionyear-to-date,bothwellaboveourguidanceof90%.

Inaddition,intheabsenceofsignificantbusinessdevelopmentactivity,ourGAAPandadjustedoperatingcashflowswillconvergeascashpaymentsforrestructuringandintegrationwinddown.

Atthebeginningoftheyear,wesetastrategicobjectivetoreduceourleverageratiotofourtimesorbelow.Weachievedthisgoalthisquarterbyreducingourtermloansby$1.1billionresultinginanetleverageratioofapproximately4timesadjustedproformaEBITDAdownfrom4.4timesatthebeginningof2014.

InadditiontoourtermloanrepaymentinQ3,werecentlyredeemed$500milliontobondinQ4.Ourdaysalesoutstandinghavecontinuedtodeclinethisquarterto64daysfrom66daysinQ2and72daysinQ1.

Aswe’vepreviouslydiscussed,webelievethatcalculatingDSOisbasedongrosssalesandgrossaccountreceivablesmakesenseforusgiventhefactthatwehaveanumberofoldproductsandtherearealargeamountofprovisionstogrosssalestogettonetsales.

Thisquarter,weareaddingadditionaldisclosureinour10Qthatwillallowinvestorstocalculateourdaysalesoutstandingusinggrossquarterlysalesandgrossaccountsreceivables.Wehaveincludedthattableintheappendixofthispresentation.

Ouroverallaccountsreceivablethisquarterincreasedby$109millionwithanoffsettingincreaseinaccruedliabilitiesofapproximately$90millionrelatedtorebates,returnsandallowances.Thisisanetincreaseofapproximately$20millioncomparedtoanincreaseofapproximately$30millioninnetsales.

Inaddition,ourUSRXwholesaleinventorylevelswiththemajorwholesalerswereflatthisquarteronaunitbasisandloweronadollarbasiscomparedtolevelsattheendofQ2.WearethrilledwiththeintegrationandperformanceofBausch&Lombduringourfirstyearofownership.

Aswe’vesaidmanytimesinthepast,thesuccessfulintegrationwillserveastheblueprintforAllergan.Sinceclosing,wehaveacceleratedorganicgrowthfromlessthan5%to10%.Thisincreasedgrowthratehasbeenachievedbycontinuedstrengthinthepharmaceutical’sbusiness,theturnaroundofthelensandsurgicalbusinesses,thecombinedconsumerbusinesswithincreasedscale,thebenefitfromourdecentralizedapproachandleveragingouremergingmarketcapabilitiesforourexpandedbusiness.

Wehavealsohadnumeroussuccessfulrecentproductlaunchesshowninthisslidewhichwillbekeygrowthdriversgoingforward.Ourintegrationhasprogressedwellsinceclose.Asoftoday,wehaveachievedalmostallofourtargetedsynergies.

Remainingsynergieswillbeachievedonarunratebasisbytheendoftheyearandourprimaryrelatedtomanufacturing,Europeandsmallamountsinanumberofotherareas.OurcosttoachievethesesynergieshasbeenabithigherthanexpectedduetocosttoachievesynergiesoutsidetheUS

Wehavealsoaddedmanygreatpeopleatourorganizationatalllevels,manyofwhomareleadingsomeofourmostimportantbusinesses.WelookforwardtoimplementingthesameformulatosuccessforacquisitionsgoingforwardincludingAllergan.




WeremainveryconfidentinthefuturegrowthprospectsforValeant.Weexpectmorethan10%same-storesalesorganicgrowthinthefourthquarterdrivenbystrongperformancebyalmostallofthebusinesses.

We’reveryexcitedaboutthestrongstartofourrecentlaunchedproductsandtheirfurtherpotentialaswelookforwardto2015and2016.Giventhisstrength,weareincreasingourfourthquarterguidanceforcashEPSby$0.10to$2.45to$2.55pershare.

OurrevenueguidanceforQ4remainsunchangedat$2.1billionto$2.3billion.Wearealsoadjustingourfull-year2014guidancetoreflecttheoutperformanceinourthirdquarterandourincreasedguidanceforQ4.

Revenuewillbeinthe$1.8to--$8.1billionto$8.3billionrange.CashEPShasincreasedto$8.2to$8.3pershare.Anadjustedcashflowfromoperationsupdatedtogreaterthan$2.5billion,whichassumesatleast90%cashconversionfortheyear.

Q4tendstohaveadisproportionamountofrevenueinDecemberandtherefore,weareconservativelyprojectingoperatingcashflowforQ4.Byyear-end,weexpectournetleverageratiotobeapproximately3.9timesadjustedproformaEBITDA.

Ourstrengtheningbalancesheetwillgiveusflexibilitytoplaycapitalforbusinessdevelopmentand/orsharerepurchasein2015.Withthebackdropofthisquarter’sstrongperformance,thestrengthofouroverallbusinessandincreasingconfidencearoundanumberofthelaunchproductsincludingthepotentialofJublia,weareincreasingour2015outlook.

Wenowexpectorganicrevenuegrowthof10%ormorerelativetothe90%growthinourJulyoutlook.Grossmarginisexpectedtoimproveto75%relativetoourpreviousoutlookof74%basedonthefactthatwearenowatcurrentgrossmarginsinthe74%range,plustheexpectedimprovedmix,decliningXenazinerevenueandcurrentcostimprovementinitiatives.

WeexpectourSG&Amarginstobeinthe23%to24%range,whichisinlinewithourpriorguidanceoflowtomid20%ofrevenue.SG&Awillcontinuetobeabovehistoricallevelsin2015toour--duetoourplannedinvestmentinnewproducts.

Inaddition,westillexpectourtaxratetobeinthe5to6%range.ThisupdatedoutlookresultsincashEPSof$10pershareassumingnoacquisitions,a21%increaseover2014.Withacquisitions,weexpecttobeabletosignificantlyaddincrementalcashEPS.

Now,turningtoAllergan.WeremaincompletelycommittedandfocusedoncompletingtheAllergantransaction.SixmonthsagowhenwemadetheoffertoAllergan,six--to-date,theAllerganBoardofManagementhavebeenunwillingtoengagewithusortakethetimetobetterunderstandourstrategyandbusinessmodel.

WeremainopentospeakingwithAllerganatanytimeshouldtheydecidetoengage.(Inaudible)hearfromAllergan’smanagementpriortoDecember,welookforwardtotheDecember18thspecialmeetingthathasbeencalledbyPershingSquarewhereshareholderswillbegiventheopportunityremoveamajorityofAllergan’sboard.

WebelieveAllergan’sshareholdersneedtoremoveamajorityofthedirectorsinorderforAllergantobecompelledtonegotiate.TherecorddatedevotedtospecialmeetingisThursday,October30th.

SharewouldneedtobepurchasedbyMonday,October27thinordertobeashareholderofrecordforthemeeting.ThecombinationofValeantandAllergancreatesanunrivaledplatformforvaluecreationforbothsetsofshareholders.

Aswehavediscussedinthepast,thetwobusinessesarehighlycomplementaryandundertheleadershipof




theValeantmanagementteam,wewillapplyourintegrationblueprinttomaximizetheefficiencyofthecombinedcompanywhilestillretainingappropriatelevelsofR&Dspendtodrivefuturegrowthininnovation.

Theeconomicchoiceisclear.In2016,anAllerganshareholderwillhavegreaterthan$20cashEPSperAllerganshareinacombinationwithValeantascomparedtoapproximately$10persharecashEPSforstandaloneAllergan.

UntilwehearfromAllerganBoardofManagementorhearfromtheAllerganshareholdersbasedontheirspecialmeetingvote,wewillstayfocusedondrivingvalueinourownbusiness.We’reextremelyexcitedaboutourprospectsaswelookforwardfortheremainderoftheyearandinto2015andbeyondandwiththat,wewillnowopenthecallforquestions.

QUESTIONS&ANSWERS

Operator:

Atthistime,I’dliketoremindeveryoneinordertoaskaquestion,pressstarandthenumberoneonyourtelephonekeypad.

YourfirstquestioncomesfromthelineofAndrewFinkelsteinfromSusquehannaFinancialGroup.Yourlineisopen.

AndrewFinkelstein(Analyst-SusquehannaFinancialGroup):

Thanksfortakingthequestion.Youknow,maybeasapreliminary,youknow,questionthatyoucan--from,youknow,alltheseresultsandthedetailsacrossbusinessesthatyou’vebeengiven,youknow,whatmessageshouldAllerganshareholders,youknow,mosttakethatmightchangeviewsofthecombinedcompany,youknow,foranyonewho’s,youknow,notconvincedabout,youknow,thestayingpowerofthecombinedcompany?

AndthenIhadsomefollow-upsonindividualdetailsyou’dgiven.


Thanksforthequestion.IthinkfromtheverybeginningsinceweannouncedouroffertoAllergan,theyhavealwaysheldupQ3assortofaLipmann’stestintermsofourabilitytosustaingrowth.

AndthatQ3wasthequarterwhereB&LannualizedandIthinkthemessagetheygavetotheirshareholderswasthatthewheelsaregoingtofalloffthebusintermsofB&LandthattherestoftheValeantbusiness,youknow,wouldcontinuetodecline.

Ithinkthisquarter,youknow,throughfactsandthroughperformance,wedemonstratedboththoseassertionsareincorrect.SoIthinkourhopeisthattheAllerganshareholderstake,youknow--justlookatthenumbers,lookattheperformanceandseethattheValeantoperatingmodeldoesworkandwillcontinuetowork,acombinationofday-to-datestrongexecutionandourR&Dmodelofsourcinginnovationbothinsideandoutsideleadstolotsofnewproductsandaverydiversifiedbusinessmodel,whichbothintermsofgeographiesandproducts.

SowewouldjustencouragetheAllerganshareholderstotakealookatourresultsandcomparethemtowhatAllergan’sbeenassertingsincethebeginning.

AndrewFinkelstein(Analyst-SusquehannaFinancialGroup):

Okay.Thanks.Andthenif--twootherthings,ifyoucouldtalkalittlebitaboutthelessonsfromtheJublia




launch,what’sworkedwellandyoumentionedsomeshiftsinthespendingawayfromprimarycare,contractsales,toadditionalin-houseresources,butwhat’stheprimarycareroleforthatproductultimatelytomaximizetheopportunity?

AndthenontheBausch&Lombside,verylargeorganicgrowthratesfromsomenewlaunchesinthesurgicalbusiness.Isthereanydetailsyoucanshareonmarketsharegainsandwhatweshouldthinkaboutforthatbusinessinthenear-term?Thanks.


Sure.IntermsoftheJublialaunch,ourteamhasjustdoneafantasticjob.AriKellan,who’shere,andDebJorn,wholeadsthebusinessunit,havedonejustafabulousjob.Ithinkthekeystosuccesssofarhavebeentherealstabilityandmotivationofthesalesrepresentatives.They’redoingaterrificjobandmakinglotsandlotsofcalls.

They’reexcitedbytheproductsinceit’ssuchagreatproduct.Ithinkthedigitalmarketingcampaignhasgroupedtobevery,veryeffective.It’squiteeasytomeasureinROIintermsof,youknow,ondigitalactivity.

Andwhatwe’remostexcitedaboutisactuallytheTVthatwillsoonberiding.IfyoulookattheimpactoftelevisiononotherdermatologylauncheslikeEpiduoandAxone,whichisanAllerganproduct,you’veseenhugeincreaseswithDTCgoeson-air.

Andthat’sthekeytogetintotheprimarycareaudience.Ithinkwhatwefoundwasdetailingthemwithoutsomethingtodrawthepatientsintotheofficesprobablydoesn’tworkaswellasjustgettingtheconsumers--maketheconsumersawareofthisproduct,andhavethemcomeintotheoffice.

So,youknow,it’sonlythestart,butifyouannualizethesalesofJubliabasedonourmostrecentweek,it’ssomewherebetween$70and$80millionayearalready.Andifweweretotakeawayourzerocopay,whichatsomepointwewill,we’reapproaching$100millionofannualrevenueevenattoday’srunrate.

Soweexpectthat--weexpectthattobecloserto$200bytheendofthisyearandwefeelvery,verygoodaboutthelaunchandit’salldueto--allduetotheteamwehaveinplace.Intermsofsurgicalmarketshare,Ithink--Ithinkwe’veincreasedourmarketshareabout3percentagepointsacrosssortofallcategoriessinceweacquiredB&L.

Partofitisthenewproducts,butpartofit’s--it’sledbyAndyChangintheUSwho’sdoingagreatjob.Ithinkthere’sa--justalotmorefocusand,again,IthinkthesalesforceincentiveshavebeenfixedandIthinkthatthenew[FRAG]approvalfortheVictusmachine,coupledwithsomeofthe--inadditiontosomeoftheChromaproductsthatwe’regoingtobringintotheUSisreallygoingto,youknow,reallysecuresortofabrightfutureforthatbusiness.

Operator:

YournextquestioncomesfromthelineofChrisSchottfromJPMorgan.Yourlineisopen.

ChrisSchot t (Analyst-JPMorgan):

Great.Thanksverymuch.Justacoupleofquestionshere.Imean,first,Valeantstock,it’s--onthisrevisedguidanceit’s12times2015earnings.Obviously,veryinexpensivevaluation.

WhenweconsiderpotentialrevisionsorchangestoyourbidheadingintotheDecember18thmeeting,istherealeveragedceilingweshouldthinkaboutatValeant?It--Iguessit--justtome,itseemslikeitwould




bealotcheapertofinancethedealwithmoredebtversusequityatthispoint.

ThesecondquestionIhadwasjustinyourpresentationyoutalkedaboutyourabilitytoachievemoresynergieswithAllerganthananybody.IsthereaminimumrateofreturnweshouldthinkaboutforlargeacquisitionssuchasAllergan’s[fixnessandherbitter]emerges?

I’mjusttryingtogaugeyourabilityas,youknow,ifsomeoneelseemergesyouclearlyhavemoresynergiesinyourabilityto,youknow--istheresomethresholdtowhichpointyoujustdon’tgoanyhigher?Just--Iknowyouhavespecificnumbers,butjusthowdowe--howdowethinkaboutthatas--ifaprocessemerges?Thankssomuch.


Okay.Intermsof,youknow--ifweweretoimproveourproposal,howwouldyou--howwewouldthinkaboutit,Imean,clearlywithourstockwhereit’sat,we’dmuchprefercashoverstockandwe’vesaidthatanumberoftimes.

Andwe’rejustbalancingthatwithmakingsurethatwecomeoutof--outofthemergerwithanincrediblystrongbalancesheetthat’llgiveustheflexibilitythatwewantgoingforward.Sowe’relookingatany--we’relookingatalloptions,butthat’showwe’rebalancingthetwo.

And,youknow,aswesaidbefore,wewouldbewillingtositdownandimproveourofferand,youknow,whenwedothat,youknow,we’llmakethatdecisionwhenwethinkit’stherighttime.We’llmakethatdecision.

Yes,Ithinkthatwhenyouknowas--Chris,youknowthatwe’renot--wedefinewinningasdeliveringvaluetoourshareholders.Andwehaveveryhighfertileforhowwedeploycapital.

Inthiscase,wehavesignificantlymoresynergiesthananybody.It’sacombinationoftheuniquebusinessoverlapthatwehave,ouremergingmarket’sinfrastructure,andour--andouroperatingmodel,whichallowsustoextractmoresynergies.

Andsothat’sall--that’sallfactoredin.Wewillbedisciplined.Asyou--asyourightlysaid,youknow,wecan’tandwon’tgiveyouaprecisenumber,butwe’llbedisciplined.Butagain,weshouldownAllergan.

WehavethemostsynergiesandAllergan’sshareholderswillbenefitthemostwithaccommodationwithValeant.


Great.Thanks.Andjustareallyquickproductfollow-up,Beznio,canyoujust--Iknowthat’sonewithpeaksales.We’vehadsomequestions.Canyoujustelaboratealittlebitmoreonthedifferentiationyouseeversusexistingagentsthatgetyoucomfortablewiththosepeaksalesassumptions?

Youthinkofoutofallthenewproductlaunches,that’stheoneweprobablygetthemostquestions.

AriKellen(Co-Chairman):

Yes,it’sAriKellen.Beznioisthefirstmonotherapythatstatisticallysignificantlybetterthan[atanoprosp]asweputoutinourphase2doserangingstudy,andthephase3study,whichwepublished,showedtheloweringof7.5millimetersto9.1millimetersofmercury.

Other[prostategland]inparticular,theXalatanlabelsaremorecloseto6to8millimetersofmercurydropping




pressurefrombaselines.Sowe’realsoencouragedbythe--bythesafetydatathatwehavenow.

Wealsohaveadditionalsecondaryendpointsthatwe’rediscussingwiththeFDAthatareuniquethat’lldemonstratetheefficacyofourdrugbutunabletosharethatatthistime.TheotherpointI’lladdisthatthe--ourKOLsareexcitedatthisdrugandthereceptionatthecurrentAAOhasbeenprettypositive.

Sowebelieveinthegrowthprospectsofthisdifferentiatedcompound.


Thanksverymuch.


Nextquestion,please.

Operator:

Asareminder,ifeveryonecanlimitthemselvestoonequestionsowecangetthroughasmanyquestionsaspossible.

YournextquestioncomesfromthelineofAlexArfaeifromBMOCapitalMarkets.Yourlineisopen.

AlexArfaei(Analyst-BMOCapitalMarkets):

Goodmorning.Thankyoufortakingthequestionsandcongratulationsonthequarter.Howard,justafollow-uptoyourearliercommentsaboutthesynergyhaving--youknow,havingmoresynergiesthantheothercombination.

AreyougettingachancetomakethatcomparativeargumentwithAllerganshareholdersandcouldyoucommentonsomeofthefeedbackyou’vebeenreceiving?Andmyfollow-upishowdoyouexpectabreak-uptheShire/Abbydealtoimpactyourprospectsgiventhesignificantroleweexpectaventureofinvestorstoplayheadingintothespecialmeeting?Thankyou.


Well,Idon’tthinkanyonehasdebatedordisagreedwiththefactthatValeantandAllergan,there’sauniquebusinessoverlap.SoIthinkthere’sgeneralagreement.Thereisgeneralagreementinourabilitytoextractthesynergiesand,again,throughthebusinessoverlapandthroughouruniqueoperatingmodel,we’vehadsomeinterestingdebateswithpeopleaboutsources,howtheyget--comefromhereorthere,butgenerallyIthinkagreementthattherewillbesignificantsynergiesandmoresynergiesfromusthanfromanyotherplayer.

SoI--wehave--therehasn’tbeenanypushbackinaddition.Weobviouslyhaveadifferentiatedtaxrateaswell.So,youknow,wecan’t--wecan’tpredictandprotectourselvesagainstpeoplefromdoingirrationalthings,butjustfocusedontheeconomicsandthefacts,weclearlyhavethemosttobringtothetable.

AndintermsoftheimpactthattheShire/Abbydealhas,Imean,clearlytherewassomelossestakenbytheevent-drivenpeoplelastweek.IthinkthatinAllergan’scasethere’salreadysignificantownershipbythehedgefundcommunityandIthinkagrowingsensethatatransactionisgoingtohappen.

SoIthinkthat’sall--that’sallpositive.Andagain,we’recommittedtogettingthistransactiondone,whichisimportanttothatcommunity,andwe’regoingtomarchon.




AlexArfaei(Analyst-BMOCapitalMarkets):

Great.Thankyou.

Operator:

Yournext--yournextquestioncomesfromthelineofDavidSteinbergfromJefferies.Yourlineisopen.

DavidSteinberg(Analyst-JefferiesLLC):

Thanksverymuch.IhadsomequestionsonJublia.ThefirstthingisitlookslikeintheprescriptiongraphthatyouaddeduptheWoltersKluwerdataandthespecialtypharmacydata.Iwasjustcurious,what’stheroughbreakoutbetweentheprescriptionauditedinformationandnowthatyougettoyourspecialtypharmacy[Filadore]?

Andsecondly,issamplingstillasignificantpartofyourprogramandifso,perhapshowmuchwouldunderstatethroughscriptspy?Andthencouldyougiveusanupdateonhowmanagedcarediscussionsaregoingonthatproduct?Thanks.


Sure.Thanks,David.Intermsofthebreakdown,thespecialtypharmacychannelsaremultiplespecialtypharmaciesthroughouttheUnitedStates,buttheroughscriptbreakdownisabout40%ofthevolumesgoingthrough,especiallypharma,and60%isgoingthroughtraditionalpharmacies.

Samplingisnot--isnotakeypartofwhatwe--whatwe’redoing.OneofthereasonsisyoumayrecallthatwehavetoshiftmanufacturerstoourJapanesepartner,whichisdoingaterrificjobforus,buttheyonlyhavetradesizebottlesatthispoint.

Andsountilwegetsomemoresamplebottles,we--sampling’snotsomethingthatwe’redoing,butwewouldexpecttostartsamplingnextyearoncewegetthesmallerbottle,whichwillbe,youknow,onemorethingthatwethinkwillhelpdrivethegrowth.

Andthelastquestion?Oh,managedcare.Ourconversationsofarisgoingwell.Ithinkwehave--wedohaveauniqueproductandthere’sastrongconsumerandphysiciandemandforitandIthinkthatweareconsciouslyoptimisticthatwe’regoingtogetexcellentmanagedcarecoverage.


Okay.Justaquickfollow-up,youhadindicatedyourguidancefornextyear,$150millioncouldbesubstantiallyexceeded.Therunrateattheendofthisyearcouldactuallybeclosetothat.

Anythoughtsonwhatperhapsanewnumbermightlooklike?


Oh,intermsofnextyearsalesforJublia?Well,ifourrunrateattheendofyearissortof$200million,thencertainly$150millionwouldbealittlebitlightasanestimate.Sowehaven’tgonethrough,butit’sprobablyclosertothe$400million--$300millionto$400million,butthat’sjustabitofa--abitofanestimate.


Okay.Thanks.

Operator:




YournextquestioncomesfromthelineSachinShahfromAlbertFried.Yourlineisopen.

SachinShah(Analyst-AlbertFried):

Goodmorning.Congratulationsonthequarter.So,youknow,Ijustwantedtofindoutthattherehasbeensomespeculationthatyou’regoingto--youmaybeconsideringimprovingyouroffer.

Iknowyou’vetalkedaboutthatinvariousways,butinlightofthefactthattherecorddate’scominguponthe30thandshares,asyoumentionedinthepresentation,canbeacquiredonthe27th,sojustwantedtofindoutinlightofkindofthemarketvolatilityanddislocation,youknow,isthatsomethingthatyou’vebeenconsideringbecauseofdislocationandjusttokindofsolidify,youknow,theDecember18thmeeting?


Yes,weconsideriteverydayasHowardsaidthatwedohavesomemoredrypowderand,youknow,attheappropriatetimewhentheconditionsareright,youknow,our--again,ourpreferenceistositdownwithmanagement,butIthinkweallknowthat’sunlikelywiththecurrentmanagementteamandboard.


Yes.


Andsowewanttodaytobeallaboutearningsand--butit’scertainlysomethingthatwe’recontemplatingand,youknow,wemaymakethatdecisionatanypointintime.


Okay.Soisthe--fine.Today’saboutearnings,butasfarastherecorddateisconcerned,shouldweusethatasagaugeoristhatnotimportanttoyouof--becauseyoualreadyhave,youknow,asmuchas40%oftheshareholdersleaningintotheDecember18thmeeting?

Isthat--wejustwantto--Ijustwanttounderstandthelevelofimportancefortheshareholdermeetingbecauseyoualreadyhavesignificantamountofsupport.You--areyoulookingformoreorisitthattheboost--potentialboostthatyou’reconsideringis,youknow,forthatreasonandtomakesurethatyougettothefinishlinehere?


Well,therecorddateisobviouslyanimportantdateandit’s--we’vethoughtaboutitinthecontextoftheoveralltransaction.The--Ithinktherealityisisthatmostoftheshareshavefound--havefoundtheirhomealready.

Thepeoplethatownthemnow,theinstitutionsthat--theloan-onlyinstitutionsthatdecidedtotakeprofitsandsellhavedoneso,theARBsandhedgefundsaresignificantholders.Pershinghastheirstakeandanumberoftheinstitutionsthatareinitforthelonghaulhaveincreasedtheirstay.

Soit’s--thevolumesaresignificantlydown.Evenonbignewsdays,they’resignificantlydown.There’salwaysgoingtobesometradingpostarecorddate,andthat’sjustreality,butforthemostpart,theshareshavefoundtherighthomeandthepeoplethatownthesharesarethepeoplethataregoingtovotecomeDecember18th.





Okay.Andjustonelast--onelastquestion,ifyoudon’tmind,there’sbeensomespeculationbythemediawithyourrelationshipwithAckman.Justcanyouconfirmthatthatrelationshipissolidgoingintotheshareholdermeeting?


Yes.No,absolutely.WecontinueaverygoodrelationshipwithBillAckmanandPershingandIthinkourinterestsarealigned.Webothwanttogetthisdealdoneandwearebothcommittedandworking,youknow--we’llworkhardtomakeithappen.

Withthat,weneedtomoveonto...


Okay.Thankyou.


...thenext--wehavealonglistandashortperiodoftime.Soletmereemphasizethistotrytokeepittoonequestionsoeveryonecangetinatleastonequestion.Thankyou.

Operator:

YournextquestioncomesfromthelineofAnnabelSamimyfromStifel.Yourlineisopen.

AnnabelSamimy(Analyst-StifelNicolaus):

Hi.Thanksfortakingmycallandcongratulationsonagoodquarterandsinceit’sanearningscall,I’llaskaboutearnings.

SoyouhavesomeverystrongincreasedoutlookandIguessmyquestioniswhat’schangedbetweenlastquarterandthisquarterthat’smadethispositiveoutlooksostrong?We’veprettymuchknownabouttheannualizationofBausch&Lombandtheannualizationofthegenerics.

Sowhatisitthat’sthebiggestdriverofyourincreasedoutlookfromthispointforward?


Ithinkit’sprimarilydermatologyintheUSwherewe’vehadreallyacompleteturnaround.Allthepromotedbrandsaregrowing.Weareveryexcitedaboutourlaunchedproducts

We’reincreasinglyoptimisticaboutAnnexinbecauseofsomeoftheuniquedatawehaveonthat,andsoIthinkthat’stheprimarydriver.Butalso,everyotherbusinessis,quitefrankly,over--youknow,everybusinessaroundtheworldwiththeexceptionofmaybeoneortwosmallonesareoutperformingwithgreatmomentum,youknow?

Wehavealotofsmallerlaunches,everythingfromCeraVetothesurgical--youknow,thesurgicalbusiness.Wejustseesignificantlymoreupsideandweare--we--also,whenyouaddallthenumberstogether,Ithinkwecanstillgivewhatisaconservativeoutlook,whichismuchimprovedfromourpreviousone,wewillbegivingguidancefor2015atournormaltimeandIwouldexpectthattobebetterthanouroutlook.


Okay.Andjustonthat--onthatpointofthedifferentbusinessesdoingbetterthanexpected,Imean--Iguessoneofthequestionswe’vealsogottenoftenisthecontactlensbusiness.Itseemstobegrowingsignificantlyhigherthantheoverallmarketanditseemsto--it’sarelativelystagmarketwiththat




much--withoutthatmuchmarketchangesfromquartertoquarter.

Socanyouhelpusunderstandwhat’sdrivingthatgrowththemost?


Well,it’sledbyMarkMcKenna,who’sjustdoinganexcellentjob.Sohe’sbroughtreallife--reallifetothefranchise.We’veupgradedourmanagementteamacrosstheboardwithsomenewhires.We’reincreasingoursalesforceupto--from120to180.Andwehavesomegreatnewproducts.

BiotrueDaily,whichwasnotbeingfocusedon,whichwaslaunched,youknow,maybeayearbeforeweacquiredB&Ls,youknow,we’redoublingeachquarter,youknow,doubling,youknow,thegrowthofthatbrand.

Ultra,thereceptionhasbeenterrificintermsofthedoctorsandit’sjustthequestionofgettingthecommerciallinesup,whichwewill.Butyoualsohavetoremember,it’soffaverysmallbase.

Bausch&Lomb’smarketsharehadfallento,like,6%intheUnitedStates.Ithadbeenonadeclineforadecade.Soit’saloteasiertogainshareifyou’reaverysmallplayer.Andsowe’redoingitandwe’redoingitthrough--it’sallvolume.

We’vekeptourpricescompletelyconstant.Theyhavenotbeendiscountingand--butwe’venotbeentakinganypriceandwe’rejustdoingitthroughbetterproductsandamorefocusedteam.We’realsogettingabit--youknow,acombinationofhavingbothUltraandBiotrueDailyhaschangedthephysician’simageofBausch&Lomb.

Andsowe’reveryexcitedaboutthecontactlensbusiness.


Great.Thankyouverymuch.

Operator:

YournextquestioncomesfromthelineofLouiseChenfromGuggenheim.Yourlineisopen.

LouiseChen(Analyst-GuggenheimPartners):

Thanksfortakingmyquestion.AndsoI’mnotsuggestingthatyoushoulddothis,butI’mjustcuriousbecauseweobviouslygetalotofquestionsonthis.AtwhatpointValeant’swillingtowalkawayfromtheAllergandealintermsoftiming,valuation,youknow?Howdoyouthinkaboutthat?Youdidsayyouweregoingtobediligentaboutassessingdeals.Thanks.


Look.Wenowhavearecorddate.Wehadtofightlongandhard.Wehadtowinabunchofcourtcases.Wenowhavearecorddate.Youknow,we’veannualizedthethird--thethirdquarter.

WedeliveredaverystrongthirdquarterandbasicallyhaveshownthroughperformancethatalltheallegationsmadebyAllerganarejustwrong.Theyputoutanothernotethismorning.We’vegonethroughit.Again,they’reallwrong.

SoIthinkthatwe’reinaverygoodpositiontowinthisthing.Andsowelookforwardtothe--totheupcomingvoteandthere’snowaywe’regoingtowalkawayatthispoint.We’rewaitinguntilDecember18th.




Operator:

YournextquestioncomesfromthelineofTimChangfromCRTCapital.Yourlineisopen.

TimChang(Analyst-CRTCapital):

Hi,Mike.Youknow,Iwaslookingatthepipelinechartandyoutalk--andyouhavethisproduct,Emerade.Imean,why--what’sthelimitingfactoringettinganauto-injectorforananaphylaxisintothemarketearlierthanlate2016intheUS?

Imean,whatdoyouhavetodobetweennowandthentogetthisproductonthemarket?


Yes,there’sonlytwothings

Andthenthere’ssortofthistimeandmotionstudyyouhavetodo.Iforgotthetechnicaltermtoshowthe--youknow,thatit’seasyenoughforpatientstouse.We’llhopefullybeatthatdate,but,youknow,thisisarealsleeperforus.

Iknowsomepeoplesortofsaid--pooh-poohedthisone,buttheEuropeanunionisactuallycontemplatingcurrentlywhethertheyjustrecommendthisproductacrosstheboardgiven--youknow,givenitssignificantbenefitscomparedtowhat’soutthereonthemarket.

Soit’samajor,majormarket.IntheUS,it’sover$1billionaloneandwearedoingeverythingtotrytoexpeditethatandgetitapproved.


Justonefollow-up,Mike.IthinkyouhadoriginallyhighlightedforJubliathatyou’dspendabout$80millioninthesecondhalfof’14.Youknow,giventhechangeswithyourmarketing,Imean,hasthatnumberchangedmaterially?


Well,actuallywe’respendingmorethanweoriginallyforecastedforJublia.We’regoingtogetTVmuchsoonerthanwethought.Wethoughtitwouldnotbeuntilsortof--sortofthe--earlyDecember.It’snowgoingtobeearlyNovember.

Wehave--we’readdingmorerepsthatwehadoriginallythoughtgiventheinitialsuccessforthat.Somyguessiswe’llprobably--thenwe’llprobablybecloserthan$100millionthatwe’respendingforthatandLuzu,whichthosearethesamemarkets.

Andsomyguessiswe’llprobablyoverspend,butwe’realsogetting,youknow,additionalrevenuesthatwedidn’texpectweweregoingtogetandtheadditionalprofitthatwedidn’t--wehadnotbuiltintoourforecasteither.


Okay.Great.Thanks.

Operator:

YournextquestioncomesfromthelineofDavidRisingerfromMorganStanley.Yourlineisopen.

DavidRisinger(Analyst-MorganStanley):




Yes,thanksverymuch.


Allright.We’llgoontothenextone.

Operator:

YournextquestioncomesfromthelineofGaryNachmanfromGoldmanSachs.Yourlineisopen.

GaryNachman(Analyst-GoldmanSachs):

Thanks,goodmorning.Mike,ofthetotalorganicgrowthforthecompany,couldyoubreakdowntheroughsplitbetweenpriceandvolume?Yousaidmorevolumethanpriceinaquarter,butmaybejustquantifyhowmuchpricecontributed.

AndthenHoward,withtherecentchangesintaxpolicy,willthatimpactyourabilitytouseyourfavorabletaxstructureatallwithM&AincludingtheAllergandeal?Justwanttoconfirmthat.Thanks.


Yes,Idon’thave--Gary,Idon’thavetheprecisebreakdownandwe’llgetbacktoyou,Iguess,offline.We’llhavetoget--wedeliveredearningsearlythisquarteronpurpose.Wewantedtogetitoutbeforetherecorddate.

Wedoknow--wedon’thaveallthenumbersfromaroundtheworld,butwedoknowthatit’sgoingtobedefinitelymorevolumethanprice.


Well,maybejusttocommentonthat,whereareyouseeingthemostpricingflexibilityinyourbusiness?


Well,that’sclear.It’sintheorphan--youknow,theorphancategoryandsomeofourtailproducts.That’sthemainareas.Inalotofourbusinesswegetnoprice,youknow?Thatvastmajorityof,youknow(inaudible)contactlenses,there’snoprice,searchbuilders,nopriceconsumer.

WhenIsay,“noprice,”it’sthelowsingle-digitprice.Emergingmarketsintherestoftheworld,Europe,noprice.Andsoit’sconcentratedinsortoftailproductsintheUS


Okay.That’shelpful.


Andintermsoftaxpolicy,there’snothingthat’sbeentalkedabout,youknow,theTreasuryregulationswouldhavenoimpactonus.We’renotaninvertedcompany,youknow?We’renot--we’renotdoingtheseupstreamloansthewaysomecompaniesare,thehopscotchloans.

Andlastweek,thedoubleIrishstructures,wedon’thaveanydoubleIrishstructures.Clearly,ifthe–thatwouldrestrictinterestexpensedeductions,thatwouldhaveanimpactandwe’vesaidthatinthepast.

We’rewellbelowtheSafeHarbordebttoequityratio.Iftheyweretochangethatandlimitinterestexpense--andagain,ourinterestexpenseisrealcashinterestexpensebecauseourdebtisalmostallinthe




--isessentiallyallintheUS

Butifthatweretolimitdoubtthatwouldhaveanimpact,itwouldn’timpactAllerganinthewaywe’relookingatAllergan.Westillthinkthere’staxsavingsupsidesifwewereabletododiligencethatwehave--thatwehaven’tfactoredinyet,but--so,youknow,third--earningsstrippingruleshavechangedcouldhavesomeimpact,nothuge.

Wesaidsomewherebetweenzeroandthree%dependingonwheretheyendup,butagain,we’reall--it’sunclearwherethey’regoingtoendup.


Oneotherfollow-up,Gary,intermsofour2015and2016outlooksthatweputout,youmightnoticethatourgrowthratesfortheneuroandgenericsbusinesswere,again,mostlypriceincreasesopportunityiswasonly5%.

Sowe’renotassumingthatwecancontinuetotakeprices.We’velookedtothefuture.Totheextentwecan,that’supside.Sowe’regoingtodowhat’sthesmartthingtodointheshortterm,butintermsofourlong-termoutlookonthebusiness,it’sprobablycomposedof80%to90%volumeand10%to20%price.

Andtotheextentwecantakemoreprice,that’llbeupsideonouroutlook.


Okay.Thankyou.

Operator:

YournextquestioncomesfromthelineofUmerRaffatfromISIGroup.Yourlineisopen.

UmerRaf fat (Analyst-ISIGroup):

Thanksfortakingmyquestion.Mike,Ijustwantedtogetintosomenumberswithyou.Sowe’verunourmassonthis,butwanttogetyourtakeonit.Sothesame-storegrowthforValeanthasbeenaround10%onanex-genericbasisforthepastseveralquartersandweknowBauschisgrowingabout10%aswell.

Sotogetto19%,that’sabout$140millioninexitrevenues.Socanyouhelpusquantifywhatthatextra$140millionofexitrevenuesisinQ3?AndthenHoward,oneforyouveryquickly.IftheAllerganbidwasraisedagain,willitcontinuetobea20%plusIRR?Thanks.


Yes,sothebigdeltainthisquarter,onewas--probablyaquarterofitisproductsthatwejustlaunched,youknow,Jublia,Luzu,Ram.08andotherproxyclears.Sotheseareproductsthatjustdidn’tevenexist.

Andsothisquarterwehavenewlaunches.Thesecondisanaccelerationofproductsthathavebeenlaunched,butweren’t,youknow,like,BiotrueDaily,youknow?It’sprobablyanotherquarter,whichwasgrowingquiteslowly,but,youknow,nowwe’regrow--nowwe’regrowingthem100%.Again,allvolume.

SoTrueLineisanotherexampleofaproductlikethatandthenumberof,youknow,thinkthisis--we’reinstallingisdoubling.Sowe’veacceleratedthegrowthonanumberofsortoflaunchedbrandsfromprioryearswhentheywereinthehandsofBausch&Lomb.




Andthenwe’vejust--youknow,thebusinesshasjusthavedone,youknow--we’vetalkedabout--we’vetalkedaboutdentalgrowing20%.Wetalkedaboutgenerics.They’vebeengrowingover20%,youknow?

Businessesarejustoutperforming.It’s,youknow--thebusinessisaccelerating.So,youknow--andwedon’texpect--we’renotgoingtoreport19%everyquarter.Iamnotprojectingthat,butwefeelquitecomfortableitwillbe10%plusfortheforeseeablefuture.


Yes,interms--intermsofanincrease--potentialincreaseproposal,Imean,that--forobviousreasons,we’renotgoingtogetintowhatwe’regoingtodoandwhenwe--Ithinkwewereprettyclearthatwehadmoretoofferandwewoulddoitatthetimewethoughtwasrightandstrategic.

AndIthinkyouknowaswellenoughtoknow,youknow,again,wedefinesuccessasdeliveringvaluetoourshareholders.Ithinkwe’rebigbelieversthatsharepricesand--willcorrelatewithreturnoncapitalovertime.

There’spointsandtimesinthemarketwheremarketfallsinlovewithearningssecretion,butthat’snotrealvalueandthat’swhatwe’refocusedon.Andwe’regoingtocontinuetobedisciplinedand,youknow,watchcarefullywherewethinkthereturnsare.

Andwe’renotgoingtodoatransactionifwedon’tbelieveourshareholdersaregettingrewardedfortherisk.


Nextquestion,please.

Operator:

YournextquestioncomesfromthelineofGreggGilbertfromDeutscheBank.Yourlineisopen.

GreggGilbert (Analyst-DeutscheBank):

Thanks.Howard,canyouquantifythenewlaunch’scontributioninthequarter?AndyoumentionedwholesalerinventorylevelsintheUSwerestable,butcanyoutalkaboutwhatthatlevelisintermsofweeks?Thanks.


Thelauncheswerearound3%thisquarterand,again,goingforwardwhenyourollitoutto’15and’16,there’llbeamuchmoresignificantpiece.AndIthinkthat’swhatgetsussoexcitedaboutthe’15and’16.

Mike--someoneaskedabouttheconfidencelevel,whatgaveustheconfidencetoincreasetheoutlook.IfyouthinkaboutJubliaalone,$80millionequalsabout--$82millionequals1percentagepointofourorganicgrowthin2015.Andwehad[$150]forJublia.

MiketalkedaboutpotentialforJublianextyear.Youcanseethepotentialforincrementalorganicgrowth.RamisgoingtobeatwhatwesaidRamandAnnexinwoulddotogether.Sothat’sadditionalupsidetoorganicgrowth.

SoIthinkstartingnextyearyou’rereallygoingtoseethepotentialoftheselaunchproductstodriveorganicgrowth.And,youknow,aswealso--we--youknow,wedid--we’vebeenaskedbecause




Allerganhasraisedissueswithin--withinvestorsaboutinventorylevels.

Ourinventorylevelswereexactlyflatonaunitbasisandactuallydeclinedonadollarbasisandthey’vebeenbasicallyflatformostoftheyear.AndIdon’thavetheexactnumberperwholesaleratthispoint,butthey’vebeenflatanddeclining.

AndIwouldexpectwe’llstayintheselevels.Wewon’tseeanybenefitofanyadditionalchanneladdandprobablygiventhegrowthofabunchoftheseproducts,weprobablywon’tseeany--havethemcomedowninthenear-termeither.

Operator:

YournextquestioncomesfromthelineofRamSelvarajufromAEGISCapital.Yourlineisopen.

RaghuramSelvaraju(Analyst-AEGISCapital):

Thanksverymuchfortakingmyquestion.IwantedtoaskaboutyourfeelingsregardingValeant’scompetitivepositioninginthecontextofthenewTreasuryregulations,whichIthinkarelikelytoimpacttaxinversionsgoingforward.

Sointhecontextofthatgiventhatyou’realreadyinataxadvantageposition,whatdoyouthinkislikelytobethecompetitiveedgethatyouhaveandtheenhancementtothatcompetitiveedgegiventhefactthatmaybesomeofyourcompetitorsarenowgoingtobelesslikelytobeabletorealizetaxsynergiesandtherefore,shouldenableyoutocontinuetobecompetitive,onepursuingfutureacquisition?


Well,Ithinkyousortofansweredthequestion.Youknow,we’renotaninvertedcompany.We’renot--thoseTreasuryregulationshavezeroimpactonourtaxstatus,ourtaxrate,andobviouslyclearlyifothersarepreventedfromreducingtheirtaxratethroughaninversion,thatgivesusanadvantage,butasMikeandIhavesaidmany,manytimes,youknow,ourobjectiveisnottocompeteaway--payawayourtaxadvantage,andthat’stopreserveforour--forourshareholdersandtotryadditionalcashflowstobeabletoredeploytocreatemorevalue.

Butweexpectthatadvantagetocontinueand,again,theTreasuryregulationswillhavezeroimpactonus.


Andthenjustgoingforward,doyouseedisproportionatestrengthinaparticularlineoftheBausch&Lombbusinessandifso,whatspecificlinedoyouthinkismostlikelytooutperformgoingforward?Isthatlikelytobeonthecontactlenssideoronthesurgicalside?


Ithinkit’sgoingtobecontactlensesandsurgical.IthinkthepharmabusinesswasrunquitewellbyBausch&Lomb.Ithinkit’llcontinuetodowell.It’sagreatbusiness,contactlenses.We’reveryexcitedabouttheUltralens.

Unfortunately,wewon’thavecommercialcapacityuntilthesecondquarter,butwe’veorderedthreeadditionallinestothefirstlinebecausewethinkthiscouldbeavery,verylargeproductgiventhereceptioninthemarketplace.

Andwe’reworkingfromaverysmallbase.So,again,it’smucheasiertogrowmarketshareifyou’reasmallplayerwithsuperiorproductsand...





Thankyou.Okay.Thankyou.

Operator:

YournextquestioncomesfromthelineofAlanRidgewayfromParadigmCapital.Yourlineisopen.

AlanRidgeway(Analyst-ParadigmCapital):

Hi.Goodmorning,guys.Thanksfortakingthequestion.Howard,youmentionedthatthestrongerbalancesheetortheimprovinginthe--improvementsinthebalancesheetwouldallowyouguystheabilitytodomoreB.D.andpotentiallyreturncashtoshareholdersthroughshareholder--sharebuyback.

Canyouguysmaybetalkabouthowyouthinkaboutthat?Doyouhavesomekindoflevelsearmarkedforoneversustheothergoingforwardandwouldthatchangewhetheryoudoordon’tgetAllerganinanacquisition?Thankyou.


Well,Imean,Alan,asyou’dexpect,wehavea--wehaveaninternalmodel.Wehaveaviewastowhatwebelievewe’reworthandwheneverwelookatanacquisition,we’reaskingourselveswhetherthisacquisitionwillcreatemorevalueversusbuyingbackourshares.

And,youknow,overthelastyearIthinkwe’vebeenhamstrungalittlebitonourdesiretodeleverandourcommitmenttodelever,pluswetiedupourbalancesheetwithAllergan.We’vebeenfrustratedinthefactwehaven’tbeenabletorepurchasesharesgiventhelevelsourstockstradedatmostofthisyearand,youknow,aswestrengthenourbalancesheetandreduceourleverage,wewillhavethatflexibilitytomakethosedecisions.

So,youknow,we’rejustexcited.It--ifyoulookatthemodelingwedidbackinJuly,we’re--Ibelievewe’llhave,youknow,$6billiontodeploycapitalforacquisitionslessifweweretorepurchasesharesbecause,ofcourse,there’snoEBITDAthatcomesinwhenyourepurchaseyourshares.

Thatgivesusasignificantamountoffirepowerandstillmaintainingastrongbalancesheet.Andthatcoupledwiththeorganicgrowthwe’vetalkedaboutwebelievereallyallowsustodrivevalueforshareholders.

Operator:

YournextquestioncomesfromthelineofMarcGoodmanfromUBS.Yourlineisopen.

MarcGoodman(Analyst-UBS):

Morning.Howard,canyoujustonslide7--IjustwanttomakesureIunderstandtheseBausch&Lombgrowthrates--soarethesegrowthratesforthe3monthsthatyouownedthemthisyearversusthe2monthsthatyouownedthemlastyearorhaveyoumadesometypeofalterationtothattofigureoutthe2monthsversus2monthsorsomethinglikethat?

Andthensecondquestionisonslide23,youlistallthesenewproductacquisitionsthatyou’vemadeorabouttomake,canyoujustgiveusasenseofhowbigtheseare,youknow,like,annualsalesforeachonejustreallyquicklyjustsowehaveasenseofhowmuchweshouldbeaddinginandobviouslyyouraisedsalesguidancebyafew$100millionfornextyear.

SoI’mtryingtofigureout,youknow,whatpartofitcomesfromthatandwhichpartisfromthebase.




Thanks.


Sure.Firstofall,justtobecrystalclear,theQ32014is100%.It’sthe3monthsversusthe3months.Soit’s--theactual3months,there’snoadjustmentsfortheAugust--aroundtheAugust5thdateandthissinceinceptionis--sinceinceptionsortofday-to-daycomingtothesalesforthosedays--thosefirst5daysinAugustinlookingattheactualsales.

Andtheonlyadjust--theonlyadjustmentsareforFX.Sothere’snoadjustments.There’snoacquisitionsinthere.There’snoadjustmentforanydivestituresordiscontinuations.Bromdayis--thedeclineofBromdayisincludedinthat.

Youknow,we--whenwepublishourorganicgrowth,we’veveryclearthatweadjustfordiscontinuations.Inthis--inthisslide,there’sbeennoadjustmentsforanythingotherthanFX


Sojusttobeclear,thisisthethreemonthsthatyouowneditthisyearandtwomonthslastyear,plustheonemonthyoudidn’tnoteit,butyoumadeitthreemonths,sowegottheactualthreemonthsversusthreemonths?


Yes,theactualsalesthisyearandtheactual3monthsof2013.


Perfect.Thankyou.


NoadjustmentsotherthanFX.Allright.Andintermsoftheacquisitions,there’sreally--these--remember,theseacquisitionsotherthanChroma,Chromaweknewwasgoingtohappen.

Wejust--well,wethoughtitwas--wejusthadn’tassignedityet.Alltheotheroneswereincludedandthey’requitesmallrightnow.[FulvasconandThin–andArmexindo]aresortof$15million,maybealittlebitlessintermsofannualrevenue.

Metformin’sinthesame--thesamekindofrange.Zeracomisevensmallerthanthat.Chromaisalittlebitlarge,butthatwasalsoincludedintheforecast.Sothere’s--inthat--inour2015outlook,therearenoacquisitionsbuiltinandallthesesmallacquisitionshavealreadybeenfactoredin.


AndChroma’showbig?


Chromaisinthe$40million,$50millionrange.


Great.





Andintermsoftheimpactonthisquarterasyoucanseeinthefootnote,itwasabout$2millionofsalesinQ3fromtheseacquisitions.So...


Andtheprecisioncompany,thatwasinthenumbersthisquarter,right?Soyouhadrevenuesof--whatkindofrevenuesdidthatdothisquarter?


Afterwe--afterweclosed?


Itwasunder$20million.Itwasbetween$15millionand$20million.


Thankyou.

Operator:

AndyournextquestioncomesfromthelineofTonyReinerfromImperialCapital.Yourlineisopen.

TonyReiner(Analyst-ImperialCapital):

Hey,guys.Thanksfortakingthecall.Iknowyou’vegotalotgoingon.CanyoupleasejustwithaquicktwominutesonwheredoyoucurrentlystandwithMr.Ackmanonyourearningsachievementsandgoingforward?


I’mnotsureIunderstandthequestionintermsof...


Well,there’sbeensome--there’sbeensomereportsthat--anditwasonTVlastweek--thatyouandMr.Ackmanweren’tonthesamepage.Soyouwanttotalkaboutitonthisforum?


Sure.Well,I’mnotsure--Idon’tthink--well,there’snobasisforthosereports.Wetalkedtohimfrequently.Infact,hewasinourofficeyesterdayforawhile.AndsoIthinkwe’recompletelyaligned.

We’realignedthatwearegoingtowinthisbattle,thatwearegoingtoacquireAllergan.Wefeelthat,youknow,we’recommittedtomarchingforwardandget--andgettingthisdealdone.


Arethingsproceedingasbothofyousawplanned?It’sobviouslybeen,youknow,alengthyprocesswithlotsofstuffplannedandstufflikethat,butoverall,wouldyousayit’sgoneasyouplanned?


SoIthinkwe--intermsofthetiming,it’saboutwherewethoughtit--we--Ithinkearlyonwethoughtthatwe’dprobablygetthespecialmeetinginNovember,Ithinkwecommunicated,butatthetime--in




December.Somaybeitflippedamonth,butcertainlynomore.

Ithinkwe’vebeenalittlesurprisedbysortofthebaselessattacksthathave--thathavebeenputonourcompanyintermsof,youknow,the--they’rejustnottrue.Andsopubliccompaniesusuallydon’tputthingsoutthatareuntrue,butanyways,IthinkourQ3performanceandouroutlookisdiscreditingthoseattacks.

AndfirstthingI’vebeensurprisedbytheboardofdirectorsthatthey’vedonenoindependentanalysis.They,youknow--youwould--youwould--youwould’vethoughtoneofthemmight,youknow--whenwecontinuetoproveeverythingtheysaidiswrong--oneofthemmight’vebreaking--brokenranks,buttheyhaven’tandthe--maybethepoorgovernance,butoverall,Ithinkwe’rehappywithwherewe’reat,we’rehappyintermsofthatthereisarecorddate.Wearepleasedwithourlegalvictoriesandwe’reverypleasedwithourperformance.


The--well,wherewouldyousaythebiggestleftfieldandthethingyouanticipatedlessmorethananything,whatwasthatduringthisprocess?


Again,I’mnotsure--Ido...


Justoverthetimeframe.Soyes,there’sbeen--youdidn’tanticipatethehostility,butoverallyouarewhereyouwanttobeandyougotthemeetingandthemeetingcertainlydeserve--and,youknow,whenMr.Ackmanwrotethese,there’salotofcreditforthat.

Wherewastheone--thebiggestleftfieldinthelastfewmonthsthatyouhaven’tanticipated?Wasitjustthehostilenatureofthem?Wasittheleaksinthepress?Wasittalkingdownyourcompany?

Which--ifyouhadtomakeonecommentonwhereyousaw--youdidn’tanticipatethishappeningduringtheprocess,whatitwouldbe?


Yes,IthinkIansweredthatquestionwhichisprobablytheattacksonus,thesortofviciousnessofthoseattackswouldprobablybethethingthat--atleast,I...


Also--butthefalsemisleading--consistentfalseandmisleadingnatureofthecomments.


So...


Understood.Thanksverymuch,guys.Iappreciatetheresponse.


Yes.





Nextquestion.


We’redone.


We’redone?


Yes.


Oh,we’redone.

Operator:

Therearenofurtherquestions.


So--allright.Sothanks,everyone.Iknowitwasalongcall.Appreciateyourpatienceandwe’lllookforwardtotalkingsoon.

Operator:

Thisconcludestoday’sconferencecall.Youmaynowdisconnect.

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