Bausch Health Companies Inc.

first quarter 2024 earnings call. At this time, all participants are on 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 Serafian, Investor Relations at Bausch. You may begin.

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 House, and John Barresi, Interim Chief Financial Officer. Before we begin, I'd like to remind you that our presentation today contains forward-looking information. We ask you to take a moment to read the forward-looking statements 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 forward-looking statements. 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. 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 guidance. Our discussion today, Thursday, May 2nd, will focus on Bausch House, excluding Bausch & Lomb. However, we will briefly comment on Bausch & 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?

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. 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. 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 BNL was 504 million an increase of approximately 9% compared to the prior year. We also continue to make progress on our key R&D initiatives during the quarter in line with our established timing goals. First, for amicillomat, in April, we met with the FDA for an end of phase two meeting and a phase three planning meeting for mild to severe ulcerative colitis, UC. In addition, We were also pleased for Amicillimod to have been accepted for a podium presentation at Digestive Week on May 19th. 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. And third, we are pursuing approval of CAB TRIO 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 11th, 2024, the US Court of Appeals for the Federal Circuit affirmed the US District Court of Delaware's August 10th 2022 judgment and also the May 17th, 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 Zyfaxan until October 2029. On April 5th, 2024, we filed a patent lawsuit against Amniel Pharmaceuticals following the receipt of a notice of paragraph four certification stating that Amniel had submitted an ANDA to the FDA seeking approval to market a generic version of Zyfaxan. This action formally initiates the litigation process under the Hatch-Waxman Act and triggers a 30-month stay of any potential FDA approval for amniosanda. 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. 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. 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 the $250 million of bonds with 2025 and 2026 maturities, as noted on our year-end call. 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 and L. Any decision regarding if and when a separation occurs or 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 approvals. Turning now to an overview of our segment performance for the quarter starting on slide eight. Salix revenue grew slightly year over year with reported growth of 1% and organic growth of 2%. driven by Xifaxin and Relastor offset by net pricing pressure for Trulance and certain non-promoted products. During the quarter, we continue to see an increase in demand for our key products, Xifaxin, Relastor, Trulance, with TRX growth of 3%, 3%, and 9%, respectively. Overall, Zyfaxion 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 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. 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 Euceris 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 and 23% on organic basis, led by Asia Pacific. Importantly, we are pleased to see the US return to growth, posting 14% year-over-year growth in revenue. We remain highly focused on maintaining momentum in Asia with Thermage FLX 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. 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 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 continue to capitalize on opportunities in the market created by competitor supply constraints. While we did see volume declines in Wellbutrin and Aplenzin 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 nine, starting with our GI pipeline. As you will recall, in December, we announced positive top line results from our phase two study evaluating Amicillimod, an S1P antagonist for the treatment of UC. We held a phase three planning meeting with the FDA in April and expect to meet with the international authorities including in EMEA and Japan later this year. In the meantime, we are pleased that Amicillimod 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 two 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 and cirrhosis, our global program focused on assessing the efficacy of our Rifaximin SSD formulation versus placebo to delay the occurrence of hepatic encephalopathy-related hospitalizations. 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. Together, these studies are expected to include over 1,000 patients across North America, Europe, and Asia Pacific. 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 of 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. 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. 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 the first quarter performance.