Bausch Health Companies Inc.

Greetings. Welcome to the Bausch Health second 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 Serafian, Investor Relations at Bausch. You may begin.

Good morning, and welcome to Bausch Health's Second 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. 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 operating 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 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. do not undertake any obligation to update guidance. Our discussion today, Thursday, August 1st, will focus on Bausch-Hoff, 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?

Thank you. and welcome to those of you joining the call this morning. I am pleased with the continued positive momentum we saw in the second quarter following our strong start to the year, positioning us well to continue to drive growth and execute against our strategic priorities in the back half of the year, all while focused on patient-centered outcomes. The second quarter marked our fifth consecutive quarter of year-over-year growth in both revenue and adjusted EBITDA. For the second quarter of 2024, revenues for Bausch Health, excluding BNL, were $1.19 billion, up 55 million or 5% on a reported basis and 6% on an organic basis when compared to the second quarter of 2023, with organic growth in all of our segments led by Zyfaxan with 10% organic growth year over year and Solta with 19% organic growth led by Asia Pacific where our business approximately doubled in South Korea with China and Taiwan each posting high teens organic growth. Adjusted EBITDA for Bausch Health excluding BNL was $614 million an increase of approximately 8% compared to the prior year. John will provide additional commentary on the financial results later in the call. I want to touch on other key developments during the quarter. As we previewed during last quarter's earnings call, in May we presented data related to our Phase II trial for amicillimod for mild to moderate ulcerative colitis at Digestive Disease Week's annual conference. I attended this conference and I had the opportunity to meet with a number of key opinion leaders and other industry participants in the gastroenterology space. I came away from these discussions with a clear sense that our efforts are reinforcing our strong positioning in this area with healthcare providers. At the European Association for the Study of the Liver Conference in June, we presented data comparing Rifaximin monotherapy to Lactulose monotherapy in preventing overt hepatic encephalopathy recurrence in cirrhosis patients with a history of OHE, which suggests Rifaximin monotherapy has the potential to be a viable treatment option for OHE recurrent risk reduction in the appropriate patient population. Also in June, I had the opportunity to meet with our CELTA China team, including our newly appointed China Vice President and General Manager, for this important and high growth market in our new offices in Shanghai. While there, I had the opportunity to review the Thermage FLX launch. I left impressed by the commitment and enthusiasm of the team and with the excitement about the opportunities for Solta in the Asia Pacific markets. I also want to take a moment to highlight important changes to our executive leadership team. Amy Lennar has joined the company as Executive Vice President, U.S. Pharma, with the responsibility for the leadership of the salix, neurology, and generics businesses, as well as market access and commercial operations. Amy brings more than 20 years of experience in the pharmaceutical industry, most recently with Galderma, as well as AbbVie and Allergan. We also recently announced that our search for Chief Financial Officer has concluded and that JJ Charjon will join us in mid-August. JJ has extensive experience leading financial organizations in the healthcare technology and service industries. I also want to thank John Barresi for all his hard work and dedication as interim CFO in addition to his other responsibilities. He will resume his role as Senior Vice President and Chief Accounting Officer and remain a valued member of the financial leadership team. The additions of Amy and JJ will bring valuable perspective and expertise to the company, and I'm looking forward to closely partnering with them and with our teams to drive our transformation into a globally integrated and innovative healthcare company trusted and valued by patients, healthcare providers, employees, and investors. Speaking of innovation, I will now turn to our R&D pipeline. We continue to make progress on our key R&D initiatives during the quarter and are tracking in line with our previously established timing goals. Starting with our GI pipeline, for Amicillimod, in June we submitted our draft protocol for our phase three clinical trial for patients with moderate to severe UC to the FDA and plan to meet with authorities in EMEA in the second half of the year. We also continue to move forward with evaluating phase two program for Crohn's disease. Our two global phase three studies for our Red C program with rifaximin for reduction of early decompensation and cirrhosis are in the treatment phase. These studies are focused on assessing the efficacy of our Rifaximin SSD formulation versus placebo to delay the occurrence of hepatic encephalopathy-related hospitalization. Top-line results for these studies, which together include over 1,000 patients across North America, Europe, and Asia Pacific, are expected by early 2026. In our dermatology business, we are pleased with the initial response to our U.S. launch of Captreo, with further marketing efforts planned for this product in the back half of the year. We also anticipate that Captreo will be approved in Canada in the second half of the year. Turning now to our aesthetics pipeline. As we have discussed, Thermage FLX and the TR4 return pad have launched in China as a medical device. Early results are consistent with our expectation and the product has been well received in the market. In Q2, we also filed an FDA submission for our next generation Fraxel, a fractionated laser device for skin resurfacing and continue to expect 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, New Zealand, and the Philippines this year, representing our first approvals outside of the United States and our plan for regulatory submission in 2024 for Europe, Asia Pacific, and Canadian markets remained on track. Overall, we feel good about the initiatives the team is driving forward related to new market authorizations and next generation products as we continue to grow this global durable portfolio of aesthetics products. Moving to developments with respect to Xifaxan litigation. Regarding Norwich's first ANDA for Xifaxan 550, as you will recall, on April 11th, 2024, the US Court of Appeals for the Federal Circuit affirmed the decision of the US District Court for the District of Delaware. Subsequently, both we and Norwich petitioned the court for a rehearing or a hearing en banc, and both petitions were denied by the court. This ANDA remains barred from approval by the FDA until October, 2029. During the second quarter, we initiated lawsuits in the U.S. District Court for the District of New Jersey regarding Norwich's amended ANDA and Abneal's ANDA directed to Xifaxin 550 milligram for IBSD. 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. We also continue to prepare for the first trial and the remaining shareholder opt-out cases. which is currently scheduled to commence on September 3rd. 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 currently anticipated outcome of these settlements does not have a material impact on the company's results or cash flows. We remain focused on our balance sheet and liquidity, ending the second quarter with approximately $1.5 billion of liquidity. In Q2, we repaid over $360 million of debt, including repurchasing approximately $305 million of bonds with 2025 maturities. 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. 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 circumstance. Any potential separation will also be subject to shareholder and other applicable approvals. 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 Baresi, who will provide further details on our second quarter performance. John?