Bausch Health Companies Inc.

Greetings. Welcome to the Bosch Health First Quarter 2025 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 will now turn the conference over to your host, Garen Serafian, Investor Relations at Bosch. You may begin.

Good afternoon, and welcome to Bosch Health First Quarter 2025 Earnings Conference Call. Participating in today's call are Thomas Appio, Chief Executive Officer of Bausch Health, and JJ Chiron, Chief Financial Officer. Before we begin, I would 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 pages 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. These refer to our SEC filings and our 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 as an alternative to measures calculated in accordance with GAAP. You will find reconciliations of our historic non-GAAP measures in the appendix of the pages that accompany this presentation, which are available on Bausch House 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, Wednesday, April 30th, will focus on Bausch House, excluding Bausch and Long, However, we will briefly comment on Bausch & Lomb's results announced this morning. We will refer to year-over-year comparisons with the same period last year unless otherwise noted. With that, I would like to turn the call over to our CEO, Thomas Zappio. Tom?

Thank you, Garen, and welcome to everyone joining our earnings call today. In the first quarter for Bausch Health, excluding Bausch & Lomb, we continued the momentum we had in 2024 and used it strategically to drive further progress. We delivered year-over-year revenue and adjusted EBITDA growth of 6% and 14% versus the prior year respectively. We successfully completed a $7.9 billion refinancing effort in early April to extend near and medium-term maturities. We received a favorable ruling from the DC District Court in Norwich case against the FDA after the quarter closed. And finally, we are maintaining full year 2025 revenue and adjusted EBITDA guidance while updating guidance for adjusted cash flow from operations to reflect higher interest rate expense. JJ will discuss our financial results in more detail shortly. I will start by touching on several financial performance and key business highlights from the first quarter. We started the year off strong, with Bausch Health, excluding Bausch & Lomb, achieving an eighth consecutive quarter of year-over-year revenue and adjusted EBITDA growth. I'm incredibly thankful and grateful of our global team for their hard work and dedication in the current macroeconomic environment. Revenues for Bausch Health, excluding Bausch and Loan, increased 6% on a reported basis and 7% on an organic basis when compared to the first quarter of 2024. Adjusted EBITDA for Bausch Health, excluding Bausch and Loan, increased by approximately 14% compared to the prior year period. As such, we are maintaining our full year 2025 guidance for revenue, and adjusted EBITDA while updating guidance for adjusted operating cash flows to reflect our successful refinancing transaction. And as JJ will touch on in his prepared remarks, we continue to assess the impacts on our business of evolving tariff and trade measures. We also made progress on our objective of optimizing our capital structure. On April 8th, we closed a private offering of senior secured notes due in 2032 and also entered into a new term loan and revolving credit facility maturing in 2030, the proceeds of which we used in large part to retire approximately $6.9 billion of maturities ranging from 2025 into 2028. This transaction extends our maturity runway and provides the company with additional financial flexibility, allowing us to focus on growing our business and maximizing the value creation for our shareholders. Furthermore, we believe that the tremendous demand we saw in the credit markets underscores investors' confidence in both our future performance as well as the long-term value of our assets. Turning to litigation in Norwich. As many of you are aware, the FDA denied final approval of Norwich's second ANDA for generic Rifaximin 550 MG tablets. Following this decision, Norwich sued the FDA in the DC District Court, alleging that the FDA acted improperly by only granting tentative approval to their second ANDA rather than final approval. Norwich asked the DC District Court to find that Teva had forfeited its first filer status for a Faxman 550 and forced the FDA to grant final approval to their second ANDA. We, along with Teva, intervened as defendants in the FDA lawsuit. We are pleased that on April 17th, the DC District Court granted summary judgment in favor of the FDA, Teva, and the company. The D.C. District Court confirmed that the FDA's decision denying final approval of Norwich Andor was not arbitrary, capricious, or contrary to law because Teva had not forfeited its first filer status. We will continue to vigorously defend our intellectual property and are committed to serving our patients as every patient deserves better health outcomes and the chance to make the most of life. Moving on to page six, where I will touch upon segment-specific key financial and operating highlights in the first quarter. The first quarter reflected a solid performance in growth on an organic basis across many of our business segments. Salix grew 6% on an organic basis versus the prior period and continued to deliver strong Xifaxa performance of 8% growth, including 1.5% total retail script growth and strong non-retail extended unit growth of approximately 6%. Salta. trend of strong double-digit growth continued in the first quarter of 2025, with 33% organic revenue growth primarily driven by strong performance in South Korea and China, with year-over-year organic growth of 136 and 30% respectively. Our international segment demonstrated continued resilience, achieving organic revenue growth across Canada, Latin America, and EMEA, with EMEA marking its ninth consecutive quarter of organic revenue growth. Other highlights include Canada's 18% promoted products portfolio growth and 9% growth in EMEA's second largest market, which is comprised of Serbia and Montenegro. And lastly, the diversified segment grew revenue modestly, driven by neurology, and delivered growth in segment profit in part due to disciplined expense management. Now turning to our strategic priorities for 2025. Although we have achieved eight consecutive quarters of growth, we believe the stock price does not reflect the strong performance of the business and the value of the company. Unlocking value is critical. We have continued to deliver strong financial momentum. with revenue and earnings growth across multiple segments to start the year. And we successfully completed the major refinancing initiative mentioned earlier. Yet we are keenly aware that work still needs to be done to unlock shareholder value. Therefore, we remain committed to evaluating all options for unlocking the value of our shares, including maximizing the value of our Bausch Health and voucher loan assets, as well as other possible initiatives, such as share buybacks. Next is growth. With eight consecutive quarters of year-over-year top-line and bottom-line growth, we continue to invest for sales growth and profitability as we expand across segments and geographies. Zyfaxan's 8% growth this quarter was broad in terms of both price and volume. As it relates to volume, growth was generated across both indications, IBSD and OHE. Activating new patients is core to pharmaceutical product growth, and in the first quarter, over 59,000 new patients were started on Zyfaxan. This represents both year-over-year and quarter-over-quarter growth. Our sales force and our media investments drove the growth as we increased our investments in high ROI channels, such as online streaming, connected and addressable TV, and online video. This positioned us to better reach and activate patients, caregivers, and providers as seen with our first quarter results. representing our fifth consecutive quarter of top-line growth in our Salix business. The Xifax and Salesforce continues to become more productive as we fine-tune our AR engine. Our Salesforce today delivers 20% to 30% more calls than we did 18 months ago and to the right targets, a clear indicator of operational momentum. This increased efficiency has enabled us to do more and deploy resources to other strategic investments for the franchise. SALTA also delivered exceptionally strong results with 33% organic revenue growth, including 136% in South Korea and 30% in China in the first quarter. Importantly, growth was further supported by positive results in the United States, Canada, As announced in our recent press release in April at the American Society of Laser Medicine and Surgery 2025 Annual Conference, we launched Next Generation Fraxel called Fraxel FTX. We have rollouts planned for dermatologists, plastic surgeons, and other licensed professional over the coming months in the United States. And most recently, on April 29th, Bausch Health announced that Health Canada has granted medical device license clearance for our latest generation Thermage FLX device for non-evasive skin tightening and contouring. Canadian providers will now gain access to the same technology in use by leading aesthetics clinics elsewhere in the world. Captrio, the first combination product for the treatment of acne vulgaris, continues to build momentum in North America. In the U.S. alone, we are seeing healthy, sequential, double-digit script growth with over 8,900 healthcare providers having now prescribed Captrio. Now turning to innovation. New product flow is intrinsic to creating value with Bausch Health. We are focused on developing our pipeline internally and seeking licensing opportunities externally. We have a disciplined process for examining opportunities at a detailed level in terms of strategic, operational, and financial logic. We are focused on opportunities with a reasonable probability of technical and regulatory success and that create operating leverage, revenue, and earnings in the near term. Starting with our internal product pipeline, we are pleased with the progress of our Red Sea program, where our phase three global studies remain on track. As we have shared previously, both studies were fully enrolled in the third quarter of last year, and we expect to see the initial data read out by early 2026. To recap, The Red Sea program is studying a solid soluble dispersion rifaximin complex in a unique patented non-crystalline water soluble form that enables delivery throughout the entire gastrointestinal tract. Red Sea is also being studied in patients with cirrhosis from any form of liver disease. The patient population is innovative as these are cirrhotic patients being studied prior to their first decompensation event. In the United States, this patient population is at least three times larger than the OAT population that Zyfaxan serves today. This is also a very meaningful global opportunity for Bausch Health and, if successful, may enable us to address an unmet need and deliver a novel therapy to cirrhotic patients globally. We are already working cross-functionally across multiple areas to sequence global regulatory filings, US NDA planning, and ensuring adequate global product supply. We are also systematically evaluating additional data generation opportunities, both to enhance our current profile in cirrhosis and to evaluate new indications that have potential to impact the gut-liver-brain access. On the business development front, we are expanding into the cardiometabolic market in Latin America. We have two brands already licensed with launches planned to start at the end of May. We look forward to more progress on this front as the year progresses. As a reminder, we also signed an exclusive licensing and supply agreement with George Medicines in December. The partnership grants Bausch Health the exclusive rights to seek regulatory approval of and to commercialize GMRX2 in Canada, Mexico, Colombia, and Central America. GMRX2 is intended for the treatment of hypertension, including initial treatment. This is a proprietary single-pill combination of three classes of antihypertensive medicines. an angiotensin receptor blocker, a calcium channel blocker, and a diuretic. Developed in ultra-low, low, and standard dose options, it has the potential to be the only triple combination approved for the initial treatment of hypertension. The innovative formulation aims to optimize efficacy, safety, and adherence. with a multi-mechanism approach and at lower dosing than today's therapies. GMRX2 is designed to deliver the synergistic benefits of a triple therapy while maintaining tolerability. This is a unique opportunity for advancing cardiometabolic care in these regions that will leverage our expertise and infrastructure. To wrap up on the first quarter, I am encouraged by our strong start to the year, building on our great progress in 2024. We executed against our operational objectives while making significant strides in improving our capital structure and optimizing across our businesses. We remain critically focused on maximizing shareholder value with urgency. Despite the volatile macroeconomic environment, we remain confident in the durability and growth path of our business as we leverage our broad and diverse footprint and the results-driven mindset of our talented global team. With that, I will pass it over to JJ to discuss the financial results in more detail.