Valeant s Acquisition of Medicis: Creating a Global Leader in Dermatology September 4, 2012

Transcription

1 Valeant Pharmaceuticals International, Inc. Valeant s Acquisition of Medicis: Creating a Global Leader in Dermatology September 4, 2012

2 Forward-Looking Statements This presentation contains forward-looking statements regarding, among other things, the proposed business combination between Valeant and Medicis, Valeant's and Medicis' financial position, market position, product development and business strategy, expected cost synergies, expected timing and benefits of the transaction, as well as estimates of Valeant's future expenses and future earnings per share. Statements including words such as "believes," "expects," "anticipates," "intends," "estimates," "plan," "will," "may," "intend," "guidance" or similar expressions are forward-looking statements. Because these statements reflect Valeant's or Medicis' current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Investors should note that many factors could affect the proposed business combination of the companies, future financial results and could cause actual results to differ materially from those expressed in forward-looking statements contained in this presentation. These factors include, but are not limited to: the risk that the acquisition will not close; the risk that Valeant's business and/or Medicis' business will be adversely impacted during the pendency of the acquisition; the risk that the operations of the two companies will not be integrated successfully; Valeant's and Medicis' ability to successfully develop, commercialize and market new products; Valeant's and Medicis' ability to obtain regulatory approval of any of their respective pipeline products; competition for the business of Valeant's and Medicis branded and generic products; market acceptance of Valeant's and Medicis' future products; government regulation of the pharmaceutical industry; the outcome of any pending or future litigation or claims by third parties or the government; the risk of changes in governmental regulations; the impact of economic conditions; the impact of competition and pricing and other risks and uncertainties, including those detailed from time to time in the companies' periodic reports filed with the Securities and Exchange Commission (SEC) and in the case of Valeant, the Canadian Securities Administrators ( CSA ), including current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption "RISK FACTORS" in their annual reports on Form 10-K for the year ended Dec. 31, 2011, which have been filed with the SEC and in the case of Valeant, the CSA. The forward-looking statements in this presentation are qualified by these risk factors. These are factors that, individually or in the aggregate, could cause the companies actual results to differ materially from expected and historical results. The companies assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. 1

3 Transaction Overview $44.00 per share all cash payable to Medicis stockholders 39% premium to closing price on Friday, August 31 31% premium to 3-month average price Transaction value ~$2.6bn; expected to close in 1H13 Will deliver significant shareholder value Annual run rate cost synergies of $225+mm expected to be achieved within 6 months of closing Highly accretive to Cash EPS following closing Attractive IRR and cash payback Will take leverage to ~4.2x net debt (1) /pro forma adjusted EBITDA (2) Board and management committed to reducing leverage to below 4.0x within 12 months of closing Committed financing from J.P. Morgan for 100% of transaction value (1) Net of $150 mm minimum cash (2) Including estimated $225mm run rate synergies and giving pro forma effect to all Valeant acquisitions for full LTM period 2

4 Combination Creates A Global Leader in Dermatology Strengthens medical dermatology portfolio and brings critical mass in aesthetic dermatology, creating a leading US and Global player in both markets Ability to leverage strong Medicis reputation by adopting the Medicis name for combined Dermatology and Aesthetics organizations Builds leading dermatology and aesthetics sales forces across US and Canada by bringing together top talent from both Medicis and Valeant Combined commercial dermatology operations in Scottsdale, AZ with US corporate functions primarily based in NJ Research and Development to be located in Laval, QC, Scottsdale, AZ and Petaluma, CA Highly complementary product portfolio and pipeline to drive growth In dermatology, oral acne treatment SOLODYN complements topical acne offerings In aesthetics, RESTYLANE, PERLANE and DYSPORT add complementary injectables to our current SCULPTRA and PRO THERAPY MD offerings Robust pipeline of near-term opportunities 3

5 U.S. Dermatology/Aesthetics Market Dynamics Overall market Coverage Large (~$12+bn) and growing market Low government reimbursement Low big pharma presence Increasing self-pay component Fragmented competition/many small players Normal managed care controls Prescribers Innovation Focused target list Primarily singles and doubles Relationship-oriented/industry-friendly Growing influence of physician assistants/nurses Predominantly through formulation innovation 4

6 Valeant Will Become Largest US Derm Company Top 15 (US) Top 15 (US) Galderma GSK (Stiefel) Medicis Nycomed Graceway Warner Chilcott Astellas Ortho derm Dermik NewCo Medicis Galderma Valeant Sandoz/Novartis GSK (Stiefel) Warner Chilcott Allergan Leo Valeant PF #1 Allergan Valeant Merz Triax Intendis/Bayer Pedinol Valeant #11 Astellas Merz Intendis/Bayer Onset Promius Aqua $0 $200 $400 $600 $800 $1,000 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Note: based on gross sales Source: Wolters Kluwer Health Integrated AWP Dollars for Rx Derm Products Only - May

7 Pro Forma Business Impact 2012 Forecast - Standalone 2012 Forecast Pro Forma 29% 23% 20% 51% 16% 61% US Canada/Australia Emerging Markets US Canada/Australia Emerging Markets 6

8 M E D I C I S V A L E A N T Highly Complementary Dermatology Portfolio Topical Acne Oral Acne Actinic Keratosis Anti-Viral Dermatitis Anti-Fungal OTC Combination Agent 5FU Product Non-Steroidal Single Agent Imiquimod Product Steroidal 7

9 M E D I C I S V A L E A N T Highly Complementary Aesthetic Portfolio Collagen Stimulator Dermal Filler Botulinum Toxin Physician dispensed 8

10 Strong Late Stage Pipeline Late Stage Pipeline Dermatitis A. Keratosis Acne Anti-Fungal Aesthetics OTC Novel Lifecycle Management 9

11 Medicis Transaction Is Consistent with Valeant Business Development Model Strategic Criteria Financial Criteria Niche market Avoid big pharma Cash pay / limited government reimbursement Durable assets Low-risk, near-term R&D and lifecycle management Base Case Conservative forecasts 36% tax rate With cost synergies U.S. and Canada only No pipeline Attractive IRR and cash payback 10

12 Focused Integration Strategy to Drive Synergies Retain Scottsdale, AZ location for combined business Continued use of Medicis name Corporate support functions in NJ Best of the best selection process for personnel to build a stronger organization $225+mm in annual run rate cost synergies expected to be achieved within 6 months of closing 11

13 Successful Acquisition & Integration Track Record Selected Transactions Include: AcneFree and certain assets from University Medical Atlantis Pharma Aton Pharma Biovail/Valeant (MOE) Coria Labs Dermik Dow Pharmaceutical Sciences Elidel & Xerese (rights from Meda) Eyetech, Inc. GL Pharma inova Pharmaceuticals OraPharma Ortho Dermatologics Assets Pedinol Pharmacal Pelenova Biotecnologia PharmaSwiss Probiotica Laboratorios Sanitas Swiss Herbal Remedies Limited Zovirax U.S. & Canada 12

14 Ortho / Dermik Dermatology Precedent Rapid Synergy Realization December 2011 Acquisitions Total Dermik Total Pre- Total Post VRX Derm & Ortho Synergy Synergy Headcount OpEx $84.5 M $151.3 M $235.8 M $125.1 M Total Synergies of $110.7M Achieved in 1Q12 13

15 Balance Sheet Impact Transaction value ~$2.6bn; expected to close in 1H13 Committed financing from J.P. Morgan for 100% of transaction value Expect to finance transaction with combination of term loan and bonds ~4.2x Net Debt (1) / pro forma adjusted EBITDA (2) Board and management committed to reduced leverage to below 4.0x Expect to achieve within 12 months, while continuing to pursue small tuck-in acquisitions (1) Net of $150 mm minimum cash (2) Including estimated $225mm run rate synergies and giving pro forma effect to all Valeant acquisitions for full LTM period 14

16 Q&A

17 Valeant Pharmaceuticals International, Inc. Valeant s Acquisition of Medicis: Creating a Global Leader in Dermatology September 4, 2012