Valeant 4Q15 Earnings Call Notes

Valeant Pharmaceuticals’ (VRX) CEO Michael Pearson on Q4 2015

There’s some good news and some bad news

“So as you all know, I have been back from my medical leave for about two weeks and I have had a chance to review what is happening in the businesses and there is a mixed combination of some good news and some bad news, and I just wanted to take a few minutes to sort of give you my assessment and then what we plan to do about it.”

Committed to reducing prices

“First, our approach to pricing. We have already committed to reducing pricing on our brand in dermatology and ophthalmology products, within the Walgreens portfolio an average 10%. This price reduction is on lack, and will impact and will be taken across all channels, not just Walgreens. Other price increases will be modest and in line with market and payer contracts.”

No plans for divestitures

“In terms of divestitures, as a public company, we continue to review our assets in order to maximize shareholder value. We have no current plans to divest any major platform. However, we will continue to look at our non-strategic assets and make appropriate decisions.”

Subject on ongoing investigation

“Finally, we are the subject to several ongoing investigations. These include investigations by the U.S. Attorney’s Office for Massachusetts in the Southern District of New York, the SEC, and Congress. We are cooperating in these investigations and have provided and will be providing documents, information, and testimony in this various investigations; whether pursuing to subpoenas or otherwise.”

Business is not operating in all centers

“So, in summary, our business is not operating in all centers, but we and I are committed to gain it back on track. We have a set of terrific products and brands and a loyal set of physicians, patients, and customers, to both revenue enhancement cost reduction, we are confident that we can and again will be able to begin to deliver the cash flows or shareholders and debt holders are accustomed to.”

We have to earn back credibility

“In terms of management credibility, we have to earn it. And you raised some terrific points, I would argue January, I don’t think we said a whole lot in January, I think it was in a hospital but I do accept your point and it starts with me. So, our team has been working hard and we are deliver on our commitments. So, the world has changed to some degree since December but we have to do a better job. We’ve had some underperforming businesses; that’s on us. Right that’s totally on us. So we have to earn back the credibility we have to deliver on the results, we have to meet or exceed this guidance and I think we are all recognize that. And so it’s a bit of a starting over point at this point for me and the company. And clearly if we don’t deliver, then again that’s on me. And but I can assure you, I am completely committed to making sure that we do deliver and I do think we knew we have a lot more line of sight in terms of managed care at this point.”

I’m not aware of any golden parachute if I get fired

“actually I think I am pretty modest if I got fired. It’s pretty modest they maybe referring to some stock that is invested that’s not delivered until in the future but that’s been divested, I mean, that was. So, David I am not aware of any golden parachute that I have.”

Linda LaGorga

Balance sheet is key priority for 2016

” One of our key 2016 priorities is to focus on our balance sheet. We remain committed to using the vast majority of our cash flow to pay down debts. At our Investor Day in December, we said we expect to pay down more than 2.25 billion of permanent debt in 2016.”

Robert Rosiello

We believe in our mission

“And I think that’s what motivates our team. I think we believe in our mission. We believe in what our company is trying to achieve and that’s what we do day-to-day. The issues surrounding us are distracting and it takes courage to forge ahead to execute our mission day-to-day in the face of all that. So, all I can say is we have fabulous people we are blessed to have them, we believe in them and we think they’ll do the right thing for the business.”