The Valeant Approach –

An Enduring Engine for Growth

May 28, 2014

Filed by Valeant Pharmaceuticals International, Inc.

(Commission File No. 001-14956) pursuant to Rule 425

under the Securities Act of 1933 and deemed filed pursuant

to Rule 14a-12 under the Securities Exchange Act of 1934

Subject Company:  Allergan, Inc.

Commission File No.: 001-10269

The following is the presentation used during Valeant’s

Investor Presentation on May 28, 2014:

1

Forward-looking Statements

Forward-looking Statements

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities laws. 

These forward-looking statements include, but are not limited to, statements regarding Valeant Pharmaceuticals International, Inc.’s (“Valeant”) offer to acquire

Allergan, Inc. (“Allergan”), its financing of the proposed transaction, its expected future performance (including expected results of operations and financial guidance),

and the combined company’s future financial condition, operating results, strategy and plans.  Forward-looking statements may be identified by the use of the words

“anticipates,”

“expects,”

“intends,”

“plans,”

“should,”

“could,”

“would,”

“may,”

“will,”

“believes,”

“estimates,”

“potential,”

“target,”

“opportunity,”

“tentative,”

“positioning,”

“designed,”

“create,”

“predict,”

“project,”

“seek,”

“ongoing,”

“upside,”

“increases”

or “continue”

and variations or similar expressions. These statements are based upon

the current expectations and beliefs of management and are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual

results to differ materially from those described in the forward-looking statements.  These assumptions, risks and uncertainties include, but are not limited to,

assumptions, risks and uncertainties discussed in the company’s most recent annual or quarterly report filed with the Securities and Exchange Commission (the “SEC”)

and the Canadian Securities Administrators (the “CSA”) and assumptions, risks and uncertainties relating to the proposed merger, as detailed from time to time in

Valeant’s filings with the SEC and the CSA, which factors are incorporated herein by reference.  Important factors that could cause actual results to differ materially

from

the

forward-looking

statements

we

make

in

this

communication

are

set

forth

in

other

reports

or

documents

that

we

file

from

time

to

time

with

the

SEC

and

the

CSA, and include, but are not limited to:

The ultimate outcome of any possible transaction between Valeant

and Allergan including the possibilities that Valeant will not pursue a transaction  with

Allergan and that Allergan will reject a transaction with Valeant;

If

a

transaction

between

Valeant

and

Allergan

were

to

occur,

the

ultimate

outcome

and

results

of

integrating

the

operations

of

Valeant

and

Allergan,

the

ultimate outcome of Valeant’s pricing and operating strategy applied to Allergan and the ultimate ability to realize synergies;

The

effects

of

the

business

combination

of

Valeant

and

Allergan,

including

the

combined

company’s

future

financial

condition,

operating

results,

strategy

and

plans;

The effects of governmental regulation on our business or potential business combination transaction;

Ability

to

obtain

regulatory

approvals

and

meet

other

closing

conditions

to

the

transaction,

including

all

necessary

stockholder

approvals,

on

a

timely

basis;

Our ability to sustain and grow revenues and cash flow from operations in our markets and to maintain and grow our customer base, the need for innovation

and the related capital expenditures and the unpredictable economic conditions in the United States and other markets;

The impact of competition from other market participants;

The development and commercialization of new products;

The availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary

capital expenditures, either through (i) cash on hand, (ii) free

cash flow, or (iii) access to the capital or credit markets;

Our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default of

our other obligations under cross-default provisions; and

The

risks

and

uncertainties

detailed

by

Allergan

with

respect

to

its

business

as

described

in

its

reports

and

documents

filed

with

the

SEC.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary

statement.  Readers are cautioned not to place undue reliance on

any of these forward-looking statements. These forward-looking statements speak

only as of the date hereof.  Valeant undertakes no obligation to

update any of these forward-looking statements to reflect events or circumstances

after the date of this communication or to reflect actual outcomes

2

More Information

Additional Information

ADDITIONAL

INFORMATION

This

communication

does

not

constitute

an

offer

to

buy

or

solicitation

of

an

offer

to

sell

any

securities.

This

communication

relates

to

a

proposal

which

Valeant

Pharmaceuticals

International,

Inc.

(“Valeant”)

has

made

for

a

business

combination

transaction

with

Allergan,

Inc.

(“Allergan”).

In

furtherance

of

this

proposal

and

subject

to

future

developments,

Valeant

and

Pershing

Square

Capital

Management,

L.P.

(“Pershing

Square”)

(and,

if

a

negotiated

transaction

is

agreed,

Allergan)

may

file

one

or

more

registration

statements,

proxy

statements

or

other

documents

with

the

SEC.

This

communication

is

not

a

substitute

for

any

proxy

statement,

registration

statement,

prospectus

or

other

document

Valeant,

Pershing

Square

and/or

Allergan

may

file

with

the

SEC

in

connection

with

the

proposed

transaction.

INVESTORS

AND

SECURITY

HOLDERS

OF

VALEANT

AND

ALLERGAN

ARE

URGED

TO

READ

THE

PROXY

STATEMENT(s),

REGISTRATION

STATEMENT,

PROSPECTUS

AND

OTHER

DOCUMENTS

FILED

WITH

THE

SEC

CAREFULLY

IN

THEIR

ENTIRETY

IF

AND

WHEN

THEY

BECOME

AVAILABLE

AS

THEY

WILL

CONTAIN

IMPORTANT

INFORMATION

ABOUT

THE

PROPOSED

TRANSACTION.

Any

definitive

proxy

statement(s)

(if

and

when

available)

will

be

mailed

to

stockholders

of

Allergan

and/or

Valeant,

as

applicable.

Investors

and

security

holders

will

be

able

to

obtain

free

copies

of

these

documents

(if

and

when

available)

and

other

documents

filed

with

the

SEC

by

Valeant

and/or

Pershing

Square

through

the

web

site

maintained

by

the

SEC

at

http://www.sec.gov.

Information

regarding

the

names

and

interests

in

Allergan

and

Valeant

of

Valeant

and

persons

related

to

Valeant

who

may

be

deemed

participants

in

any

solicitation

of

Allergan

or

Valeant

shareholders

in

respect

of

a

Valeant

proposal

for

a

business

combination

with

Allergan

is

available

in

the

additional

definitive

proxy

soliciting

materials

in

respect

of

Allergan

filed

with

the

SEC

by

Valeant

on

April

21,

2014

and

May

28,

2014.

Information

regarding

the

names

and

interests

in

Allergan

and

Valeant

of

Pershing

Square

and

persons

related

to

Pershing

Square

who

may

be

deemed

participants

in

any

solicitation

of

Allergan

or

Valeant

shareholders

in

respect

of

a

Valeant

proposal

for

a

business

combination

with

Allergan

is

available

in

additional

definitive

proxy

soliciting

material

in

respect

of

Allergan

filed

with

the

SEC

by

Pershing

Square.

The

additional

definitive

proxy

soliciting

material

referred

to

in

this

paragraph

can

be

obtained

free

of

charge

from

the

sources

indicated

above.

Non-GAAP

Information

To

supplement

the

financial

measures

prepared

in

accordance

with

generally

accepted

accounting

principles

(GAAP),

the

Company

uses

non-GAAP

financial

measures

that

exclude

certain

items.

Management

uses

non-GAAP

financial

measures

internally

for

strategic

decision

making,

forecasting

future

results

and

evaluating

current

performance.

By

disclosing

non-GAAP

financial

measures,

management

intends

to

provide

investors

with

a

meaningful,

consistent

comparison

of

the

Company’s

core

operating

results

and

trends

for

the

periods

presented.

Non-GAAP

financial

measures

are

not

prepared

in

accordance

with

GAAP;

therefore,

the

information

is

not

necessarily

comparable

to

other

companies

and

should

be

considered

as

a

supplement

to,

not

a

substitute

for,

or

superior

to,

the

corresponding

measures

calculated

in

accordance

with

GAAP.

The

Company

has

provided

preliminary

results

and

guidance

with

respect

to

cash

earnings

per

share,

adjusted

cash

flows

from

operations

and

organic

product

growth

rates,

which

are

non-GAAP

financial

measures.

The

Company

has

not

provided

a

reconciliation

of

these

preliminary

and

forward-looking

non-GAAP

financial

measures

due

to

the

difficulty

in

forecasting

and

quantifying

the

exact

amount

of

the

items

excluded

from

the

non-GAAP

financial

measures

that

will

be

included

in

the

comparable

GAAP

financial

measures.

Reconciliations

of

historical

non-GAAP

financials

can

be

found

at

www.valeant.com.

Note 1:  The guidance in this presentation is only effective as of the date given, May 28, 2014, and will not be

updated or affirmed unless and until the Company publicly announces updated or affirmed guidance.

3

What We Will Show Today

Our extremely talented, hard-working business leaders, working in a

decentralized model, are relentlessly focused on and delivering

organic growth

We have maintained / accelerated revenue growth for

nearly every platform asset we have acquired

Bausch + Lomb’s organic growth has accelerated from 4%

to 10%+ since acquisition, almost exclusively through

volume growth. We remain on track to over-achieve our

original cost synergy targets

Our output-driven R&D approach has delivered more

launches than most competitors, as evidenced by 19 US

launches in 2014 

4

What We Will Show Today  (continued)

We have a rich late-stage product pipeline. We will continue to

augment this pipeline with late stage product in-licensing,

partnerships and acquisitions to bring additional innovation to the

marketplace

We would deliver on Allergan’s post-approval requirements at lower

cost and would also continue to invest in expansion of indications,

(e.g., Botox), but in a leaner R&D model

Our strong track record of smart and disciplined capital deployment

has generated superior cash-on-cash returns on our acquisitions. In

aggregate, we are significantly ahead of our original deal models in

cash flow generation

Our operating model will substantially accelerate Allergan’s growth in

emerging markets

5

30 Years Healthcare Experience

–

Pharma

–

Consumer

–

Medical devices

–

Payors

–

Strategy

–

Commercial

–

Organization

–

R&D

–

Operations

23+ years at McKinsey working with leading companies

Worked on a broad range of topics

Last 6+ years building Valeant

6

Observations on the Pharma Industry…Looking Back

Industry of great people working to do good things for patients and

doctors

Worked when R&D productivity was high, pricing was free, intellectual

property was honored, managed care was weak, reimbursement

challenges were limited as was regulatory oversight on promotional

activities

Spend as much as company can afford on R&D; maximize “shots on

goal”

(which worked when productivity was high)

Rely

on

intellectual

property

to

create

enduring

“17

year”

assets

Divest products as they near expiry (so they won’t hit “patent cliff”)

Focus on largest therapeutic areas to create blockbusters drugs

Build centralized global functions (e.g., sales, marketing, operations,

R&D) to support “blockbuster”

strategy

Create global infrastructure (e.g., IT, systems, regulatory) to enable

all products to be sold in all markets

Most companies followed the same formula:

7

My Perspective on What Matters Going Forward

Eliminate bureaucracy and slow decision-making

Become superior allocators of capital

Drive R&D decisions on value of output, not on target spending

levels

Take advantage of overcapacity in manufacturing and R&D by

buying outside at variable cost

Challenge traditional bias that in-house resources are always

superior and cheaper

Focus on small products with attractive margins

Deliver transformational, not marginal, cost reduction efforts

Recognize that the next generation of durable assets will not

depend on patents, but will resemble consumer products

…Like many industries (e.g., autos, steel, airlines) business model

innovation must come from the outside

8

Valeant’s Strategy and Operating Model

–

Committed to R&D, focused on “outputs”

not “inputs”

–

Lean cost structure

–

Decentralized organization

–

“International”

not “global”

–

Durable products

–

High-growth markets

–

Smaller assets

–

Therapeutic areas/geographies where physician relationships matter

–

Capital allocation decisions through shareholder filter

Great people who care about patients and doctors…and also work

hard and wear multiple hats

A different operating model:

Relentless focus on organic growth and creating shareholder value

9

Valeant’s Approach to Capital Allocation

Deliver consistent shareholder returns over the medium and long

term

Find durable assets (~85% of Valeant sales) -

e.g., OTCs,

branded generics -

and accelerate growth

Continue to buy shorter-lived assets where we can generate

exceptional short-term financial returns, essentially risk free

(~15% of Valeant sales) -

e.g.,Targretin, Retin-A Micro, Elidel -

even though they may mask true underlying organic growth in

some years

Take advantage of short term opportunities in pricing, but focus

primarily on unit growth

Focus on products relevant to each local market

Require exceptional short-

and long-term returns for all deals

and recognize there is a walk away price no matter how

“strategic”

10

Today’s Meeting

You will hear directly from Valeant’s management team

We are confident this will demonstrate our strategy and

operating model…

…and reveal the excitement and commitment our people bring

to serving patients and health professionals…and as

shareholders

11

Our Presenters

Today’s

speakers

manage

~85% of

sales and

will cover

75% of our

business

Gaelle Waltinger

VP, Western Europe

John Connolly

VP, Russia and CIS,

General Manager Russia

Steve Sembler

President, OraPharma,

Sr. VP, Neuro / Other

Howard Schiller

Executive VP, CFO

Dr. Pavel Mirovsky

President and General

Manager, Europe

Theo  Melas-Kyriazi

12 year Valeant Board Member

Member of Audit & Transaction

Committees

Joe Gordon

General Manager, Consumer

Health Care

Dr. Leszek Wojtowicz

VP and General Manager,

Poland

Tom Appio

VP, North Asia / Japan

Tracy Valorie

VP, Marketing Pharmaceutical

Ophthalmology

Dr. Tage Ramakrishna

Chief Medical Officer, Head

of R&D and Quality, U.S.

Deb Jorn

VP, Marketing Dermatology

12

Agenda

The First 3 Years

Topic

Update

on

Bausch

+

Lomb

Growth

and

Value

Creation

(Blueprint

for

Allergan)

Developing New Market Platforms

Creating Leadership Positions in Emerging Markets

Unique Innovation Model and Future Pipeline

Presenter

Revised Bid for Allergan and Next Steps

Track Record in Capital Allocation

Our Response to Yesterday’s Allergan Release

Coria

Dow

Aton

Biovail

OraPharma

Dermatology

EMEA

Poland

Russia

US B+L businesses: Rx, Lens, and Surgical

US B+L Consumer

B+L Western Europe

B+L China

Review of past deals

Review Bausch + Lomb

Mike Pearson

Steve Sembler

Deb Jorn

Dr. Pavel Mirovsky

Dr. Leszek Wojtowicz

John Connolly

Tracy Valorie

Joe Gordon

Gaelle Waltinger

Tom Appio

Dr.

Tage

Ramakrishna

Howard Schiller

Howard Schiller

Mike Pearson

13

Speakers

The First Three Years

14

Key Elements of Legacy Valeant Turnaround

–

Divested Western Europe, Asia, Argentina

–

Invested in Canada and Poland/CEE

–

Turned around Mexico and Australia

–

Eliminated internal fixed costs

–

Partnered out Retigabine and Taribavirin

–

Only maintained core R&D spend (e.g., pharmacovigilance)

–

Repurchased shares, converts, senior notes (~$2.2B)

–

Began making acquisitions in priority businesses

Replaced the entire executive management team

In the US, de-emphasized Neurology, emphasized Dermatology

Refocused ex-US geographic footprint based on growth prospects and

strength of management

Significantly reduced R&D spend

Redeployed cash to create shareholder value

What We Accomplished in My First Two Years

2007

2009

$ 618M

Revenue

1

$ 847M

68

Number of Countries

8

1%

Growth

20%

8%

Operating Margin %

28%

$93M

Cashflow from Operations

$226M

US: Retigabine, Taribavirin & Diastat NS

ROW: Minimal

Pipeline

US: Retigabine, Taribavirin, IDP 107,

108, 113 & 115

Canada & Australia: BEMA Fentanyl,

Sublinox, Ziana

Branded Generics Europe: >30 projects

Branded Generics Latam: >30 projects

$718M

(Maturity 2010, 2011 & 2013)

Debt

$601M

(Maturity 2010, 2013 & 2016)

$309M (Dec 31, 2007)

Cash

$68M (Dec 31, 2009)

94M (Dec 31, 2007)

Shares

84M (Dec 31, 2009)

~2,000

Number of SKU’s

~1,000

1 Constant USD

15

16

Early Acquisitions

22

21

15

14

27%

12%

33%

(0.6%)

Quarters owned

Organic Growth Since

Acquisition PY

through 2013

(CAGR)

17

Coria’s Organic Growth Since Acquisition

23

2014E

62

2012

129

2010

2009

2011

44

79

2013

31

103

2008

(acquired

Oct 16)

24

2007

Coria products revenues¹

USD Millions

Key growth drivers

–

CeraVe

–

Atralin

1 Excludes Cloderm sales

27% CAGR

26%

CAGR

Key products

Invested in CeraVe, promoting

OTC with Derm sales force

Promoted Atralin with an

increased Derm sales force of

~180

Increased CeraVe SKUs from

4 to 18 through internal

development

Beginning international

CeraVe expansion in Mexico,

Brazil, Canada, and China

Divested Cloderm for 6x sales

18

Dow Acquisition Provided an R&D Platform

x

US Peak sales

Products launched

Pipeline

$300-800M

$200-300M

IDP-118

Psoriasis 

$36M

$50-75M

Extensions

Onexton

$70M

R&D capabilities:

2014 expected launches

$5-60M

IDP-120

Acne

$20-30M

RAM .08%

Expertise / specialization: formulation development, analytical

sciences, QA, RA, toxicology, and clinical development

Facilities and equipment: formulators and clean rooms

19

Aton Delivered New Platforms in Orphan Drugs

and Ophthalmology

Aton sales performance pre-

vs. post-acquisition

USD Million Revenues

Ophthamology

Neurology

Accelerated growth by:

–

Direct promotional

partners

–

Patient assistance

programs

59

78

96

148

206

19

27

33

37

53

60

105

2012

259

185

2013

2014E

130

2011

2010

(acquired 

in May)

78

2009

33% CAGR

37%

CAGR

Building infrastructure

for orphan assets

Investing in

Ophthalmology sales

force, MSLs, and

reimbursement

services

20

Overview of Biovail Merger

Merged with Biovail on September 28

th

, 2010

–

Zovirax –

from $146M in 2009 to ~$251M in 2012

–

Wellbutrin XL –

from $162M in 2009 to $173M in 2012

1 In constant USD

Global sales of ~$820M in 2009

A US business of tail assets that have been managed for value

until loss of exclusivity

A Canadian business that we have grown; ~$87M

1

in

revenues in 2009 to ~$118M

1

in 2013 (8% CAGR)

A new corporate structure (effective tax rate from 36% in 2009

to 3.1% in 2013)

21

EBITA Generation and Tax Savings from Biovail Merger

1 As of Q1 2014

Valeant cash tax rate under new

corporate structure

Cash tax rate, Percent

2,636

2,429

2,503

Cumulative EBITA

1

~5,000

Cumulative

returns

Biovail value 

at merger

announcement

Purchase price and returns

USD Millions

3.1

2013

2009

36.0

Est. Corporate

structure benefits

22

Speakers

Developing New Market Platforms

23

Speakers

Steven Sembler

President, OraPharma, Sr. VP Neurology / Other Products

24

Steven Sembler

President, OraPharma, Sr. VP Neurology / Other Products

Background

–

Chief Commercial Officer, OraPharma

–

Sr. VP, Chief Commercial Officer, Eisai

–

Sr. VP, Oncology and Hospital Businesses

–

VP, All Specialty Care Businesses

–

VP and Business Unit Head for Oncology

–

Executive management roles in Oncology and

Hospital businesses

Education

30 years in Pharma and Healthcare industry

OraPharma

(2

years)

Eisai

Pharmaceuticals

(2

years)

Roche Laboratories

(5 years)

GlaxoSmithKline

(3

years)

Bristol-Myers Squibb

(16 years)

B.A., Psychology and Sociology, University of Missouri

25

Why We Acquired a Dental Platform:

Dental is an attractive market that fits

Valeant’s focused investment criteria

$20B US market growing at ~6% per

year

Primarily cash-pay

Doctor-dispensed

Relationship-driven physician model

Big Pharma is not present

Opportunity to expand this platform

outside the US

26

How We Optimized the OraPharma Commercial Model

–

Increased specialty dental sales force from 100 to 150 reps in Q1

2014 (largest in industry)

–

Expanded Rx Access program

–

Developed relationships with specialty pharmacies

–

Established key relationships with Dental Group Practices

–

Continued investment in R&D to grow the pipeline

–

Aligned SG&A resources to support business needs

–

Eliminated “Low Return on Investment”

initiatives for marketing

spend

–

Rationalized OPEX spend to align revenue and profit growth

objectives

Increased investment in commercial and customer facing

activities

Streamlined costs

27

Substantial Organic Growth Under Valeant Model

120

108

42

86

85

80

82

54

+11%

+1%

+9%

-3%

2014E

2013

2H 12

96

1H 12

2011

2010

2009

2008

x

CAGR

J&J ownership

PE ownership

Valeant ownership

OraPharma Arestin revenues

USD Millions

Strong sales growth

primarily driven by

increased volume

(TRx up 10% from

2012-2013)

Increased operating

margins from 28%

to 49% from 2012-

2013

28

Bone regeneration expansion

Oral hygiene care products

(e.g.,

oral products to treat

xerostomia / dry mouth)

Gum disease products to

supplement Arestin

Enamel strengthening products,

specialized toothpaste / gels to

help prevent cavities from

occurring

Significant expansion

opportunities outside of the US

Launches and re-launches

Significant business development &

R&D  opportunities

2016+

Titanium

Reinforced

2015

Peri-implantitis

(two phase III

trials underway)

Bone, Soft

2014

2013

Robust Future Pipeline and Growth Prospects

29

My Personal Reflections . . .

I joined Valeant through the OraPharma acquisition

I have found the independence provided to me as a business

unit head via the decentralized approach allows me to set the

strategies that will grow my businesses

I am able to determine the assets to be placed into my

business portfolio and have responsibility for identifying and

negotiating terms for acquisition targets

Valeant has demonstrated a commitment and willingness to

invest in business platforms (mine and others) that offer

growth potential

There is no doubt in my mind that OraPharma is much further

ahead today than where it would have been without Valeant’s

operating model in terms of its future growth prospects and

continued expansion of the dental platform

30

Speakers

Deb Jorn

Vice President Marketing Dermatology

31

Deb Jorn

Vice President Marketing Dermatology

Background

–

VP for Women’s Healthcare and Fertility

–

VP for Allergy, Respiratory, and Urology

–

VP for Internal Medicine

–

VP for Detrol / Detrusitol and Urology

–

Executive Director, Worldwide Human Health Marketing;

Respiratory Products; senior marketing roles

Education

30+ years in Pharma industry

Bausch + Lomb;

VP and CMO (3 years)

Schering-Plough

(5+ years)

J&J

(2 years)

Pharmacia Corporation

(2 years)

Merck

(20 years)

M.B.A., NYU Stern Graduate School of Business

Administration

B.A., Rutgers University

32

Why We Continue to Invest in Medical Dermatology

–

Aesthetics:

Similar doctors and call-

points

–

Consumer:

Physician detailing of

CeraVe and other brands

1 Excluding oral antibiotics, biologics and aesthetics

Large, growing US market with $7.1+B

1

in

sales and a 6-7% growth rate

Doctors drive decision-making and prefer

trusted manufacturer brands

Relationships with physicians critical to

prescription choice

Market is largely commercial and           

cash-pay

Complementary to existing Valeant 

platforms

33

1 Excludes biologics and aesthetics

Source: PHAST Integrated Monthly Month Ending March, 2014

Valeant Is the Leader in the $7.1 Billion US Medical

Dermatology Market

1

Dermatological, Ethical MAT Dollar Sales

USD Millions

34

Source: PHAST Integrated Monthly Month Ending March, 2014

Valeant Is Ranked #1 in the Two Largest Sub-Classes of

the Dermatology Category

Sales Contribution of Dermatological Subclasses

35

–

Retin A Micro

–

Zovirax

–

Vanos

–

Benzaclin

In 2013, We Faced Challenges

4 of our top 10 products across all of Valeant lost

exclusivity in 2013; all in Medical Dermatology:

Field force disruption as a result of integrating multiple

companies and re-structuring

Increased managed care pressure

36

2014 –

Return to Growth

37

We Turned Around Solodyn –

It Continues as the

Leader in Oral Antibiotics and has Returned to Growth

Source: PHAST Prescription Weekly & AF Data

Solodyn Branded TRx Market Share Among Dermatologists

38

Acanya is the Market Leader in the Branded

Clindamycin / BPO Segment Among Dermatologists

Source: PHAST Prescription Weekly & AF Data

Acanya Branded TRx Market Share Among Dermatologists

39

Elidel is Gaining Share in the TCI Market

Source: PHAST Prescription Weekly & AF Data

40

Onset Products Will Expand Valeant’s Portfolio in

Atopic Dermatitis and Acne (Pending FTC Approval)

•

Locoid is the #1 prescribed branded mid-potency steroid

•

Hylatopic is the #1 prescribed 510(k) product for dermatitis in the US

•

Aurstat is currently the #1 prescribed non-steroid / non-antihistamine anti-itch

gel

•

Clindagel is the #1 prescribed topical branded clindamycin

41

Highlights of New Dermatology Launches

Brand (US peak sales)

Jublia

($300-800M)

New azole antifungal with low surface tension allowing

for unsurpassed absorption into the nail bed for

the treatment of Onychomycosis; pending FDA

approval

Luzu ($50-75M)

Only topical azole antifungal approved to treat 

interdigital tinea pedis in 2 weeks with once-daily

dosing and efficacy demonstrated at 4 weeks post-

treatment

Onexton

($50-75M)

New topical clindamycin / BPO combination product for

the treatment of acne; pending FDA approval

RAM 0.08%

($20-30M)

0.08% formulation, new topical option for acne with a

new strength

Bensal HP

($25-75M)

Topical ointment indicated for inflammation and

irritation associated with many common forms of

dermatitis

42

Luzu Case Study:

Unlocking the Potential

Introducing Luzu; video animation

of running man accompanied by

music was inserted at this

point of the presentation

Marketing Launch Strategy Focused On Differentiation

vs. Competition

Interdigital Tinea Pedis

Tinea Cruris / Corporis

43

44

LUZU Launch Campaign:

Multi-Faceted Physician “Surround Sound”

Visual Aid

iBook

Sales Aid

Annotated PI

Flashcard

Shelf Talker

Waiting Room

Brochure

Patient

Tear Sheet

Pharmacy

Sell Sheet

45

Professional Medical Education

Significant Booth Presence

Building Advocacy: Major Presence

at DERM & Podiatry Meetings

January

April

March

June

June

November

46

LuzuRx.com

Journal Ads

DermTube

Banner Ads

eBlasts

Targeted Non-Manpower Promotion

Supports Rapid Awareness and Prescribing

47

In Just 5 Weeks, LUZU Captured 5% Share of the

Branded Topical Antifungal Market

Weekly TRx Weekly Market Share

Source: WK Pharmaceutical Audit

Luzu

5%

5%

4%

3%

2%

1%

0%

28-Mar

4-Apr

11-Apr

18-Apr

25-Apr

2-May

48

Large market: 35M patients in US

suffer from onychomycosis

3.5M prescriptions are written annually

for these patients

Derms and Podiatrists are the

most productive specialties

JUBLIA is designed to penetrate the

toenail and kill the fungus where it lives

JUBLIA for Onychomycosis: Approved in Canada; US

approval pending FDA Review (June 20

th

)

49

High Energy, Dynamic Organization

Strong Bent Toward Action

Relentless Pursuit of New, Innovative Approaches

Non-Hierarchal, Flat Organization

Rapid Decision Making

Autonomy with High Accountability

My Personal Perspective on Valeant Versus Other

Pharmaceutical Companies

Based on 30+ Years in the Industry,

Valeant is the “Antithesis”

of Big Pharma

50

Speakers

Creating Leadership Positions in Emerging Markets

51

Speakers

Dr. Pavel Mirovsky

President & General Manager, EMEA

52

Dr. Pavel Mirovsky

President & General Manager, EMEA

20+ years in Pharma / Medical industry with international

background

PharmaSwiss

(2

years)

–

CEO

IMS

Health

(4

years)

–

Vice President

Polpharma

(3

years)

–

President and CEO

Aventis

(5

years)

–

Regional GM  Poland & Baltics, VP NE / ME

RPR

(5

years)

–

Country Manager, GM, Country representative

M.D., PhD, Faculty of Medicine at Charles University

M.B.A.,

The

French-Czech

Institute

of

Management

(IFTG)

Background

Education

53

EMEA Overview

Developed

EMEA

42

58

Emerging

EMEA

Revenue breakdown

Percent, 2014 = $2.2B

1 Constant USD

–

Western Europe

–

Poland

–

Russia and CIS

–

Turkey and MENA

–

CEE, Baltics, Balkans and Adriatrics

Poland, Turkey, Middle East

and contact lenses

5 regions:

Prioritized strategic markets:

Russia,

Focused

on

branded

generics,

OTCs,

1

54

394

2007

2006

2010

2009

2008

119

112

2012

101

2011

604

1,263

150

172

826

2013

2014E

Revenues

Constant USD Millions

EMEA Emerging markets: 8% Organic Same Store

Sales Growth

Acquisitions

Organic same store

sales growth (08-13):

+8%

Organic same store

sales growth (13-14E):

+13%

55

Our Strategy in European Emerging Markets

Non-reimbursement dependent products and segments

Targeting high-growth markets:

ophthalmology, dermatology, aesthetic medicine,

OTC and branded RX generics (rich pipeline built for at least 5 years)

Very active BD:

tuck-in opportunities sourced by local line management

Maximizing returns by shifting resources in line with market trends

–

Investment increase in high growth markets (Turkey, Russia, CIS,

Middle East)

The GM is king or queen

–

this allows speed, customer focus, and local product

portfolios

Focus on durable businesses

Investment strategy (geographies)

Business development

Decentralization

56

Current Level of Organic Growth Expected for the Next

Decade

Geo-expansion

–

~$80M

opportunity

to

launch

existing

products

into

new

markets leveraging in-house production

Rich

pipeline

–

~300

new

product

launches

each

year

across

70+

countries

with peak 3-year turnover of ~$150M

In-house

development

–

smart

galenic

formulations

Growth

of

current

portfolio

–

continue

focused

promotion

to

gain

share

and

capture pricing upsides

57

EMEA doubled in size with the Bausch + Lomb

integration; this also gave

us a platform for Turkey, Middle East and Western Europe

We . . .

. . . integrated and simplified all the structures

. . . kept and on-boarded the best people

. . . grew our combined business

. . . delivered or exceeded sales and EBITA targets and expect to

exceed synergy capture targets of $198M (vs. $178M planned). We

captured a 40% run-rate by the end of 2013 and are ahead of plan to

capture 97% by the end of Q3 2014

We

are

ready

for

another

M&A

including

Allergan

and

will

do

exactly

the same, perhaps more efficiently with the gained experience

Overview of the Bausch + Lomb EMEA Integration

58

My Personal Reflections . . .

We are running a highly profitable business, improving our

gross margin and EBITA every year

We are achieving double digit organic growth in 2014 and

keeping extremely lean through our decentralized structure

with emphasis on entrepreneurship and the General

Manager role

We have a clear and aligned strategic agenda in place for

each region and each VP, and are on track to execute it

We are learning from each acquisition, big and small, and

are ready for the next challenge

59

Speakers

Dr. Leszek Wójtowicz

Vice President and General Manager, Poland

60

Dr. Leszek Wójtowicz

Vice President and General Manager, Poland

Background

–

GM, Poland

–

Sales and Marketing Director, Central Europe

–

Sales and Marketing Director, Poland

various sales and marketing positions (10 years)

Education

20 years in Pharma industry

Valeant

(10

years)

Upjohn,

Pharmacia

&

Upjohn,

Pharmacia,

Pfizer

in

M.D., Medical University of Silesia

M.B.A., University of Minnesota

61

Poland Overview

Market grew at ~4% between 2008 and 2013; Valeant

grew at ~9% organic same stores sales growth

No. 2 BGx company in Poland

80% of products are non-government reimbursed (OTC

and BGx)

Sustainable leading branded generic and OTC portfolio

Bisocard $27M sales; #1 product in Poland (in volume)

In 2012, moved from government reimbursement list to

cash-pay given strength of brand

14% growth in 2013

Other top products:

Corhydron (#1 in market)

Hydroxyzinum (#1)

Diosminex (#1)

Dexaven  (#2)

62

Poland: 9% Organic Same Store Sales Growth

308

13

262

12

213

11

174

10

128

09

119

08

90

07

83

06

75

2005

2014E

71

Revenues

Constant USD Millions

Organic same store sales

growth (08-13):

+9%

Organic same store sales

growth (13-14E):

+9%

63

Poland: Key Product Launches

Year of launch

2008

Adipine

Finanorm

Tamsunorm

2009

Anastralan

Donectil

Maxibiotic

Presartan

Quentapil

2010

Letralan

Ristidic

Tetrix

2011

Citaxin

Lacillus

Momederm

Taliximun

2012

Aneptinex

Defibrotide

Exbol

Grypolek 24

Halaven

Moviprep

Mycofenolate

Prazolacid

Relamax

Sachol sol.

Silectus

Tasectan

Trimepect

Zanacodar

Zopridoxin

2014

4Flex Silver

Acnelec

Aspulmo

Bimatoprost

Chlorigardin

Clarderin

Diosminex max

Eplerenon

Esomeprazol

Fastgrip

Falvit Beauty

Kefort

Relamax Stres

Venozel

Vitaral junior

2013

Aqua slim

Appetite Control

Crosuvo

Escitalopram

Lamifortan

Levetiracetam

Lioven max

Neoxen

Ropinirol

Timolol

Vitaral cardio

40+ new launches between 2008 and 2013 and 15 new launches expected in 2014

Sales from new products expected to reach ~$43M in 2014

64

Robust Future Pipeline in Poland

Ophthalmology

portfolio

Bimatoprost PFO3

Dorzolamide PF

Dorzolamide+Timolol PF

Levocabastine PFMD

Brimonidine+ TimoIoI

Cefuroxime

Besivance

Matoprost+Timolol

Travoprost PF

Travoprost+Timolol PF

Dermatology

portfolio

FaceIine

Tacrolimus

Bodyline

Tretinoin cream

OTC portfolio

Paracetamol/Phenira-

mine/Ascorbic acid

Caphosol

Utipro

Other branded

generics

portfolio

Aripiprazole

Aripiprazole ODT

Betamethasone inj.

Bortezomib

Rivastigmine patch

Erwinase

Kidrolase

Oxycoden LF

$13.4M

$14.6M

2016

2015

2017-2019

Total peak sale

revenues (estimate)

1

Additional

products

under

negotiation,

peak

sales

not

included

in

current

estimate

for

2017

$14.0M+

Vision Care /

Surgical portfolio

Biotrue ONEday

OCD

Zeus

Lancement teneo

Lancement nouvelle

generation Victus 3.2

Endolaser

High speed vitreotome

Victus extensions

Ongoing negotiations in

key

categories:

Ophthalmology

Dermatology

Aesthetics

Podiatry

OTC

Allergy/ pulmonology

1

65

Valeant is Investing in DTC for Core OTC Brands

Major OTC Products with on-going

DTC

Diosminex, Systemic antivaricose

Chlorchinaldin, Sore throat remedies

4Flex, Joint care

Falvit, Multivitamins

Others

2013 TV, radio, and

other media spend

~$ 1.8M

~$ 1.5M

~$ 1.3M

~$ 0.9M

~$ 3.8M

DTC spend is ~25%

of listed products’

revenues

Total

~$ 9.3M

66

Overview of Poland Organization

General

Manager

Poland

(1532 FTEs)

R&D

(57 FTEs)

Sales

(411 FTEs)

Marketing

(32 FTEs)

Regulatory /

Supply chain

(13 FTEs)

G&A

(21 FTEs)

Manufactu-

ring

(997 FTEs) 

67

Built

brand

loyalty

and

market

leading

positions

(e.g.,

4

of

top

5

brands

are

#1)

and

above

market

growth

–

Focused on building branded generics loyalty

–

Optimized customer coverage with ~400 sales reps (fifth largest in

Poland)

Wide

distribution

channel

coverage

across

Poland,

e.g.,

pharmacy

chains, DTC distribution

Valeant

is

a

well-recognized

player

in

Poland

Focus

on

building

platforms

independent

from

national

payers

–

Invested in self-pay Rx and OTC portfolio, including small targeted

acquisitions (e.g., Croma)

Highly

experienced

local

management

with

backgrounds

in

multinational

companies

Confident

in

our

ability

to

maintain

/

accelerate

current

growth

trajectory

Valeant Has Achieved Sustainable Growth

68

Four separate BUs combined into one: Bausch + Lomb

Pharma, Bausch + Lomb

Vision Care, Bausch + Lomb

Surgery, Valeant Ophthalmology

Eliminated unnecessary layers

90% of field force successfully integrated in Valeant team

Achieved back-office synergies of 95%

Integration completed by September 2013, with full team in

place and field force working together

Overview of Poland Bausch + Lomb Integration

69

My Personal Reflections . . .

We empower people in the Valeant way: best decisions made by

local managers, fast implementation, energetic, powerful and

highly competitive organization

We have a lean cost structure with high involvement of the local

management; our fast paced and effective implementation of

changes makes a difference in the market and makes Valeant

highly competitive vs. other pharma companies

Our entrepreneurial environment develops employees, empowers

them and leads to the success of individuals and the Company

Our organic growth since 2008 has outgrown the market

significantly. Profitability has grown even quicker (>30% a year

on

average since 2008)

70

Speakers

John Connolly

Vice President, Russia and CIS; General Manager,

Russia

71

John Connolly

Vice President, Russia and CIS, General Manager Russia

Background

23 years in Pharma industry

PharmaSwiss

(4 years)

–

Regional GM South East Europe

Wyeth

(5 years)

–

Commercial Director Central Eastern Europe

–

Country Manager Romania & Southern Balkans

–

Country Manager Russia

Eli

Lilly

(11

years)

–

BD Manager Central Eastern Europe

–

Area Manager Russia and CIS

–

Marketing Manager Russia and CIS

–

National Sales Manager Russia

–

Country Manager Kazakhstan, Central Asia, Ukraine

Education

B.Sc. (Mgmt.) Trinity College Dublin, Ireland

M.B.A., Fuqua School of Business, Duke University

72

Since entry Valeant has consistently outgrown the market:

–

Market grew 5% from 2011-2013

–

Valeant grew 16% (same store organic growth) from 2011-2013

–

B+L business grew 14% YoY in first 6 months of Valeant ownership

85% of Valeant products have free pricing, 94% of Valeant sales are

OTC or self-pay Rx products

Strong OTC, Ophthalmology, Cardio / Neuro, Derma platforms

Acquisitions of Sanitas, Natur Produkt, Gerot Lannach assets;

significant additional opportunities in tuck-in business development

Market leaders

2013 revenue growth

–

Thrombo ASS (Low dose aspirin)

13%

–

Neuromultivit (Multi-vitamin)

33%

–

ReNu (Lens solution)

5%

–

Naturino (Children’s aspirin)

15%

–

Sage (Herbal throat remedy)

15%

–

Cholisal (Ulcerative gingivitis)

14%

–

Ocuvite (Eye vitamin)

26%

–

Antigrippin (Anti-flu)

17%

Valeant key brands

Russia Overview

73

Russia: 16% Organic Same Store Sales Growth

Acquisitions

Product Sales

Constant USD Millions

Organic same store sales

growth (13-14E):

+19%

2010

2011

2013

2012

2014E

329

76

194

0

9

Organic same store sales

growth (11-13):

+16%

74

Overview of Russia Organization

General

Manager

Russia, VP

Russia and CIS

(633 FTEs)

Regulatory

Affairs

(10 FTEs)

Sales

(517 FTEs)

Marketing

(29 FTEs)

Supply

chain

(13 FTEs)

G&A

(62 FTEs)

75

My Reflections on the Current Russia Environment

Russia is the No. 9 pharmaceutical market globally. It will continue to grow and

Valeant will seize the opportunities that are here. Locally, we are already working on

this

Russian

consumers

want

quality

pharmaceutical

brands.

Brands

are

resilient

and

most

consumers

are

happy

to

see

‘Made

in

Austria,

Germany,

Poland’

on

a

pack.

Our

brands are well known and trusted

What is happening in Russia has impacted us primarily through currency devaluation.

However, we work in the non-reimbursed / non-premium segments of the market thus

mitigating risk

There is a market slowdown, driven by macroeconomics. However, we will continue

to grow by focusing on disciplined execution and leveraging our excellent umbrella

brands such as Bausch + Lomb and Natur Produkt (“Brilliant at the Basics”)

The Eurasian Customs Union and the planned (2015) Eurasian Economic Union

should make doing business easier in the next few years in this Region. Our entire

CIS business will benefit

76

July 2013:

Pre-integration meetings with Russia and CIS GMs and B+L Russia leadership team

Developed detailed Plan for integration incl. communication and Town Hall meetings

to begin execution from Day 1 (August 7

)

September 2013:

Integrated sales conference with full attendance from B+L sales team

October 2013:

Physically moved B+L employees to the Valeant office

By end of December 2013:

Integrated B+L sales and marketing structures to Valeant model and transferred

employees to Valeant legal entity Russia

92% of field force successfully integrated in Valeant team

Overall

Integrated Supply Chain, Finance, Regulatory from August to December 2013

Simultaneously integrating another acquisition (Natur Produkt), allowing us to go

through organizational change once, with minimal business interruption

Tracked execution weekly initially, then bi-weekly; included elements in 2014 KPI’s

Overview of Russia’s Bausch + Lomb Integration

th

77

My Personal Reflections . . .

Valeant is a ‘nuts and bolts’

company, focusing on results and having the

best people in the right roles in the organization.

Trust is normally earned. This is earned through results at Valeant. Once

you have that trust it makes work easier.

Our entrepreneurial culture and apprenticeship model creates career

opportunities and empowers people to take ownership of their business.

Building a business from the ground up is extremely challenging and

personally rewarding. It is not for everybody but it is for me.

I have grown professionally and am a good example of the Valeant

model

of empowerment. It is something I push downwards also. Personally, I am

ready for the next challenge and so is my team.

In 2011 I was invited to a leadership meeting in the USA. We met

with

Mike, other senior leaders and members of the Board of Directors. I was

pleasantly surprised at Board members’

involvement and this is what

makes Valeant different.

78

Speakers

Update on Bausch + Lomb Growth and Value Creation

(Blueprint for Allergan)

79

Speakers

Tracy Valorie

VP, Marketing Pharmaceutical Ophthalmology

80

Tracy Valorie

VP, Marketing Pharmaceutical Ophthalmology

Background

20+ years in Pharma industry

Bausch + Lomb

–

Vice President of Pharmaceutical Marketing

–

Former Global Head of Glaucoma

Pfizer

–

Global Commercial Lead of Ophthalmology

(Xalabrands and Macugen), mid-stage development

portfolio, and long-range planning

Experience in discovery, clinical development, commercial

assessment, marketing and strategic planning

Previous board membership The Glaucoma Foundation

and ARVO Foundation for Eye Research  (AFER)

Education

M.B.A., Rensselaer Polytechnic Institute

B.S. Molecular Biology, University of Connecticut

81

Evolution of US Bausch + Lomb Professional Business

B+L Legacy: 3 Distinct Global BUs with

siloed operating model

Siloed business units

Minimal communications

Inefficient resource allocation across

businesses

Global

Rx

Global

Vision

Care

Global

Surgical

Valeant operating model: 3 Units rolling up

into decentralized US Eye Care business

Greater communication across Units

–

Leverage institutional knowledge to

support overall business

Improve operational efficiencies; share

resources

Bausch + Lomb

US Eyecare

Global

Mktg

BU

Director

US Sales

Global

Mktg

BU

Director

US Sales

Global

Mktg

BU

Director

US

Sales

US Lens

US Surgical

US Rx

82

US Rx Pharma: Where We Started

Strongest of the three US B+L businesses

–

Robust product line covering numerous

therapeutic categories

–

Established relationships with Eye Care

Professionals and experienced Sales

Professionals

–

Effective lifecycle management

programs (e.g., Bromday

Prolensa)

Inefficiencies in operating model

–

Duplicative global and US marketing

–

Unfocused and fragmented marketing

spend

–

Overstaffed central commercial

operations support

83

US Rx Pharma: Continued Momentum Under

Valeant Operating Model

Applied Valeant operating model:

–

Did not disrupt customer-facing organization

–

Removed duplicate marketing organizations

–

Leaned out commercial support functions

–

Eliminated management layers

–

Invested behind priority growth brands and

promoted products

Executed Bausch + Lomb

integration decisions

–

Separated US Rx business from OTC /

Vitamins / Generics

–

Accelerated non-personal promotion for

remaining portfolio

–

Continued focus on successful launches of

Prolensa and Lotemax Gel

Maintained investment in late-stage pipeline

(e.g., Latanoprostene bunod) and key lifecycle

projects (e.g., next generation “Lotemax Gel”)

TRx Thousands

831

880

1Q 2014

1Q 2013

+6% p.a.

US Rx Pharma Prescription Trends

84

US Lens: Where We Started

Aging, non-competitive, declining, and

unprofitable business

Despite inventing the category, Bausch + Lomb

suffered sustained share loss due to lack of

innovation and focus

–

Poor performance masked by combining

results with profitable LensCare business

–

High management turnover; frequent changes

in strategic direction

Bloated cost structure

–

Duplicative global and regional management

and marketing

–

Ineffective and competing channel strategies

–

Complex sales model with numerous (40+)

and unaligned incentive plans

85

US Lens: Performance Turnaround

Applied Valeant operating model and

returned to profitability:

–

Replaced entire senior management team

and removed two layers

–

Transferred LensCare to Consumer

(natural owner), exposing under-

performance of Lens business

–

Developed tailored channel and pricing

strategies for independents and retail

–

Aligned incentive compensation to deliver

short and long-term performance

Launched Ultra and PureVision 2 MF

Increased and accelerated investment in

pipeline products (e.g., Ultra MF / Toric,

Biotrue ONEday Toric)

Total US Lens Product Sales

USD Millions

2008

10

09

12

11

2014E

13

-5%

+15%

86

Our Launch Brands: Delivering Long-term Value

Ultra

Transformative SiHy FRP lens that provides

unsurpassed comfort and vision all day

Novel launch strategy ensuring strong uptake

by eye-care professionals

Biotrue ONEday

High water, mid oxygen, non-silicone

hydrogel daily disposable lens

Designed to work like the eyes to provide

comfortable vision throughout the day

PureVision 2 Multifocal

Multi-focal product launched in Q3 2013

Redesigned MF lens to address comfort

issues

Strongest pipeline in industry for the next decade

87

US Surgical: Where We Started

Underperforming, marginally profitable

surgical business losing share to major

competitors

–

Ineffective senior management team

–

Dysfunctional selling model with multiple

sales forces selling against each other

–

Complex customer contracting process

and terms

–

Never integrated TPV after acquisition

Bloated overhead structure

–

Multiple layers of leadership

–

Scattered “commercial operations”

centers

across the country

–

Unclear portfolio prioritization for

commercial investments

Stellaris

US Surgical: Performance Turnaround Under

Valeant Operating Model

Replaced top management team and

removed unproductive costs

Redesigned go-to-market approach

–

Simplified and standardized

contracting and selling process

–

Realigned rep incentives

–

Prioritized marketing and sales spend

behind growth products

–

Developed tailored channel strategies

(e.g., ASCs, hospitals)

Invested in new products (e.g., Cirle

navigation) and surgical platform

extensions (e.g., StellarisPC) 

Total US Surgical Product Sales

USD Millions

2014E

2013

88

89

Promising Surgical Late-stage Pipeline

Fragmentation Needle

StellarisPC Integrated Laser

Stellaris / StellarisPC Upgrades

Stellaris Advanced Cataract Procedures

Light Fibers

Cirle 3D Surgical Navigation

StellarisPC Pack Enhancements

Envista Toric

New Vitreo-Retinal Devices

90

My Personal Reflections…

Empowered to own / run the business

Empowered business development philosophy

Entrepreneurial business model (forward-thinking culture)

Accountable for both short and long-term numbers

Accessible executive leadership

Recognition of need to maintain visible customer-facing

investments in eye care space

91

Speakers

Joseph Gordon

General Manager, Consumer Health Care

Joseph Gordon

General Manager, Consumer Health Care

27 years in OTC Health Care

Bausch

+

Lomb

(2.5

years)

Worldwide Consumer

Wyeth

(19

years)

VP, Sales

VP, Marketing, Advil

GM, Nutritionals Business Unit

GSK

(5

years)

B.A. Economics, Rutgers University

92

Education

Background

Valeant Consumer: Healthcare Integration

Rolled out the integration as smoothly as possible, with minimal

customer disruption (e.g., visited top customers within 2 weeks)

Combined 3 separate groups (Valeant skin care, B+L Lens Care, and

B+L Vitamins / Drops) into one Consumer organization

Leveraged existing top talent

Leveraged our increased scale (across all brands) to accelerate top-line

growth

Greatly improved selling model (e.g., professional sales force that

details OTCs to medical professionals)

Improved retailer relationships (e.g., category management and

logistics)

Increased ability to allocate funds to highest value opportunities

Maintained financial discipline and improved bottom line margin

Consolidated brokers / agencies and renegotiated rates

Achieved numerous cost of goods reductions

Consolidated distribution centers

93

Valeant Consumer HealthCare is a Top 15

Health &

Beauty Care Manufacturer in the US

Lens solutions

Top brands: BioTrue,

Renu, Boston

Segment growth: -1%

Valeant growth: 8%

Vitamins/Eye drops

Top brands: Preservision,

Ocuvite, Opcon-A, Alaway

Segment growth: Flat

Valeant growth: 9%

Skin Care

Top brands: CeraVe,

AcneFree, Ambi

Segment growth: 1%

Valeant growth: 10%

94

Year-to-date Consumption +25%

Overall category -1%

Biotrue Challenge

Consumer Engagement / Trial Program

Eye care physician share of

recommendations

+9%

16% to 25% share vs. 1 year ago

Professional sales force detailing

160 Eye health reps serving optometrists

Biotrue’s Growth has been Supported by Consistent

Investment in Eye Care Physicians and Consumer

Promotions

95

96

CERAVE

®

is the Fastest Growing Skin Care Brand

Top 10 Manufacturers Latest 52 Weeks 3-23-14

$ % Change vs prior year

Detailed by 153 Dermatology reps reaching ~5000

Dermatologists and skin care professionals

#1 Derm Recommended

Moisturizer Brand for:

-2.1%

JERGENS

NATURAL GLOW

GOLD BOND

ULTIMATE

CETAPHIL

JERGENS

VASELINE TOTAL

MOISTURE

AVEENO ACTIVE

NATURALS DAILY

MOISTURIZING

LUBRIDERM DAILY

MOISTURE

JERGENS ULTRA

HEALING

PRIVATE LABEL

23.0%

18.7%

17.1%

8.1%

6.7%

5.2%

4.8%

4.7%

-5.3%

96

Facial Moisturizer

Skincare for Eczema

Body Moisturizer

NOTE: Does not include all channels

Source: IRI Market Advantage; 52 WE 03/23/14

97

Eye Vitamins Strategy –

Two Distinct Brands

People with Age-related Macular

Degeneration

AREDS Study 1 & 2

ECP & Patient

Adults 45+ to Help Protect

Eye Health

Consumer Focus

Growth vs. PY:

Category:

+10%

-2%

Growth vs. PY:

Category:

+13%

-2%

Market

leader

Market

leader

98

3 of the 10 Top Selling SKUs in the Vitamins Aisle

Rank

Description

$ Sales

(000s)

1

Mega Red Omega-3 60ct

$32,941

2

Ocuvite Adult 50+ 50ct

$30,487

3

Emergen-C 1000mg 30ct

$29,485

4

Centrum Silver Ultra Women’s 100ct

$28,716

5

Align Probiotic 28ct

$28,183

6

Align Probiotic 42ct

$27,498

7

Airborne 10ct

$26,646

8

PreserVision AREDS SG 120ct

$25,401

9

PreserVision AREDS 2 120ct

$25,331

10

VitaFusion MultiVites 150ct

$25,046

Nielsen XAOC Calendar Year 2013

$81,219

Total Valeant brands

Help Protect Your Eye Health

Ocuvite

®

360 Marketing Spend >$20M in 2014

99

100

Robust Future Pipeline in Consumer Products

PeroxiClear

CeraVe

–

Baby

–

Eye Cream

–

Foot Cream

–

Stretch

AcneFree formula

upgrade / Body Spray

/ Energizing

Soothe XP

2014

2015

2016+

Preservision AREDS 2

line extensions

Ocuvite gummies

CeraVe

–

Cleansing bar

–

Hydrating cleanser

(Shower)

Ambi natural line

AcneFree cleansing

brush

Luminesse

Next gen multi-

purpose solution

CeraVe Therapeutic

(Rosacea, Psoriasis)

AcneFree Overnight

strips

Valeant US Consumer: 10% Organic Growth

Consumer Health products revenues

USD Million

590

535

2013

2014E

+10%

101

102

My Personal Reflections…

The outside perception of Valeant is much harsher than the actual

environment

The best people get the job.  The best ideas get the funding

There is a true sense of empowerment and encouragement to lead

Own your business, invest like it is your own money

–

Gather facts, analyze, take action

–

Move very quickly

Unlike Big Pharma, we are not a powerpoint heavy company -

marketers don’t spend half their week creating presentations to

management

Don’t have to worry about the consequences of failing –

“all in it

together”

attitude

103

Speakers

Gaelle Waltinger

Vice President, Western Europe

104

Gaelle Waltinger

Vice President, Western Europe

Background

16 years in Pharma and Healthcare

Bausch

+

Lomb

(5

years)

–

General Manager Germany, Austria, and Switzerland

Novartis

Pharma

(6

years)

–

Marketing and Sales management roles in France,

Switzerland, and Hungary

PwC

(5 years)

–

Healthcare and pharma

Education

Master’s Degree in International Law and Finance,

Master’s Degree in Quality and Organizations

Management, ESCP Europe

105

Organic same

store sales

growth (13-14E):

Organic same

store sales

growth (08-13):

Western Europe: Above-Market Sales Growth Post-

B+L Acquisition and Even Stronger EBITA Growth

+6%

Revenues

Constant USD Millions

+2%

891

804

784

751

735

744

753

2009

2008

2013

2014

2012

2011

2010

5% growth in Q1

YOY from 2013-

2014

Increased EBITA

margin from 28% to

42% through new

Valeant operating

structure

Strong post

acquisition growth

Valeant’s Western European Product Portfolio

8

OTC

24

14

Rx reimbursed

Gx reimbursed

3

RX free pricing

Vision Care

Surgical

25

1 In constant USD; excludes BD revenues and Solta

~85%

of

portfolio

is

not

subject

to

price

control,

reimbursement

or

patent

expiry

~60%

of

pharma

portfolio

is

free

pricing

and

growing

+10%

year-on-year

Percent of sales

100% = $ 854M

1

26

106

U.K. and Ireland

$114M sales,

+4% YoY

~99 employees

Nordics

$39M

sales

+14% YoY

~39 employees

DACH

$231M sales,

+7% YoY

~247 employees

Italy

$105M sales,

+11% YoY

~109 employees

Iberia

$102M sales,

+16% YoY

~125 employees

France / Benelux

$263M sales,

+7% YoY

~295 employees

R&D

Munich (surgical) 58

Berlin (pharma) 35

1 All sales in constant USD

Western Europe: Each Cluster Is Independent

107

1

OTC / Pharma

Bold Moves, using Valeant’s Mode of Operation

Vision Care

Surgical

108

Diversifying

from

eye

only

into

OTC,

thus

gaining

more

critical

mass

Geo

Expansion:

Investing

in

the

Derma

/

Aesthetic

field

with

Obagi

and

Solta:

sales

forecast

$20M

in

2015

Local

cross-promotion

partnerships

with

global

players

Launching

superior

new

products

Biotrue

ONEday

and

Purevision2HD

winning in high growth segments

Exploiting

growing

Private

Label

segment

opportunities

across

all

franchises, across Western Europe

Winning

with

Key

Accounts:

Optic

2000,

Fielmann,

Specsavers

Leveraging

equipment

share

(25%)

through

portfolio

selling

approach

Focusing

on

key

drivers,

align

R&D

and

BD

with

customers

expectations

Acquiring

new

IOLs

product

ranges

giving

Valeant

access

to

70%

of

the

market we could not participate with B+L existing portfolio

Simplified

approval

process

for

Equipment

sales

and

clear

guidance

for

the field force on margins requirements

3

year

sales

est.:

$19M

from

Valeant

portfolio,

$11M

from

B+L

portfolio

70

launches

by

end

of

2014,

80

launches

in

2015-16

Robust Future Pipeline in Western Europe

2014

2016-2017+

Ophthalmology

portfolio

Bimatoprost PFO3

Conineff

Dorzolamide PF

Dorzolamide+Timolol PF

Levocabastine PFMD

Timolol PF

Eyefill C.

Eyefill D.C.

Eyefill H.D.

Eyefill M.B.

Eyefill S.C.

Brimonidine+Timolol

Moxifloxacin PF

Netildex

Ceforuxim (optha-

use)

Besivance

Bimatoprost PF

Bimatoprost+TimoIoI

Latanoprost PF

Latanoprost+Timolol PF

Travoprost

Travoprost PF

Travoprost+Timolol PF

Dermatology

portfolio

Betamethasone/Salicylic

Lulliconazole

Mupirocin ointment

Tretinoin cream

Obagi

Vision Care /

Surgical

portfolio

New Si-Hi Monthly

Contact Lens

Victus extension indication

New Peroxide

High speed

vitreotome

Biotrue ONEday

Teneo

Victus 3.2

Stellaris PC endolaser

Ambroxol syrup

Paracetamol/Pheniramine

Hemorrhoids

cream

CinqsurCinq

Clens

Cetirizine

Ibuprofen/

Pseudoephedrine

Pelargonium

OTC

portfolio

$ 144M

$ 117M+

Estimated peak sale

revenues

GEO-expansion

80 launches

70 launches

2015

$ 59M

Ongoing

negotiations in key

categories

1

:

Over 300M

peak sales

Covers the

entire

spectrum of

selling

categories

High

likelihood to

be delivered

109

Pain/ ortho

OTC

Dermatology

Ophthalmology

1 Additional products under negotiation, peak sales not included in current estimate for 2016-2017+

110

The challenge for WE was to quickly apply the new model and thinking of Valeant as

there were no Valeant people based in W Europe. What we did:

–

Decentralized structure:

we eliminated interference with corporate and adapted

to local realities

–

Combined

3

B+L

business

units

into

one

company

with

1

GM

holding

the

decision making power

–

Newly

promoted

management:

investing

in

“hungry”

talent

and

offer

them

an

opportunity to demonstrate what they can do

People: headcount

reduction of 28%, shared G&A resources

Costs reduced by $67M (annualized run rate realized end 1Q14)

–

Fast

execution

of

social

plans

in

all

countries

completed

by

end

of

2013

–

COGS

optimisation

by

bringing

manufacturing

in

house

and

/

or

in

Europe

for

products manufactured by third-parties or in U.S. (e.g., Biotrue, Ocuvite)

–

Margin

improvement

by

taking

back

the

Valeant

business

in

Western

Europe

(~$20M) previously managed by distributors

HR and Finance get much more responsibilities and are real change agents,

supporting the mindset turnaround

Overview of Western Europe’s Bausch + Lomb

integration

111

My Personal Reflections . . .

There aren’t many healthcare companies where you find a 42 year old

female running a $1 billion business. That is possible at Valeant. We

bet on management, not on science. We give more opportunities to

our

people to demonstrate what they can

Rules are very clear: only your performance and ethics count.

Mistakes

are allowed, underperformance is not. This way you save a lot of

time,

have sole focus on business while taking risks to try new things

It is scary from the outside because it is challenging all the

conventions. It is THE exception in the healthcare world. But it

makes

so much sense once you live it

You must like entrepreneurship, speed and autonomy+++. There is no

one to tell you how to position your brand, no one to review your KPIs.

But we are all in it together and it’s a lot of fun

112

Speakers

Thomas J. Appio

Vice President, North Asia / Japan

113

Thomas J. Appio

Vice President, North Asia / Japan

Background

27 years in Pharma/Healthcare (15 years in Asia Pacific)

Bausch

+

Lomb

(4

years)

–

VP North Asia / Japan

–

Managing Director Greater China

Schering-Plough

(23 years)

–

General Manager Korea and Hong Kong

–

Global Integration Planning Lead

–

General Manager Hong Kong

–

Director New Zealand

–

Director of Operations and Administration Venezuela

–

Director of Operations Asia-Pacific and South Africa

–

Senior Auditor and Compliance

Education

B.S. Accounting, Arizona State University, W.P. Carey

School of Business

113

114

North Asia Overview

B+L creating platform for

growth in fast growing markets

(e.g., China, Korea)

2014E Sales:

$663M

2014E EBITA:

>30%

Strength across segments,

lens, lens care, aesthetics,

pharmaceuticals & surgical

2 manufacturing sites in China;

1 Distribution Center in Hong

Kong

2,051 colleagues

China

$236M sales

2 manufacturing sites

(Pharma and vision care)

Hong Kong

$35M sales

1 Distribution Center

Taiwan

$41M sales

Japan

$293 M sales

Korea

$59M sales

* 2014 estimated sales & EBITA in constant dollars

B+L Created Growth Platform for Valeant in China

Beijing

Shanghai

Jinan

1.3 billion people

Growing affluence & consumerism

Elevating interest in health & beauty

Developed

Developing

Underdeveloped

Not developed

Valeant business status

Sales force deployment

Pharmacies

Hospitals

Optical stores

Distributors / wholesalers

Shanghai

115

116

Valeant China Market Snapshot

Vision Care

China vision care market $481M in

2013 with 13% growth

Valeant growth of 19%

with 24%

market share; #2 in contact lenses

Broad

portfolio

addresses

consumer

vision care needs across segments

& city tiers

Strong distribution network

Capitalizing on fast growing

cosmetic lens segment

Rich

pipeline

of

future

lens

launches

Best selling clear lens SKU in China

Multiple offerings to meet different consumer needs

Fashion trend with cosmetic lens

#1 vision care brand in China & most recognized by Chinese consumers

117

Launch Experience in China

2014

2013

2012

SofLens Daily

Disposable Toric

LACELLE Daily

LACELLE Color Daily

NATURELLE Daily

Black

PureVision2

NATURELLE Daily Brown

RENU Fresh

BIOTRUE

LACELLE

Half yearly & yearly

LACELLE Color

Half yearly & yearly

PureVision

Bandage Lens

(Vision Care)

Valeant China Market Snapshot

OTC/

Pharmaceuticals

Eye drop market $500M in 2013 with 11% growth

Valeant growth of 23%, with 16% market share

#1 OTC eye drop

brand -

Mioclear &

Moisten

Iviz

Levsaxin -

Antibiotics

Future growth

through local

development

#1 Visocoelastic

Continue to gain

share in eye drop

steroid market 

Lotemax

First China FDA

approved & #1

bandage lens

#1 eye drop company in China with strong pharmacy & hospital coverage

PureVision

118

119

Valeant China Market Snapshot

Medical Devices

First China FDA

approved femtosecond

platform for Cataract &

Refractive Procedure

Cataract & Retinal

machine installed

over 1,000 units

The fastest

growing

monofocal IOL

Leverage existing

infrastructure, network &

knowledge entering into

aesthetic market

Rich experience in medical device & grow consumables by equipment placement

Strong synergy between pharmaceutical & medical device team

Intraocular Lens “IOL”

Surgical market size $200M in 2013 with 12% growth

Valeant market share 16%, beat market growth by 4%

Launch Experience in China

2014

2012

CeraVe

Single Dose

Kids

New

size

HA

single-dose

Fraxel

B+L brand

Zylet

enVista

2013

Crystalens

OTC / Pharmaceuticals

Stellaris PC

120

Medical Devices

Overview of Valeant China Team

Head of

China

(1585 FTEs)

R&D

(43)

Sales

(602)

Marketing

(26)

Manufac-

turing (730)

G&A

(76)

Other

Commercial

(108)

121

China: Post-acquisition Valeant Growth

Accelerates to 21%

+2%

+21%

Vision

Care

2014E

Surgical

OTC/

Pharma

236

2013

194

2012

191

Total Revenues

Constant  USD Millions 

92

110

80

65

84

38

42

31

80

122

21% growth in Q4 YOY

from 2012-2013

44% growth in Q1

YOY from 2013-2014

Increased EBITA by 50%

through new Valeant

operating structure

Strong post acquisition

growth

My Personal Reflections…

Ethics

(Strong & Supportive

Compliance Mindset)

Results

(Challenges Thinking &

Status Quo)

Speed

(Drives Commitment &

Conviction) 

Candor

(Stimulates Thought & Reflection)

Entrepreneurship

(Generates Energy & Efficiency)

Trust 

(Motivates &

Creates Ownership)

124

Unique Innovation Model and Future Pipeline

125

Speakers

Dr. Tage Ramakrishna

Chief Medical Officer; Head of R&D and Quality, U.S.

126

Dr. Tage Ramakrishna

Chief Medical Officer; Head of R&D and Quality, U.S.

Background

Progenics

Pharmaceuticals

(4

years)

–

VP Clinical Research

Nycomed

(formerly

Altana)

(5

years)

–

Corporate VP International Drug Safety

Insmed Inc.

–

Medical Director

Degge Group

–

Pharmacovigilance Consultant

Education

B.A. in Biology, Rutgers University

M.D., Karol Marcinkowski University of Medicine

Medical College of Virginia

127

1. Products developed in our labs

2. Lifecycle management programs

4. Late-stage product in-licensing

5. Late-stage / pre-launch product

acquisition

3. Branded Generics development

We Build a Robust Pipeline Drawn from Internal and

External Sources

Our output-driven R&D

approach has delivered

more launches than most 

competitors

Our approach to R&D is

lower cost and lower risk

without sacrificing quality or

likelihood of approval

We have a robust internal pipeline, which is

supplemented with aggressive business

development

128

Focusing on R&D Output Rather than Input

Traditional Big Pharma input-driven

approach

Focus on shots on goal

Higher spend levels assumed to

generate more new products

Incentives linked to investment levels

Valeant’s output focused approach

Focus on productivity –

outputs

measured against inputs

Lower risk projects

Decentralization helps ensure right

products for right markets

Focus on line extensions and new

indications

Portfolio prioritization via rigorous,

unbiased peer scientific review

With overall industry R&D

productivity steadily declining,

traditional bets on R&D are unlikely

to pay off

129

We Leverage a Variable vs. Fixed Cost Model

Discovery

Pre-clinical

PK / PD

Formulation

Clinical /medical

strategy

Clinical operations

Regulatory

Safety /

pharmacovigilance

Very limited (e.g., Dow scientists)

Limited to 3 FTEs

Fully outsourced

In-house capabilities through Dow and Bausch + Lomb

4 FTEs for protocol design, trial design, etc.

Fully outsourced

Substantial outsourcing, small team focused on strategy

Largely outsourced, have roughly 25% as many FTEs as

similar companies

Traditional R&D functions

Valeant approach

Big Pharma traditionally

staffs all functions with

hundreds of FTEs and

uses selective outsourcing

We staff only the high value-add functions

Our model

Is not focused on “staffing for peak capacity”

Allows maximum resource flexibility and efficiency

130

Valeant Has Lean Decentralized R&D Capabilities Across

the Globe

Valeant presence

Seoul

Tokyo

China

Singapore

Berlin

Munich

Waterford

Irvine

Clearwater

Rochester

St. Louis

Tampa

Sydney

Poland

Brazil

Mexico City

Bridgewater

Petaluma

Bothell

Long Beach

Hong Kong

Montreal

Bothell

Montreal

St. Louis

China

2014 expected launches

Pipeline Products

1. Products

developed in

our labs

~60 launches,

including:

•

Ambi Naturals Line (US)

•

AcneFree Drying Lotion (US)

•

Biotrue ONEday presbyopia (Canada)

•

CeraVe Restoring Serum and Cream (US)

•

CeraVe cream, lotion, cleanser, PM facial cream

(China)

•

Jublia (Canada, US)

•

Obagi 360 range and hydrate luxe (Hong Kong)

•

Ocuvite + Lutein (Japan)

•

Pilexil anti-dandruff and new formulation (Brazil)

•

Preservision line extensions (US, Canada)

•

Regenica (Australia, Canada)

•

Soothe XP (US)

•

Trulign toric (Canada)

~60 projects,

including:

•

Artelac Care (EU)

•

Biotrue ONEday multifocal and toric (US, Canada,

Japan, Korea)

•

BLIS IOL inserter (US)

•

Envista Toric (US, Canada, Korea)

•

IDP-118 for Psoriasis (US)

•

Neoface and Neohair (Brazil)

•

Netildex (EU)

•

Obagi Clenziderm, Regenica, Gentle Rejuvenation

ranges (Hong Kong)

•

Ocuvite gummy, 50+ and other extensions (US, EU)

•

Ultra multifocal and toric (US, Canada)

•

Victus 3.2 OCT (Canada)

2. Lifecycle

management

programs

~5 launches,

including:

•

Onexton (US)

•

RAM 0.08% (US)

•

Stellaris next generation (Australia)

~10 projects,

including:

•

Arestin for peri-implantitis (US)

•

Lotemax  next generation (US, Canada)

•

Thermage –

Cheetah (US, Korea)

•

Difflam line extensions (NZ)

3. Branded

Generics

development

~300 launches in 2014 across LatAM, Asia, EMEA,

including:

•

Captopril (RU / CIS)

•

Levsaxin (China)

•

Yurelax (Mexico)

~150 projects, including:

•

Bortezomib (Poland)

•

Brinzolamide (Canada)

•

Latanoprost (Brazil, MENA, Western Europe, CEE,

Korea)

•

Zolendronic acid (Mexico)

Overview of Efforts that Fuel Product Development (1/2)

131

Overview of Efforts that Fuel Product Development (2/2)

132

2014 expected launches

Pipeline Products

4. Late stage

product in-

licensing

~20

launches,

including:

~60

projects,

including:

5. Late

stage/pre-

launch

product

acquisition

~20

launches,

including:

~20

projects,

including:

•

Emerade (US, ANZ)

•

Ideal Implants (US)

•

Lacelle line extensions (Hong Kong, China, Korea)

•

Lodalis (Canada)

•

Macugen (Japan)

•

Neotensil (Canada, Hong Kong, Australia)

•

Ortho K lens (China)

•

Recrexina (Brazil)

•

317 Eximer (Korea)

•

Cefuroxime (EU)

•

Cirle 3D navigation (US)

•

Latanoprostene bunod (US, Canada)

•

MIM-D3 (US, Canada)

•

Ocular redness therapy (US, Canada)

•

Ossix plus (US)

•

Traser (US)

•

BV Metrogel (US)

•

Eyefill (Western Europe, MENA)

•

Peroxiclear (US, Canada)

•

Luzu (US)

•

Arucom (Brazil)

•

Besivance (EU)

•

Dexagel (CEE)

•

Peroxiclear (ANZ)

•

Prolensa (Canada)

133

Case Example: Jublia North America

PDUFA

date

June

20  ,

2014

Developed a NCE on a very limited development budget of

$35M

¹

1 Total cost since 2006 (Valeant acquired in 2008)

2 $1.2B as per PhRMA profile 2013

Expected

peak sales of

$300-800M in

2018

th

Substantially lower cost than typical estimates of drug

development of approximately $1.2B per NCE²

Utilized distinctive development expertise where it matters

–

Internal

team

focused

on

critical

activities

(e.g.,

study

design / management, regulatory interactions)

–

Leveraged DOW team for formulation expertise

–

All other activities via vendors / CROs

Made technical leads responsible for all functions related to

their

area

–

lean

‘startup’

model

Lean project team of 7 FTEs

134

Allergan Claims the Proposed Valeant R&D Spend Would Only

Cover the Cost of Post-Approval Requirements

Our lean and productive R&D model enables us to fulfill post-approval

requirements at lower cost

Allergan originally asserted they expect to spend ~$200M per year on post-

approval requirements, now updated to be on post-approval requirements and

maintenance

We estimate it would cost us ~$100M per year to complete Allergan’s current

post-approval requirements and maintain products, based on 11 ongoing

clinical

trials posted by Allergan as of May 27

th

, 2014

135

Allergan Claims Valeant Would Not Have Invested in Products

Such as Botox to Grow the Market

Our R&D model delivers successful line extensions and new indications at lower

cost

Allergan stated they spent ~$2.2B on Botox, Alphagan / Combigan,

and

Juvederm extensions

In preparation for our April 22

nd

presentation, we estimated it would cost us ~$1B

to develop the full set of Allergan line extensions and new indications; we then

conservatively added another $1B for a total of approximately $2B

We believe we can fund the development of Allergan’s late stage programs to the

next milestone with our stated $300M+ of R&D spend

136

Held a joint pipeline / portfolio meeting with R&D, Commercial, and Senior

Management to review status and scientific / commercial rationale for all projects

Utilized a scientific peer review process for all projects

All essential staff were identified and retained to ensure knowledge of programs

and relationships were maintained

Only projects deemed high risk, duplicative, and with low commercial value by the

joint team were terminated

Most programs were kept and are currently ongoing, or they have achieved

development milestones, such as Ultra Contact Lenses and brimonidine.

Transitioned to our lean R&D model, including strategic outsourcing and creating a

flat organization

Overview of our Approach to Bausch + Lomb Integration

My Personal Reflections…

Our lean and decentralized operating model works extremely well in R&D.  It

allows projects to be developed quicker due to the lack of multiple layers and

unnecessary global obligations

The

lack

of

multiple

layers

of

management,

as

seen

in

“Big

Pharma,”

allows

quick development decisions to be made

We work much harder than others

There are no politics between therapeutic areas, common in most pharma

companies

The Valeant model allows me to offer our R&D staff development and scientific

opportunities that they cannot find in any other company

I have grown professionally by having responsibility for R&D on such an

intimate, hands on level, which would not  be possible in the typical pharma

model

137

138

Track Record in Capital Allocation

139

Speakers

Howard Schiller

Executive Vice President and Chief Financial Officer

Valeant Business Development

Deal activity since 2008

100+ acquisitions / licenses / co-promotes

$19B+ in capital deployed

Disciplined approach and objectives

IRRs of at least 20%

Statutory tax rates

Payback periods with 6 years or less

Deal types

7 Platform investments

Tuck-ins to supplement existing platforms

Declining assets at attractive prices generating superior returns

140

141

Growth Achieved in Platform Deals

Coria

Dow

Aton

Pharmaswiss

Sanitas

OraPharma

Medicis

Bausch + Lomb

22

21

15

12

10

7

5

2

-4%

N/A

30%

1%

4%

3%

3%

4%

27%

12%

33%

5%

5%

9%

4%

10%

1 From first year of acquisition

2 From first year of acquisition to most recent forecast

1)

2)

3)

4a)

4b)

5)

6)

7)

Quarters

Owned

Growth Year

before Acquisition

Deal

Organic Growth Since

Acquisition PY to 2013

(CAGR)

1

2

Returns On All Deals From 2008-2013

Achieved

Deal Models

Achieved

Deal Models

Cumulative EBITA

USD Millions

Cumulative Net Income

USD Millions (includes corporate

tax structure)

6,092

4,846

5,750

3,781

Four deals fully paid back to date: Coria, Aton,

Elidel, Biovail (Dow expected in 2014)

142

+26%

+52%

143

An iconic company that had fallen on hard times

–

Stalled as a public company due to underinvestment and weak leadership

–

Began turnaround under Private Equity ownership

A stable of valuable assets in need of disciplined leadership

–

Strong brand recognition in a market where brand is important

–

Strong portfolio of durable products and rich late-stage pipeline

–

Significant presence in all major segments of eye health

Prescription drugs

Surgical products

Consumer / OTC products

Highly complementary with Valeant

–

Businesses with attractive fundamentals

Fast growing categories

Largely cash-pay and private insurance

Strong brands

Durable products

–

Strong combined portfolio in emerging markets

–

Offered an at-scale entry into China; introduction into Turkey and the Middle East

144

Bausch + Lomb Was A More Complex Integration

Than Allergan Would Be

Number of

employees

13,000

11,400

Manufacturing

plants (primary)

14

6

Revenues in

North America

41%

66%

Revenues in

Emerging Markets

~25%

~17%

SKUs

200,000

Far fewer

145

How We Integrated Bausch + Lomb

Not one, but 50+ decentralized integrations

Targets built from the bottom-up, with disciplined cost

synergy tracking

Fast, fair and best-of-the-best team

talent selection 

Moved quickly to minimize disruption and course corrected

where needed

Folded into decentralized Valeant operating model

Maintained flexibility where necessary (e.g., global contact

lens manufacturing)

Protected customer facing activities: no changes to US B+L

sales force; minimal impact on ex-US B+L sales force

How We Integrated Bausch + Lomb (continued)

Focus on stabilizing (and accelerating) acquired

business assets first

Reduced duplicative / oversized G&A functions 

Eliminated global BU and regional structures and

overhead

Rationalized regional facilities footprints, including US

HQ in NJ

Switched to zero-based budgeting process

146

Most Reductions (40%) Were to B+L’s Bloated G&A

B+L CEO

% Reduction

to B+L personnel

US Commercial

9%

Consolidated and leaned parallel commercial teams (Pharma, Surgical, Vision Care)

and large Commercial Operations staff (6%)

Reduced marketing management (3%)

Europe

19%

Consolidated commercial teams (10%)

Eliminated redundant regional HQ and country-level G&A (6%)

Consolidated country-level Ops and R&D (3%)

Latin America

33%

Consolidated commercial teams (14%)

Eliminated redundant G&A (10%)

Consolidated country-level functional leaders in Ops and R&D (9%)

Asia

6%

Eliminated redundant G&A

Canada

14%

Consolidated commercial teams (10%)

Eliminated duplicate G&A and functional leaders (4%)

Global Supply

Chain

3%

Eliminated

global

infrastructure

creating

“one

size

fits

all”

policies

and

pushing

all

products to all markets

Global R&D +

Quality

23%

Eliminated high-risk projects, increased use of outsourcing, and eliminated redundant

leadership in 3 parallel R&D organizations (17%)

Consolidated country-level personnel (6%)

Corporate

Center

Leaned bloated Finance, IT, Legal, HR, Global Marketing and Corporate

Communications teams (60%)

Consolidated G&A from parallel global BUs (Pharma, Surgical, Vision Care) (6%)

66%

Actions taken

147

Bausch + Lomb 2014 Run Rate Savings

Combined

baseline

Target

synergies

(% of

baseline)

Q1 2014

run-rate

savings

Team

2014 exit run

rate as a

percent of

target

US Corporate

US Commercial

LatAm

Canada

Asia

Europe

Global R&D

Quality

Ops / Supply Chain

Total

339

727

187

100

352

611

309

39

2,226

4,890

159 (47%)

155 (21%)

51 (27%)

21 (21%)

81 (23%)

178 (29%)

178 (58%)

5 (13%)

30 (1%)

857 (18%)

125

122

42

16

62

140

126

5

20

657

91%

99%

118%

106%

105%

111%

99%

96%

198%

105%

$ Millions

2014 exit

run-rate

savings

145

154

60

23

85

198

176

5

59

904

148

Bausch + Lomb’s Global Organic Growth Rates

Bausch + Lomb

businesses

Growth since

acquisition

1

US

14%

ROW Developed markets

4%

Emerging markets

16%

Total

10%

1 Through Q1 2014

Volume / mix: >9%

Price: <1%

Volume / mix: 13%

Price: 1%

149

150

Valeant Has Increased Bausch + Lomb’s Growth

Global sales

USD millions

2012

2014E

2013

+3%

+10%

3,038

3,130

3,435

151

Our Experience With Bausch + Lomb Provides

An Excellent Blueprint for Allergan

Significant performance improvement to be gained by

decentralizing and eliminating global / regional leadership layers

Valeant GMs are well versed in rapidly identifying and capturing

synergies, while keeping the business growing

Complementary product portfolios can be leveraged by existing

sales forces from Day 1

Valeant R&D is very experienced bringing discipline to R&D teams

that have grown up with “Big Pharma thinking”

Potential to improve capacity utilization (over time) across

operational footprints, given product similarities

Untapped leadership potential often exists 2 or 3 layers below top

management

152

Revised Bid for Allergan and Next Steps

153

Proposed Transaction Review -

consideration

Cash/Share

1

$58.30

+ Exchange Ratio

0.83

Allergan Ownership

1

43%

Improved Proposal

Offers a substantial

premium to unaffected $116.63 share

price as of April 10

th

, 2014 the day before Pershing Square

crossed the 5% Schedule 13D ownership level and

commenced its rapid accumulation program

DARPin CVR provides value of up to ~$25.00 per share

2

1. Financing commitments for $18.9B from Barclays, RBC Capital Markets, The Bank of Tokyo- Mitsubishi UJF, Ltd.,  Deutsche Bank, 

DNB Bank ASA, and HSBC. Based off of diluted shares of 310.9M.

2. Based on Allergan’s assumptions in its May 12, 2014 presentation.

154

Value of an Allergan Share:

Key Assumptions

1. Source for analyst consensus: FactSet

2. Based on Allergan's assumptions in its May 12, 2014 presentation

2014 non-GAAP EPS Guidance: $5.64 to $5.73

Unaffected share price of $116.63 as of April 10, 2014 the day before Pershing Square

crossed the 5% Schedule 13D ownership level and commenced its rapid accumulation

program

Unaffected

2014

P/E

multiple

of

21.3x

as

of

April

10,

2014

based

on

consensus

1

2014 Cash EPS Guidance: $8.55 to $8.80

Unaffected

2014

P/E

multiple

of

14.2x

as

of

April

10,

2014

based

on

consensus

1

Unaffected

2014

P/E

blended

multiple

of

16.8x

as

of

April

10,

2014

based

on

consensus

1

Assumes the transaction closed and full synergies realized on January 1, 2014

Cash EPS Accretion relative to standalone Valeant: 25% to 30%

CVR

provides

value

of

up

to

approximately

$25.00

per

share

2

Allergan Standalone

Valeant Standalone

Weighted Average Blended Multiple for Valeant / Allergan

New Valeant Pro Forma Cash EPS

Pro Forma Cash EPS of $10.90 to $11.22 assuming 27.5% accretion (midpoint)

CVR

155

Proposed DARPin CVR Structure

1 Based on Allergan’s assumptions in its May 12, 2014 presentation.

Stand-alone entity

Current Allergan employees will continue to work on DARPin

Five member independent advisory board will be established to

oversee the clinical development and regulatory processes

Allergan will propose eight members, of which five will be

chosen by Valeant (combination of business people and

scientists)

CVR

holders

are

entitled

to

40%

of

net

sales

for

10

years

1

in

excess of the $400M

1

invested in R&D

Based

on

Allergan’s

estimated

of

up

to

$20B

1

in

net

sales

over

10 years

1

, the CVR provides value of up to approximately

$25.00 per share

Valeant

will

invest

up

to

$400M

1

to

develop

DARPin

Value of an Allergan Share:

Allergan stand-alone vs. Valeant proposal

Stand-alone Allergan

$120.13

to

$122.05

per

share

based

on

21.3x

2014

P/E

multiple

to

recently

revised

EPS

guidance

Premium to unaffected price: 3.0% to 4.6%

Valeant Proposal

1. For Allergan shareholders to receive value of $180 to $200 per share (excludes CVR)

New Valeant would need to trade at a 2014 P/E multiple of 13.1-15.7x or $146.63 to

$170.72 per share

Premium to unaffected price: 54.3% to 71.5% plus the value of the CVR

2. If New Valeant trades at a blended multiple of 16.8x

Total value per Allergan share of $210.29 to $214.75 (excludes CVR)

Premium to unaffected price: 80.3% to 84.1% plus the value of the CVR

156

157

Value of an Allergan Share:

Allergan stand-alone vs. Valeant proposal

Stand-alone Allergan

$120.13-$122.05

P/E Multiple

Premium to

unaffected price

$210.29-$214.75

21.3x

16.8x

3.0-4.6%

Allergan shareholders

receive value of $180-$200

per share

$180.00-$200.00

13.7-15.7x

54.3%-71.5%

plus CVR value

Allergan share price

Total value per

Allergan share

Total value per

Allergan share

Valeant Proposal

New Valeant trades at a

blended multiple of 16.8x

Blended

Implied

80.3%-84.1%

plus CVR value

Our Response to Yesterday’s Allergan Release

158

Speakers

J. Michael Pearson

Chairman of the Board and Chief Executive Officer

159

Yesterday, Allergan Published an Analysis of Valeant

That Was Full of Errors

•

It is unfortunate that Allergan hasn’t taken the time to understand our business

•

We have offered many times to sit down with Allergan management to:

•

Allergan management has refused these invitations

•

The numerous inaccuracies in Allergan’s analysis call into question the quality

of the analysis they, and their advisers, have done on the attractiveness of a

deal

•

Our presentation so far has hopefully helped Allergan’s management team,

Board and stockholders better understand Valeant’s robust business model

•

We remain confident that investors have a clear view of this deal’s potential

160

–

Explain our business

–

Explore value creation potential of a combination of our businesses

Assertions Made By Allergan

•

Valeant’s pro-forma organic revenue growth is negative for fiscal year 2013

and Q1 2014

•

Bausch + Lomb’s Rx Ophthalmology revenue growth is driven by

unsustainable price increases

•

Our management has no experience running large, global brands

•

Medicis performance has rapidly eroded

•

Valeant has overstated the synergy potential of a Allergan/Valeant

combination

•

Allergan has a significantly stronger market share position in the largest,

fastest growing, emerging markets

•

Valeant’s stated combined company tax rate is neither achievable nor

sustainable

•

Valeant’s adjusted cash-flow metric is misleading

•

Valeant is a second Tyco

•

Valeant’s management lacks experience in pharmaceuticals and has

experienced significant turnover

161

Dissecting Organic Growth Rates

Allergan alleges:

Actuals:

8

1

N/A

-1.4

Organic Growth

Including Generic

Impact

Pro-Forma Revenue

Growth Ex-Generic

Impact

Pro-Forma Revenue

Growth Including

Generic Impact

Organic Growth Ex-

Generic Impact

Q1 2014

Revenue

Growth Rates

FY 2013

Revenue

Growth Rates

0

-0.5

10

N/A

7

4

1

8

Q1 2014

Growth

Rates

1

FY 2013

Growth

Rates

1

7

2

0

10

Allergan’s analysis

had several errors

Included total

revenues which

include:

Valeant is very

transparent about

our adjustments

1 Calculated using product sales

Percent

162

Allergan’s

calculations do

not adjust for the

impact of:

–

Royalties

–

Milestones

–

Contract

manufacturing

revenue

–

Currency

–

Divestitures

–

Discontinu-

ations

Our Actual Quarterly TRx Trends in US Prescription

Ophthalmology

2%

-17%

-11%

23%

28%

Lotemax

•

With 2 exceptions, our products

have all experienced volume

growth quarter-over-quarter

•

Allergan's analysis "cherry-

picked" select products and

excluded important products,

e.g.,

Lotemax Gel

Bromday franchise (including

impact of our Prolensa life-

cycle management)

TRx Trends for Q4 2013 vs. Q4 2012

Bromfenac franchise

(Prolensa/Bromday)

Allergan’s view

Wolters Kluwer Data

Suspension,

Gel and

Ointment

-21%

-21%

-12%

N/A

12%

Alrex

Bepreve

Besivance

% of B&L US Rx

Business

80%

41%

Volume growth

7%

-19%

163

Every One of Our Leaders Today has Worked on Billion-

Dollar-Plus Global Brands

Tracy Valorie

Joe Gordon

Gaelle Waltinger

Dr. Tage Ramakrishna

Tom Appio

164

Steve Sembler

Deb Jorn

Dr. Pavel Mirovsky

Dr. Leszek Wojtowicz

John Connolly

President, OraPharma,

Sr. VP Neuro / Other

30 years in Pharma

and Healthcare

VP Marketing

Dermatology

34 years in Pharma

President and GM,

Europe

23 years in Pharma

and Medical

VP and GM Poland

20 years in Pharma

VP Russia and CIS,

GM Russia

23 years in Pharma

VP, North Asia / Japan

27 years in Pharma /

Healthcare

Chief Medical Oficer;

Head of R&D and

Quality, U.S.

10 years in Pharma

VP, Marketing

Pharmaceutical

Ophthalmology

23 years in Pharma

General manager,

Consumer Health Care

27 years in OTC health

care

VP, Western Europe

16 years in Pharma

Medicis –

A Financially Compelling Transaction

Purchase price

$703M

$1,240M

$1,025M

$2,968M

Proceeds from

divestitures

1

Net investment

in Medicis

Tax-affected

cumulative EBITA

through Q1 2014

NOTE: Includes Sculptra

1 Assumes 170M taxes on proceeds

~2x effective

multiple on

2014E sales of

~$500M

(Including cost of

restructuring and

integration)

2014 launches:

Luzu and

Metrogel,

165

166

Expected Savings Are In Line With Precedent Transactions

Combined OpEx ($M)

Synergies ($M)

5,800

Allergan

2,625

Medicis

Bausch

+Lomb

Biovail

667

1,099

900

2,700

300

350

n/a

36%

73%

49%

Allergan’s assertion

Synergies / OpEx

~52%

~27%

~47%

~34%

167

Emerging Markets Are a Clear Strength of Valeant

Valeant 2014E

Revenues

•

Allergan only looked at ophthalmic Rx,

which represents <5% of Valeant’s

emerging market revenues

•

Valeant sales in the four markets

Allergan isolated deliver ~75% of

Allergan’s total sales in emerging

markets

(including Japan)

•

Valeant’s aggregate growth in

emerging markets from 2011-2013

was

49%,

Allergan’s

was

11%

•

Valeant has made a specific decision

not

to

invest

in

India

due

to

market’s

lack of IP protection and profitability

potential

•

Valeant

also

has

critical

mass

in

other

attractive

markets,

including:

Valeant Growth

2013-2014E

Russia

$330M

63%

China

$230M

154%

Brazil

$210M

35%

India

$40M

185%

–

Vietnam

–

South Africa

–

Mexico

–

Southeast Asia

–

Turkey / Middle East

Sustainability of Valeant’s Tax Rate

Allergan’s Assertions

Actual

Tax Deferral

Structures and

Audit Risk

•

Taxing authorities are likely to heavily scrutinize

Valeant’s tax-deferral structures and transfer

pricing

•

Valeant does not have multiple deferral

structures

•

Valeant’s tax structure is compliant with all

applicable laws and undergoes the same

scrutiny as any other public company

•

Allergan itself uses tax deferral structures to

reduce its tax rate and which are subject to the

same scrutiny

Undisclosed

Cash Tax Cost to

Achieve “Tax

Synergies”

•

The upfront cash tax cost of migrating IP could

be substantial and…take over a decade to

recover

•

The cash tax cost could also have a significant

impact on the cash flows of the combined

company

•

Any costs are included in our estimated high

single digit tax rate

Tax Treatment of

Transaction to

Shareholders

•

Legislators…have recently proposed changes

to current US tax law which could make the

resulting Valeant/Allergan entity a US tax

resident

•

The majority of shareholders are not taxpayers

•

We do not speculate on whether proposed

legislation will be enacted

Significantly

Lower Tax Rate

vs. Re-domiciled

Pharma Peers

•

Valeant / Allergan tax rate expected to be “high

single-digit”

•

Valeant is not a recently inverted company, so

comparisons to recently inverted companies is

inappropriate

•

Valeant’s tax structure is a well-documented

advantage to shareholders

168

169

Allergan and Valeant Make the Same Adjustments to

Report Non-GAAP Earnings

•

Inventory step-up

•

Other amortization and non-cash charges

•

Stock-based compensation step-up

•

Stock Based comp (excluding step up)

•

Contingent Consideration (accretion, adjustments)

•

Restructuring and other costs

•

Acquired in-process research and development / Milestone

Payments to Partners

•

Asset Impairment Charges

•

Acquisition-related costs

•

Legal settlements

•

Amortization of intangible assets

•

Amortization of deferred financing costs, debt discounts and

ASC 470-20 (FSP APB 14-1) interest

•

Loss on early extinguishment of debt

•

(Gain) loss on investments, net

•

Milestone Revenue

•

Proceeds from Outlicensing Activities + Other Non-Recurring

Revenue

•

Write-down of deferred financing costs

•

Deferred Income Taxes

•

Depreciation

•

Deferred Revenue

Excluded

Excluded

Excluded

Included

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Included

Included

Excluded

Excluded

Excluded

Included

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

Excluded

N/A

Excluded

Excluded

Excluded

N/A

Excluded

Included

Included

Source: SEC Filings

170

M&A Has Been An Important Part Of Many Leading

Healthcare Companies’

Growth Strategies

Number of transactions with >$50M deal value over the last 10 years

Source: Valeant actuals; all others Capital IQ

30

27

26

22

10

21

171

Both Allergan and Valeant Have Changed Segment

Reporting Under Current CEOs

2 Segments:

•

Specialty pharmaceuticals

•

Medical Devices

1 Segment:

4 Segments:

•

US

•

Europe

•

Asia/Pac

•

Other

2 Segments:

•

Developed markets

•

Emerging markets

4 Segments:

•

US Neuro/Other

•

US Derm

•

Canada/Australia

•

Emerging markets

5 Segments:

•

US Neuro/Other

•

US Derm

•

Canada/Australia

•

BGx Europe

•

BGx Latin America

Source: SEC Filings

3 Segments:

•

Specialty

•

BGx Europe

•

BGx Latin America

2000-2002

(Rev: $1.6B)

2002-2006

(Rev: $1.4B)

2006-2014

(Rev: $3.1B)

2008-2010

(Rev: $0.7B)

2011

(Rev: $2.4B)

2012

(Rev: $3.5B)

2013-2014

(Rev: $5.8B)

•

Specialty

pharmaceuticals

172

Valeant’s senior management philosophy

Valeant’s business has grown dramatically over the past 3

years and we have consistently looked to expand and

upgrade our senior management talent

Management and the Board assess, on an annual basis,

the talent in each key role, given the rapid growth of our

company

We instituted the Company Group Chairman structure to

bring on a broader and stronger senior management team

Our current team includes a combination of internal

promotions, leaders retained in acquisitions and top-notch

external hires

Many departed executives have retired or become CEOs of

other companies

173

Assertions Made By Allergan

Valeant’s pro-forma organic revenue growth is negative for fiscal year 2013 and

Q1 2014

Bausch + Lomb’s Rx Ophthalmology revenue growth is driven by unsustainable

price increases

Our management has no experience running large, global brands

Medicis performance has rapidly eroded

Valeant has overstated the synergy potential of a Allergan/Valeant combination

Allergan has a significantly stronger market share position in the largest, fastest

growing, emerging markets

Valeant’s stated combined company tax rate is neither achievable nor

sustainable

Valeant’s adjusted cash-flow metric is misleading

Valeant is a second Tyco

Valeant’s management lacks experience in pharmaceuticals and has

experienced significant turnover

174

Closing Remarks

Our decentralized model has delivered strong organic

growth over six years

We have maintained / accelerated revenue growth for

nearly all platform assets acquired

Bausch + Lomb organic growth has accelerated from 4% to

10%+, almost exclusively through volume

We are committed to innovation through an output-driven

R&D approach that has delivered more launches than most

competitors

175

Closing Remarks (continued)

We have a rich late-stage pipeline. We will continue to

augment this pipeline with late stage product in-licensing,

partnerships and acquisitions

We can deliver Allergan’s post-approval requirements at a

lower cost and continue to invest in expansion of

indications within our leaner R&D model

We have generated consistent and superior cash-on-cash

returns over a six year period.  In aggregate we are

significantly ahead of our original deal models

We have a detailed bottoms-up understanding of Allergan

synergies coupled with a decentralized integration

approach that proves we will deliver (or exceed) our $2.7B

synergy estimate