Good day, and welcome to the Bausch Health Q1 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then the 1 on your touchtone phone. To withdraw your question, please press Star then 2. We do ask that you limit yourself to one question and a single follow-up. Please note, today's event is being recorded. I would now like to turn the conference over to Christina Chang, Senior Vice President of Investor Relations. Please go ahead, ma'am. Good morning. Welcome everyone to our Q1 2022 Earnings Conference Call. Participating in today's call are the chairman of Bausch Health and Bausch + Lomb's CEO, Mr. Joe Papa, the new CEO of Bausch Health, Mr. Thomas Appio, and the new Chief Financial Officer of Bausch Health, Mr. Tom Vadaketh. Before we begin, I'd like to remind you that our presentation today contains forward-looking information. Our actual results may vary materially from those expressed or implied in our forward-looking statements, and you should not place undue reliance on any forward-looking statements. Please refer to our SEC filings and filings with the Canadian Securities Administrators for a list of factors that could cause our actual results to differ materially from our expectations. We use non-GAAP financial measures to help investors understand our ongoing business performance. Non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and should not be considered along with, but not as alternatives to, operating performance measures as prescribed by GAAP. You will find reconciliations to our non-GAAP measures in our appendix of the presentation online. Finally, the financial guidance in this presentation is effective as of today only. We do not undertake any obligation to update guidance. I would like to take a moment to remind you that the Q1 results are the fully consolidated results of Bausch Health, covering the quarter ended March thirty-first, before the IPO of Bausch + Lomb, which is scheduled to close this morning, subject to customary closing conditions. Our discussion today will focus on Bausch Pharma and Solta, and we will briefly comment on Bausch + Lomb's results disclosed in its IPO prospectus. Bausch + Lomb will file a separate 10-Q within 45 days after IPO pricing and will host a separate earnings call in conjunction with the filing. Please note that the results of the B&L segment presented here today will differ from the results presented in the standalone financial statements of Bausch + Lomb, as those standalone stated results include certain corporate and shared costs that are allocated to Bausch + Lomb, which are not included in our B&L segment results. It is my pleasure to turn the call over to Joe. Thank you, Christina, and thank you everyone for joining us today. With the initial public offering of Bausch + Lomb scheduled to close today, Bausch Health begins the journey towards the separation of its global pharmaceutical and eye health business, an important step that we expect will help unlock the value in each of our established franchises. Before I start, I would like to thank the 20,000 Bausch Health employees around the world for their ongoing contributions to simultaneously move forward with our strategic alternatives process, advance our R&D projects, and drive business performance that helps to improve people's lives around the world. As part of our planned succession of Bausch Health management team, Thomas Appio will lead the new Bausch Health into its next chapter as Chief Executive Officer. Thomas' extensive experience in pharmaceuticals includes more than 2 decades at Schering-Plough and 12 years in Bausch Health, where the B&L international business delivered significant top line and bottom line growth under his leadership as president and co-head. Tom Vadaketh succeeds Sam Eldessouky as the new Chief Financial Officer of Bausch Health, with over 30 years of financial leadership experience in several industries and companies, both public and private, including Tyco, Procter & Gamble, and Cambrex Corporation. Tom's experience in the successful spin-off of Tyco subsidiaries will guide the separation process. Sam Eldessouky began serving as the Chief Financial Officer of Bausch + Lomb today, May tenth. We are confident each organization will benefit from a dedicated focus on our respective verticals that will fuel innovation to address significant unmet medical needs. On page six, let me provide a quick update on our strategic alternative process in the B&L IPO. We launched the initial public offering of 35 million shares of Bausch + Lomb last week, equivalent to 10% of shares outstanding, generating gross proceeds of approximately $630 million, which will go towards the repayment of Bausch Health debt upon closing. Given current market conditions, we decided to proceed with a smaller IPO offering than we originally intended. At IPO closing, Bausch Health will own a 90% majority stake in Bausch + Lomb. Bausch Health will have the flexibility to monetize approximately an additional 10% of Bausch + Lomb shares to decrease debt and for the benefit of Bausch Health shareholders. The remaining 80% will be distributed directly to Bausch Health shareholders following the expiry of agreed upon lockups and the achievement of our target net leverage ratios of 6.5-6.7x subject to shareholder and regulatory approval, as noted on page 7. We remain patient with Solta and wait for better market conditions for its IPO. Solta Medical is a valuable asset and has the potential to grow in the double digits driven by healthy demand for aesthetic products and services. Solta CEO Scott Hirsch will report to Thomas Appio going forward. Before I turn it over to Tom, I'd like to make three points. First, since resolving the legacy U.S. class action securities litigation in 2019, we have reached mutually agreeable settlements with a meaningful portion of the opt-outs and have 21 matters remaining. We disagree with reports in the media regarding the characterization of potential risk and dispute the claims in the remaining individual opt-out complaints. We believe we have viable defenses in each of these actions and will continue to vigorously defend ourselves. With respect to the evaluation of the 21 remaining opt-out cases as publicized by the plaintiffs, we disagree with any suggestion that these cases have greater value than the class action and have taken provision for these remaining opt-out cases. Second, I'd like to comment on a few items that have been raised recently in the public and reiterate our confidence in the position we have previously stated. One such item are various allegations made by the opt-out plaintiffs in the securities case, which we disagree with. We have stated this before, but I think it's important to reiterate. Bausch Health is and will continue to be fully compliant regarding the debt covenants as we go through the strategic alternatives process with the IPO and spin-off of Bausch + Lomb. The entire company, together with multiple legal advisors in the U.S. and Canada, accounting evaluation advisors, and our banking advisors, have done a tremendous amount of work over the past 18 months to get to this point. One of the final steps of this process, we are committed to Bausch Health achieving the leverage target we set out with a 6.5-6.7 before spinning off Bausch + Lomb. With respect to the XIFAXAN Norwich trial, as you know, we had our trial in March 2022. Our evidence went in well. We remain more confident in the strength of our intellectual property today than before the trial and therefore in our chances of a successful outcome. Finally, I wanna comment on the B&L business and our recent roadshow activities. Over the past few weeks, Jim and I had a chance to meet with many investors and analysts to share the B&L story. B&L fundamentals are strong and the business continues to show strong momentum with 5% organic growth in the Q1 of 2022. We continue to see the favorable impact of mega trends that we expect to continue to drive the Bausch + Lomb business in the future. As a final comment, today, we're reaffirming our top-line guidance of 4%-5% organic growth for the full year 2022. With that, let me turn the floor over to Thomas. Thank you, Joe, and congratulations on Bausch + Lomb's IPO. It is a privilege to lead Bausch Health as it enters a new chapter. I look forward to working with our chairman, Joe Papa, and our future chairman, Bob Power, who will assume his role upon Bausch + Lomb's full distribution, and the rest of the Bausch Health management team. Before I speak about Bausch Health, let me say that our thoughts are with those affected by the Russia-Ukraine conflict. Each of our 76 employees based in Ukraine is safe and accounted for. We have dedicated resources to address the humanitarian crisis in the country through multiple channels, including collaborating with GlobalGiving, a nonprofit organization for an employee donation program to support affected communities. Bausch Health is a global organization with an energized and talented team and a well-established platform for scientific innovation and proven success in the commercialization of healthcare products. We have a global organization with a presence in approximately 90 countries. We have a differentiated pharmaceutical portfolio across multiple high-growth therapeutic areas. We have a global medical aesthetics business in approximately 50 countries. We have strong cash flow supporting delevering and investment in pipeline opportunities. We have the ability to leverage global infrastructure to pursue a robust business development agenda. We have a seasoned leadership team with a track record of driving profitable growth. Our diverse portfolio spans more than 600 products across multiple therapeutic areas, including gastroenterology, hepatology, dermatology, and neurology. Our team have built a strong foundation that positions the company for continued success. Our specialty sales force is instrumental in the success of our well-known established franchises, led by XIFAXAN, which is recognized for its strong efficacy in treating IBS-D and hepatic encephalopathy, also known as HE. We continue to leverage our primary care sales force to maximize opportunities for the products in our GI franchise. Through better market access and commercial strategies, we have grown TRULANCE into a 100 million-plus brand. We are laser-focused on accelerating the growth of our existing pipeline. With our commercial platform, we are well-positioned for business development and partnership opportunities. We are committed to making our products accessible to patients around the world. Our pricing strategies balances access, affordability, and the ability to invest in future medicines. We advocate for payers to expand access to our products and provide patient assistance wherever possible. We recognize different economic realities require the use of flexible approaches for market access, and these efforts made it possible for more patients to benefit from our drug therapies. We have continued to strengthen our governance framework. We have separated the chairman and CEO roles. Our board consists of talented directors with valuable industry and functional experience. I want to personally welcome Dr. Richard Mulligan, currently a professor of genetics at Harvard Medical School and a former director of the Harvard Gene Therapy Initiative. Under the guidance of our board, we'll establish a strong framework for creating value for our stakeholders, operating agility and continued commitment to the highest standards of ethics and integrity. Lastly, we are committed to building a culture of performance and accountability, as going forward, we'll focus on people, products and processes. Finally, let me briefly comment on Q1 performance. Q1 organic growth was stable compared to the Q1 of last year with sales of $1.9 billion, despite incremental macro pressures and a challenging supply chain environment. Q1 was also impacted by the divestiture of our Amoun business in July 2021. Adjusted EBITDA for the quarter was $732 million, down 13% versus Q1 last year on a constant currency basis, driven by higher investments in sales and marketing R&D, which we believe will strengthen our business for the future. The separation of Bausch + Lomb enables us to increase our ability to grow the pharmaceutical/Solta businesses with focused commercial investments while expanding our product pipeline with innovation. I wanna thank the team for all their hard work and dedication to get us to this point. With that, let me invite Tom Vadaketh to provide a financial update for Q1 and our outlook. Thank you, Thomas, and good morning. We appreciate everyone who has joined us on this call. Before I start, please note that my comments on revenue today will focus on organic revenue, which excludes the impact of foreign exchange, divestitures and discontinuations. Consolidated revenue for the Q1 was $1.9 billion, with flat organic growth versus the prior year. Q1 revenues for Bausch Pharma and Solta were $1 billion, down 3% on an organic basis versus last year. This was driven by a low single-digit increase in average price offset by lower volume. Q1 was a challenging environment with the Omicron resurgence impacting primary care and nursing home capacity in the U.S. as well as the resulting COVID lockdowns in China. The geopolitical tensions have created ripple effects on an already tight supply chain, which continues to create an inflationary pressure on input costs. Navigating these challenges requires increased focus and agility as we safeguard the supply of our products. Let me provide more details on each of our segments. You can refer to slide 9 for a summary of our sales results. Please note that starting this quarter, we will report sales under our new reporting segments, Salix, International, Diversified Products, Solta Medical, and Bausch + Lomb or B&L. Please see slide 34 for a quick guide. Turning to page 11, Salix revenues of $464 million were down 2% versus the Q1 last year, following a record high Q4. The reduction was partially due to lower volumes related to the loss of exclusivity in certain products. The year-over-year decline was also related to the non-recurrence of favorable wholesaler inventory rebalancing in the Q1 of the prior year. We estimate that this impacted the year-on-year revenue comparison by approximately $50 million. XIFAXAN sales increased in the low single digits, and TRULANCE sales grew in the mid-teens on healthy volumes. The Omicron surge in the US slowed XIFAXAN growth, and we are increasing our digital marketing investments behind XIFAXAN to accelerate growth and continued market share gains. You can see on page 12 that the key Salix brands continue to gain market share. Turning to page 13, International delivered Q1 revenues of $244 million, an organic growth of 8%, which excludes the impact of the divestitures and discontinuations, primarily Amoun as well as FX headwinds. The growth was driven by continued strength in Canada and EMEA. As a reminder, our international business is a highly diverse business with a durable portfolio of over 500 products, with no single product accounting for greater than 10% of segment sales and no risk from potential loss of exclusivity. Turning to diversified products which now includes the Ortho Dermatologics business. Q1 revenues of $249 million were down 16% versus last year. Wellbutrin and Aplenzin combined reported a 14% increase in revenue driven by net realized pricing. Our neuro business was down 17% due to unfavorable comps arising from the COVID-related demand last year for Pepcid, Ativan and Mysoline. Our generics business was down 24%, primarily due to new competition. Our dermatology sales were down 13%, while dentistry was flat. Lastly, on page 14, Solta Medical's revenue was $72 million, flat year-over-year due to the COVID lockdowns in China, which accounts for about a third of Solta's business and a shortfall of critical components in the Q1. We estimate these two factors impacted growth by about 17 percentage points in the Q1. We expect these factors to continue into the Q2 and are focused on resolving the microchip issue. We expect COVID lockdown in China to abate as the year progresses. Our revised guidance for the full year revenue now reflects this temporary impact to growth. The business is well-positioned to grow at attractive rates, and we will continue to focus on maximizing shareholder value. Now let me provide brief commentary on Bausch + Lomb. As a reminder, the Q1 is fully consolidated with B&L's results. Turning to page 15, Bausch + Lomb's revenues of $889 million were up 5% organically, which is in line with our 4%-5% organic growth guidance for the full year 2022. The strong momentum heading into 2022 drove solid performance in the Q1 and enabled us to overcome softness due to COVID-related lockdowns in China and currency headwinds of $29 million for the quarter. We continue to see megatrends driving the durability of this business and expect this dynamic to support growth for many years to come. Adjusted EBITDA was $170 million for the quarter, which includes approximately 9% of sales for R&D expense and reflects our commitment to continue to invest in the business and launch new products. The growth in the quarter was led by the global surgical and vision care segments. In the surgical segment, we saw strong demand for consumables and IOLs as the market worked through the COVID-related backlog and the number of procedures continues to increase. In the vision care segment, which now includes contact lenses and consumer products, we are continuing to see growth momentum in the key franchises, eye vitamins, LUMIFY, and Biotrue. The ramp-up in Daily SiHy lens is adding to the growth. During Q1 2022, we launched the Daily SiHy in 14 different markets in Europe and Malaysia, and we expect the global rollout to continue with another 10 countries this year and the launch of the multifocal lenses later this year. In the Ophtho Rx business, we are excited about the recent launch of XIPERE in late March. We view this as a first step in the transformation of the portfolio. We expect 2 additional products, NOV03 and the Lucentis biosimilar to launch in 2023, which we view will be catalysts to accelerate growth. Vyzulta TRXs were up over 40%, and the international ophtho grew organically by 16% in the Q1. You'll find a summary of our market share performance on page 17. Turning to the consolidated P&L for the quarter, I'm gonna focus my comments on non-GAAP results on page 19. Q1 adjusted gross margin decreased 40 basis points compared to last year, driven by significant inflation in freight, energy, and other input costs driven by current market conditions. We began to experience inflationary pressures in late 2021, which have since been exacerbated by the Russia-Ukraine crisis and the lockdowns in China. Adjusted operating expenses for the Q1 was $705 million, an increase of 6% on a constant currency basis versus last year, driven by higher selling expenses to invest in the business and support product launches and R&D spending as we continue to invest in the business. R&D was up 14% on a constant currency basis and represented 6.6% of product sales compared to 5.5% last year as spending returns to pre-COVID levels in Bausch + Lomb and Salix. Adjusted EBITDA was $732 million for the quarter, down 14% versus last year. Adjusted EBITDA margin was 38% compared to last year's 42%, with half of this decline driven by higher selling expenses and a third from higher R&D. Now let me discuss our balance sheet on pages 20 and 21. We used $63 million of cash from operations on a GAAP basis, which was impacted by legacy legal settlements. After excluding these legal settlements, adjusted cash flow from operations is $325 million, down from last year due to timing of payments. We ended the quarter with net debt of $23.4 billion for Bausch Pharma after repaying $200 million of the senior secured term loans using cash on hand. Turning to page 22, let me take a few moments to walk you through the changes to our capital structure as a result of the IPO and related transactions since quarter end. The Bausch + Lomb IPO resulted in gross cash proceeds of $630 million before underwriting costs. Concurrent with the IPO, Bausch + Lomb also expects to close on its new debt issuance today, raising $2.5 billion of new term loans. In addition, you'll recall that BHC had raised $1 billion from a new secured bond offering in January 2022, and our cash balance at the end of the quarter includes proceeds from this offering. The net proceeds from the IPO and the debt raise, plus the secured bond proceeds, will reduce debt by $3.4 billion since quarter end, taking the debt for unconsolidated Bausch Pharma from $23.4 billion at the end of Q1 2022 to approximately $20 billion as of today. Finally, in January 2022, BHC entered into a new credit facility with new term loans of $2.5 billion, which is also closing today. As you see on page 23, with the expected closing of these transactions today, we have made significant progress in reducing our debt, and we will have extended the maturity profile of our debt and our debt obligations through 2025 by approximately $6 billion. Following these transactions, our debt is approximately 85% fixed, and we currently do not have any maturities until 2025. We'll continue to optimize our capital structure while retaining our flexibility to invest in the business. It's important to note that post-IPO, Bausch + Lomb's cash flow will not be available to the rest of Bausch Health. Bausch + Lomb is required to remain a restricted subsidiary of Bausch Health under its debt instruments until Bausch Health achieves the required leverage ratio under the bank facility and the fixed charge coverage ratio under the bonds. Bausch Health then designates it, Bausch + Lomb, as unrestricted. As a result of the low proceeds in the IPO and less deleveraging than initially contemplated, we are not yet able to unrestrict B&L. However, although B&L is still a restricted subsidiary for the time being, as of May 10th, it is no longer a guarantor of Bausch Pharma's unconsolidated debt. We believe that B&L's status as a restricted subsidiary will not have any material effect on its ability to operate or implement its business plan. From a capital allocation standpoint for our combined Bausch Pharma and Solta business, deleveraging remains a priority for the use of cash. We will also invest to grow the business organically and inorganically. Given the high cash flow conversion rate of the business, we have the ability to improve our net leverage ratio by up to approximately 0.75 turns per year, while continuing to invest in R&D projects with the potential to deliver attractive returns. Now let me take a few moments to discuss our outlook for the year, which you can find on slides 26 and 27. We are reaffirming our outlook for organic growth for the total Bausch Health business of 3%-5%. Our revenue guidance on a consolidated basis is in the range of $8.25 billion-$8.4 billion. On an organic basis, we expect Bausch Pharma to grow 2%-3%, B&L 4%-5%, and Solta 2%-5%. Given that the B&L IPO is expected to close later today, we will provide limited guidance for the Bausch + Lomb segment. Bausch + Lomb will provide such guidance moving forward when appropriate to do so after the closing of the IPO and in compliance with applicable law. On a consolidated basis, we expect to generate an adjusted EBITDA of $3.225 billion-$3.375 billion for 2022. This assumes higher FX and ongoing COVID impact, as we have experienced in the Q1 of 2022, and post-IPO dyssynergies now that B&L has gone public. Based on current rates, we anticipate total FX pressure of approximately $230 million over 2021, representing an incremental FX impact of approximately $135 million since our February guidance. The impact of FX on full-year adjusted EBITDA is $50 million, which is an incremental $20 million since our February guidance. Our guidance assumes that the China lockdowns last through the Q2 and that inflationary headwinds remain in the near term. We expect the slow recovery in the healthcare capacity in the U.S. to dampen TRX growth near term, and our commercial strategy this year will execute new ways to support patient needs in this environment. We expect full-year gross margin of 71.5% compared to 72% previously, based due to product mix and net inflation. We continue to look for ways to offset these pressures through operating efficiency while keeping our products affordable and growing market access. We continue to invest in the business and expect R&D and selling and marketing expenses to grow this year after the significant pullback in spending last year. Furthermore, we had previously estimated full-year dyssynergies of $150 million on a run rate basis. Following the IPO of Bausch + Lomb, we will begin to incorporate these costs into our non-GAAP results starting in the Q2. We estimate dyssynergies of $100 million for the balance of this year. For interest expense on a consolidated basis, we expect $1.48 billion for the full year due to the higher cost of debt, partially offset by savings from the paydown of debt. Please note that this interest expense forecast includes interest expense from the new $2.5 billion of B&L term loans that are closing today. Assuming no further capital markets or debt transactions, we expect to generate $1.55 billion from cash flow from operations. Before I wrap up, let me take a moment to update you on how our financial reporting will change as we move forward towards the spin-off of Bausch + Lomb. Going forward, we will consolidate B&L's results and report a majority interest to reflect our 90% stake until we complete its distribution. After the distribution, we expect to report Bausch + Lomb as a discontinued operation. Now let me turn the floor back to Thomas Appio for concluding remarks. Thank you, Tom. It is great to have you on the Bausch Health team. Before I wrap up, I wanna wish the Bausch + Lomb team tremendous success. Having worked with this team closely for 12 years, I am excited to see our talented team lead the independent Bausch + Lomb in its next chapter of growth and success. Looking forward, Bausch Health is moving with a sense of urgency to drive near-term growth while supporting our long-term strategic priorities on slide 32, which I would like to elaborate more in detail. Firstly, we will drive growth through operational excellence across the enterprise. We continue to believe that Salix and International will be growth engines for our company. Our anchor brand, XIFAXAN, is best positioned for incremental growth with increased investments intended to further raise awareness of the clinical unmet need in IBS-D and HE. We recognize the pressure on the U.S. healthcare system to safeguard the standards of care for patients as hospitals and nursing home facilities navigate ongoing capacity and staffing challenges. XIFAXAN provides a clear healthcare solution for reducing rehospitalization of patients with HE, reducing pressure on our already overburdened healthcare systems. Evidence of commercial excellence is seen in our ability to derive results with RELISTOR, TRULANCE, and JUBLIA, where we have realized increases in market share with targeted market access wins and direct-to-consumer investments. We will leverage our international commercial scale by launching 45 different products across 50 markets within our international segment. We will increase focus on operational efficiencies through effective portfolio and life cycle management. We also see good potential to stabilize our cash-generating business of derm, neuro, generics, and dentistry. In the second half of 2022, we believe our Solta business will see the recovery of procedures in Asia Pacific, availability of inventory, and continued market expansion in Europe. Second, we will intensify our focus in operating rigor behind R&D and business development. We know that building our pipeline through both effective R&D and strategic BD is crucial to the long-term health of our company. We have been investing in middle and late-stage clinical trial development for unique and novel rifaximin formulations to address GI, HE, and sickle cell anemia, as you can see on slide 31. Our clinical studies for IDP-120 and IDP-126 for patients with acne met their primary and secondary endpoint, and we are currently preparing the next steps for regulatory approval. We are also advancing our research of amiselimod for mild to moderate UC. Third, we will cultivate a high-performance, results-oriented culture. Already, we are feeling the energy that comes from our renewed focus. We are going to continue to create a sense of urgency, ownership, and accountability and really build a fit-for-purpose organization. Finally and fourth, we will progress our strategic alternatives and deliver shareholder value. This has been a key priority for Bausch Health in the past, and it will continue to be a key priority going forward. We have an attractive cash flow profile. We will utilize cash generated from operations to improve leverage. We have the flexibility to monetize an additional 10% remaining stake of B&L equity and launch Solta's IPO when the market conditions are right, as we target a net leverage ratio of 6.5-6.7 times as we previously committed. As the past two years have reinforced, ongoing engagement with all our stakeholders is critical to operating a business that is agile enough to keep pace with the world transforming at an unprecedented pace. We will be laser-focused on these priorities as we build Bausch Health for the future. Before we open up for questions, I'd like to take a moment to highlight that we will endeavor to reach out to many of you in the coming months as part of a comprehensive IR effort. For future programs, please visit our Events page for more details or contact Christina Chang, our new SVP of Investor Relations. With that, let me turn the floor to the operator for questions. Thank you. We will now begin the question- and- answer session. To ask a question, you may press Star then 1 on your touchtone phone. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press Star then 2. We also ask that you please limit yourself to one question and a single follow-up. Today's first question comes from Ken Cacciatore with Cowen and Company. Please go ahead. Hi. Thanks, everyone. Congratulations as you continue to move forward. My question is, you do have upcoming potential lawsuits. You mentioned, Joe, at one point the opt-out. Wondering about XIFAXAN, if there is a loss, and we know you could appeal if there was one, would that in any way hinder the spin or hinder the covenants? And then also just wondering, I know it's difficult for you to speak to, but t here's clearly a discrepancy in how the two shares are trading. Obviously, Bausch still retains 90%. Can you just talk about why this discrepancy is there? Anything that you'd like to comment on what might be causing this? Thanks so much. All right. Hi again, it's Joe Papa. I'll take that question. I mean, let me start with respect to the XIFAXAN case in the Norwich trial. As I said in my call comments, I do believe that what we presented, the evidence that went in, well, we remain more confident in the strength of our intellectual property today. I remind you, there's 26 intellectual property patents. We remain more confident today than before the trial, and therefore, the chance of a successful outcome. Number two, I wanna add to that comment. In addition to that, we have seen that the FDA put through an additional product-specific guidance on XIFAXAN, specifically in August 2021, that has an incremental requirement for approval of XIFAXAN. For both of those reasons, we feel very confident in our situation with the XIFAXAN intellectual property, our expectations, as I've stated. I will answer the question, though: does it hinder the spin? Obviously, we do not expect that the IP loss will occur, but if it did occur, it would have to have an influence on the timing of the spin as we think through this. Once again, I just wanna repeat one more time, we've had a high degree of confidence based on our expectations of how the trial went. I did see some additional public comments on this that supported that we would prevail, but I'll certainly wait and get the answer in August. At this time, our expectation is we will win, we will be able to move forward with the spin. On the question of the share price discrepancies within Bausch Health and B&L and Dendreon. You know, I think the comment comes down to part of what you asked. I do think that there are some questions that people have raised specifically in terms of some of the comments that I made in terms of how we're looking at and some of the opt-out claims that occurred by opt-outs. They've made suggestions that their potential claims against us are more than the class action lawsuit. We do not see it that way at all. We have taken reserves for this. I do think that's one point. I do think that XIFAXAN was the other point. Then the final point was there was a question that came up recently on the Granite Trust. Once again, on the Granite Trust, we feel very confident in our position with Granite Trust, and I think that is the other question that was out there. All of these really, in my mind, are gonna go back to the business fundamentals. We think there are strong business fundamentals as what Thomas Appio laid out in the Bausch Pharma business. Clearly, what I have said on the B&L business going forward, we think the B&L business is gonna be driven by a number of mega trends that we think are gonna continue to push us forward with good opportunity for growth. And as we said publicly, we are reaffirming where we are on the guidance of B&L for the 2022 timeframe. All of those, I think, wrap around and talk about why we see the upside from where we are today. Operator, next question, please. Yes, sir. Our next question comes from Chris Schott at JP Morgan. Please go ahead. Hey, guys. Thanks for the question. Can you just elaborate a little bit more on the path forward to separate here? It seems like you need to monetize the remaining 10% of B&L, IPO Solta, and then you'd still need some ongoing cash flow from the core business, if I'm thinking about the math right. I guess just, in light of just, you know, the capital raise, et cetera, is there any timelines you can point us to in terms of when the company could be in a position to complete this process? I think it just would be helpful. I don't know if you can say much, but anything on that front would be helpful. Then kind of tied to that in a follow-up, how do you think about an IPO of Solta versus revisiting a sale process for that asset? That seems like that could address your delevering process, but I just didn't know where, you know, are you kind of committed to this IPO process, or is there an opportunity to kind of revisit a different, alternative for that asset? Thanks so much. Sure. Good question, Chris. Let's start with the path forward on the spin. I think as we laid out in the earnings deck, we look at there's a couple things that have to happen in terms of us going forward with the full separation. The first thing is, obviously, it's gonna be based on the performance of the B&L business and the performance of the Bausch Pharma business. I remind you what Thomas Appio has talked about, the very profitable cash generation of the Bausch Pharma business, as well as the growth that we're expecting in the B&L business. I think that clearly is probably the first issue. The second one, obviously, as the B&L business performs, Bausch Health will have the ability to monetize the remaining 10% of the B&L shares and utilize that to pay down debt. Obviously, that will also be beneficial. The third thing I would comment on is just the continued opportunity with the Solta business and what we can do with the Solta business in terms of the IPO of Solta. I take the point on the sale, and probably I'll weave that in. All of our businesses are, as we've always stated, we're a public company. All those businesses are available for us to make some decisions on what to do with it. Right now, we've declared that the path of the IPO Solta seems to be the best path for us going forward. I think it's gonna be the combination of all three of those things. I probably can't make any specific comments on timing other than what we said before. We've got to get ourselves through the customary lock-up periods that occur after the IPO, so we won't do anything before the customary lock-up periods. Number 2, we wanna make sure that we have Bausch Pharma at the appropriate debt leverage to 6.5-6.7 times. Those would be the only other comments I can make on the specific timing question. Obviously, we're gonna continue to move expeditiously through this as quickly as we possibly can. Operator, next question, please. Yes, sir. Our next question today comes from Doug Miehm with RBC Capital Markets. Please go ahead. Yeah. I just wanted to maybe delve into a bit more detail with respect to the change related to, you know, your inflation comments, COVID, foreign exchange. Is there a chance as we look out through the remainder of the year that we could see another change to your outlook for EBITDA, which is very important to you in terms of meeting all the requirements that you just mentioned for the distribution? I'm just wondering, in those types of markets, you know, you already indicated that Q2 for Solta is likely gonna be like Q1, but could this last through the remainder of the year and make it even worse? Yeah. It's Tom Vadaketh here, Doug. I'll take it. I'll take this question. Look, we have baked into our guidance everything that we can see as of now. We can all see the COVID lockdowns in China. They've in fact expanded, as you know, and now Beijing is moving into a lockdown category. In our guidance, we've assumed that that will lift off sometime in the second half, and that obviously impacts the Solta business, as you said. From an inflation point of view, again, we have baked in what we see. We had started to see inflationary factors really start at the end of 2021. We've taken mitigating actions, done some pricing. We've also, our supply chain folks have done a great job shoring up on contracts and locking in longer term supply contracts to try and protect our bottom line. We'll continue to do that to mitigate as much pressure as we can see. Yeah, right now, is there a risk that we could see more headwinds? Yes, of course, but you know, it's impossible to predict. We think we've captured everything we can see right now in our outlook. Okay. Great. Then I don't wanna harp on this, but when you look at the 6.5-6.7 debt-to-EBITDA range that you're looking for to complete the distribution, you know, our work had suggested that you might be able to get there by the end of the year. But now with the lower cash flow you're expected to generate, my guess is you're gonna have, you know, less of an ability to pay down debt between the, you know, over the next nine months by year end or so. I'm just wondering, is it, you know, realistic to believe that the distribution could be made this year, given the lower cash flows the company is gonna generate, even if we consider, you know, the follow-on offering at BLCO and a Solta IPO by year-end? Sure. I'll take it, and Tom Vadaketh, you may wanna add to it. What I would say to that is we've obviously worked our way through this and we're thinking about the valuation of the B&L, the secondary 10%. We're thinking about what the Solta valuation is and what that opportunity is. Of course we're looking at the cash generation of the Bausch Pharma business. I think all of those are factors we're working into it. Once again, I can't put a specific time on it at this point, but we do see abilities to continue to pay down debt. We think the profitability of the Bausch Pharma, as I think Tom Vadaketh mentioned, is very strong and they will utilize that to pay down debt. We do think there's all the pieces are in place. It's just gonna continue to execute on the business as we think about the go forward situation. I don't know there's much more I can put a specific timing on it. Could the possibility be the end of this year, early next year? Yeah, those are all certainly possibilities for us. I think earlier would depend on Solta. Later also would depend on Solta on what happens. I think that timing is not out of the realm and possibly earlier, depending on what happens with our cash generation and what happens with Solta. Tom, anything you'd add to it, what I said? I'd just reiterate the fundamentals of the business, you know, continue to be very strong. The pharma business has, you know, will have EBITDA margins in the mid-50s% range. Our cash generation on an unlevered basis, free cash flow generation is at the 80% level. I expect those to continue. We have a great team that's focused on making sure that those things continue to get delivered. I agree with you, Joe. I think in terms of timing, I wouldn't dare put a date out there. What I would say is, you know, as I spoke to my remarks is that, you know, the business spends a lot of cash, and we're gonna prioritize paying down debt and accelerating the performance. As Joe pointed out and Tom pointed out, you know, we're gonna be, you know, focused on, you know, delivering the business growth and paying down debt and see where that gets us, as we move to the second half of the year. There is, you know, certainly, as we look what's going on between COVID in China, the lockdowns, supply, of course, what's happening in Russia and Ukraine, these will all factor into it. You know, clearly focused on delivering the second half. Thank you. Operator, next question. Yes, sir. Our next question comes from Greg Fraser, Truist Securities. Please go ahead. Thank you. Good morning. Just following up on the XIFAXAN patent case, you're clearly confident in your position, more confident than before. Can you comment on whether you've engaged in settlement discussions? Is settlement still a possibility? And do you have insight into whether Norwich's generic candidate is compliant with the new bioequivalence guidelines? Thanks. Good questions. You know, we can't obviously talk about whether or not we are in settlement discussions. I think that what I'd simply say, you know, from a holistic point of view on this is the question of, number 1, as a company, we have 26 patents on this XIFAXAN formulation. And we, as we think about it, know that that's a really strong case. You know, we know that, number one, Teva looked at that and made a decision to settle. The Sun company looked at it and made a decision to settle, and Sandoz made a decision to settle. So we think all those reasons suggest that is a strong intellectual property position. Number 2, as I mentioned in my previous comment, we know that the FDA put some additional product-specific guidance out. I believe the date was August 2021, and that requires some additional data on the bioequivalence of the product. I cannot speak directly to what Norwich has or doesn't have, but I do know that there are differences in polymorphs, and there's different absorption by polymorph. Obviously we have strong polymorph patents in addition to use patents. I'll just let Norwich make the comment specific on their product. Clearly we believe that in addition to the intellectual property, there are some product specific guidelines that we think are going to cause some questions for them and how they could potentially move forward. Those guidelines of course came out after their submission for their ANDA. They'll have to make comments about what is specifically going on relative to their product. I can't make specific comments, but we feel good about what we said, and I said in my prepared comments that we feel better today than we before the trial. I think that's probably the best answer I can give. Yeah, Greg, this is Thomas. You know, after the trial, you know, we feel we have a strong case against Norwich, our position remains the same. We're very confident. Thank you. Thank you. Our next question today comes from Gary Nachman with BMO Capital Markets. Please go ahead. Hi. Thanks. Again, on the Bausch Health 6.5-6.7x leverage target to achieve that, what other levers might you have? Could B&L take on any more of the debt to affect the spin? Is that leverage target still less than 2.5x? You didn't mention that today. Any other divestitures that you think might happen in the near term to help generate cash flow? Then for Thomas, talk about your flexibility for Bausch Health to do business development if you carry leverage up at that level. Generally, how good you feel about the pipeline versus how much inorganic growth you might need for that business to really grow going forward. Thanks. Okay, Gary. I'll take on the first part of the question. Thomas can take the second one. You know, relative to the 6.5x-6.7x, I think as I've tried to answer it, the question of the company is we've got the opportunity for the business fundamentals. I think it's gotta be first and foremost the answer for both the B&L business as well as the Bausch Pharma business. Specifically on Bausch Pharma, obviously they've got some good opportunities for a very profitable business, generates significant amount of cash. Number two on the question is, could B&L take on more debt? Just I do want to comment on that. We did take 2.9x leverage. That is the leverage we took. In light of the fact that we only went out with a 10% IPO, we made a decision to take the debt of B&L to 2.9x of debt leverage. I just wanna be specific on that. Thomas, do you wanna take the other parts on the divest- Yeah. Hey, Gary. What I would say is in terms of monetizing other assets, of course, we're a publicly held company, so we'll always look at ways to, if we can, to monetize assets that is good for shareholders. And of course, if we're able to do that then frees us up, you know, to do things with some of the cash. What I would say is from an R&D perspective and a BD perspective, clearly we have opportunities as I spoke about of our pipeline right now in R&D. I was just out at our R&D facility in California. There's a really great energized team out there. We have a lot of good projects that we're working on. We have, you know, established an entire BD and strategy team, and that is looking at tuck-in type acquisitions that we can bring into the portfolio. As I said in my prepared remarks, you know, we have teams in 90 countries around the world. Depending on where it is, especially if we take a look from a U.S. perspective or an international perspective, looking at things that we can bring into the portfolio that will fit nicely into the commercial presences that we have. You know, of course it'll be a focus and a balance, but clearly always looking at that balance to pay down debt, but also put products into the pipeline, which we have, as I said in my remarks of what we're going to be able to launch in international and bringing in products that we can put there. We're also looking at how we can bring products into, again, our US business to really maximize the value of our commercial capabilities. Operator, next question. Absolutely. Our last question today comes from Jason Gerberry at Bank of America. Please go ahead. Hi. Good morning, everyone. This is Chi-Minh for Jason. Thanks for taking our questions. Maybe just a couple follow-ups on the XIFAXAN IP case. Do you have a sense of a view on sort of what the timing of a potential ruling could be? Typically, I think, you know, a ruling could come 6-8 months after the trial conclude. I think for me, sitting at a trial, I think there was expected to be a post-trial brief due sometime early June. If you can comment sort of the timing, that would be great. Then maybe just a follow-up on Ken's earlier question about how in a scenario, if you were to lose the IP case, how it could affect the spin. If I understand the commentary correctly, you know, if it does occur in that scenario, it might have an impact on the timing of the spin and some other additional considerations. I'm curious what may have changed from last quarter. I think if I recall correctly that, you know, last quarter view is that XIFAXAN case would not have any impact on the spin regardless of the outcome. Curious about commentary on there. Thanks. Okay. I'll take the first part of it, and you know, on the XIFAXAN. The Norwich decision, we're expecting a decision in early August. We're hoping that that's the timeframe that we can see so we can move forward from this. Right now, that's what we're looking at from a decision standpoint. I'll let Joe address your second part of the question. Sure. On the question on the intellectual property, I've got to say one more time, just simply because I believe it, that we believe that we will prevail on that intellectual property. We have 26 patents. We have a strong case. We feel better about the case today than we did before the trial. I wanna say that right up front. Number two, I wanna be specific about the product specific guidelines that are, you know, the FDA has put those draft guidelines out in August of 2021. Our view is that that could have an impact on the potential approvability of the Norwich product. I clearly think that's another variable that has to be considered. Having said that, I will answer your question. If we were to lose the XIFAXAN case, which I do not expect to say one more time, that could have an issue for us. In terms of the exact timing, obviously, we would continue to look at that in light of how we are expecting our overall timing, but we will have more comments about something like that, should it happen. Once again, we do not expect that outcome. Thank you. I think, operator, you said that was the last question. Yes, sir. That is correct. Well, I'd like to conclude today's call, and, you know, thank you all for joining. As I said in my remarks, Bausch Health is moving forward with a sense of urgency to drive long-term growth, with supporting our strategic imperative to provide shareholder value. I'd like to, you know, as I said at the end, we're gonna reach out and endeavor to reach out to many of you in the coming months as a part of a comprehensive IR effort. Really looking forward to having discussions about the Bausch Health business, and what we can provide and do for patients and shareholders. Thank you. Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.