Good morning, and welcome to the Bausch + Lomb first quarter 2022 earnings 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 one on your touch tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Allison Ryan. Please go ahead. Thank you. Good morning, everyone, and welcome to our first quarter 2022 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer, Mr. Joe Papa, and Chief Financial Officer, Mr. Sam Eldessouky. In addition to this live webcast, a copy of today's slide presentation and a replay of this conference call will be available on our website under the Investor Relations section. Before we begin, we would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the forward-looking statement legend at the beginning of our presentation as it contains important information. This presentation contains non-GAAP financial measures. For more information about these measures, please refer to slide 2 of the presentation. Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website. Finally, the financial guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter and to not update or affirm guidance other than through broadly disseminated public disclosure. With that, it is my pleasure to turn the call over to Joe. Thank you, Allison, and thank you everyone for joining us today in the Bausch + Lomb first earnings call as a publicly traded company. I will begin with some comments about our vision for Bausch + Lomb now that the IPO has been completed and briefly discuss the first quarter highlights. Sam Eldessouky, our CFO, will then review the first quarter financial results in detail and discuss our 2022 guidance. Finally, I will conclude by discussing our product pipeline and upcoming catalyst before opening the line for questions. Before I get started, let me answer the question. If we provided the first quarter B&L results on May tenth as part of Bausch Health, what is the objective for today's call? Simply stated, we wanted to provide greater clarity on B&L performance, our vision for B&L's future growth, and provide a forum to answer your questions. Let's begin with slide 4. With a nearly 170-year history as a leading eye health brand, Bausch + Lomb has always stood at the forefront of cutting-edge scientific and technological optical advancements. Today, we are more focused than ever on developing and offering new treatments to meet unmet eye health needs. Specifically, Bausch + Lomb is the most integrated eye care company operating today, the fastest-growing global contact suppliers in 2021, the company with the highest brand awareness in eye care, and a global leader in consumer health, outpacing US market growth by approximately 1.7 times since 2018. B&L also has critical mass with a commercial presence in approximately 100 countries. Over 80% of the world's population has access to Bausch + Lomb products. Turning to slide 5. We have outlined three key areas of strategic focus for this important point in Bausch + Lomb's development. One, accelerate growth in large addressable markets. Two, invest in categories that are growing faster than the overall eye health market. Three, expand into new product categories. As we look to the future as a publicly traded company, we see attractive opportunities for a pure play eye health company. We believe the company is well-positioned for growth in large, durable markets driven by new product and favorable megatrends or tailwinds, such as the increasing prevalence of myopia and diabetes, an aging population, and a growing middle class that are expected to continue driving demand for eye health products. In addition, we have the potential for margin expansion over the long term based on new product and supply chain efficiencies. Finally, as a publicly traded company, we expect to have balance sheet flexibility to expand investment in the business and additional strategic bolt-on product opportunities. With respect to the spin-off process, the initial public offering was completed last month, an important first step toward the spin-off of Bausch + Lomb. The spin-off is expected to be completing following the expiry of agreed-upon lockups and the achievement of Bausch Health's target net leverage ratios subject to shareholder and necessary approvals and other conditions. While the final date for completion of the spin-off has not yet been determined, the spin-off is expected to occur by the distribution of approximately 80% of the remaining B&L shares to Bausch Health shareholders. Separate from the spin-off process, Bausch Health has the flexibility to monetize an additional approximately 8.7% of Bausch + Lomb shares subject to market conditions and the expiry of agreed upon lockups. Moving now to the first quarter highlights on slide 6. First quarter organic revenue growth of 5% was driven by our two largest segments, vision care and surgical, which grew organically by 4% and 13% respectively, despite macro headwinds. Looking at the first quarter through the lens of our key areas of focus, consumer eye care had an approximately 33% U.S. market share in the first quarter, demonstrating continued momentum in eye vitamins and LUMIFY. Our daily lens market share doubled, and we expect annual U.S. market growth of approximately 10% in this category from 2019 to 2030. Finally, we launched XIPERE here in the first quarter, entering into a new product category with the first and only product used the suprachoroidal space of the eye for patients with macular edema associated with uveitis. These impressive achievements are due to the sustained effort and dedication of the approximately 12,500 Bausch + Lomb employees around the world whose hard work and ongoing contributions enabled us to execute on our key areas of focus and navigate external headwinds in the first quarter while completing an important milestone on the road to becoming an independent, publicly traded company. With that, I will turn the call over to Sam to cover the financial results in more detail. Thank you, Joe. I'm happy to be here on our first earnings call as a publicly traded company to discuss our first quarter results. Before we go into the details, I would remind listeners that when we talk about organic revenue growth, we mean on a constant currency basis and adjusted to remove the impact of divestitures and discontinuations. Also, as a reminder, we now report our financial results in three segments, vision care, surgical, and ophthalmic pharmaceuticals. Turning now to our results on slide 7. Our first quarter results continue to demonstrate the durability of our business and the benefits of integrated eye health platform. Our focus on commercial execution and investment continues to lead to strong demand across our key franchises, which is reflected in the total company revenue of $889 million for the first quarter, up 1% on a reported basis and up 5% organically. Strong momentum heading into 2022 enabled us to overcome two primary headwinds at the start of the year. First, unfavorable foreign currency exchange impacts of approximately $29 million in the first quarter. Second, headwinds of roughly $10 million from COVID-related lockdowns in China. Excluding the impact of China lockdown, organic revenue grew by 6% for the quarter. Overall, we believe the business is well-positioned to benefit from market dynamics. In the near term, we expect growth to be driven by the ongoing recovery in surgical, continued growth in vision care, led by daily SiHy market penetration and launches in additional countries, and our market leadership position in consumer eye health. Over the longer term, we expect growth to benefit from favorable mega trends in the market and new product launches in the ophthalmic business. Now I'll go into more detail on each of our segments. Revenue for the vision care segment, which includes contact lenses and consumer products, grew organically by 4% in the first quarter, driven by 7% reported and 8% organic growth in eye vitamins and 35% reported and organic growth in LUMIFY. Both products are the market share leaders in their categories. 41% reported and organic growth in daily SiHy lenses, which we have now launched in 24 countries, and 19% reported and 22% organic growth in the Biotrue Solutions franchise, which includes the Biotrue Hydration Boost and Multipurpose Solution. To leverage the brand platform, the Biotrue Hydration Boost was launched in 2021, and earlier this month, we launched the Biotrue Hydration Plus Multi-Purpose Solution in the U.S. Our goals for the remainder of the year are, one, to expand the market leadership position of our eye vitamin products and LUMIFY. Two, to continue the global rollout of the daily SiHy lenses. Three, to launch the daily SiHy multifocal lenses. Moving on to our surgical segment. First quarter revenue grew by 13% organically. The segment has had sustained positive momentum as the market continues working through the COVID-related backlog of elective surgeries. Growth was mainly driven by increased demand for implantables, including our enVista IOL franchise, consumables in the cataract and retina procedures, and by the entry of the LuxSmart IOL into the premium IOL category in international markets. Finally, the ophthalmic pharmaceutical segment first quarter revenue of $155 million reflected a decline of 3% on organic basis. We're pleased to see the strong performance in the international ophtho business, which represents approximately 43% of the segment. Organic revenue in international markets grew by 16% compared to the prior year quarter, mainly driven by strong performance in Europe and Asia. This growth was offset by 14% organic revenue decline in the US. While we continue to see TRX growth in our key promoted brands, including VYZULTA TRX growth of 44% in the quarter, the portfolio was impacted by the tail end of LOE products and high rebates due to generic competition. We continue to transform the ophthalmic pharmaceuticals portfolio following the impact of LOTEMAX LOE. At the end of March, we were pleased to have launched XIPERE. We see this launch as a key first step on the path to transforming the portfolio. Followed by NOV03, which we expect to launch in 2023. We believe the new product launches will provide the ophthalmic segment with a stronger foundation to drive growth in the quarters and years ahead, and will allow us to leverage the scale and investment we have made in the commercial organization. Turning now to slide 8. With strong business fundamentals, in Q1 2022, we continued our long-term strategy by investing behind our product launches and supporting our R&D pipeline, notwithstanding the impact of macro market conditions. Our adjusted EBITDA in the first quarter was $170 million. Our total adjusted gross margin for the quarter was approximately 61%, which is 130 basis points lower than Q1 2021, largely driven by product mix and macro headwinds, including inflation pressure, higher commodity prices driven by the Russian war in Ukraine, and supply chain challenges. Higher SG&A spend in Q1 can be attributed mainly to increased investment in our product launches, including the daily SiHy lenses, and the return to more normalized level spend to continue the momentum seen during the recovery from COVID to position us for market share gains. R&D spend in the quarter versus first quarter 2021 increased to roughly 9% of sales. This increase is mainly due to the timing of projects to accelerate our ability to execute on our R&D pipeline. We will expect full-year R&D spend in the range of 7% of revenue. Finally, foreign exchange and COVID lockdowns in China resulted in headwinds of roughly $15 million to Q1 adjusted EBITDA. Moving on to slide 10. Cash flow from operations of $3 million in the first quarter was negatively impacted by the timing of settlement of certain intercompany balances between Bausch + Lomb and Bausch Health. We do not anticipate that these timing factors will have a significant impact on cash flows from operations in future quarters. In the quarter, CapEx was approximately $42 million, which includes investment in our lens manufacturing facilities. Subsequent to Q1 2022, and in conjunction with the IPO, we launched and closed on a credit agreement for $2.5 billion. Our goal is for the debt to be investment-grade rated at the time of the spinoff and continue to invest in the business and further enhance our flexibility to operate going forward. Now turning to our guidance on slides 12 and 13. Our revenue guidance for 2022 is a range of $3.75 billion-$3.8 billion, representing between 4% and 5% organic revenue growth, while absorbing the impact of China lockdown. We estimate foreign exchange headwinds to be approximately $160 million for the full year. We expect the headwinds from China COVID policies and lockdowns that we saw in Q1 to continue to have an impact in Q2, and we expect that it will normalize into the second half of 2022. Our adjusted EBITDA guidance for 2022 is a range of $740 million-$780 million. This represents approximately 5% base performance growth over full year 2021 pro forma adjusted EBITDA, with acquisitions and excluding the impact of currency. Our adjusted EBITDA guidance also includes approximately 100 basis points of inflation pressure. We estimate foreign currency exchange headwinds to be approximately $30 million for the full year. Interest expense is expected to be approximately $150 million on an annual basis. Adjusted tax rate expected to be approximately 12%. We expect full-year adjusted free cash flow to be approximately 50% of adjusted EBITDA. This guidance is consistent with the overall guidance provided by Bausch Health in their earnings call on May tenth. In summary, we're pleased with our momentum in Q1 as we continue to recover from the global impacts of COVID-19 and navigate various macroeconomic factors. We believe the results reflect the flexibility and resilience of our business and portfolio. Across our segments, we're in a strong financial position to execute on our current strategy and continue to find ways to enhance the integrated Bausch + Lomb. Now back to you, Joe. Thank you, Sam. I will now discuss our product pipeline and the upcoming catalysts that we expect to drive our business results. Beginning with LUMIFY on slide 15. Here we have illustrated an example of the power of our fully integrated eye care platform to successfully launch, promote, and drive the performance of our products. In the case of LUMIFY, we began with a highly differentiated product. After launching it in May 2018, LUMIFY became a $100 million brand in 2021. Today, it is the number one redness reliever category in the U.S., with approximately 46% market share and the number one physician-recommended brand. Our team was able to drive education and awareness of the product by collaborating with eye care professionals while driving awareness with a strong television, public relations, and social media presence. These efforts, along with a 97% customer satisfaction rate, helped to drive patient demand, which we were able to meet through our ongoing partnerships with retailers like Walmart and CVS and through e-commerce channels. We expect to take an integrated similar approach to launching our next wave of new products, including NOV03, our dry eye disease product. Turning now to slide 16 for an illustration of how we're able to address an unmet market need with our daily disposable silicone hydrogel lenses. In response to patient concerns about contact lens dryness, in August 2020, we launched INFUSE daily SiHy lenses into the fastest-growing contact lens category. INFUSE is the first and only daily SiHy lens with a next generation material infused with ProBalance Technology to help minimize symptoms of contact lens dryness. The lens is doing exceptionally well with patients who experience contact lens dryness. In fact, 94% of patients surveyed agreed that INFUSE contact lenses do not feel dry, and that they can comfortably wear INFUSE lenses all day long. Moving to the XIPERE on slide 17. XIPERE is the first and only therapy available in the U.S. that utilizes the suprachoroidal space to treat patients suffering from macular edema associated with uveitis, which is the leading cause of vision loss in people with uveitis. FDA approval of XIPERE was based on results from a pivotal phase III trial of 160 patients with a best corrected visual acuity or BCVA primary endpoint. As you can see from the chart on the right, the primary efficacy endpoint was the proportion of patients in whom BCVA had improved by at least 15 letters from baseline after 24 weeks of follow-up. We are particularly excited about the innovative micro injector, which offers unique access to the back of the eye and enables targeted delivery and compartmentalization of the medication. Moving on to slide 18. I want to spend a minute on the market opportunity for an investigational new class of dry eye therapy. NOV03 is a potential first in class treatment for dry eye disease associated with meibomian gland dysfunction. Consistent, statistically significant efficacy, safety, and tolerability has now been demonstrated in two phase III trials. The charts on slide 18 show the efficacy endpoints for the second phase III trial. Importantly, all primary and secondary endpoints were achieved, including statistically significant changes from baseline as early as day 15. We are ecstatic with the results of these two phase III studies and believe that NOV03 has the potential to be a major future growth driver for our business. We anticipate and are working towards filing an NDA for NOV03 in the coming weeks. On slide 19, we present some of the near-term pipeline opportunities for the surgical segment. First, our enVista premium IOLs and LuxSmart premium IOL expansions offer new opportunities in a $1.4 billion market that is growing at a 7% compound annual growth rate. We're also working on a SeeLuma 3D that is expected to launch later this year and will integrate with our eyeTELLIGENCE clinical decision support software. Finally, the TENEO Excimer Laser for refractive surgery is expected to be the first significant LASIK innovation in the U.S. in more than a decade. The TENEO laser has been well received and is widely adopted in more than 50 markets around the world as one of the more versatile lasers available with a compact footprint. Slide 20 captures the next generation of surgical innovation, including a new market opportunity with the femtosecond laser, which fully integrates into the cataract workflow for operating room efficiency. The LASIK flap laser, which complements TENEO for refractive surgery, and the 22X combined cataract retina platform with redefined fluidics, efficient advanced lens removal technology, and integration with our eyeTELLIGENCE software. To summarize, on slide 21, we have illustrated the eye health ecosystem which Bausch + Lomb operates in. The power of an integrated platform that uniquely positions Bausch + Lomb to serve eye care needs. Bausch + Lomb has the highest brand awareness of any eye care company. Bausch + Lomb has long-standing relationships with eye health professionals as well as key retailers and e-commerce channels that reach a broad consumer base. B&L is a fully integrated eye health company that offers a comprehensive portfolio of more than 400 products to meet significant patient and consumer needs, spanning everything from contact lenses, lens and eye care products, ophthalmic pharmaceuticals, over-the-counter products, and ophthalmic surgical devices and instruments. B&L serves our patients and consumers throughout all phases of their lives, developing and offering new treatments to meet unmet eye health needs and, importantly, help people see better to live better. With that, operator, let's open up the line for questions. We will now begin the question and answer session. To ask a question, you may press Star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star, then two. Finally, please limit yourself to one question per turn. At this time, we will pause momentarily to assemble our roster. The first question comes from Ken Cacciatore with Cowen and Company. Ken, please go ahead. Yeah, thanks so much. Thanks for all the fundamental discussion. I'm actually gonna save my one question for a non-fundamental. Joe, lots of questions still coming in on the 90% holdings that BHC has of BLCO. I know it's easier to understand the likely path forward in a XIFAXAN patent win. It's less clear to everyone what the options are for BHC in a loss. I'm not sure that you'll be able to discuss it, but can you talk about that 90%? I know you've broken it out. There's some that could be sold in the near term and 80% still remaining. Can you talk about the potential ramifications in the event of a XIFAXAN launch as you could best describe them for folks? Thanks so much. Okay. Thank you, Ken, for the question. Let me just maybe back up a little bit and get towards the actual question that you're getting to. Number one, as we think about this, the path forward for us is clear. We've always stated that we'd utilize 20% of the Bausch + Lomb value to pay down the debt of Bausch Health. We've done now the initial 10-plus percent for the IPO. The remaining actually will turn out to be 8.7% will be monetized by Bausch Health to reduce their debt. They have the flexibility to do that. As to the question on the XIFAXAN Just to be clear on the remaining 80%, that will be that direct spin of that 80% will go to the shareholders of Bausch Health. That's how that will play out. On the question of XIFAXAN In fact, IPD, an independent company that was attending at the trial, looked at it and expects that we will prevail. As to your question, though, on this XIFAXAN Norwich loss, let me get to that. As any company would you'd expect, we always evaluate multiple scenarios for the business, for planning purposes, and we have done that. I have to say we continue to expect to win, and I'll probably leave it at that and not speculate any further on that comment. Obviously, that's something that Bausch Health will need to continue to look at in terms of process, but we do expect to win. Thank you. The next question is coming from Craig Bijou with Bank of America. Craig, your line is live. Please go ahead.Craig, good morning, guys. Thank you for taking the questions and, congrats on getting the IPO done. I wanted to ask about top-line guidance. Obviously 5% organic growth in the Q1. Your full year guidance of 4%-5% suggests, you know, slight slowdown. Just wanted to ask, is that simply conservatism? Is it China? Is there something else that we should be thinking about? You know, how should we think about the quarterly cadence of that guidance and, you know, from a segment perspective, should we think about growth of each of the segments similar to what we saw in Q1? Sam? Craig, good morning, and I'll take this question. The way I would think about it is, our guidance from a 4%-5%, it's all referred to as a balanced guidance. We factor in what we have been seeing so far in Q1 from China. We saw the lockdown in China did have an impact on us of roughly about $10 million. If that impact continues with us in Q2, still early in the second quarter, we didn't yet complete second quarter. The good news is, right now we understand that the Chinese government have opened up the market. Things are coming back to normal. Still not 100%, but we'll have to see how the month of June plays out, that we had the month of April and May shut down. Our guidance of 4%-5% anticipates what we've seen in the month of April and May as well from shutdown in China. When you step back and you think about just our phasing in general, we tend to be more revenue on the second half than the first half of the year. That's in general. When you think about the cadence of our phasing, you would expect that we will ramp up with more into Q3, Q4 from a phasing point of view than what you've seen in Q1 and Q2 from us. That's at a normal basis. You just have to factor in the anomaly of China, which again we've seen in Q1 and Q2. I think the only I'd add to Sam's comment is just to put a little bit more perspective on that back-to-school contact lens business is something that we see in that third quarter, fourth quarter. That's part of what we see in some of the commentary that Sam was making on how we're looking at the seasonality of our business. There is some third quarter, fourth quarter pickup as kids go back to school, and they get their contact lenses, but that's probably the only thing I'd add. I mean, everything else was agreement. Operator, next question, please. Certainly. The next question is from Larry Biegelsen with Wells Fargo. Larry, your line is live. Please go ahead. Good morning. Thanks for taking the question. I'll ask just one big picture question. Just at a high level, Joe and Sam, how are you thinking about Bausch's organic growth and margins beyond 2022? Joe, upfront, you said one of the goals of this call, you know, was to talk about, you know, growth, long-term growth for the company. The guidance implies an EBITDA margin of about 20% this year. You know, how are you thinking about the pathway back to, I think, you know, your EBITDA margin in 2019 was about 24%. Thanks for taking the question. I'll start, Sam, and you can add to it. First and foremost, I think the important point I want to make is on a strategic question of what we're planning to do. Number one, we plan to continue the momentum in our current portfolio. Last 2021, Bausch + Lomb finished with the fastest-growing contact lens business. We grew at about 18% in 2021 as an example. Try to continue that momentum with all of our products in our portfolio is our first strategic direction. Number two, as we've said publicly, we plan to invest in categories in eye health that are growing faster than the overall eye health business. The good news for us is that we're gonna have a chance to launch new products as the daily SiHy lenses. We've now launched in about 24 countries. We have more coming on board every quarter. We expect also to launch the multifocal product that daily SiHy. These daily SiHy lenses will also add to both on the revenue side and the growth side on the margin. I'll get to that in just a second. As we go into these faster-growing categories like daily SiHy, which we believe will grow certainly more than double digit, we're going into the premium IOLs. We've launched our LuxSmart outside the U.S. We have some additional enVista IOL, premium IOLs coming forward, and also looking at the opportunity to enter the dry eye market. All these new products in the faster-growing categories will help us to expand on these margins and the growth as what we are planning. Finally, we're going into some brand new categories for us. We're gonna enter into the digital surgical ecosystem. We're looking at biosimilars, some brand new categories for us. We just launched XIPERE, the first and only product available in the U.S. that utilizes the suprachoroidal injection therapy, allowing us to help patients who have macular edema associated with uveitis. All those new products are gonna be helping us to drive the overall growth. Importantly, with new products come opportunity for margin enhancement. A simple example, as patients progress from the opportunity with going from the monthly lens to the daily lens to a daily SiHy lens, that's a higher price point for patients, which in the long term allow us to achieve better margins. Also on that margin question, as we get more experience, we know that our yield on the daily SiHy will get stronger all the time. Usually when you first come out with a product on a facility on a line, you know, you'll get about a 60% yield in the first year. That'll gradually go to 70%, 80% yield, and then up to 90%+ yield, as you get more experience with it. That also helps to contribute to the margin. The margin story will be driven by these new products. The margin story will be driven as we get more experience with the SiHy daily lens as we're launching it, and at the higher price point. That will all help to contribute to the overall margin story and help us to get to levels that we were in the past. Sam, anything you wanna add specifically? Yeah. Then Larry, if I can just add two things to what Joe said. Again, the launches is a very critical part in terms of how we think about where we are today and where we're heading into the future, because I think there's number of critical launches across all three segments that are gonna be very important for us as we move forward from growth on the top line as well as from a margin contribution. You see it in the vision care, surgical, and with the ophthalmology having XIPERE coming out this year and NOV03 coming out next year. The base business in itself is in a very durable standing right now. I think we have number of our key brands are performing very well. We highlight some of them in the prepared remarks, such as the vitamins, the LUMIFY, we've seen also the international opto business, which is showing growth, organic growth of roughly 16%. We have very good fundamental elements of the business. How we think about the cost structure as we go forward here is we had in 2022, it's a year where we stepped up our investment to position ourselves for those launches and to support the growth that we're seeing in our existing portfolio. Also stepped it up for the standalone company to allow B&L to operate as a standalone company. As we go forward beyond 2022, we don't need that step change in our cost structure as we move forward. What that means is that that translates to a leverage from a cost structure that we have the infrastructure that's built right now that will be able to be scaled both on the commercial front as well as the overall company. That all will help us in terms of achieving our margin expansion as we go forward. Thank you. Operator, next question, please. Certainly. Your next question is coming from Yatin Suneja from Guggenheim Partners. Yatin, your line is live. Please go ahead. Hi, guys. Thank you for taking my question. Can you just touch a little bit on the market opportunity for NOV03? What sort of infrastructure build will it require? How big is the market? Obviously, there is a relevant comp there, Restasis, just trying to understand your strategy there. Also, if you can provide a little bit color on Lucentis biosimilar. What's the update there? Thanks. Sure. Let me start on the NOV03 dry eye market. It's a very large market. Specifically, the gross sales numbers are in the order of magnitude of $3 billion. Obviously, if you go down to net, it's somewhere probably closer to $2 billion, but a very large market, first comment. Importantly, it's 17 million Americans, and it continues to grow at around the double-digit level. Large market growing rather significantly. Number two, the opportunity we see here is that we looked at our clinical data, and I'm delighted to say that we have statistically significant improvement in the signs and symptoms of dry eye disease associated with meibomian gland dysfunction. We've shown that at as early as day 15. For us, that's a significant, we think, opportunity to help a number of patients if we are approved by the FDA, help a significant number of patients with their dry eye disease. Importantly, as we think about, you know, what that means is, you know, the current products out in the category can take sometimes up to three months to six months to work. If you've got a product that can help patients as early as day 15, we think that makes it a very exciting opportunity to help a significant number of patients and realize the revenue opportunities from that. We're excited about the size of the market, large, $3 billion gross sales, approximately $2 billion on a net basis. We look at what's happening with the current players out there and our ability to show the quick relief of the signs and symptoms of dry eye disease. We're excited about it. Good news for us is that Bausch + Lomb has a very large capabilities, a footprint to sell this product in the United States. We've got capabilities already a team in place. Bausch + Lomb has one of the largest portfolio around the world of this, for the capabilities in the pharmaceutical business, and that we think is what's important for how we will approach this category. The other thing that I think I have to say that we think differentiates Bausch + Lomb is by us having an integrated footprint in all of the businesses so that we have a capability in consumer business, a capability in the contact lens business, a capability in the surgical business, as well as our pharma business. We think that integrated footprint is very important for us as a platform to help us to be successful with new products, and we've seen it. We've seen real-life examples of that as we launched our LUMIFY product, as an example. On the second part of your question was Lucentis biosimilar update. We are continuing to work on that. We have announced that there is a question that the FDA has asked us about the submission. Our partner, Xbrane, who's working on this, has been asked a question relative to some of the information that the FDA is seeking. We are going to take the FDA comments on that, work with the FDA to revise our filing, and we'll be back with more specifics in terms of filing on that product, exactly when we'll get that product filed and move forward with the opportunity. Clearly, the biosimilar opportunity is very large in the United States. It's a $6+ billion product category in the United States, and Lucentis is not. Lucentis is about a third of that, but it's a big opportunity for us, and we look forward to bringing forward a biosimilar, and have more to comment about that in the near future. Thank you. Thank you. As a reminder, ladies and gentlemen, if you'd like to join the queue at any time, you can still press star one on your telephone keypad to enter the queue. Once again, that's star one to enter the queue to ask a question. Your next question is coming from Ravi Misra with J.P. Morgan. Ravi, your line is live. Please go ahead. Yeah. Thanks for taking the question. Congrats on your first quarter. Wanted to just follow up on, I think it was the first question about, the spin from Bausch. You know, what are the plans if the parent company isn't able or the Bausch company isn't able to deleverage? How do you plan to address the capital structure going forward, and what are the contingency plans? Thanks. All right. Let me take that one, see if you can add anything. Number one, we have specifically laid out the plans for how we will do this, as we've said publicly. Our plans will be that as we think through the Bausch Health, and I wanna keep most of our comments today to Bausch + Lomb, to be clear. As we think about Bausch Health, Bausch Health has stated and agreed that we will do a full separation or spin, at the time that Bausch Health gets to a leverage profile of 6.5-6.7 times. Once we get to that point, we'll do that. As we think about that question, there's gonna be a couple different variables that we have to consider in that question. The first, obviously, is the performance of Bausch Health. As Bausch Health continues to improve their performance, that will be an opportunity to pay down more debt. It also will be the performance of the B&L business, of course. As B&L continues to perform, we'll have an opportunity to improve our capabilities, and that will also when Bausch Health monetizes the remaining 8.7%, that obviously will be another way to de-lever. Finally, there's the value of the Salix business that also will be a consideration for Bausch Health as they think about this de-levering. Clearly, we have all the plans in place to make that happen. As to what could happen there, I really don't wanna speculate on what would happen if they don't de-lever. We do think that we have a plan in place to do that. Of course, as all companies do, we have multiple different scenarios that we'll look at from a business planning point of view, but we absolutely expect that we're gonna be able to move forward to de-lever the Bausch Health business as we've stated publicly. Great. Thanks a lot. Thank you. Operator, next question, please. Certainly. The next question is coming from Joanne Wuensch from Citi. Joanne, your line is live. Please go ahead. Thank you. Good morning, and also congrats on your first call. I wanna spend a little bit of time on the contact lens market. We tend to divide between unit growth as well as, you know, reported revenue growth, or even organic revenue growth, any way you wanna look at it. Specifically, how much of your growth is coming from sort of the cannibalization of older lenses versus new fits? And can you just pull this apart in the U.S. geography as well as anything outside the United States you can point to? Thank you. Sure. Let me start on that question. You know, first and foremost, I think what we've been looking at is in terms of our growth, looking at U.S. versus OUS, we've had a chance to show the U.S. share of our business growing from somewhere, let's call it 9% up to the latest data was somewhere around 14.5%. We've been able to show some very significant growth in our U.S., predominantly behind the growth of the newer products, both our Biotrue ONEday, and then now importantly, our INFUSE product, the daily SiHy product. That's probably, I think, the first thing I'd talk about in terms of the overall growth is our performance, especially in the U.S., where we've seen some very significant growth in our contact lens business. Probably the second thing I would talk about in terms of cannibalization, this really comes into the question of what we're looking at from the launch of our Daily SiHy, our INFUSE product. Remarkably, our cannibalization of our existing products has been lower than we've expected. What we've actually picked up on the INFUSE product is we picked up share from our competitors, as well as brand new patient starts have come to our INFUSE product. We've been very happy with what we've seen from a cannibalization. It's been lower than we've expected. A large percentage, you would imagine, has come from the other Daily SiHy lenses. Importantly, what we believe the problem out there on the current daily SiHy prior to the launch of our INFUSE or ULTRA ONE DAY, we call it outside the U.S., the issue has been the existing products still have a problem causing contact lens dryness. One of the things that we were able to do with our product by putting osmoprotectants and electrolytes in and moisturizers into the formulation is we've got very high response from patients in terms of the ability to wear their products all day long. We think that's an important part of how we will be successful with the launch of our INFUSE or ULTRA ONE DAY, we call it outside the United States. I think I've got most of the questions there in terms of contact lens market growth. We clearly see the daily SiHy business growing dramatically. Where we've launched INFUSE in the United States, for example, we have the best data in the US. We know that where we have the fit sets, we have about a 14% market share. Obviously that's very positive for us as we think about a product category in the United States that's going from like $1 billion up to about a $3 billion category by 2030. We're excited about what it means and where we'll pick up business. There will be some cannibalization of our older brands, but majority of it so far has come from competitive products and new patient starts is probably the best answer to your question. Joanne, just to add to what Joe said, we did include certain information on the products in our earnings deck, but you'll see that the Biotrue grew in the quarter roughly about 8% organically, and ULTRA grew about 4% organically, notwithstanding the softness that we've seen in the China lockdown. Thank you. Thank you. Your next question is coming from Pito Chickering from Deutsche Bank.P ito, your line is live. Please go ahead. Hey, good morning, guys. Thanks for taking my questions. Back in December and January this year, you were able to increase prices to help offset the inflationary pressures. Can you quantify for us what percentage of your portfolio you were able to increase those prices for? And if those increases had any negative impact on demand? And also, if inflation continues going forward, are you still confident that you can keep on passing through these price increases to consumers without impacting demand? Thanks so much. Yeah, great question. Let's start with historical. You're 100% correct. In that January timeframe, we did take pricing. We took pricing on our prescription pharmaceutical product portfolio. That was in the ballpark mid-single digits. Now, I wanna be clear that when you take pricing even at, let's just use 5% as an example. If you take a 5% pricing, you're not gonna realize a 5% pricing. You're gonna have to offset that with some additional gross net reductions, et cetera. We did take pricing on our prescription business, yes. In addition, we took pricing on our consumer business, and in that case, we took on the consumer business the action in January, but we did not see the actual realized pricing there until really in the March timing. tWe have to give retailers approximately two to three months of time to build that into their process. That did not really occur till March, but we have seen that. In both the pricing aspects of what we saw on both the consumer as well as on the prescription side, we did not see any diminution of the demand for either of those categories. We are continuing to be able to pass on that price. On the other area, on the vision contact lens business, we did also take pricing there, ballpark in the mid-single digits areas where we took pricing, and that did occur in that January timeframe. Now, as to the question on going forward, we do think that inflation is real. It's something we are going to look to take additional pricing. We have not seen a really different demand from the prices we've taken in the past. We will continue to look at this. It's something that we do believe is part of our need to look at this from an inflationary pressure that we're facing. Beyond the pricing aspect, though, I wanna be very clear, and as we're thinking about the future, we're thinking about it not just simply on a price as the actual selling price, but we're also looking at other things like discounts and other rebates in terms of how we can take a look at the challenge we face from an inflationary pressure. We've also, going forward, instituted what we refer to as Project CORE. Project CORE stands for Cost Optimization and Revenue Enhancement. That's a program that we're looking at through our entire all the different P&L aspects of like manufacturing, everywhere we can do to reduce obsolescence, to improve yield, to try to move forward with additional response to the inflationary pressure now, to get ahead of this rather than to be responding to it. We wanna continue to get ahead of this, because we do see inflationary pressures and, you know, everything from, you know, the resins we purchase for the polymers, energy obviously, and shipping. We're trying to get ahead of that, and we think Project CORE is gonna help us get ahead of that as we think through this going forward. Sam, anything you wanna add to what I said? No. I'm perfect. Thank you. Operator, next question, please. Certainly. The next question is coming from Cecilia Furlong with Morgan Stanley. Cecilia, your line is live. Please go ahead. Great. Good morning, and thank you for taking the questions. I wanted to ask specifically on the capital equipment front, what you're seeing globally in terms of just demand for capital, especially in this environment, how you contemplated that in your 2022 outlook. Also on XIPERE, just would love to hear a bit more about the initial days of launch as well as how you're thinking about that product through the balance of this year in terms of growth. Thank you. Sure. Let me start on the capital front. One of the things I want to refer you to on slide number 27 of our presentation is we did show all of the top 10 products we have as a company, and one of them specifically was the surgical equipment. That shows that versus a year ago, the capital demand has been, I'll call it flat. There absolutely was increased demand for consumables. It was up 13%, and also the implantables was up 4.5%. We did see increased demand for our overall surgical business as we stated, but the actual capital demand has slowed down a little bit, which is not surprising to us. It's part of what we had expected. We do see that that will improve as we work our way through some of the issues that we're currently seeing in the marketplace. We did see the growth clearly in the consumables and the implantable side of the business. As it would relate to XIPERE, what we're really excited about is the response rate. We showed the response rate in our information, very, very clear response rate for patients when you use XIPERE. The specific data is on page 17 of our presentation. The best corrected visual acuity has increased dramatically. You can see that we had 46.9% improvement versus the control group only had a 15.6%. That is the reason why we're getting very favorable feedback from the initial launch of the product. Now to be clear, I wanna be absolutely clear that this is a product that requires additional training to how to inject into the suprachoroidal space, so that's going to take some time. That's clearly one of the things that we're thinking about in terms of, you know, this overall uveitis US market being about, you know, a $400 million opportunity. The actual macular edema is so much less than that, you know, about a third of that or 25% of that. We clearly think that this is an opportunity because of our response that we've gotten from training of the physicians who've seen a very good reception as they've used this product. More to stay tuned for that, more to happen, especially as we get additional reimbursement with the product, but we're excited about the initial launch. Most importantly, we're excited about how this is really helping patients, by utilizing the suprachoroidal space. We think the suprachoroidal space may be a platform for additional products, in the future that we hope to have more to say about that in the future. Thank you for your question. Operator, next question, please. Certainly. The next question is coming from Philip Hazan with Goldman Sachs. Phil, your line is live. Please go ahead. Hi. Thanks. This is Phil on for Phil. Thanks for taking the question. Thought I'd ask a broader picture question as well. Balance sheet, very strong free cash flow generation. I think maybe just touch on capital allocation priorities for the company and then to some of the prior questions. I'm interested if burdening Bausch + Lomb with additional debt is a potentiality in the future, depending on how things play out at the parent company to help feel better. Thanks for taking the question. Thanks, Phil. It's a good question. I'll start with the capital allocation. I would just focus on sort of where we are and what we also have done in the last couple of years. I think in the past, number of years, we invested roughly about $2 billion in the B&L business since 2018. About half of that came into R&D investments, about $700 million of that $2 billion was about in CapEx investment. That was very important for us to invest in our platform as to be able to enable us to see what we are seeing today in terms of launches and the products that we're able to bring to the market. As we go forward, I think we'll continue to have the same level of investment in our business between the R&D of at 7% of sales. When we think about CapEx, we're thinking about it about $200 million-$225 million. We built pretty good capacity to allow us to support our launches and what we need for the next number of years. Right now, we're turning our attention to ensure that we are building for the future, for allowing for additional growth as we go forward with the spend that we're doing. I think that you'll find that investment in our platform is gonna be a key priority for us. We also did talk about the opportunity for us as we now, on a standalone basis, will be able to deploy some of our cash and our balance sheet towards the acquisitions, mainly on the bolt side of bolt-on type of acquisitions. They're gonna be very strategic as we think about where we are within the marketplace, where we can leverage our infrastructure, commercial infrastructure, and we can scale it even further than what we have now, by pulling in some of these products or acquisitions into our portfolio. From a debt standpoint on B&L, we raised about $2.5 billion as part of the IPO. It's important to step back and just reflect in terms of the capital structure that we deployed within B&L. I think we focused on what we wanted and how we wanted B&L to be structured from a sufficient capital structure going forward, ensuring that we will be able to get to an investment grade rating as we do the spin-off. That all plays in our thinking in terms of how we thought about the capital structure, and how we thought about where we are from a leverage and where we are from a balance sheet. I think we're gonna be able to continue to focus on the investment-grade as we move forward for B&L. It's an important factor for us. If I could just add a little bit to what Sam said, because I agree with everything you said, is that as we're thinking about this, we see the eye health being an excellent market opportunity. It's got strong tailwinds, whether you're thinking about, you know, patients over the age of 65 using 10 times more eye health than people under the age of 65, as an example, and we know that the population is going to increase. We know that there's a myopia epidemic out there that it's moved from 20% of the population with myopia to 40%, on its way to 50% of the population. We know about diabetes. All those reasons we think are suggesting it's a good time to invest in a business in eye health, whether it's the organic side that we've referenced in the prior part of the conversation or to the inorganic side. We think the markets are gonna grow 4%-5%. We think we can grow at or above market growth rates. On top of that, we have this opportunity now with these new products, as well as investing in business development, M&A opportunities to bolt on additional assets on this capital allocation question. We think that's a chance to grow organically at or above market growth rate, and then bolt on inorganic growth opportunities. We have not had the chance to do that in the past because of some of the debt issues that Bausch Health, the total parent company, had. We think this is a great opportunity for the future. Order of magnitude, I don't want you to think we're doing billion-dollar transactions, but multi-billion-dollar transactions, but we do think there are opportunities there to do some additional bolt-ons for us, specifically in the areas that we do think are two areas, we're interested to bolt on some additional assets in the surgical space and also in the ophthalmology prescription spaces from a capital allocation point of view. Those would be the areas that we are interested in thinking about, going forward. Robert, I think we have time for maybe one more question, please. Certainly. Your final question is coming from Young Li from Jefferies. Zach, your line is live. Please go ahead. Hey, thanks for taking the question. I just wanted to hit on the 14% market share that you guys talked about in regions that you have fit sets. Just any color on expanding that fit set broader, more broadly across the U.S. and where ultimately do you think that you can get that share? It's an absolutely great question. I want to be specific that the data I shared on that 14%, it was specific to the US data, in terms of where we have fit sets in the US. We have been able to get a 14% share of our INFUSE product. That just may be one clarity. Do we believe there's an opportunity to continue to expand? The answer is absolutely yes. Look to us as we've now increased our capacity for making contact lenses and the SiHy Daily lens. As we do that, we'll have opportunities to introduce additional fit sets or samples across the broad category of the United States, but also how we're looking at this market opportunity globally. As I said, at the end of 2021, we had launched in approximately 5 markets. Now we're up to about 24 markets in terms of the launch of our SiHy Daily lens. Look to us to continue to move forward with the opportunities to grow market share of INFUSE. Importantly, though, maybe just make one important comment. We think United States, the SiHy Daily market is gonna grow from about $1 billion, $1.1 billion last year to somewhere closer to $3 billion by 2030, 2031. We also think the international portion of it is gonna grow from about $1.5 billion to about $3.7 billion. You're looking at a market on the daily SiHy lenses growing from, you know, $2.5 billion to something close to $6 billion globally. That's why we're excited about this ability to come forward with a contact lens, our INFUSE, that we believe delivers on some of the challenges in the current SiHy Daily portfolio of products that are available, predominantly for addressing this area of contact lens dryness, because of our formulation. Certainly, the patient feedback has been outstanding, based on the patients that we've had a chance to show it to. Clearly, taking a look at as we expand our capacity, we absolutely go out with more fit sets and more opportunity for the future, with our INFUSE product. Thank you very much for the question. That concludes our presentation and Q&A today. Thank you very much for joining. We look forward to getting back and talking to you in the near future. Have a great day, everyone. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.