Price Graph
Price
Yield
These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
Your subscription will be on a month to month basis and automatically renew every month. You may terminate your subscription at any time through your account.
We will provide you with advance notice of any change in fees.
You represent that you are of legal age to form a binding contract. You are responsible for any
activity associated with your account. The account can be logged in at only one computer at a
time.
The Services are intended for your own individual use. You shall only use the Services in a
manner that complies with all laws. You may not use any automated software, spider or system to
scrape data from Alphaminr.
Alphaminr is not a financial advisor and does not provide financial advice of any kind. The service is provided “As is”. The materials and information accessible through the Service are solely for informational purposes. While we strive to provide good information and data, we make no guarantee or warranty as to its accuracy.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES SHALL ALPHAMINR BE LIABLE TO YOU FOR DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR INVESTMENT LOSSES, LOSS OF DATA, OR ACCURACY OF DATA, OR FOR ANY AMOUNT, IN THE AGGREGATE, IN EXCESS OF THE GREATER OF (1) FIFTY DOLLARS OR (2) THE AMOUNTS PAID BY YOU TO ALPHAMINR IN THE SIX MONTH PERIOD PRECEDING THIS APPLICABLE CLAIM. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL OR CERTAIN OTHER DAMAGES, SO THE ABOVE LIMITATION AND EXCLUSIONS MAY NOT APPLY TO YOU.
If any provision of these Terms is found to be invalid under any applicable law, such provision shall not affect the validity or enforceability of the remaining provisions herein.
This privacy policy describes how we (“Alphaminr”) collect, use, share and protect your personal information when we provide our service (“Service”). This Privacy Policy explains how information is collected about you either directly or indirectly. By using our service, you acknowledge the terms of this Privacy Notice. If you do not agree to the terms of this Privacy Policy, please do not use our Service. You should contact us if you have questions about it. We may modify this Privacy Policy periodically.
When you register for our Service, we collect information from you such as your name, email address and credit card information.
Like many other websites we use “cookies”, which are small text files that are stored on your computer or other device that record your preferences and actions, including how you use the website. You can set your browser or device to refuse all cookies or to alert you when a cookie is being sent. If you delete your cookies, if you opt-out from cookies, some Services may not function properly. We collect information when you use our Service. This includes which pages you visit.
We use Google Analytics and we use Stripe for payment processing. We will not share the information we collect with third parties for promotional purposes. We may share personal information with law enforcement as required or permitted by law.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the Quarterly Period Ended June 30, 2013
|
|
|
OR
|
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from
to
|
|
|
Canada
(State or other jurisdiction of incorporation or organization) |
98-0448205
(I.R.S. Employer Identification No.) |
|
2150 St. Elzéar Blvd. West, Laval, Quebec
(Address of principal executive offices) |
H7L 4A8
(Zip Code) |
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company
o
|
|
Part I.
|
Financial Information
|
|
|
Item 1.
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
Item 2.
|
||
|
Item 3.
|
||
|
Item 4.
|
||
|
Part II
.
|
Other Information
|
|
|
Item 1.
|
||
|
Item 1A.
|
||
|
Item 2.
|
||
|
Item 3.
|
||
|
Item 4.
|
||
|
Item 5.
|
||
|
Item 6.
|
||
|
•
|
the challenges and difficulties associated with managing the rapid growth of our Company and a large, complex business;
|
|
•
|
the introduction of generic competitors of our brand products;
|
|
•
|
the introduction of products that compete against our products that do not have patent or data exclusivity rights, which products represent a significant portion of our revenues;
|
|
•
|
our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
|
|
•
|
our ability to identify, acquire, close and integrate acquisition targets successfully and on a timely basis;
|
|
•
|
factors relating to the integration of the companies, businesses and products acquired by the Company (including the integration relating to our recent acquisitions of Bausch & Lomb Holdings Incorporated (“B&L”), Medicis Pharmaceutical Corporation ("Medicis"), and Obagi Medical Products, Inc.), such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations (including potential disruptions in sales activities), and the achievement of the anticipated benefits from such integrations;
|
|
•
|
factors relating to our ability to achieve all of the estimated synergies from our acquisitions, including from our recent acquisition of B&L (which we anticipate will be approximately $800 million), and/or the estimated synergies from our
|
|
•
|
our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements;
|
|
•
|
our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
|
|
•
|
our substantial debt and debt service obligations and their impact on our financial condition and results of operations;
|
|
•
|
our future cash flow, our ability to service and repay our existing debt and our ability to raise additional funds, if needed, in light of our current and projected levels of operations, acquisition activity and general economic conditions;
|
|
•
|
interest rate risks associated with our floating debt borrowings;
|
|
•
|
the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets;
|
|
•
|
adverse global economic conditions and credit market and foreign currency exchange uncertainty in Europe, Latin America, Asia, Africa, and other countries in which we do business;
|
|
•
|
economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
|
|
•
|
our ability to retain, motivate and recruit executives and other key employees;
|
|
•
|
the outcome of legal proceedings, investigations and regulatory proceedings;
|
|
•
|
the risk that our products could cause, or be alleged to cause, personal injury, leading to potential lawsuits and/or withdrawals of products from the market;
|
|
•
|
the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including, but not limited to, the U.S. Food and Drug Administration, Health Canada and European, Asian, Brazilian and Australian regulatory approvals, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
|
|
•
|
the results of continuing safety and efficacy studies by industry and government agencies;
|
|
•
|
the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products;
|
|
•
|
the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith;
|
|
•
|
the impact of price control restrictions on our products, including the risk of mandated price reductions;
|
|
•
|
the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, including ezogabine/retigabine, which could lead to material impairment charges;
|
|
•
|
the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
|
|
•
|
the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing;
|
|
•
|
our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and supply difficulties and delays;
|
|
•
|
the disruption of delivery of our products and the routine flow of manufactured goods;
|
|
•
|
the seasonality of sales of certain of our products;
|
|
•
|
declines in the pricing and sales volume of certain of our products that are distributed by third parties, over which we have no or limited control;
|
|
•
|
compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations;
|
|
•
|
the impacts of the Patient Protection and Affordable Care Act and other legislative and regulatory healthcare reforms in the countries in which we operate; and
|
|
•
|
other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing.
|
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
||||
|
Assets
|
|
|
|
||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
2,539,390
|
|
|
$
|
916,091
|
|
|
Accounts receivable, net
|
1,127,006
|
|
|
913,835
|
|
||
|
Inventories, net
|
497,059
|
|
|
531,256
|
|
||
|
Prepaid expenses and other current assets
|
115,497
|
|
|
130,279
|
|
||
|
Assets held for sale
|
54,400
|
|
|
90,983
|
|
||
|
Deferred tax assets, net
|
198,674
|
|
|
195,007
|
|
||
|
Total current assets
|
4,532,026
|
|
|
2,777,451
|
|
||
|
Property, plant and equipment, net
|
440,998
|
|
|
462,724
|
|
||
|
Intangible assets, net
|
9,289,669
|
|
|
9,308,669
|
|
||
|
Goodwill
|
5,277,798
|
|
|
5,141,366
|
|
||
|
Deferred tax assets, net
|
42,331
|
|
|
76,422
|
|
||
|
Other long-term assets, net
|
199,436
|
|
|
183,747
|
|
||
|
Total assets
|
$
|
19,782,258
|
|
|
$
|
17,950,379
|
|
|
|
|
|
|
||||
|
Liabilities
|
|
|
|
||||
|
Current liabilities:
|
|
|
|
||||
|
Accounts payable
|
$
|
284,544
|
|
|
$
|
227,384
|
|
|
Accrued liabilities and other current liabilities
|
1,035,007
|
|
|
1,008,224
|
|
||
|
Acquisition-related contingent consideration
|
91,029
|
|
|
102,559
|
|
||
|
Current portion of long-term debt
|
346,875
|
|
|
480,182
|
|
||
|
Deferred tax liabilities, net
|
4,363
|
|
|
4,403
|
|
||
|
Total current liabilities
|
1,761,818
|
|
|
1,822,752
|
|
||
|
Acquisition-related contingent consideration
|
342,079
|
|
|
352,523
|
|
||
|
Long-term debt
|
10,447,230
|
|
|
10,535,443
|
|
||
|
Liabilities for uncertain tax positions
|
105,766
|
|
|
103,658
|
|
||
|
Deferred tax liabilities, net
|
1,261,125
|
|
|
1,248,312
|
|
||
|
Other long-term liabilities
|
161,711
|
|
|
170,293
|
|
||
|
Total liabilities
|
14,079,729
|
|
|
14,232,981
|
|
||
|
|
|
|
|
||||
|
Shareholders’ Equity
|
|
|
|
||||
|
Common shares, no par value, unlimited shares authorized, 332,455,182 and
|
|
|
|
||||
|
303,861,272 issued and outstanding at June 30, 2013 and December 31, 2012, respectively
|
8,250,192
|
|
|
5,940,652
|
|
||
|
Additional paid-in capital
|
225,289
|
|
|
267,118
|
|
||
|
Accumulated deficit
|
(2,429,051
|
)
|
|
(2,370,976
|
)
|
||
|
Accumulated other comprehensive loss
|
(343,901
|
)
|
|
(119,396
|
)
|
||
|
Total shareholders’ equity
|
5,702,529
|
|
|
3,717,398
|
|
||
|
Total liabilities and shareholders’ equity
|
$
|
19,782,258
|
|
|
$
|
17,950,379
|
|
|
Commitments and contingencies (note 18)
|
|
|
|
||||
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Revenues
|
|
|
|
|
|
|
|
||||||||
|
Product sales
|
$
|
1,063,513
|
|
|
$
|
742,972
|
|
|
$
|
2,102,380
|
|
|
$
|
1,493,852
|
|
|
Alliance and royalty
|
13,922
|
|
|
56,869
|
|
|
23,180
|
|
|
136,100
|
|
||||
|
Service and other
|
18,327
|
|
|
20,249
|
|
|
38,557
|
|
|
46,241
|
|
||||
|
|
1,095,762
|
|
|
820,090
|
|
|
2,164,117
|
|
|
1,676,193
|
|
||||
|
Expenses
|
|
|
|
|
|
|
|
||||||||
|
Cost of goods sold (exclusive of amortization of
|
|
|
|
|
|
|
|
||||||||
|
intangible assets shown separately below)
|
283,183
|
|
|
192,928
|
|
|
568,087
|
|
|
417,124
|
|
||||
|
Cost of alliance and service revenues
|
14,459
|
|
|
16,839
|
|
|
29,888
|
|
|
104,479
|
|
||||
|
Selling, general and administrative
|
257,373
|
|
|
185,440
|
|
|
499,272
|
|
|
362,726
|
|
||||
|
Research and development
|
24,469
|
|
|
17,711
|
|
|
48,264
|
|
|
39,717
|
|
||||
|
Amortization of intangible assets
|
303,598
|
|
|
210,570
|
|
|
629,773
|
|
|
411,213
|
|
||||
|
Restructuring, integration and other costs
|
53,665
|
|
|
30,004
|
|
|
102,650
|
|
|
92,341
|
|
||||
|
In-process research and development impairments and other charges
|
4,830
|
|
|
4,568
|
|
|
4,830
|
|
|
4,568
|
|
||||
|
Acquisition-related costs
|
7,879
|
|
|
13,867
|
|
|
15,778
|
|
|
21,372
|
|
||||
|
Legal settlements and related fees
|
1,124
|
|
|
53,624
|
|
|
5,572
|
|
|
56,779
|
|
||||
|
Acquisition-related contingent consideration
|
3,669
|
|
|
7,729
|
|
|
1,484
|
|
|
17,568
|
|
||||
|
|
954,249
|
|
|
733,280
|
|
|
1,905,598
|
|
|
1,527,887
|
|
||||
|
Operating income
|
141,513
|
|
|
86,810
|
|
|
258,519
|
|
|
148,306
|
|
||||
|
Interest income
|
1,054
|
|
|
1,020
|
|
|
2,650
|
|
|
2,143
|
|
||||
|
Interest expense
|
(176,793
|
)
|
|
(100,614
|
)
|
|
(332,108
|
)
|
|
(202,639
|
)
|
||||
|
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
(21,379
|
)
|
|
(133
|
)
|
||||
|
Foreign exchange and other
|
(10,082
|
)
|
|
(4,238
|
)
|
|
(8,643
|
)
|
|
20,061
|
|
||||
|
Gain (loss) on investments, net
|
3,963
|
|
|
(35
|
)
|
|
5,822
|
|
|
2,024
|
|
||||
|
Loss before (recovery of ) provision for income taxes
|
(40,345
|
)
|
|
(17,057
|
)
|
|
(95,139
|
)
|
|
(30,238
|
)
|
||||
|
(Recovery of ) provision for income taxes
|
(51,211
|
)
|
|
4,550
|
|
|
(78,475
|
)
|
|
4,290
|
|
||||
|
Net income (loss)
|
$
|
10,866
|
|
|
$
|
(21,607
|
)
|
|
$
|
(16,664
|
)
|
|
$
|
(34,528
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic earnings (loss) per share
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.11
|
)
|
|
Diluted earnings (loss) per share
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average common shares (000s)
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
308,153
|
|
|
304,816
|
|
|
307,677
|
|
|
306,296
|
|
||||
|
Diluted
|
314,447
|
|
|
304,816
|
|
|
307,677
|
|
|
306,296
|
|
||||
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Net income (loss)
|
$
|
10,866
|
|
|
$
|
(21,607
|
)
|
|
$
|
(16,664
|
)
|
|
$
|
(34,528
|
)
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustment
|
(141,058
|
)
|
|
(202,692
|
)
|
|
(224,126
|
)
|
|
(6,647
|
)
|
||||
|
Unrealized holding gain on auction rate securities:
|
|
|
|
|
|
|
|
||||||||
|
Reclassification to net income (loss)
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
|
Net unrealized holding gain (loss) on available-for-sale equity securities:
|
|
|
|
|
|
|
|
||||||||
|
Arising in period
|
(2,094
|
)
|
|
—
|
|
|
3,584
|
|
|
—
|
|
||||
|
Reclassification to net income (loss)
|
(3,963
|
)
|
|
—
|
|
|
(3,963
|
)
|
|
(1,634
|
)
|
||||
|
Net unrealized holding gain (loss) on available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
|
Arising in period
|
—
|
|
|
20
|
|
|
—
|
|
|
7
|
|
||||
|
Reclassification to net income (loss)
|
—
|
|
|
197
|
|
|
—
|
|
|
197
|
|
||||
|
Pension adjustment
|
13
|
|
|
(78
|
)
|
|
1
|
|
|
(201
|
)
|
||||
|
Other comprehensive loss
|
(147,102
|
)
|
|
(202,553
|
)
|
|
(224,505
|
)
|
|
(8,278
|
)
|
||||
|
Comprehensive loss
|
$
|
(136,236
|
)
|
|
$
|
(224,160
|
)
|
|
$
|
(241,169
|
)
|
|
$
|
(42,806
|
)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
|
||||||||
|
Net income (loss)
|
$
|
10,866
|
|
|
$
|
(21,607
|
)
|
|
$
|
(16,664
|
)
|
|
$
|
(34,528
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization
|
317,854
|
|
|
221,866
|
|
|
659,299
|
|
|
437,448
|
|
||||
|
Amortization and write-off of debt discounts and debt issuance costs
|
33,279
|
|
|
(391
|
)
|
|
42,926
|
|
|
5,356
|
|
||||
|
In-process research and development impairments and other charges
|
4,830
|
|
|
4,568
|
|
|
4,830
|
|
|
4,568
|
|
||||
|
Acquisition accounting adjustment on inventory sold
|
26,518
|
|
|
10,294
|
|
|
69,759
|
|
|
43,392
|
|
||||
|
Loss on disposal of assets
|
—
|
|
|
1,024
|
|
|
—
|
|
|
10,551
|
|
||||
|
Acquisition-related contingent consideration
|
3,669
|
|
|
7,729
|
|
|
1,484
|
|
|
17,568
|
|
||||
|
Allowances for losses on accounts receivable and inventories
|
11,576
|
|
|
1,720
|
|
|
20,570
|
|
|
6,103
|
|
||||
|
Deferred income taxes
|
(63,220
|
)
|
|
(5,850
|
)
|
|
(100,575
|
)
|
|
(20,709
|
)
|
||||
|
Additions to accrued legal settlements
|
1,124
|
|
|
53,624
|
|
|
5,572
|
|
|
56,779
|
|
||||
|
Payments of accrued legal settlements
|
(11,728
|
)
|
|
(1,752
|
)
|
|
(14,548
|
)
|
|
(1,812
|
)
|
||||
|
Share-based compensation
|
7,381
|
|
|
15,156
|
|
|
16,476
|
|
|
34,308
|
|
||||
|
Tax benefits from stock options exercised
|
(11,845
|
)
|
|
(2,882
|
)
|
|
(16,449
|
)
|
|
(3,475
|
)
|
||||
|
Foreign exchange loss (gain)
|
10,536
|
|
|
3,299
|
|
|
8,766
|
|
|
(22,265
|
)
|
||||
|
(Gain) loss on sale of marketable securities
|
(3,963
|
)
|
|
35
|
|
|
(5,822
|
)
|
|
(2,024
|
)
|
||||
|
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
21,379
|
|
|
133
|
|
||||
|
Payment of accreted interest on contingent consideration
|
(2,234
|
)
|
|
(898
|
)
|
|
(2,872
|
)
|
|
(898
|
)
|
||||
|
Other
|
(3,609
|
)
|
|
(60
|
)
|
|
(2,644
|
)
|
|
(7,673
|
)
|
||||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
|
Accounts receivable
|
(44,775
|
)
|
|
8,183
|
|
|
(134,002
|
)
|
|
(6,603
|
)
|
||||
|
Inventories
|
(33,960
|
)
|
|
(16,433
|
)
|
|
(58,908
|
)
|
|
(51,513
|
)
|
||||
|
Prepaid expenses and other current assets
|
5,354
|
|
|
1,133
|
|
|
5,232
|
|
|
(3,133
|
)
|
||||
|
Accounts payable, accrued liabilities and other liabilities
|
47,375
|
|
|
(24,156
|
)
|
|
56,568
|
|
|
(39,741
|
)
|
||||
|
Net cash provided by operating activities
|
305,028
|
|
|
254,602
|
|
|
560,377
|
|
|
421,832
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Cash Flows From Investing Activities
|
|
|
|
|
|
|
|
||||||||
|
Acquisition of businesses, net of cash acquired
|
(513,457
|
)
|
|
(454,020
|
)
|
|
(751,060
|
)
|
|
(726,832
|
)
|
||||
|
Acquisition of intangible assets and other assets
|
(32,509
|
)
|
|
(695
|
)
|
|
(33,216
|
)
|
|
(2,560
|
)
|
||||
|
Purchases of property, plant and equipment
|
(12,761
|
)
|
|
(13,601
|
)
|
|
(26,803
|
)
|
|
(24,717
|
)
|
||||
|
Proceeds from sales and maturities of marketable securities
|
7,993
|
|
|
1,048
|
|
|
17,020
|
|
|
9,412
|
|
||||
|
Purchases of marketable securities and other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,200
|
)
|
||||
|
Proceeds from sale of assets
|
19,001
|
|
|
—
|
|
|
27,430
|
|
|
66,250
|
|
||||
|
Increase in restricted cash
|
—
|
|
|
(8,873
|
)
|
|
—
|
|
|
(8,873
|
)
|
||||
|
Net cash used in investing activities
|
(531,733
|
)
|
|
(476,141
|
)
|
|
(766,629
|
)
|
|
(694,520
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Cash Flows From Financing Activities
|
|
|
|
|
|
|
|
||||||||
|
Issuance of long-term debt, net of discount
|
340,000
|
|
|
640,767
|
|
|
340,000
|
|
|
1,286,410
|
|
||||
|
Repayments of long-term debt
|
(174,707
|
)
|
|
(127,181
|
)
|
|
(604,743
|
)
|
|
(429,993
|
)
|
||||
|
Short-term debt borrowings
|
14,171
|
|
|
12,236
|
|
|
18,642
|
|
|
19,600
|
|
||||
|
Short-term debt repayments
|
(10,855
|
)
|
|
(21,582
|
)
|
|
(12,272
|
)
|
|
(21,582
|
)
|
||||
|
Issuance of common stock, net
|
2,271,250
|
|
|
—
|
|
|
2,271,250
|
|
|
—
|
|
||||
|
Repurchases of convertible debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,975
|
)
|
||||
|
Repurchases of common shares
|
(20,624
|
)
|
|
(172,000
|
)
|
|
(55,629
|
)
|
|
(280,724
|
)
|
||||
|
Proceeds from exercise of stock options
|
1,894
|
|
|
1,911
|
|
|
4,571
|
|
|
7,019
|
|
||||
|
Tax benefits from stock options exercised
|
11,845
|
|
|
2,882
|
|
|
16,449
|
|
|
3,475
|
|
||||
|
Payments of employee withholding tax upon vesting of share-based awards
|
(14,683
|
)
|
|
(9,910
|
)
|
|
(21,531
|
)
|
|
(13,734
|
)
|
||||
|
Payments of contingent consideration
|
(61,885
|
)
|
|
(33,518
|
)
|
|
(82,939
|
)
|
|
(61,018
|
)
|
||||
|
Payments of debt issuance costs
|
(325
|
)
|
|
(1,107
|
)
|
|
(33,636
|
)
|
|
(2,542
|
)
|
||||
|
Net cash provided by financing activities
|
2,356,081
|
|
|
292,498
|
|
|
1,840,162
|
|
|
502,936
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Effect of exchange rate changes on cash and cash equivalents
|
(3,722
|
)
|
|
(6,172
|
)
|
|
(10,611
|
)
|
|
907
|
|
||||
|
Net increase in cash and cash equivalents
|
2,125,654
|
|
|
64,787
|
|
|
1,623,299
|
|
|
231,155
|
|
||||
|
Cash and cash equivalents, beginning of period
|
413,736
|
|
|
330,479
|
|
|
916,091
|
|
|
164,111
|
|
||||
|
Cash and cash equivalents, end of period
|
$
|
2,539,390
|
|
|
$
|
395,266
|
|
|
$
|
2,539,390
|
|
|
$
|
395,266
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-Cash Investing and Financing Activities
|
|
|
|
|
|
|
|
||||||||
|
Acquisition of businesses, contingent consideration obligations at fair value
|
$
|
(8,291
|
)
|
|
$
|
(108,284
|
)
|
|
$
|
(67,355
|
)
|
|
$
|
(126,028
|
)
|
|
Acquisition of businesses, debt assumed
|
(5,029
|
)
|
|
(46,336
|
)
|
|
(42,583
|
)
|
|
(46,336
|
)
|
||||
|
1.
|
DESCRIPTION OF BUSINESS
|
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
3.
|
BUSINESS COMBINATIONS
|
|
•
|
On
April 25, 2013
, the Company acquired all of the outstanding shares of Obagi Medical Products, Inc. (“Obagi”) at a price of
$24.00
per share in cash. The aggregate purchase price paid by the Company was approximately
$437.1 million
. Obagi is a specialty pharmaceutical company that develops, markets, and sells topical aesthetic and therapeutic skin-
|
|
•
|
On
February 20, 2013
, the Company acquired certain assets from Eisai Inc. (“Eisai”) relating to the U.S. rights to Targretin®, which is indicated for the treatment of Cutaneous T-Cell Lymphoma. The consideration includes up-front payments of
$66.5 million
and the Company may pay up to an additional
$60.0 million
of contingent consideration based on the occurrence of potential future events. The fair value of the contingent consideration was determined to be
$50.8 million
as of the acquisition date.
As of June 30, 2013
, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date.
|
|
•
|
On
February 1, 2013
, the Company acquired Natur Produkt International, JSC (“Natur Produkt”), a specialty pharmaceutical company in Russia, for a purchase price of
$137.0 million
, including a
$20.0 million
contingent refund of purchase price relating to the outcome of certain litigation involving AntiGrippin™ that commenced prior to the acquisition. Subsequent to the acquisition, during the
three-month
period ended
March 31, 2013
, the litigation was resolved, and the
$20.0 million
was refunded back to the Company. Natur Produkt’s key brand products include AntiGrippin™, Anti-Angin®, Sage™ and Eucalyptus MA™.
|
|
•
|
During the
six-month
period ended
June 30, 2013
, the Company completed other smaller acquisitions which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below.
|
|
•
|
amounts for intangible assets, property and equipment, inventories and working capital adjustments pending finalization of the valuation;
|
|
•
|
amounts for income tax assets and liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; and
|
|
•
|
amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed.
|
|
|
|
Amounts
Recognized as of
Acquisition Dates
|
||
|
Cash
|
|
$
|
21,864
|
|
|
Accounts receivable
(a)
|
|
62,051
|
|
|
|
Inventories
|
|
29,869
|
|
|
|
Other current assets
|
|
13,806
|
|
|
|
Property, plant and equipment
|
|
5,477
|
|
|
|
Identifiable intangible assets, excluding acquired IPR&D
(b)
|
|
659,220
|
|
|
|
Acquired IPR&D
(c)
|
|
18,714
|
|
|
|
Indemnification assets
|
|
3,201
|
|
|
|
Other non-current assets
|
|
154
|
|
|
|
Current liabilities
|
|
(31,918
|
)
|
|
|
Short-term borrowings
(d)
|
|
(30,855
|
)
|
|
|
Long-term debt
(d)
|
|
(11,728
|
)
|
|
|
Deferred tax liability, net
|
|
(143,715
|
)
|
|
|
Other non-current liabilities
|
|
(1,114
|
)
|
|
|
Total identifiable net assets
|
|
595,026
|
|
|
|
Goodwill
(e)
|
|
217,283
|
|
|
|
Total fair value of consideration transferred
|
|
$
|
812,309
|
|
|
(a)
|
The fair value of trade accounts receivable acquired was
$62.1 million
, with the gross contractual amount being
$64.1 million
, of which the Company expects that
$2.0 million
will be uncollectible.
|
|
(b)
|
The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:
|
|
|
|
Weighted-
Average
Useful Lives
(Years)
|
|
Amounts
Recognized as of
Acquisition Dates
|
||
|
Product brands
|
|
7
|
|
$
|
453,857
|
|
|
Corporate brand
|
|
13
|
|
85,782
|
|
|
|
Patents
|
|
3
|
|
71,676
|
|
|
|
Royalty Agreement
|
|
5
|
|
26,466
|
|
|
|
Partner relationships
|
|
5
|
|
16,000
|
|
|
|
Technology
|
|
10
|
|
5,439
|
|
|
|
Total identifiable intangible assets acquired
|
|
8
|
|
$
|
659,220
|
|
|
(c)
|
The acquired in-process research and development (“IPR&D”) assets relate to the Obagi and Natur Produkt acquisitions. Obagi’s acquired IPR&D assets primarily relate to the development of dermatology products for anti-aging and suncare. Natur Produkt’s acquired IPR&D assets include a product indicated for the prevention of viral diseases, specifically cold and flu, and a product indicated for the treatment of inflammation and muscular disorders.
|
|
(d)
|
Short-term borrowings and long-term debt primarily relate to the Natur Produkt acquisition. In
March 2013
, the Company settled all of Natur Produkt’s outstanding short-term borrowings and long-term debt.
|
|
(e)
|
The goodwill relates primarily to the Obagi and Natur Produkt acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of Obagi’s and Natur Produkt’s goodwill is expected to be deductible for tax purposes.
The goodwill recorded from the Obagi and the Natur Produkt acquisitions represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company.
|
|
(Number of shares, stock options and restricted
share units in thousands)
|
|
Conversion
Calculation
|
|
Fair
Value
|
||||
|
Number of common shares of Medicis outstanding as of acquisition date
|
|
57,135
|
|
|
|
|
||
|
Multiplied by Per Medicis Share Consideration
|
|
$
|
44.00
|
|
|
$
|
2,513,946
|
|
|
Number of stock options of Medicis cancelled and exchanged for cash
(a)
|
|
3,152
|
|
|
33,052
|
|
||
|
Number of outstanding restricted shares cancelled and exchanged for cash
(a)
|
|
1,974
|
|
|
31,881
|
|
||
|
Total fair value of consideration transferred
|
|
|
|
|
$
|
2,578,879
|
|
|
|
(a)
|
The cash consideration paid for Medicis stock options and restricted shares attributable to pre-combination services has been included as a component of purchase price. The remaining
$77.3 million
balance related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control was recognized as a post-combination expense within Restructuring, integration and other costs in the
fourth quarter of 2012
.
|
|
|
|
Amounts
Recognized as of
Acquisition Date
(as previously
reported)
(a)
|
|
Measurement
Period
Adjustments
(b)
|
|
Amounts
Recognized as of
June 30, 2013
(as adjusted)
|
||||||
|
Cash and cash equivalents
|
|
$
|
169,583
|
|
|
$
|
—
|
|
|
$
|
169,583
|
|
|
Accounts receivable
(c)
|
|
81,092
|
|
|
9,116
|
|
|
90,208
|
|
|||
|
Inventories
(d)
|
|
145,157
|
|
|
(7,635
|
)
|
|
137,522
|
|
|||
|
Short-term and long-term investments
(e)
|
|
626,559
|
|
|
—
|
|
|
626,559
|
|
|||
|
Income taxes receivable
|
|
40,416
|
|
|
—
|
|
|
40,416
|
|
|||
|
Other current assets
(f)
|
|
74,622
|
|
|
—
|
|
|
74,622
|
|
|||
|
Property and equipment, net
|
|
8,239
|
|
|
(5,625
|
)
|
|
2,614
|
|
|||
|
Identifiable intangible assets, excluding acquired IPR&D
(g)
|
|
1,390,724
|
|
|
(21,843
|
)
|
|
1,368,881
|
|
|||
|
Acquired IPR&D
(h)
|
|
153,817
|
|
|
5,992
|
|
|
159,809
|
|
|||
|
Other non-current assets
|
|
616
|
|
|
—
|
|
|
616
|
|
|||
|
Current liabilities
(i)
|
|
(453,909
|
)
|
|
(12,375
|
)
|
|
(466,284
|
)
|
|||
|
Long-term debt, including current portion
(j)
|
|
(777,985
|
)
|
|
—
|
|
|
(777,985
|
)
|
|||
|
Deferred income taxes, net
|
|
(205,009
|
)
|
|
12,204
|
|
|
(192,805
|
)
|
|||
|
Other non-current liabilities
|
|
(8,841
|
)
|
|
—
|
|
|
(8,841
|
)
|
|||
|
Total identifiable net assets
|
|
1,245,081
|
|
|
(20,166
|
)
|
|
1,224,915
|
|
|||
|
Goodwill
(k)
|
|
1,333,798
|
|
|
20,166
|
|
|
1,353,964
|
|
|||
|
Total fair value of consideration transferred
|
|
$
|
2,578,879
|
|
|
$
|
—
|
|
|
$
|
2,578,879
|
|
|
(a)
|
As previously reported in the 2012 Form 10-K.
|
|
(b)
|
The measurement period adjustments primarily reflect: (i) reductions in the estimated fair value of a product brand intangible asset and property and equipment; (ii) changes in estimated inventory reserves; (iii) changes in certain assumptions impacting the fair value of acquired IPR&D; (iv) additional information obtained with respect to the valuation of certain pre-acquisition contingent assets, as well as legal and milestone obligations; and (v) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.
|
|
(c)
|
The fair value of trade accounts receivable acquired was
$90.2 million
, with the gross contractual amount being
$90.3 million
, of which the Company expects that
$0.1 million
will be uncollectible.
|
|
(d)
|
Includes
$104.6 million
to record Medicis’ inventory at its estimated fair value.
|
|
(e)
|
Short-term and long-term investments consist of corporate and various government agency and municipal debt securities, investments in auction rate floating securities (student loans), and investments in equity securities. Subsequent to the acquisition date, the Company liquidated these investments for proceeds of
$615.4 million
,
$9.0 million
and
$8.0 million
in the
fourth
quarter of 2012,
the first quarter of 2013
, and the
second quarter of 2013
, respectively.
|
|
(f)
|
Includes prepaid expenses and an asset related to a supplemental executive retirement program. The supplemental executive retirement program was settled as of
December 31, 2012
.
|
|
(g)
|
The following table summarizes the amounts and useful lives assigned to identifiable intangible assets:
|
|
|
|
Weighted-
Average
Useful Lives
(Years)
|
|
Amounts
Recognized as of
Acquisition Date
(as previously
reported)
|
|
Measurement
Period
Adjustments
|
|
Amounts
Recognized as of
June 30, 2013
(as adjusted)
|
||||||
|
In-licensed products
|
|
11
|
|
$
|
633,429
|
|
|
$
|
2,283
|
|
|
$
|
635,712
|
|
|
Product brands
|
|
8
|
|
491,627
|
|
|
(24,877
|
)
|
|
466,750
|
|
|||
|
Patents
|
|
5
|
|
224,985
|
|
|
1,148
|
|
|
226,133
|
|
|||
|
Corporate brands
|
|
14
|
|
40,683
|
|
|
(397
|
)
|
|
40,286
|
|
|||
|
Total identifiable intangible assets acquired
|
|
9
|
|
$
|
1,390,724
|
|
|
$
|
(21,843
|
)
|
|
$
|
1,368,881
|
|
|
(h)
|
The significant components of the acquired IPR&D assets primarily relate to the development of dermatology products, such as Luliconazole, a new imidazole, antimycotic cream for the treatment of tinea cruris, pedis and corporis, and Metronidazole 1.3%, a topical antibiotic for the treatment of bacterial vaginosis (
$136.9 million
, in the aggregate), and the development of aesthetics programs (
$22.9 million
). A New Drug Application (“NDA”) for Luliconazole was submitted to the U.S. Food and Drug Administration (“FDA”) on
December 11, 2012
. A multi-period excess earnings methodology (income approach) was primarily used to determine the estimated fair values of the acquired IPR&D assets. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project. Risk-adjusted discount rates of
10%
-
11%
were used to present value the projected cash flows. On
April 30, 2013
, the Company agreed to sell the worldwide rights in its Metronidazole 1.3% Vaginal Gel antibiotic development product, a topical antibiotic for the treatment of bacterial vaginosis, to Actavis Specialty Brands for approximately
$55 million
, which includes upfront and certain milestone payments, and minimum royalties for the
first three years
of commercialization. For further details, see note 20 titled “SUBSEQUENT EVENTS AND PENDING TRANSACTIONS”.
|
|
(i)
|
Includes accounts payable, a liability for a supplemental executive retirement program, a liability for stock appreciation rights, deferred revenue, accrued liabilities, and reserves for sales returns, rebates, managed care and Medicaid. The supplemental executive retirement program was settled as of
December 31, 2012
.
|
|
(j)
|
The following table summarizes the fair value of long-term debt assumed as of the acquisition date:
|
|
|
|
Amounts
Recognized as of
Acquisition Date
|
||
|
1.375% Convertible Senior Notes
(1)
|
|
$
|
546,668
|
|
|
2.50% Contingent Convertible Senior Notes
(1)
|
|
231,111
|
|
|
|
1.50% Contingent Convertible Senior Notes
(1)
|
|
206
|
|
|
|
Total long-term debt assumed
|
|
$
|
777,985
|
|
|
(1)
|
During the period from the acquisition date to
June 30, 2013
, the Company redeemed the
2.50%
Contingent Convertible Senior Notes, the
1.50%
Contingent Convertible Senior Notes and a portion of the
1.375%
Convertible Senior Notes. For further details, see note 11 titled “LONG-TERM DEBT”.
|
|
(k)
|
Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:
|
|
•
|
cost savings, operating synergies and other benefits expected to result from combining the operations of Medicis with those of the Company;
|
|
•
|
the value of the continuing operations of Medicis’ existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and
|
|
•
|
intangible assets that do not qualify for separate recognition (for instance, Medicis’ assembled workforce).
|
|
•
|
On
October 2, 2012
, the Company acquired certain assets from Johnson & Johnson Consumer Companies, Inc. (“J&J ROW”) for a purchase price of
$41.7 million
, relating to the rights in various ex-North American territories to the OTC consumer brands Caladryl® and Shower to Shower®.
|
|
•
|
On
September 28, 2012
, the Company acquired certain assets from Johnson & Johnson Consumer Companies, Inc. (“J&J North America”) for a purchase price of
$107.3 million
, relating to the U.S. and Canadian rights to the OTC consumer brands Ambi®, Caladryl®, Corn Huskers®, Cortaid®, Purpose® and Shower to Shower®.
|
|
•
|
On
September 24, 2012
, the Company acquired certain assets from QLT Inc. and QLT Ophthalmics, Inc. (collectively, “QLT”) relating to Visudyne®, which is used to treat abnormal growth of leaky blood vessels in the eye caused by wet age-related macular degeneration. The consideration paid included up-front payments of
$62.5 million
for the assets related to the rights to the product in the U.S. and
$50.0 million
for the assets related to the rights to the product outside the U.S. The Company may pay a series of contingent payments of up to
$20.0 million
relating to non-U.S. royalties and development milestones for QLT’s laser program in the U.S. In addition, the Company will pay royalties on sales of potential new indications for Visudyne® in the U.S. The fair value of the contingent consideration was determined to be
$7.9 million
as of the acquisition date.
As of June 30, 2013
, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date.
|
|
•
|
On
May 23, 2012
, the Company acquired certain assets from University Medical Pharmaceuticals Corp. (“University Medical”), a specialty pharmaceutical company located in the U.S. focused on skincare products, including the rights to University Medical’s main brand AcneFree™, a retail OTC acne treatment. The consideration includes up-front payments of
$65.0 million
, and the Company may pay a series of contingent consideration payments of up to
$40.0 million
if certain net sales milestones are achieved. The fair value of the contingent consideration was determined to be
$1.5 million
as of the acquisition date.
As of June 30, 2013
, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date.
|
|
•
|
On
May 2, 2012
, the Company acquired certain assets from Atlantis Pharma (“Atlantis”), a branded generics pharmaceutical company located in Mexico, for up-front payments of
$65.5 million
(MXN
$847.3 million
), and the Company placed an additional
$8.9 million
(MXN
$114.7 million
) into an escrow account. The amounts in escrow will be paid to the sellers only if certain regulatory milestones are achieved and therefore such amounts were treated as contingent consideration. The fair value of the contingent consideration was determined to be
$7.6 million
as of the acquisition date.
As of June 30, 2013
, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. Since the acquisition date, certain amounts have been released from escrow to the sellers, reducing the escrow balance to
$7.7 million
as of
June 30, 2013
. The escrow balance is treated as restricted cash and is included in Prepaid expenses and other current assets and Other long-term assets, net in the Company’s consolidated balance sheets. Atlantis has a broad product portfolio, including products in gastro, analgesics and anti-inflammatory therapeutic categories.
|
|
•
|
On
March 13, 2012
, the Company acquired certain assets from Gerot Lannach, a branded generics pharmaceutical company based in Austria. The Company made an up-front payment of
$164.0 million
(
€125.0 million
), and the Company may pay a series of contingent consideration payments of up to
$19.7 million
(
€15.0 million
) if certain net sales milestones are achieved. The fair value of the contingent consideration was determined to be
$16.8 million
as of the acquisition date.
As of June 30, 2013
, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. In
June 2013
, the Company made a contingent consideration payment of
$6.5 million
(
€5.0 million
). As part of the transaction, the Company also entered into a ten-year exclusive supply agreement with Gerot Lannach for the acquired products. Approximately
90%
of sales relating to the acquired assets are
|
|
•
|
On
February 1, 2012
, the Company acquired Probiotica Laboratorios Ltda. (“Probiotica”), which markets OTC sports nutrition products and other food supplements in Brazil, for a purchase price of
$90.5 million
(
R$158.0 million
).
|
|
•
|
During the year ended
December 31, 2012
, the Company completed other smaller acquisitions which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below.
|
|
|
|
Amounts
Recognized as of
Acquisition Dates
|
|
Measurement
Period
Adjustments
(a)
|
|
Amounts
Recognized as of
June 30, 2013
(as adjusted)
|
||||||
|
Cash and cash equivalents
|
|
$
|
7,255
|
|
|
$
|
(258
|
)
|
|
$
|
6,997
|
|
|
Accounts receivable
(b)
|
|
29,846
|
|
|
(17
|
)
|
|
29,829
|
|
|||
|
Assets held for sale
(c)
|
|
15,566
|
|
|
—
|
|
|
15,566
|
|
|||
|
Inventories
|
|
64,819
|
|
|
(8,091
|
)
|
|
56,728
|
|
|||
|
Other current assets
|
|
2,524
|
|
|
—
|
|
|
2,524
|
|
|||
|
Property, plant and equipment
|
|
9,027
|
|
|
—
|
|
|
9,027
|
|
|||
|
Identifiable intangible assets, excluding acquired IPR&D
(d)
|
|
666,619
|
|
|
1,527
|
|
|
668,146
|
|
|||
|
Acquired IPR&D
|
|
1,234
|
|
|
—
|
|
|
1,234
|
|
|||
|
Indemnification assets
(e)
|
|
27,901
|
|
|
—
|
|
|
27,901
|
|
|||
|
Other non-current assets
|
|
21
|
|
|
—
|
|
|
21
|
|
|||
|
Current liabilities
|
|
(32,146
|
)
|
|
(350
|
)
|
|
(32,496
|
)
|
|||
|
Long-term debt
|
|
(920
|
)
|
|
—
|
|
|
(920
|
)
|
|||
|
Liability for uncertain tax position
|
|
(6,682
|
)
|
|
6,682
|
|
|
—
|
|
|||
|
Other non-current liabilities
(e)
|
|
(28,523
|
)
|
|
—
|
|
|
(28,523
|
)
|
|||
|
Deferred income taxes, net
|
|
(10,933
|
)
|
|
373
|
|
|
(10,560
|
)
|
|||
|
Total identifiable net assets
|
|
745,608
|
|
|
(134
|
)
|
|
745,474
|
|
|||
|
Goodwill
(f)
|
|
70,600
|
|
|
(8,587
|
)
|
|
62,013
|
|
|||
|
Total fair value of consideration transferred
|
|
$
|
816,208
|
|
|
$
|
(8,721
|
)
|
|
$
|
807,487
|
|
|
(a)
|
The measurement period adjustments primarily relate to the Probiotica acquisition and primarily reflect: (i) the elimination of the liability for uncertain tax positions; (ii) the changes in the estimated fair value of the corporate brand intangible asset; and (iii) a decrease in the total fair value of consideration transferred due to a working capital adjustment. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.
|
|
(b)
|
The fair value of trade accounts receivable acquired was
$29.8 million
, with the gross contractual amount being
$31.1 million
, of which the Company expects that
$1.3 million
will be uncollectible.
|
|
(c)
|
Assets held for sale relate to a product brand acquired in the Atlantis acquisition. Subsequent to that acquisition, the plan of sale changed, and the Company no longer intends to sell the asset. Consequently, the product brand is not classified as an asset held for sale as of
June 30, 2013
.
|
|
(d)
|
The following table summarizes the amounts and useful lives assigned to identifiable intangible assets:
|
|
|
|
Weighted-
Average
Useful Lives
(Years)
|
|
Amounts
Recognized as of
Acquisition Date
(as previously
reported)
|
|
Measurement
Period
Adjustments
|
|
Amounts
Recognized as of
June 30, 2013
(as adjusted)
|
||||||
|
Product brands
|
|
10
|
|
$
|
456,720
|
|
|
$
|
(1,325
|
)
|
|
$
|
455,395
|
|
|
Corporate brands
|
|
12
|
|
31,934
|
|
|
3,725
|
|
|
35,659
|
|
|||
|
Product rights
|
|
10
|
|
109,274
|
|
|
(873
|
)
|
|
108,401
|
|
|||
|
Royalty agreement
|
|
9
|
|
36,277
|
|
|
—
|
|
|
36,277
|
|
|||
|
Partner relationships
|
|
5
|
|
32,414
|
|
|
—
|
|
|
32,414
|
|
|||
|
Total identifiable intangible assets acquired
|
|
10
|
|
$
|
666,619
|
|
|
$
|
1,527
|
|
|
$
|
668,146
|
|
|
(e)
|
Other non-current liabilities, and the corresponding indemnification assets, primarily relate to certain asserted and unasserted claims against Probiotica, which include potential tax-related obligations that existed at the acquisition date. The Company is indemnified by the sellers in accordance with indemnification provisions under its contractual arrangements. Indemnification assets and contingent liabilities were recorded at the same amount and classified in the same manner, as components of the purchase price, representing our best estimates of these amounts at the acquisition date, in accordance with guidance for loss contingencies and uncertain tax positions. Under the Company’s contractual arrangement with Probiotica, there is no limitation on the amount or value of indemnity claims that can be made by the Company; however there is a time restriction of either
two
or
five
years, depending on the nature of the claim. Approximately $
12.9 million
(
R$22.5 million
) of the purchase price for the Probiotica transaction from the date of acquisition had been placed in escrow in accordance with the indemnification provisions. The escrow account will be maintained for
two
years, of which
50%
was released to the sellers in
February 2013
and the remaining balance will be released after the
second year
. The Company expects the total amount of such indemnification assets to be collectible from the sellers.
|
|
(f)
|
The goodwill relates primarily to the Probiotica acquisition. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. The Company expects that the Probiotica’s goodwill will be deductible for tax purposes. The goodwill recorded from the J&J ROW, J&J North America, QLT, University Medical, Atlantis and Gerot Lannach acquisitions represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. Probiotica’s goodwill recorded represents the following:
|
|
•
|
the Company’s expectation to develop and market new product brands and product lines in the future;
|
|
•
|
the value associated with the Company’s ability to develop relationships with new customers;
|
|
•
|
the value of the continuing operations of Probiotica’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and
|
|
•
|
intangible assets that do not qualify for separate recognition (for instance, Probiotica’s assembled workforce).
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Revenues
|
$
|
1,102,521
|
|
|
$
|
1,136,200
|
|
|
$
|
2,221,497
|
|
|
$
|
2,338,044
|
|
|
Net income (loss)
|
27,170
|
|
|
(29,840
|
)
|
|
29,843
|
|
|
(80,389
|
)
|
||||
|
Basic earnings (loss) per share
|
$
|
0.09
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.26
|
)
|
|
Diluted earnings (loss) per share
|
$
|
0.09
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.26
|
)
|
|
•
|
elimination of the historical intangible asset amortization expense of these acquisitions;
|
|
•
|
additional amortization expense related to the fair value of identifiable intangible assets acquired;
|
|
•
|
additional depreciation expense related to fair value adjustment to property, plant and equipment acquired;
|
|
•
|
additional interest expense associated with the financing obtained by the Company in connection with the various acquisitions;
|
|
•
|
the exclusion from pro forma earnings in the
six-month
period ended
June 30, 2013
of the acquisition accounting adjustments on these acquisitions’ inventories that were sold subsequent to the acquisition date of
$67.9 million
, in the aggregate, and the exclusion of
$10.1 million
of acquisition-related costs, in the aggregate, incurred primarily for these acquisitions in the
six-month
period ended
June 30, 2013
, and the inclusion of those amounts in pro forma earnings for the corresponding comparative periods; and
|
|
•
|
the exclusion from pro forma earnings in the
three-month
period ended
June 30, 2013
of the acquisition accounting adjustments on these acquisitions’ inventories that were sold subsequent to the acquisition date of
$26.4 million
, in the aggregate, and the exclusion of
$4.3 million
of acquisition-related costs, in the aggregate, incurred primarily for these acquisitions in the
three-month
period ended
June 30, 2013
, and the inclusion of those amounts in pro forma earnings for the corresponding comparative periods.
|
|
4.
|
DIVESTITURES
|
|
5.
|
COLLABORATION AGREEMENTS
|
|
6.
|
RESTRUCTURING, INTEGRATION AND OTHER COSTS
|
|
•
|
workforce reductions across the Company and other organizational changes;
|
|
•
|
closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities;
|
|
•
|
leveraging research and development spend; and
|
|
•
|
procurement savings.
|
|
|
|
Employee Termination Costs
|
|
IPR&D
Termination
Costs
|
|
Contract
Termination,
Facility Closure
and Other Costs
|
|
|
||||||||||||
|
|
Severance and
Related Benefits
|
|
Share-Based
Compensation
(1)
|
|
|
|
Total
|
|||||||||||||
|
Balance, January 1, 2012
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Costs incurred and charged to expense
|
|
85,253
|
|
|
77,329
|
|
|
—
|
|
|
370
|
|
|
162,952
|
|
|||||
|
Cash payments
|
|
(77,975
|
)
|
|
(77,329
|
)
|
|
—
|
|
|
(5
|
)
|
|
(155,309
|
)
|
|||||
|
Non-cash adjustments
|
|
4,073
|
|
|
—
|
|
|
—
|
|
|
(162
|
)
|
|
3,911
|
|
|||||
|
Balance, December 31, 2012
|
|
11,351
|
|
|
—
|
|
|
—
|
|
|
203
|
|
|
11,554
|
|
|||||
|
Costs incurred and charged to expense
|
|
12,902
|
|
|
—
|
|
|
—
|
|
|
2,870
|
|
|
15,772
|
|
|||||
|
Cash payments
|
|
(21,573
|
)
|
|
—
|
|
|
—
|
|
|
(2,758
|
)
|
|
(24,331
|
)
|
|||||
|
Non-cash adjustments
|
|
151
|
|
|
—
|
|
|
—
|
|
|
(177
|
)
|
|
(26
|
)
|
|||||
|
Balance, March 31, 2013
|
|
2,831
|
|
|
—
|
|
|
—
|
|
|
138
|
|
|
2,969
|
|
|||||
|
Costs incurred and charged to expense
|
|
5,174
|
|
|
—
|
|
|
—
|
|
|
111
|
|
|
5,285
|
|
|||||
|
Cash payments
|
|
(7,407
|
)
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
(7,573
|
)
|
|||||
|
Non-cash adjustments
|
|
513
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
513
|
|
|||||
|
Balance, June 30, 2013
|
|
$
|
1,111
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
83
|
|
|
$
|
1,194
|
|
|
(1)
|
Relates to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control.
|
|
7.
|
FAIR VALUE MEASUREMENTS
|
|
|
|
As of June 30, 2013
|
|
As of December 31, 2012
|
||||||||||||||||||||||||||||
|
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Money market funds
|
|
$
|
2,197,495
|
|
|
$
|
2,197,495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
306,604
|
|
|
$
|
306,604
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Available-for-sale equity securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,410
|
|
|
4,410
|
|
|
—
|
|
|
—
|
|
||||||||
|
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Auction rate floating securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,167
|
|
|
—
|
|
|
—
|
|
|
7,167
|
|
||||||||
|
Total financial assets
|
|
$
|
2,197,495
|
|
|
$
|
2,197,495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
318,181
|
|
|
$
|
311,014
|
|
|
$
|
—
|
|
|
$
|
7,167
|
|
|
Cash equivalents
|
|
$
|
2,197,495
|
|
|
$
|
2,197,495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
306,604
|
|
|
$
|
306,604
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,577
|
|
|
4,410
|
|
|
—
|
|
|
7,167
|
|
||||||||
|
Total financial assets
|
|
$
|
2,197,495
|
|
|
$
|
2,197,495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
318,181
|
|
|
$
|
311,014
|
|
|
$
|
—
|
|
|
$
|
7,167
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Acquisition-related contingent consideration
|
|
$
|
(433,108
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(433,108
|
)
|
|
$
|
(455,082
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(455,082
|
)
|
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
|
•
|
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
|
|
|
Balance,
January 1,
2013
|
|
Issuances
(a)
|
|
Payments
(b)
|
|
Net
unrealized
Loss
(c)
|
|
Foreign
Exchange
(d)
|
|
Transfers
Into
Level 3
|
|
Transfers
Out of
Level 3
|
|
Balance,
June 30,
2013
|
||||||||||||||||
|
Acquisition-related contingent consideration
|
$
|
(455,082
|
)
|
|
$
|
(67,355
|
)
|
|
$
|
85,811
|
|
|
$
|
(1,484
|
)
|
|
$
|
5,002
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(433,108
|
)
|
|
(a)
|
Relates primarily to the Eisai acquisition as described in note 3.
|
|
(b)
|
Relates primarily to payments of acquisition-related contingent consideration related to the OraPharma acquisition and the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL (“Meda”) in June 2011 (the “Elidel®/Xerese®/Zovirax® agreement”).
|
|
(c)
|
For the six months ended
June 30, 2013
, a net loss of
$1.5 million
was recognized as Acquisition-related contingent consideration in the consolidated statements of income (loss). The loss was primarily driven by a net loss of
$1.8 million
in the first half of 2013, primarily related to the Elidel®/Xerese®/Zovirax® agreement, as fair value adjustments to reflect accretion for the time value of money were partially offset by a net gain recognized in the first quarter of 2013. The net gain recognized in the first quarter of 2013 related to Mylan Inc.’s launch in April 2013 of a generic Zovirax® ointment, which was earlier than we previously anticipated. Also, in April 2013, we entered into an agreement with Actavis to launch the authorized generic ointment for Zovirax®. Refer to note 5 titled “COLLABORATION AGREEMENTS” for further information regarding the agreement with Actavis. As a result of these events, the projected revenue forecast was adjusted, resulting in an acquisition-related contingent consideration net gain of
$3.1 million
in the first quarter of 2013.
|
|
(d)
|
Included in other comprehensive loss.
|
|
8.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|
|
|
As of June 30, 2013
|
|
As of December 31, 2012
|
||||||||||||
|
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
|
Cash equivalents
|
|
$
|
2,197,495
|
|
|
$
|
2,197,495
|
|
|
$
|
306,604
|
|
|
$
|
306,604
|
|
|
Marketable securities
(1)
|
|
—
|
|
|
—
|
|
|
11,577
|
|
|
11,577
|
|
||||
|
Long-term debt (as described in note 11)
(2)
|
|
(10,794,105
|
)
|
|
(10,965,149
|
)
|
|
(11,015,625
|
)
|
|
(11,691,338
|
)
|
||||
|
(1)
|
Marketable securities are classified within Prepaid expenses and other current assets and Other long-term assets, net in the consolidated balance sheets.
|
|
(2)
|
Fair value measurement of long-term debt was estimated using the quoted market prices for the Company’s debt issuances.
|
|
|
|
As of June 30, 2013
|
|
As of December 31, 2012
|
||||||||||||||||||||||||||||
|
|
|
Cost
Basis
|
|
Fair
Value
|
|
Gross Unrealized
|
|
Cost
Basis
|
|
Fair
Value
|
|
Gross Unrealized
|
||||||||||||||||||||
|
|
|
Gains
|
|
Losses
|
|
Gains
|
|
Losses
|
||||||||||||||||||||||||
|
Auction rate floating securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,166
|
|
|
$
|
7,167
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
Equity securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,031
|
|
|
4,410
|
|
|
379
|
|
|
—
|
|
||||||||
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,197
|
|
|
$
|
11,577
|
|
|
$
|
380
|
|
|
$
|
—
|
|
|
9.
|
INVENTORIES
|
|
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
||||
|
Raw materials
|
|
$
|
130,306
|
|
|
$
|
120,885
|
|
|
Work in process
|
|
66,750
|
|
|
60,384
|
|
||
|
Finished goods
|
|
358,099
|
|
|
406,018
|
|
||
|
|
|
555,155
|
|
|
587,287
|
|
||
|
Less allowance for obsolescence
|
|
(58,096
|
)
|
|
(56,031
|
)
|
||
|
|
|
$
|
497,059
|
|
|
$
|
531,256
|
|
|
10.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
|
As of June 30, 2013
|
|
As of December 31, 2012
|
||||||||||||||||||||
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
|
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Product brands
|
|
$
|
8,330,823
|
|
|
$
|
(1,711,976
|
)
|
|
$
|
6,618,847
|
|
|
$
|
7,968,318
|
|
|
$
|
(1,345,367
|
)
|
|
$
|
6,622,951
|
|
|
Corporate brands
|
|
358,353
|
|
|
(31,994
|
)
|
|
326,359
|
|
|
284,287
|
|
|
(25,336
|
)
|
|
258,951
|
|
||||||
|
Product rights
|
|
2,151,154
|
|
|
(679,178
|
)
|
|
1,471,976
|
|
|
2,110,350
|
|
|
(525,186
|
)
|
|
1,585,164
|
|
||||||
|
Partner relationships
|
|
183,592
|
|
|
(61,512
|
)
|
|
122,080
|
|
|
187,012
|
|
|
(44,230
|
)
|
|
142,782
|
|
||||||
|
Out-licensed technology and other
|
|
251,232
|
|
|
(67,326
|
)
|
|
183,906
|
|
|
209,452
|
|
|
(57,507
|
)
|
|
151,945
|
|
||||||
|
Total finite-lived intangible assets
(1)
|
|
11,275,154
|
|
|
(2,551,986
|
)
|
|
8,723,168
|
|
|
10,759,419
|
|
|
(1,997,626
|
)
|
|
8,761,793
|
|
||||||
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Acquired IPR&D
|
|
566,501
|
|
|
—
|
|
|
566,501
|
|
|
546,876
|
|
|
—
|
|
|
546,876
|
|
||||||
|
|
|
$
|
11,841,655
|
|
|
$
|
(2,551,986
|
)
|
|
$
|
9,289,669
|
|
|
$
|
11,306,295
|
|
|
$
|
(1,997,626
|
)
|
|
$
|
9,308,669
|
|
|
(1)
|
In the
first quarter of 2013
, the Company recognized a write-off of
$22.2 million
related to Opana®, a pain relief medication approved in Canada, due to production issues arising in the
first quarter
of 2013. These production issues resulted in higher spending projections and delayed commercialization timelines which, in turn, triggered the Company’s decision to suspend its launch plans. The Company does not believe this program has value to a market participant. This write-off was recognized in Amortization of intangible assets in the consolidated statements of income (loss).
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Cost of goods sold
|
$
|
—
|
|
|
$
|
531
|
|
|
$
|
—
|
|
|
$
|
2,557
|
|
|
Amortization expense
|
303,598
|
|
|
210,570
|
|
|
629,773
|
|
|
411,213
|
|
||||
|
|
$
|
303,598
|
|
|
$
|
211,101
|
|
|
$
|
629,773
|
|
|
$
|
413,770
|
|
|
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
|
Amortization expense
|
|
$
|
1,204,708
|
|
|
$
|
1,131,581
|
|
|
$
|
1,101,701
|
|
|
$
|
1,049,606
|
|
|
$
|
1,019,292
|
|
|
|
|
Developed
Markets
|
|
Emerging
Markets
|
|
Total
|
||||||
|
Balance, January 1, 2013
(a)
|
|
$
|
3,988,795
|
|
|
$
|
1,152,571
|
|
|
$
|
5,141,366
|
|
|
Additions
(b)
|
|
158,728
|
|
|
58,460
|
|
|
217,188
|
|
|||
|
Adjustments
(c)
|
|
20,168
|
|
|
(316
|
)
|
|
19,852
|
|
|||
|
Foreign exchange and other
|
|
(31,940
|
)
|
|
(68,668
|
)
|
|
(100,608
|
)
|
|||
|
Balance, June 30, 2013
|
|
$
|
4,135,751
|
|
|
$
|
1,142,047
|
|
|
$
|
5,277,798
|
|
|
(a)
|
Effective in the
first quarter of 2013
, the Company has
two
reportable segments: Developed Markets and Emerging Markets. Accordingly, the Company has restated prior period segment information to conform to the current period presentation. For further details, see note 19 titled “SEGMENT INFORMATION”.
|
|
(b)
|
Primarily relates to the Obagi and Natur Produkt acquisitions (as described in note 3).
|
|
(c)
|
Primarily reflects the impact of measurement period adjustments related to the Medicis acquisition (as described in note 3).
|
|
11.
|
|
|
|
|
Maturity
Date
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
||||
|
New Revolving Credit Facility
(1)
|
|
April 2016
|
|
$
|
225,000
|
|
|
$
|
—
|
|
|
New Term Loan A Facility
(1)
|
|
April 2016
|
|
1,876,228
|
|
|
2,083,462
|
|
||
|
New Term Loan B Facility
(1)(2)
|
|
February 2019
|
|
1,263,793
|
|
|
1,275,167
|
|
||
|
New Incremental Term Loan B Facility
(1)(2)
|
|
December 2019
|
|
972,272
|
|
|
973,988
|
|
||
|
Senior Notes:
|
|
|
|
|
|
|
||||
|
6.50%
|
|
July 2016
|
|
915,500
|
|
|
915,500
|
|
||
|
6.75%
|
|
October 2017
|
|
498,484
|
|
|
498,305
|
|
||
|
6.875%
|
|
December 2018
|
|
939,727
|
|
|
939,277
|
|
||
|
7.00%
|
|
October 2020
|
|
686,876
|
|
|
686,660
|
|
||
|
6.75%
|
|
August 2021
|
|
650,000
|
|
|
650,000
|
|
||
|
7.25%
|
|
July 2022
|
|
541,789
|
|
|
541,335
|
|
||
|
6.375%
(3)
|
|
October 2020
|
|
2,216,993
|
|
|
1,724,520
|
|
||
|
6.375%
(3)
|
|
October 2020
|
|
2,318
|
|
|
492,720
|
|
||
|
Convertible Notes:
|
|
|
|
|
|
|
||||
|
1.375% Convertible Notes
(4)
|
|
June 2017
|
|
209
|
|
|
228,576
|
|
||
|
2.50% Convertible Notes
(4)
|
|
June 2032
|
|
—
|
|
|
5,133
|
|
||
|
1.50% Convertible Notes
(4)
|
|
June 2033
|
|
—
|
|
|
84
|
|
||
|
Other
|
|
|
|
4,916
|
|
|
898
|
|
||
|
|
|
|
|
10,794,105
|
|
|
11,015,625
|
|
||
|
Less current portion
|
|
|
|
(346,875
|
)
|
|
(480,182
|
)
|
||
|
Total long-term debt
|
|
|
|
$
|
10,447,230
|
|
|
$
|
10,535,443
|
|
|
(1)
|
Together, the “Senior Secured Credit Facilities” under the Company’s Third Amended and Restated Credit and Guaranty Agreement (the “Credit Agreement”).
|
|
(2)
|
On
February 21, 2013
, the Company and certain of its subsidiaries, as guarantors, entered into an amendment to the Credit Agreement to effectuate a repricing of its existing senior secured term loan B facility (the “Term Loan B Facility”) and its existing incremental term B loans (the “Incremental Term Loan B Facility”) by the issuance of
$1.3 billion
and
$1.0 billion
in new incremental term loans (the “New Term Loan B Facility” and the “New Incremental Term Loan B Facility”, respectively, and together, the “Repriced Term Loan B Facilities”).
|
|
(3)
|
On
March 29, 2013
, the Company announced that its wholly-owned subsidiary, Valeant, commenced an offer to exchange (the “Exchange Offer”) any and all of its outstanding
$500.0 million
aggregate principal amount of
6.375%
senior notes due
2020
(the “Existing Notes”) into the previously outstanding
$1.75 billion
6.375%
senior notes due
2020
. Valeant conducted the Exchange Offer in order to satisfy its obligations under the indenture governing the Existing Notes with the anticipated result being that some or all of such notes would be part of a single series of
6.375%
senior notes under
one
indenture. The Exchange Offer, which did not result in any changes to existing terms or to the total amount of the Company’s debt outstanding, expired on
April 26, 2013
.
$497.7 million
of aggregate principal amount of the Existing Notes was exchanged as of such date.
|
|
(4)
|
Represents obligations assumed from Medicis.
|
|
12.
|
SECURITIES REPURCHASE PROGRAM
|
|
13.
|
SHARE-BASED COMPENSATION
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Stock options
|
$
|
4,714
|
|
|
$
|
5,365
|
|
|
$
|
8,152
|
|
|
$
|
12,076
|
|
|
RSUs
|
2,667
|
|
|
9,791
|
|
|
8,324
|
|
|
22,232
|
|
||||
|
Share-based compensation expense
|
$
|
7,381
|
|
|
$
|
15,156
|
|
|
$
|
16,476
|
|
|
$
|
34,308
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cost of goods sold
|
$
|
—
|
|
|
$
|
(230
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Research and development expenses
|
—
|
|
|
210
|
|
|
—
|
|
|
440
|
|
||||
|
Selling, general and administrative expenses
|
7,381
|
|
|
15,176
|
|
|
16,476
|
|
|
33,868
|
|
||||
|
Share-based compensation expense
|
$
|
7,381
|
|
|
$
|
15,156
|
|
|
$
|
16,476
|
|
|
$
|
34,308
|
|
|
14.
|
SHAREHOLDERS’ EQUITY
|
|
|
Shareholders
|
|
|
|||||||||||||||||||
|
|
Common Shares
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders'
equity
|
|||||||||||||
|
|
Shares
(000s)
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
Balance, January 1, 2012
|
306,371
|
|
|
$
|
5,963,621
|
|
|
$
|
276,117
|
|
|
$
|
(2,030,292
|
)
|
|
$
|
(279,616
|
)
|
|
$
|
3,929,830
|
|
|
Repurchase of equity component of 5.375% Convertible Notes
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
(2,682
|
)
|
|
—
|
|
|
(2,862
|
)
|
|||||
|
Common shares issued under share-based compensation plans
|
939
|
|
|
23,944
|
|
|
(16,925
|
)
|
|
—
|
|
|
—
|
|
|
7,019
|
|
|||||
|
Repurchase of common shares
|
(5,257
|
)
|
|
(102,340
|
)
|
|
—
|
|
|
(178,384
|
)
|
|
—
|
|
|
(280,724
|
)
|
|||||
|
Share-based compensation
|
—
|
|
|
—
|
|
|
34,308
|
|
|
—
|
|
|
—
|
|
|
34,308
|
|
|||||
|
Employee withholding taxes related to share-based awards
|
—
|
|
|
—
|
|
|
(13,734
|
)
|
|
—
|
|
|
—
|
|
|
(13,734
|
)
|
|||||
|
Tax benefits from stock options exercised
|
—
|
|
|
—
|
|
|
3,475
|
|
|
—
|
|
|
—
|
|
|
3,475
|
|
|||||
|
|
302,053
|
|
|
5,885,225
|
|
|
283,061
|
|
|
(2,211,358
|
)
|
|
(279,616
|
)
|
|
3,677,312
|
|
|||||
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,528
|
)
|
|
—
|
|
|
(34,528
|
)
|
|||||
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,278
|
)
|
|
(8,278
|
)
|
|||||
|
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(42,806
|
)
|
||||||||||
|
Balance, June 30, 2012
|
302,053
|
|
|
$
|
5,885,225
|
|
|
$
|
283,061
|
|
|
$
|
(2,245,886
|
)
|
|
$
|
(287,894
|
)
|
|
$
|
3,634,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Balance, January 1, 2013
|
303,861
|
|
|
$
|
5,940,652
|
|
|
$
|
267,118
|
|
|
$
|
(2,370,976
|
)
|
|
$
|
(119,396
|
)
|
|
$
|
3,717,398
|
|
|
Issuance of common stock
(1)
|
27,059
|
|
|
2,269,470
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,269,470
|
|
|||||
|
Common shares issued under share-based compensation plans
(2)
|
2,260
|
|
|
54,288
|
|
|
(53,223
|
)
|
|
—
|
|
|
—
|
|
|
1,065
|
|
|||||
|
Repurchase of common shares
(2)
|
(725
|
)
|
|
(14,218
|
)
|
|
—
|
|
|
(41,411
|
)
|
|
—
|
|
|
(55,629
|
)
|
|||||
|
Share-based compensation
|
—
|
|
|
—
|
|
|
16,476
|
|
|
—
|
|
|
—
|
|
|
16,476
|
|
|||||
|
Employee withholding taxes related to share-based awards
|
—
|
|
|
—
|
|
|
(21,531
|
)
|
|
—
|
|
|
—
|
|
|
(21,531
|
)
|
|||||
|
Tax benefits from stock options exercised
|
—
|
|
|
—
|
|
|
16,449
|
|
|
—
|
|
|
—
|
|
|
16,449
|
|
|||||
|
|
332,455
|
|
|
8,250,192
|
|
|
225,289
|
|
|
(2,412,387
|
)
|
|
(119,396
|
)
|
|
5,943,698
|
|
|||||
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,664
|
)
|
|
—
|
|
|
(16,664
|
)
|
|||||
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(224,505
|
)
|
|
(224,505
|
)
|
|||||
|
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(241,169
|
)
|
||||||||||
|
Balance, June 30, 2013
|
332,455
|
|
|
$
|
8,250,192
|
|
|
$
|
225,289
|
|
|
$
|
(2,429,051
|
)
|
|
$
|
(343,901
|
)
|
|
$
|
5,702,529
|
|
|
(1)
|
On
June 24, 2013
, the Company completed, pursuant to an Underwriting Agreement with Goldman Sachs & Co. and Goldman Sachs Canada, Inc., a public offering for the sale of
27,058,824
of its common shares, no par value, at a price of
$85.00
per share, or aggregate gross proceeds of approximately
$2.3 billion
. In connection with the issuance of these new common shares, the Company incurred approximately
$30.5 million
of issuance costs, which has been reflected as reduction to the gross proceeds from the equity issuance.
|
|
(2)
|
During the second quarter of 2013,
225,000
common shares were repurchased by the Company pursuant to a purchase agreement with Goldman, Sachs & Co. Under this purchase program, the repurchases were made by Goldman, Sachs & Co. in compliance with Rule 10b5-1(c)(1)(i) of the Securities Exchange Act of 1934.
217,294
of these common shares were repurchased on behalf of certain members of the Company’s Board of Directors, and were subsequently transferred to such directors, in connection with the share settlement of certain deferred stock units and restricted stock units held by such directors following the termination of the applicable equity program. The remaining
7,706
common shares were repurchased on behalf of the Company pursuant to the 2012 Securities Repurchase Program (and therefore these shares are included in the
507,957
of total common shares repurchased under the 2012 Securities Repurchase Program as of June 30, 2013) and were subsequently cancelled (see note 12 titled “SECURITIES REPURCHASE PROGRAM” for further information).
|
|
15.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
Foreign
Currency
Translation
Adjustment
|
|
Unrealized
Holding
Gain (Loss) on
Auction
Rate
Securities
|
|
Net
Unrealized
Holding
Gain (Loss)
on Available-
For-Sale
Equity
Securities
|
|
Acquisition of
Noncontrolling
Interest
|
|
Pension
Adjustment
|
|
Total
|
||||||||||||
|
Balance, January 1, 2013
|
|
$
|
(121,696
|
)
|
|
$
|
1
|
|
|
$
|
379
|
|
|
$
|
2,206
|
|
|
$
|
(286
|
)
|
|
$
|
(119,396
|
)
|
|
Foreign currency translation adjustment
|
|
(224,126
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(224,126
|
)
|
||||||
|
Reclassification to net income (loss)
(1)
|
|
—
|
|
|
(1
|
)
|
|
(3,963
|
)
|
|
—
|
|
|
—
|
|
|
(3,964
|
)
|
||||||
|
Net unrealized holding gain on available-for-sale equity securities
|
|
—
|
|
|
—
|
|
|
3,584
|
|
|
—
|
|
|
—
|
|
|
3,584
|
|
||||||
|
Pension adjustment
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
|
Balance, June 30, 2013
|
|
$
|
(345,822
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,206
|
|
|
$
|
(285
|
)
|
|
$
|
(343,901
|
)
|
|
(1)
|
Included in gain (loss) on investments, net.
|
|
(2)
|
Reflects changes in defined benefit obligations and related plan assets of legacy Valeant defined benefit pension plans.
|
|
16.
|
INCOME TAXES
|
|
17.
|
EARNINGS (LOSS) PER SHARE
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Net income (loss)
|
$
|
10,866
|
|
|
$
|
(21,607
|
)
|
|
$
|
(16,664
|
)
|
|
$
|
(34,528
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic weighted-average number of common shares
outstanding (000s)
|
308,153
|
|
|
304,816
|
|
|
307,677
|
|
|
306,296
|
|
||||
|
Diluted effect of stock options and RSUs (000s)
(a)
|
6,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Diluted effect of convertible debt (000s)
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Diluted weighted-average number of common shares
outstanding (000s)
|
314,447
|
|
|
304,816
|
|
|
307,677
|
|
|
306,296
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Basic earnings (loss) per share
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.11
|
)
|
|
Diluted earnings (loss) per share
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.11
|
)
|
|
(a)
|
In the
three-month
period ended
June 30, 2012
and
six-month
periods ended
June 30, 2013
and 2012, all potential common shares issuable for stock options, RSUs and convertible debt were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive. The dilutive effect of potential common shares issuable for stock options, RSUs and convertible debt on the weighted-average number of common shares outstanding would have been as follows:
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|||||
|
|
2012
|
|
2013
|
|
2012
|
|||
|
Basic weighted-average number of common shares outstanding (000s)
|
304,816
|
|
|
307,677
|
|
|
306,296
|
|
|
Dilutive effect of stock options and RSUs (000s)
|
6,938
|
|
|
6,441
|
|
|
7,331
|
|
|
Dilutive effect of Convertible Notes (000s)
|
877
|
|
|
—
|
|
|
887
|
|
|
Diluted weighted-average number of common shares outstanding (000s)
|
312,631
|
|
|
314,118
|
|
|
314,514
|
|
|
18.
|
LEGAL PROCEEDINGS
|
|
19.
|
SEGMENT INFORMATION
|
|
•
|
Developed Markets
consists of (i) sales in the U.S. of pharmaceutical and OTC products, and alliance and contract service revenues, in the areas of dermatology and topical medication, aesthetics (including medical devices), dentistry, ophthalmology and podiatry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products the Company developed or acquired and (iii) pharmaceutical and OTC products sold in Canada, Australia and New Zealand.
|
|
•
|
Emerging Markets
consists of branded generic pharmaceutical products, as well as OTC products and agency/in-licensing arrangements with other research-based pharmaceutical companies (where the Company distributes and markets branded, patented products under long-term, renewable contracts). Products are sold primarily in Central and Eastern Europe (primarily Poland, Russia and Serbia), Latin America (Mexico, Brazil and exports out of Mexico to other Latin American markets), South East Asia and South Africa.
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Developed Markets
(1)
|
$
|
791,825
|
|
|
$
|
577,987
|
|
|
$
|
1,562,969
|
|
|
$
|
1,196,875
|
|
|
Emerging Markets
(2)
|
303,937
|
|
|
242,103
|
|
|
601,148
|
|
|
479,318
|
|
||||
|
Total revenues
|
1,095,762
|
|
|
820,090
|
|
|
2,164,117
|
|
|
1,676,193
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Segment profit:
|
|
|
|
|
|
|
|
||||||||
|
Developed Markets
(3)
|
244,149
|
|
|
200,955
|
|
|
429,402
|
|
|
356,674
|
|
||||
|
Emerging Markets
(4)
|
21,349
|
|
|
30,773
|
|
|
49,906
|
|
|
53,744
|
|
||||
|
Total segment profit
|
265,498
|
|
|
231,728
|
|
|
479,308
|
|
|
410,418
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate
(5)
|
(52,818
|
)
|
|
(35,126
|
)
|
|
(90,475
|
)
|
|
(69,484
|
)
|
||||
|
Restructuring, integration and other costs
|
(53,665
|
)
|
|
(30,004
|
)
|
|
(102,650
|
)
|
|
(92,341
|
)
|
||||
|
In-process research and development impairments and other charges
|
(4,830
|
)
|
|
(4,568
|
)
|
|
(4,830
|
)
|
|
(4,568
|
)
|
||||
|
Acquisition-related costs
|
(7,879
|
)
|
|
(13,867
|
)
|
|
(15,778
|
)
|
|
(21,372
|
)
|
||||
|
Legal settlements and related fees
|
(1,124
|
)
|
|
(53,624
|
)
|
|
(5,572
|
)
|
|
(56,779
|
)
|
||||
|
Acquisition-related contingent consideration
|
(3,669
|
)
|
|
(7,729
|
)
|
|
(1,484
|
)
|
|
(17,568
|
)
|
||||
|
Operating income
|
141,513
|
|
|
86,810
|
|
|
258,519
|
|
|
148,306
|
|
||||
|
Interest income
|
1,054
|
|
|
1,020
|
|
|
2,650
|
|
|
2,143
|
|
||||
|
Interest expense
|
(176,793
|
)
|
|
(100,614
|
)
|
|
(332,108
|
)
|
|
(202,639
|
)
|
||||
|
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
(21,379
|
)
|
|
(133
|
)
|
||||
|
Foreign exchange and other
|
(10,082
|
)
|
|
(4,238
|
)
|
|
(8,643
|
)
|
|
20,061
|
|
||||
|
Gain (loss) on investments, net
|
3,963
|
|
|
(35
|
)
|
|
5,822
|
|
|
2,024
|
|
||||
|
Loss before (recovery of) provision for income taxes
|
$
|
(40,345
|
)
|
|
$
|
(17,057
|
)
|
|
$
|
(95,139
|
)
|
|
$
|
(30,238
|
)
|
|
(1)
|
Developed Markets segment revenues reflect incremental product sales revenue of
$277.4 million
and
$534.0 million
, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions in the
three-month
and
six-mont
h periods ended
June 30, 2013
, respectively, primarily from the Medicis, OraPharma, Obagi, Eisai, J&J North America and QLT acquisitions.
|
|
(2)
|
Emerging Markets segment revenues reflect incremental product sales revenue of
$27.3 million
and
$75.3 million
, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions in the
three-month
and
six-month
periods ended
June 30, 2013
, respectively, primarily from the Natur Produkt, Gerot Lannach and Atlantis acquisitions.
|
|
(3)
|
Developed Markets segment profit reflects the addition of operations from all 2012 acquisitions and all 2013 acquisitions, including the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of
$197.5 million
and
$401.0 million
, in the aggregate, in the
three-month
and
six-month
periods ended
June 30, 2013
, respectively, primarily from Medicis and legacy Valeant operations
.
|
|
(4)
|
Emerging Markets segment profit reflects the addition of operations from all 2012 acquisitions and all 2013 acquisitions, including the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of
$57.8 million
and
$114.3 million
, in the aggregate, in the
three-month
and
six-month
periods ended
June 30, 2013
, respectively, primarily from legacy Valeant operations.
|
|
(5)
|
Corporate reflects non-restructuring-related share-based compensation expense of
$7.4 million
and
$16.5 million
in the
three-month
and
six-month
periods ended
June 30, 2013
, respectively, compared with
$15.2 million
and
$34.3 million
in the corresponding periods of
2012
.
|
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
||||
|
Assets:
|
|
|
|
||||
|
Developed Markets
(1)
|
$
|
12,745,460
|
|
|
$
|
12,859,099
|
|
|
Emerging Markets
(2)
|
4,077,372
|
|
|
4,056,666
|
|
||
|
|
16,822,832
|
|
|
16,915,765
|
|
||
|
Corporate
|
2,959,426
|
|
|
1,034,614
|
|
||
|
Total assets
|
$
|
19,782,258
|
|
|
$
|
17,950,379
|
|
|
(1)
|
Developed Markets segment assets as of
June 30, 2013
reflect (i) the provisional amounts of identifiable intangible assets and goodwill of Obagi of
$335.5 million
and
$158.5 million
, respectively, and (ii) the amounts of identifiable intangible assets acquired from Eisai of
$112.0 million
.
|
|
(2)
|
Emerging Markets segment assets as of
June 30, 2013
reflect (i) the provisional amounts of identifiable intangible assets and goodwill of Natur Produkt of
$98.8 million
and
$34.7 million
, respectively, and (ii) the provisional amount of Obagi’s goodwill of
$21.6 million
.
|
|
20.
|
SUBSEQUENT EVENTS AND PENDING TRANSACTIONS
|
|
|
|
Acquisition
Date
|
|
Acquisitions of businesses and product rights
|
|
|
|
B&L
|
|
August 5, 2013
|
|
Obagi Medical Products, Inc. (“Obagi”)
|
|
April 25, 2013
|
|
Certain assets of Eisai Inc. (“Eisai”)
|
|
February 20, 2013
|
|
Natur Produkt International, JSC (“Natur Produkt”)
|
|
February 1, 2013
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
|||||||||
|
($ in 000s, except per share data)
|
$
|
|
$
|
|
$
|
%
|
|
$
|
|
$
|
|
$
|
%
|
|||||||
|
Revenues
|
1,095,762
|
|
|
820,090
|
|
|
275,672
|
|
34
|
|
2,164,117
|
|
|
1,676,193
|
|
|
487,924
|
|
29
|
|
|
Operating expenses
|
954,249
|
|
|
733,280
|
|
|
220,969
|
|
30
|
|
1,905,598
|
|
|
1,527,887
|
|
|
377,711
|
|
25
|
|
|
Net income (loss)
|
10,866
|
|
|
(21,607
|
)
|
|
32,473
|
|
NM
|
|
(16,664
|
)
|
|
(34,528
|
)
|
|
17,864
|
|
(52
|
)
|
|
Basic earnings (loss) per share
|
0.04
|
|
|
(0.07
|
)
|
|
0.11
|
|
NM
|
|
(0.05
|
)
|
|
(0.11
|
)
|
|
0.06
|
|
(55
|
)
|
|
Diluted earnings (loss) per share
|
0.03
|
|
|
(0.07
|
)
|
|
0.10
|
|
NM
|
|
(0.05
|
)
|
|
(0.11
|
)
|
|
0.06
|
|
(55
|
)
|
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
|
Change
|
|||||
|
|
$
|
|
$
|
|
$
|
%
|
||||
|
Total assets
|
19,782,258
|
|
|
17,950,379
|
|
|
1,831,879
|
|
10
|
|
|
Long-term debt, including current portion
|
10,794,105
|
|
|
11,015,625
|
|
|
(221,520
|
)
|
(2
|
)
|
|
•
|
incremental product sales revenue of $240.3 million and $509.6 million in the aggregate, from all 2012 acquisitions in the second quarter and first half of 2013, respectively, primarily from the Medicis, OraPharma Topco Holdings, Inc. (“OraPharma”), Johnson & Johnson Consumer Companies, Inc. (“J&J North America”) and QLT Inc. and QLT Ophthalmics, Inc. (collectively, “QLT”) acquisitions. We also recognized incremental product sales revenue of $64.4
million and $99.7 million, in the aggregate, from all 2013 acquisitions in the second quarter and first half of 2013, respectively, primarily from the Obagi, Natur Produkt and Eisai acquisitions;
|
|
•
|
incremental product sales revenue of $72.2 million and $109.0 million in the second quarter and first half of 2013, respectively, related to growth from the existing business, excluding the declines in Developed Markets described below. In the Developed Markets segment, the revenue increase was driven primarily by price, while volume was the main driver of growth in the Emerging Markets segment; and
|
|
•
|
a positive foreign currency exchange impact on the existing business of $2.8 million in the second quarter of 2013.
|
|
•
|
alliance revenue of $66.3 million on the sale of 1% clindamycin and 5% benzoyl peroxide gel (“IDP-111”) and 5% fluorouracil cream (“5-FU”) products in the first half of 2012 that did not similarly occur in the first half of 2013;
|
|
•
|
decrease in product sales in the Developed Markets segment of $19.6 million and $45.7 million, in the aggregate, in the second quarter and first half of 2013, respectively, due to the continued impact of generic competition, primarily related to a decline in sales of BenzaClin® and Cesamet®;
|
|
•
|
alliance revenue of $45.0 million recognized in the second quarter of 2012 related to the milestone payment received from GSK in connection with the launch of Potiga® that did not similarly occur in the second quarter of 2013;
|
|
•
|
a negative impact from divestitures, discontinuations and supply interruptions of $13.7 million and $40.1 million, in the aggregate, in the second quarter and first half of 2013, respectively, including a decrease of $4.4 million in the first half of 2013, related to IDP-111 royalty revenue as a result of the sale of IDP-111 in February 2012;
|
|
•
|
decrease in product sales in the Developed Markets segment of $25.9 million in the second quarter and first half of 2013 related to a decline in sales of Zovirax® due to generic competition;
|
|
•
|
a decrease in service revenue of $7.7 million in the first half of 2013, primarily due to lower contract manufacturing revenue from the Laval, Quebec facility, which was acquired as part of the acquisition of the Dermik business from Sanofi in December 2011; and
|
|
•
|
a negative foreign currency exchange impact on the existing business of $2.4 million in the first half of 2013.
|
|
•
|
an increase in contribution (product sales revenue less cost of goods sold, exclusive of amortization of intangible assets) of
$230.3 million
and
$457.6 million
in the second quarter and first half of 2013, respectively, mainly related to the incremental contribution of Medicis, OraPharma, Obagi, Eisai, Natur Produkt and Gerot Lannach;
|
|
•
|
an increase of
$55.8 million
and
$82.8 million
in recovery of income taxes in the second quarter and first half of 2013, respectively, as described below under “Results of Operations — Income Taxes”;
|
|
•
|
a decrease of
$52.5 million
and
$51.2 million
in legal settlements and related fees in the second quarter and first half of 2013, respectively, as described below under “Results of Operations — Operating Expenses — Legal Settlements and Related Fees”; and
|
|
•
|
a decrease of
$16.1 million
in acquisition-related contingent consideration losses in the first half of 2013, as described below under “Results of Operations — Operating Expenses — Acquisition-Related Contingent Consideration”.
|
|
•
|
an increase of
$93.0 million
and
$218.6 million
in amortization expense in the second quarter and first half of 2013, respectively, as described below under “Results of Operations — Operating Expenses — Amortization of Intangible Assets”;
|
|
•
|
an increase of
$71.9 million
and
$136.5 million
in selling, general and administrative expense in the second quarter and first half of 2013, respectively, as described below under “Results of Operations — Operating Expenses — Selling, General and Administrative Expenses”;
|
|
•
|
an increase of
$76.2 million
and
$129.5 million
in interest expense in the second quarter and first half of 2013, respectively, as described below under “Results of Operations — Non-Operating Income (Expense) — Interest Expense”;
|
|
•
|
a decrease of
$42.5 million
and
$46.0 million
in contribution from (i) alliance and royalty revenue and (ii) service revenue (alliance and royalty revenue and service revenue less cost of alliance and service revenue) in the second quarter and first half of 2013, respectively, primarily due to $45.0 million recognized in the second quarter of 2012 related to the milestone payment received from GSK in connection with the launch of Potiga® that did not similarly occur in the second quarter of 2013;
|
|
•
|
an increase of
$28.7 million
in foreign exchange and other in the first half of 2013, as described below under “Results of Operations — Non-Operating Income (Expense) — Foreign Exchange and Other”;
|
|
•
|
an increase of
$21.2 million
in loss on extinguishment of debt in the first half of 2013, as described below under “Results of Operations — Non-Operating Income (Expense) — Loss on Extinguishment of Debt”; and
|
|
•
|
an increase of
$23.7 million
and
$10.3 million
in restructuring, integration and other costs in the second quarter and first half of 2013, respectively, as described below under “Results of Operations — Operating Expenses — Restructuring, Integration and Other Costs”.
|
|
•
|
Developed Markets
consists of (i) sales in the U.S. of pharmaceutical and OTC products, and alliance and contract service revenues, in the areas of dermatology and topical medication, aesthetics (including medical devices), dentistry, ophthalmology and podiatry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products we developed or acquired and (iii) pharmaceutical and OTC products sold in Canada, Australia and New Zealand.
|
|
•
|
Emerging Markets
consists of branded generic pharmaceutical products, as well as OTC products and agency/in-licensing arrangements with other research-based pharmaceutical companies (where the Company distributes and markets branded, patented products under long-term, renewable contracts). Products are sold primarily in Central and
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||||
|
($ in 000s)
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
||||||
|
Developed Markets
|
791,825
|
|
72
|
|
577,987
|
|
70
|
|
213,838
|
|
37
|
|
1,562,969
|
|
72
|
|
1,196,875
|
|
71
|
|
366,094
|
|
31
|
|
Emerging Markets
|
303,937
|
|
28
|
|
242,103
|
|
30
|
|
61,834
|
|
26
|
|
601,148
|
|
28
|
|
479,318
|
|
29
|
|
121,830
|
|
25
|
|
Total revenues
|
1,095,762
|
|
100
|
|
820,090
|
|
100
|
|
275,672
|
|
34
|
|
2,164,117
|
|
100
|
|
1,676,193
|
|
100
|
|
487,924
|
|
29
|
|
•
|
in the Developed Markets segment:
|
|
•
|
the incremental product sales revenue of $277.4 million and $534.0 million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions in the second quarter and first half of 2013, respectively, primarily from (i) the 2012 acquisitions of Medicis (mainly driven by Solodyn®, Restylane®, Dysport®, Ziana®, Vanos® and Perlane® product sales), OraPharma (mainly driven by Arestin® product sales), certain assets of J&J North America (mainly driven by Ambi®, Shower to Shower® and Caladryl® product sales) and certain assets of QLT (Visudyne® product sales); and (ii) the 2013 acquisitions of Obagi (mainly driven by Nu-Derm® and Obagi-C® product sales) and certain assets of Eisai (Targretin® product sales); and
|
|
•
|
an increase in product sales from the existing business (excluding the declines described below) of $40.3 million or 8%, and $52.1 million or 5%, in the second quarter and first half of 2013, respectively, driven by growth of the core dermatology brands, including Retin-A Micro®, CeraVe® and Acanya®.
|
|
•
|
alliance revenue of $66.3 million on the sale of the IDP-111 and 5-FU products in the first half of 2012 that did not similarly occur in the first half of 2013;
|
|
•
|
decrease in product sales of $19.6 million and $45.7 million, in the aggregate, in the second quarter and first half of 2013, respectively, due to the continued impact of generic competition, primarily related to a decline in sales of BenzaClin® and Cesamet®. We anticipate a continuing decline in sales of Cesamet® and BenzaClin® due to continued generic erosion, however the rate of decline is expected to decrease in the future, and these brands are expected to represent a declining percentage of total revenues primarily due to anticipated growth in other parts of our business and recent acquisitions;
|
|
•
|
alliance revenue of $45.0 million recognized in the second quarter of 2012 related to the milestone payment received from GSK in connection with the launch of Potiga® that did not similarly occur in the second quarter of 2013;
|
|
•
|
decrease in product sales of $25.9 million in the second quarter and first half of 2013 related to a decline in sales of Zovirax® due to generic competition. As a result of the approval of a generic Zovirax® ointment in April 2013, we anticipate a continuing decline in Zovirax® ointment revenues in the future, and such declines could be material. Refer to note 5 of notes to unaudited consolidated financial statements for details regarding Zovirax® agreements entered into in April 2013 with Actavis;
|
|
•
|
a negative impact from divestitures, discontinuations and supply interruptions of $9.0 million and $26.2 million in the second quarter and first half of 2013, respectively, including a decrease of $4.4 million in the first half of 2013, related to IDP-111 royalty revenue as a result of the sale of IDP-111 in February 2012;
|
|
•
|
a decrease in service revenue of $4.8 million in the first half of 2013, primarily due to lower contract manufacturing revenue from the Laval, Quebec facility, which was acquired as part of the acquisition of the Dermik business from Sanofi in December 2011; and
|
|
•
|
a negative foreign currency exchange impact on the existing business of $1.8 million and $3.0 million in the second quarter and first half of 2013, respectively.
|
|
•
|
in the Emerging Markets segment:
|
|
•
|
the incremental product sales revenue of $27.3 million and $75.3 million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions in the second quarter and the first half of 2013, respectively, primarily from (i) the 2012 acquisitions of certain assets of Gerot Lannach (mainly driven by Thrombo™ product sales) and Atlantis and (ii) the 2013 acquisition of Natur Produkt (mainly driven by AntiGrippin™ and Sage™ product sales);
|
|
•
|
an increase in product sales from the existing business of $31.9 million, or 14%, and $56.6 million, or 13%, in the second quarter and first half of 2013, respectively; and
|
|
•
|
a positive foreign currency exchange impact on the existing business of $4.7 million in the second quarter of 2013.
|
|
•
|
a negative impact from divestitures, discontinuations and supply interruptions of $4.7
million and $13.8 million in the second quarter and first half of 2013, respectively.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||||||
|
($ in 000s)
|
$
|
%
(1)
|
|
$
|
%
(1)
|
|
$
|
%
|
|
$
|
%
(1)
|
|
$
|
%
(1)
|
|
$
|
%
|
||||||||
|
Developed Markets
|
244,149
|
|
31
|
|
200,955
|
|
35
|
|
43,194
|
|
21
|
|
|
429,402
|
|
27
|
|
356,674
|
|
30
|
|
72,728
|
|
20
|
|
|
Emerging Markets
|
21,349
|
|
7
|
|
30,773
|
|
13
|
|
(9,424
|
)
|
(31
|
)
|
|
49,906
|
|
8
|
|
53,744
|
|
11
|
|
(3,838
|
)
|
(7
|
)
|
|
Total segment profit
|
265,498
|
|
24
|
|
231,728
|
|
28
|
|
33,770
|
|
15
|
|
|
479,308
|
|
22
|
|
410,418
|
|
24
|
|
68,890
|
|
17
|
|
|
•
|
in the Developed Markets segment:
|
|
•
|
an increase in contribution of $211.4 million and $393.3
million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions in the second quarter and first half of 2013, respectively, primarily from the product sales of Medicis, OraPharma, Obagi and Eisai, including expenses for acquisition accounting adjustments related to inventory of $24.5
million and $65.6 million, in the aggregate, in the second quarter and first half of 2013, respectively;
|
|
•
|
a favorable impact of $9.7 million and $42.6
million related to the existing business acquisition accounting adjustments related to inventory in the second quarter and first half of 2012, respectively, that did not similarly occur in the second quarter and first half of 2013; and
|
|
•
|
an increase in contribution from product sales from the existing business (excluding the favorable impact related to the acquisition accounting adjustments related to inventory in the second quarter and first half of 2012 that did not similarly occur in the second quarter and first half of 2013 and the declines described below) of $32.7
million and $47.5 million in the second quarter and first half of 2013, respectively, driven by growth of the core dermatology brands, including Retin-A Micro®
,
CeraVe® and Acanya®.
|
|
•
|
an increase in operating expenses (including amortization expense) of $111.8 million and $268.2 million in the second quarter and first half of 2013, respectively, primarily associated with the acquisitions of new businesses within the segment;
|
|
•
|
alliance revenue of $45.0 million recognized in the second quarter of 2012, related to the milestone payment received from GSK in connection with the launch of Potiga® that did not similarly occur in the second quarter of 2013;
|
|
•
|
a decrease in contribution of $18.2 million and $44.2
million in the second quarter and first half of 2013, respectively, primarily related to the lower sales of BenzaClin® and Cesamet® as a result of the continued impact of generic competition;
|
|
•
|
a decrease in contribution of $25.9 million in the second quarter and first half of 2013 related to the lower sales of Zovirax® as a result of generic competition;
|
|
•
|
a decrease in contribution of $7.6 million and $23.0
million in the second quarter and first half of 2013, respectively, primarily related to divestitures, discontinuations and supply interruptions. The largest contributor to the decrease was a reduction in IDP-111 royalty revenue of $4.4 million in the first half of 2013 as a result of the sale of IDP-111 in February 2012; and
|
|
•
|
a negative foreign currency exchange impact on the existing business contribution of $1.4
million and $2.4 million in the second quarter and first half of 2013, respectively.
|
|
•
|
in the Emerging Markets segment:
|
|
•
|
an increase in contribution of $15.4 million and $46.2 million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions, in the second quarter and first half of 2013, respectively, primarily from the sale of Natur Produkt and Gerot Lannach products, including expenses for acquisition accounting adjustments related to inventory of $2.0
million and $4.2 million, in the aggregate, in the second quarter and first half of 2013, respectively;
|
|
•
|
an increase in contribution from product sales from the existing business of $14.0 million and $25.7 million in the second quarter and first half of 2013, respectively;
|
|
•
|
an increase in alliance contribution of $2.6 million and $5.0 million in the second quarter and first half of 2013, respectively; and
|
|
•
|
a positive foreign currency exchange impact on the existing business contribution of $2.7
million in the second quarter of 2013.
|
|
•
|
an increase in operating expenses (including amortization expense) of $42.6 million and $74.5
million in the second quarter and first half of 2013, respectively, primarily associated with the acquisitions of new businesses within the segment; and
|
|
•
|
a decrease in contribution of $6.5 million in the first half of 2013 related to divestitures, discontinuations and supply interruptions.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||||||
|
($ in 000s)
|
$
|
%
(1)
|
|
$
|
%
(1)
|
|
$
|
%
|
|
$
|
%
(1)
|
|
$
|
%
(1)
|
|
$
|
%
|
||||||||
|
Cost of goods sold (exclusive of amortization of intangible assets shown separately below)
|
283,183
|
|
26
|
|
192,928
|
|
24
|
|
90,255
|
|
47
|
|
|
568,087
|
|
26
|
|
417,124
|
|
25
|
|
150,963
|
|
36
|
|
|
Cost of alliance and service revenues
|
14,459
|
|
1
|
|
16,839
|
|
2
|
|
(2,380
|
)
|
(14
|
)
|
|
29,888
|
|
1
|
|
104,479
|
|
6
|
|
(74,591
|
)
|
(71
|
)
|
|
Selling, general and administrative
|
257,373
|
|
23
|
|
185,440
|
|
23
|
|
71,933
|
|
39
|
|
|
499,272
|
|
23
|
|
362,726
|
|
22
|
|
136,546
|
|
38
|
|
|
Research and development
|
24,469
|
|
2
|
|
17,711
|
|
2
|
|
6,758
|
|
38
|
|
|
48,264
|
|
2
|
|
39,717
|
|
2
|
|
8,547
|
|
22
|
|
|
Amortization of intangible assets
|
303,598
|
|
28
|
|
210,570
|
|
26
|
|
93,028
|
|
44
|
|
|
629,773
|
|
29
|
|
411,213
|
|
25
|
|
218,560
|
|
53
|
|
|
Restructuring, integration and other costs
|
53,665
|
|
5
|
|
30,004
|
|
4
|
|
23,661
|
|
79
|
|
|
102,650
|
|
5
|
|
92,341
|
|
6
|
|
10,309
|
|
11
|
|
|
In-process research and development impairments and other charges
|
4,830
|
|
—
|
|
4,568
|
|
1
|
|
262
|
|
NM
|
|
|
4,830
|
|
—
|
|
4,568
|
|
—
|
|
262
|
|
NM
|
|
|
Acquisition-related costs
|
7,879
|
|
1
|
|
13,867
|
|
2
|
|
(5,988
|
)
|
(43
|
)
|
|
15,778
|
|
1
|
|
21,372
|
|
1
|
|
(5,594
|
)
|
(26
|
)
|
|
Legal settlements and related fees
|
1,124
|
|
—
|
|
53,624
|
|
7
|
|
(52,500
|
)
|
(98
|
)
|
|
5,572
|
|
—
|
|
56,779
|
|
3
|
|
(51,207
|
)
|
(90
|
)
|
|
Acquisition-related contingent consideration
|
3,669
|
|
—
|
|
7,729
|
|
1
|
|
(4,060
|
)
|
(53
|
)
|
|
1,484
|
|
—
|
|
17,568
|
|
1
|
|
(16,084
|
)
|
(92
|
)
|
|
Total operating expenses
|
954,249
|
|
87
|
|
733,280
|
|
89
|
|
220,969
|
|
30
|
|
|
1,905,598
|
|
88
|
|
1,527,887
|
|
91
|
|
377,711
|
|
25
|
|
|
•
|
the impact of higher acquisition accounting adjustments of $16.2 million and $26.4 million in the second quarter and first half of 2013, respectively, related to acquired inventories that were subsequently sold in the second quarter and first half of 2013.
|
|
•
|
a favorable impact from product mix primarily related to the Medicis product portfolio, despite decreased sales of Zovirax®, BenzaClin® and Cesamet® which have a higher gross profit margin than our overall margin; and
|
|
•
|
the benefits realized from worldwide manufacturing rationalization initiatives.
|
|
•
|
increased expenses in our Developed Markets segment ($39.1 million and $80.1 million in the second quarter and first half of 2013, respectively) primarily driven by the acquisitions of new businesses within the segment, including the Medicis acquisition, partially offset by the realization of cost synergies;
|
|
•
|
increased expenses in our Emerging Markets segment ($15.2 million and $35.0 million in the second quarter and first half of 2013, respectively), primarily driven by the acquisitions of new businesses within this segment, partially offset by the realization of cost synergies; and
|
|
•
|
net incremental compensation expense of $15.5 million in the second quarter and first half of 2013 related to certain equity awards held by current non-management directors which were modified from units settled in common shares to units settled in cash. See note 13 to the unaudited consolidated financial statements for additional information.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
|||||||||
|
($ in 000s; Income (Expense))
|
$
|
|
$
|
|
$
|
%
|
|
$
|
|
$
|
|
$
|
%
|
|||||||
|
Interest income
|
1,054
|
|
|
1,020
|
|
|
34
|
|
3
|
|
2,650
|
|
|
2,143
|
|
|
507
|
|
24
|
|
|
Interest expense
|
(176,793
|
)
|
|
(100,614
|
)
|
|
(76,179
|
)
|
76
|
|
(332,108
|
)
|
|
(202,639
|
)
|
|
(129,469
|
)
|
64
|
|
|
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
NM
|
|
(21,379
|
)
|
|
(133
|
)
|
|
(21,246
|
)
|
NM
|
|
|
Foreign exchange and other
|
(10,082
|
)
|
|
(4,238
|
)
|
|
(5,844
|
)
|
138
|
|
(8,643
|
)
|
|
20,061
|
|
|
(28,704
|
)
|
(143
|
)
|
|
Gain (loss) on investments, net
|
3,963
|
|
|
(35
|
)
|
|
3,998
|
|
NM
|
|
5,822
|
|
|
2,024
|
|
|
3,798
|
|
188
|
|
|
Total non-operating expense
|
(181,858
|
)
|
|
(103,867
|
)
|
|
(77,991
|
)
|
75
|
|
(353,658
|
)
|
|
(178,544
|
)
|
|
(175,114
|
)
|
98
|
|
|
•
|
an increase of $42.6 million and $91.1 million, in the aggregate, in the second quarter and first half of 2013, respectively, related to the borrowings under our senior notes and our senior secured credit facilities; and
|
|
•
|
an increase of $33.7 million and $37.6 million, in the aggregate, in the second quarter and first half of 2013, respectively, related to the non-cash amortization of debt discounts and deferred financing costs, including the write-off of deferred financing costs related to the commitment letter entered into in connection with the financing of the B&L Acquisition. Refer to note 11 of notes to unaudited consolidated financial statements for further details.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
|||||||||
|
($ in 000s; (Income) Expense)
|
$
|
|
$
|
|
$
|
%
|
|
$
|
|
$
|
|
$
|
%
|
|||||||
|
Current income tax expense
|
12,000
|
|
|
10,400
|
|
|
1,600
|
|
15
|
|
22,100
|
|
|
25,000
|
|
|
(2,900
|
)
|
(12
|
)
|
|
Deferred income tax benefit
|
(63,211
|
)
|
|
(5,850
|
)
|
|
(57,361
|
)
|
NM
|
|
(100,575
|
)
|
|
(20,710
|
)
|
|
(79,865
|
)
|
NM
|
|
|
Total (recovery of) provision for income taxes
|
(51,211
|
)
|
|
4,550
|
|
|
(55,761
|
)
|
NM
|
|
(78,475
|
)
|
|
4,290
|
|
|
(82,765
|
)
|
NM
|
|
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
|
Change
|
|||||
|
($ in 000s; Asset (Liability))
|
$
|
|
$
|
|
$
|
%
|
||||
|
Cash and cash equivalents
|
2,539,390
|
|
|
916,091
|
|
|
1,623,299
|
|
177
|
|
|
Long-lived assets
(1)
|
15,008,465
|
|
|
14,912,759
|
|
|
95,706
|
|
1
|
|
|
Long-term debt, including current portion
|
(10,794,105
|
)
|
|
(11,015,625
|
)
|
|
221,520
|
|
(2
|
)
|
|
Shareholders’ equity
|
5,702,529
|
|
|
3,717,398
|
|
|
1,985,131
|
|
53
|
|
|
•
|
the net proceeds of
$2,271.3 million
related to the issuance of common stock in June 2013, which were utilized to fund the B&L Acquisition;
|
|
•
|
$560.4 million
in operating cash flows;
|
|
•
|
$225.0 million of borrowings under our new revolving credit facility (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”); and
|
|
•
|
the proceeds of
$17.0 million
on the sale of marketable securities assumed in connection with the Medicis acquisition.
|
|
•
|
$784.3 million
paid, in the aggregate, in connection with the purchases of businesses and intangible assets, mainly in respect of the Obagi, Natur Produkt and Eisai acquisitions in the first half of 2013;
|
|
•
|
$233.6 million
repayment of long-term debt assumed in connection with the Medicis acquisition in December 2012;
|
|
•
|
$206.3 million repayment under our senior secured term loan A facility (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”);
|
|
•
|
contingent consideration payments within financing activities of
$82.9 million
primarily related to the OraPharma acquisition and the Elidel®/Xerese®/Zovirax® agreement entered into in June 2011;
|
|
•
|
$55.6 million
related to the repurchase of our common shares;
|
|
•
|
$37.6 million repayment of short-term borrowings and long-term debt, in the aggregate, assumed in connection with the Natur Produkt acquisition;
|
|
•
|
$33.6 million
related to debt issue costs paid primarily due to the repricing of our senior secured term loan A facility, our senior secured term loan B facility and our incremental term loan B facility, in the aggregate (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”);
|
|
•
|
purchases of property, plant and equipment of
$26.8 million
; and
|
|
•
|
$11.5 million repayments under our senior secured term loan B facility and our incremental term loan B facility, in the aggregate, (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”).
|
|
•
|
the inclusion of the identifiable intangible assets, goodwill and property, plant and equipment from the 2013 acquisitions of $900.7
million, in the aggregate, primarily related to the Obagi, Natur Produkt and Eisai acquisitions; and
|
|
•
|
purchases of property, plant and equipment of
$26.8 million
.
|
|
•
|
the depreciation of property, plant and equipment and amortization of intangible assets of
$633.2 million
in the aggregate; and
|
|
•
|
a decrease from foreign currency exchange of $202.4 million.
|
|
•
|
$233.6 million
repayment of long-term debt assumed in connection with the Medicis acquisition in December 2012;
|
|
•
|
$206.3 million repayment under our senior secured term loan A facility (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”); and
|
|
•
|
$11.5 million repayments under our senior secured term loan B facility and our incremental term loan B facility, in the aggregate (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”).
|
|
•
|
$225.0 million of borrowings under our revolving credit facility (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”).
|
|
•
|
an increase of
$2,269.5 million
related to the issuance of common stock in June 2013 in connection with the B&L Acquisition; and
|
|
•
|
$16.5 million
of share-based compensation recorded in additional paid-in capital.
|
|
•
|
a negative foreign currency translation adjustment of
$224.1 million
to other comprehensive loss, mainly due to the impact of a strengthening of the U.S. dollar relative to a number of other currencies, including the Polish zloty, Australian dollar and Brazilian real, which decreased the reported value of our net assets denominated in those currencies;
|
|
•
|
a decrease of
$55.6 million
related to the repurchase of our common shares in the first half of 2013; and
|
|
•
|
a net loss of
$16.7 million
.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
|||||||||
|
($ in 000s)
|
$
|
|
$
|
|
$
|
%
|
|
$
|
|
$
|
|
$
|
%
|
|||||||
|
Net cash provided by operating activities
|
305,028
|
|
|
254,602
|
|
|
50,426
|
|
20
|
|
|
560,377
|
|
|
421,832
|
|
|
138,545
|
|
33
|
|
Net cash used in investing activities
|
(531,733
|
)
|
|
(476,141
|
)
|
|
(55,592
|
)
|
12
|
|
|
(766,629
|
)
|
|
(694,520
|
)
|
|
(72,109
|
)
|
10
|
|
Net cash provided by financing activities
|
2,356,081
|
|
|
292,498
|
|
|
2,063,583
|
|
NM
|
|
|
1,840,162
|
|
|
502,936
|
|
|
1,337,226
|
|
NM
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(3,722
|
)
|
|
(6,172
|
)
|
|
2,450
|
|
(40
|
)
|
|
(10,611
|
)
|
|
907
|
|
|
(11,518
|
)
|
NM
|
|
Net increase in cash and cash equivalents
|
2,125,654
|
|
|
64,787
|
|
|
2,060,867
|
|
NM
|
|
|
1,623,299
|
|
|
231,155
|
|
|
1,392,144
|
|
NM
|
|
Cash and cash equivalents, beginning of period
|
413,736
|
|
|
330,479
|
|
|
83,257
|
|
25
|
|
|
916,091
|
|
|
164,111
|
|
|
751,980
|
|
NM
|
|
Cash and cash equivalents, end of period
|
2,539,390
|
|
|
395,266
|
|
|
2,144,124
|
|
NM
|
|
|
2,539,390
|
|
|
395,266
|
|
|
2,144,124
|
|
NM
|
|
•
|
the inclusion of cash flows in the second quarter of 2013 from all 2012 acquisitions, primarily the Medicis and OraPharma acquisitions, as well as all 2013 acquisitions, primarily the Natur Produkt and Obagi acquisitions;
|
|
•
|
incremental cash flows from continued growth in the existing business; and
|
|
•
|
a decreased investment in working capital of
$5.3 million
in the second quarter of 2013, primarily related to timing of payments and other receipts in the ordinary course of business, partially offset by an increase of
$53.0 million
in accounts receivable, reflecting the growth of the business, including strong sales in June 2013. The increase in receivables also resulted from a changing geographic and customer mix which carries longer payment terms, impacted by recently completed acquisitions.
|
|
•
|
the receipt of the $45.0 million milestone payment from GSK in connection with the launch of Potiga® in the second quarter of 2012 that did not similarly occur in the second quarter of 2013;
|
|
•
|
a decrease in contribution of $44.1
million in the second quarter of 2013, primarily related to the lower sales of Zovirax®, BenzaClin® and Cesamet® as a result of generic competition; and
|
|
•
|
higher payments of
$6.7 million
related to restructuring, integration and other costs in the second quarter of 2013.
|
|
•
|
the inclusion of cash flows in the first half of 2013 from all 2012 acquisitions, primarily the Medicis, OraPharma, University Medical, Atlantis, Probiotica and Gerot Lannach acquisitions, as well as all 2013 acquisitions, primarily the Natur Produkt and Obagi acquisitions; and
|
|
•
|
incremental cash flows from continued growth in the existing business.
|
|
•
|
a decrease in contribution of $70.1
million in the first half of 2013, primarily related to the lower sales of Zovirax®, BenzaClin® and Cesamet® as a result of generic competition;
|
|
•
|
the receipt of the $45.0 million milestone payment from GSK in connection with the launch of Potiga® in the second quarter of 2012 that did not similarly occur in the first half of 2013; and
|
|
•
|
an increased investment in working capital of
$30.1 million
in the first half of 2013, primarily related to an increase of
$127.4 million
in accounts receivable, reflecting the growth of the business, including strong sales in June 2013. The increase in receivables also resulted from a changing geographic and customer mix which carries longer payment
|
|
•
|
an increase of
$91.3 million
, in the aggregate, related to the purchases of businesses (net of cash acquired) and intangible assets in the aggregate.
|
|
•
|
the proceeds from the sale of assets of
$19.0 million
related to the sale of Buphenyl® in the second quarter of 2013, which was acquired in connection with the Medicis acquisition in December 2012;
|
|
•
|
a decrease of
$8.9 million
related to a transfer to restricted cash in the second quarter of 2012 related to the acquisition of certain assets from Atlantis in May 2012; and
|
|
•
|
a decrease of
$6.9 million
related to higher proceeds from the sale of marketable securities.
|
|
•
|
an increase of
$54.9 million
, in the aggregate, related to the purchases of businesses (net of cash acquired) and intangible assets in the aggregate; and
|
|
•
|
an increase of
$38.8 million
, related to lower proceeds from sales of assets, primarily attributable to the cash proceeds of $66.3 million for the sale of the IDP-111 and 5-FU products in the first quarter of 2012, partially offset by the proceeds related to the sale of Buphenyl® in the second quarter of 2013.
|
|
•
|
a decrease of
$8.9 million
related to a transfer to restricted cash in the second quarter of 2012 related to the acquisition of certain assets from Atlantis in May 2012;
|
|
•
|
a decrease of
$7.6 million
related to higher proceeds from the sale of marketable securities; and
|
|
•
|
a decrease of
$7.2 million
related to purchases of marketable securities in the first quarter of 2012.
|
|
•
|
the net proceeds of
$2,271.3 million
related to the issuance of common stock in June 2013, which were utilized to fund the B&L Acquisition;
|
|
•
|
an increase of $225.0 million of borrowings under our revolving credit facility in the second quarter of 2013 (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”);
|
|
•
|
an increase of
$151.4 million
related to lower repurchases of common shares in the second quarter of 2013; and
|
|
•
|
an increase of $37.9 million related to the repayment of long-term debt assumed in connection with the OraPharma acquisition in June 2012 that did not similarly occur in the second quarter of 2013.
|
|
•
|
a decrease of $581.8 million in net borrowings under our senior secured term loan B facility in the second quarter of 2013;
|
|
•
|
a decrease due to higher contingent consideration payments of
$28.4 million
in the second quarter of 2013, primarily due to a payment of $38.3 million related to the OraPharma acquisition, partially offset by (i) a contingent consideration payment in the second quarter of 2012 related to the PharmaSwiss S.A. acquisition in March 2011 and (ii) lower
|
|
•
|
a decrease of $24.8 million related to the higher repayments under our senior secured term loan A facility in the second quarter of 2013 (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”).
|
|
•
|
the net proceeds of
$2,271.3 million
related to the issuance of common stock in June 2013, which were utilized to fund the B&L Acquisition;
|
|
•
|
an increase of $445.0 million of borrowings under our revolving credit facility in the first half of 2013 (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”);
|
|
•
|
an increase of
$225.1 million
related to lower repurchases of common shares in the first half of 2013; and
|
|
•
|
an increase of $37.9 million related to the repayment of long-term debt assumed in connection with the OraPharma acquisition in June 2012 that did not similarly occur in the first half of 2013.
|
|
•
|
a decrease of $1,182.0 million in net borrowings under our senior secured term loan B facility in the first half of 2013;
|
|
•
|
$233.6 million
repayment of long-term debt assumed in connection with the Medicis acquisition in December 2012;
|
|
•
|
a decrease of $156.2 million related to the higher repayments under our senior secured term loan A facility in the first half of 2013 (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”);
|
|
•
|
$37.6 million in repayments of short-term borrowings and long-term debt, in the aggregate, assumed in connection with the Natur Produkt acquisition;
|
|
•
|
a decrease of
$31.1 million
related to the higher debt issue costs paid primarily due to the repricing of our senior secured term loan A facility, our senior secured term loan B facility and our incremental term loan B facility in the first quarter of 2013 (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”); and
|
|
•
|
a decrease due to higher contingent consideration payments of
$21.9 million
, in the first half of 2013, primarily due to a payment of $38.3 million related to the OraPharma acquisition, partially offset by (i) a contingent consideration payment in the second quarter of 2012 related to the PharmaSwiss S.A. acquisition in March 2011 and (ii) lower contingent consideration payments related to the Elidel®/Xerese®/Zovirax® agreement entered into with Meda in June 2011.
|
|
|
Maturity
Date
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
|
Change
|
||||||
|
($ in 000s; Asset (Liability))
|
|
$
|
|
$
|
|
$
|
|
%
|
|||||
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
|
2,539,390
|
|
|
916,091
|
|
|
1,623,299
|
|
|
177
|
|
|
Marketable securities
|
|
|
—
|
|
|
11,577
|
|
|
(11,577
|
)
|
|
(100
|
)
|
|
Total financial assets
|
|
|
2,539,390
|
|
|
927,668
|
|
|
1,611,722
|
|
|
174
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||
|
New Revolving Credit Facility
(1)
|
April 2016
|
|
(225,000
|
)
|
|
—
|
|
|
(225,000
|
)
|
|
—
|
|
|
New Term Loan A Facility
(1)
|
April 2016
|
|
(1,876,228
|
)
|
|
(2,083,462
|
)
|
|
207,234
|
|
|
(10
|
)
|
|
New Term Loan B Facility
(1)
|
February 2019
|
|
(1,263,793
|
)
|
|
(1,275,167
|
)
|
|
11,374
|
|
|
(1
|
)
|
|
New Incremental Term Loan B Facility
(1)
|
December 2019
|
|
(972,272
|
)
|
|
(973,988
|
)
|
|
1,716
|
|
|
—
|
|
|
Senior Notes:
|
|
|
|
|
|
|
|
|
|
||||
|
6.50%
|
July 2016
|
|
(915,500
|
)
|
|
(915,500
|
)
|
|
—
|
|
|
—
|
|
|
6.75%
|
October 2017
|
|
(498,484
|
)
|
|
(498,305
|
)
|
|
(179
|
)
|
|
—
|
|
|
6.875%
|
December 2018
|
|
(939,727
|
)
|
|
(939,277
|
)
|
|
(450
|
)
|
|
—
|
|
|
7.00%
|
October 2020
|
|
(686,876
|
)
|
|
(686,660
|
)
|
|
(216
|
)
|
|
—
|
|
|
6.75%
|
August 2021
|
|
(650,000
|
)
|
|
(650,000
|
)
|
|
—
|
|
|
—
|
|
|
7.25%
|
July 2022
|
|
(541,789
|
)
|
|
(541,335
|
)
|
|
(454
|
)
|
|
—
|
|
|
6.375%
(2)
|
October 2020
|
|
(2,216,993
|
)
|
|
(1,724,520
|
)
|
|
(492,473
|
)
|
|
29
|
|
|
6.375%
(2)
|
October 2020
|
|
(2,318
|
)
|
|
(492,720
|
)
|
|
490,402
|
|
|
(100
|
)
|
|
Convertible Notes:
|
|
|
|
|
|
|
|
|
|
||||
|
1.375% Convertible Notes
|
June 2017
|
|
(209
|
)
|
|
(228,576
|
)
|
|
228,367
|
|
|
(100
|
)
|
|
2.50% Convertible Notes
|
June 2032
|
|
—
|
|
|
(5,133
|
)
|
|
5,133
|
|
|
(100
|
)
|
|
1.50% Convertible Notes
|
June 2033
|
|
—
|
|
|
(84
|
)
|
|
84
|
|
|
(100
|
)
|
|
Other
|
|
|
(4,916
|
)
|
|
(898
|
)
|
|
(4,018
|
)
|
|
NM
|
|
|
Total financial liabilities
|
|
|
(10,794,105
|
)
|
|
(11,015,625
|
)
|
|
221,520
|
|
|
(2
|
)
|
|
Net financial liabilities
|
|
|
(8,254,715
|
)
|
|
(10,087,957
|
)
|
|
1,833,242
|
|
|
(18
|
)
|
|
(1)
|
Together, the “Senior Secured Credit Facilities” under our Credit Agreement.
|
|
(2)
|
On March 29, 2013, we announced that our wholly-owned subsidiary, Valeant, commenced an offer to exchange (the “Exchange Offer”) any and all of its outstanding $500.0 million aggregate principal amount of 6.375% senior notes due 2020 (the “Existing Notes”) into the current outstanding $1.75 billion 6.375% senior notes due 2020. Valeant conducted the Exchange Offer in order to satisfy its obligations under the indenture governing the Existing Notes with the anticipated result being that some or all of such notes would be part of a single series of 6.375% senior notes under one indenture. The Exchange Offer, which did not result in any changes to existing terms or to the total amount of our debt outstanding, expired on April 26, 2013. $497.7 million of aggregate principal amount of the Existing Notes was exchanged as of such date.
|
|
|
|
Payments Due by Period
|
|||||||||||||
|
|
|
Total
|
|
2013
|
|
2014 and 2015
|
|
2016 and 2017
|
|
Thereafter
|
|||||
|
($ in 000s)
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
|
Long-term debt obligations, including interest
(1)
|
|
14,662,300
|
|
|
414,858
|
|
|
2,055,589
|
|
|
3,724,798
|
|
|
8,467,055
|
|
|
(1)
|
Expected interest payments assume repayment of the principal amount of the debt obligations at maturity.
|
|
•
|
the challenges and difficulties associated with managing the rapid growth of our Company and a large, complex business;
|
|
•
|
the introduction of generic competitors of our brand products;
|
|
•
|
the introduction of products that compete against our products that do not have patent or data exclusivity rights, which products represent a significant portion of our revenues;
|
|
•
|
our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
|
|
•
|
our ability to identify, acquire, close and integrate acquisition targets successfully and on a timely basis;
|
|
•
|
factors relating to the integration of the companies, businesses and products acquired by the Company (including the integration relating to our recent acquisitions of B&L, Medicis, and Obagi), such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations (including potential disruptions in sales activities), and the achievement of the anticipated benefits from such integrations;
|
|
•
|
factors relating to our ability to achieve all of the estimated synergies from our acquisitions, including from our recent acquisition of B&L (which we anticipate will be approximately $800 million), and/or the estimated synergies from our recent acquisition of Medicis (which we anticipate will be approximately $300 million) as a result of cost-rationalization and integration initiatives, including greater than expected operating costs, the difficulty in eliminating certain duplicative costs, facilities and functions, and the outcome of many operational and strategic decisions, some of which have not yet been made;
|
|
•
|
our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements;
|
|
•
|
our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
|
|
•
|
our substantial debt and debt service obligations and their impact on our financial condition and results of operations;
|
|
•
|
our future cash flow, our ability to service and repay our existing debt and our ability to raise additional funds, if needed, in light of our current and projected levels of operations, acquisition activity and general economic conditions;
|
|
•
|
interest rate risks associated with our floating debt borrowings;
|
|
•
|
the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets;
|
|
•
|
adverse global economic conditions and credit market and foreign currency exchange uncertainty in Europe, Latin America, Asia, Africa, and other countries in which we do business;
|
|
•
|
economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
|
|
•
|
our ability to retain, motivate and recruit executives and other key employees;
|
|
•
|
the outcome of legal proceedings, investigations and regulatory proceedings;
|
|
•
|
the risk that our products could cause, or be alleged to cause, personal injury, leading to potential lawsuits and/or withdrawals of products from the market;
|
|
•
|
the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including, but not limited to, the U.S. Food and Drug Administration, Health Canada and European, Asian, Brazilian and Australian regulatory approvals, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
|
|
•
|
the results of continuing safety and efficacy studies by industry and government agencies;
|
|
•
|
the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products;
|
|
•
|
the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith;
|
|
•
|
the impact of price control restrictions on our products, including the risk of mandated price reductions;
|
|
•
|
the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, including ezogabine/retigabine, which could lead to material impairment charges;
|
|
•
|
the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
|
|
•
|
the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing;
|
|
•
|
our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and supply difficulties and delays;
|
|
•
|
the disruption of delivery of our products and the routine flow of manufactured goods;
|
|
•
|
the seasonality of sales of certain of our products;
|
|
•
|
declines in the pricing and sales volume of certain of our products that are distributed by third parties, over which we have no or limited control;
|
|
•
|
compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations;
|
|
•
|
the impacts of the Patient Protection and Affordable Care Act and other legislative and regulatory healthcare reforms in the countries in which we operate; and
|
|
•
|
other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing.
|
|
Period
|
Total Number of
Shares (or Units)
Purchased
|
|
Average Price
Paid Per Share
(or Unit)
|
|
Total Number of Shares
(or Units) Purchased
as Part of Publicly
Announced Plan
|
|
Approximate Dollar Value
of Shares (or Units) That
May Yet Be Purchased
Under the Plan
|
||||||
|
|
|
|
|
|
|
|
(In thousands)
|
||||||
|
March 31, 2013
|
|
|
|
|
|
|
$
|
1,464,995
|
|
||||
|
April 1, 2013 to April 30, 2013
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,464,995
|
|
|
May 1, 2013 to May 31, 2013
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,464,995
|
|
|
June 1, 2013 to June 30, 2013
|
7,706
(1)
|
|
|
$
|
91.66
|
|
|
7,706
(1)
|
|
|
$
|
1,464,289
|
|
|
June1, 2013 to June 30, 2013
|
217,294
(1)
|
|
|
$
|
91.66
|
|
|
N/A
|
|
|
N/A
|
|
|
|
2.1
|
Agreement and Plan of Merger, dated as of March 19, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Valeant Pharmaceuticals International, Inc. and Obagi Medical Products, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on March 20, 2013, which is incorporated by reference herein.
|
|
2.2
|
Amendment to Agreement and Plan of Merger, dated as of April 3, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Obagi Medical Products, Inc. and Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on April 3, 2013, which is incorporated by reference herein.
|
|
2.3
|
Agreement and Plan of Merger, dated as of May 24, 2013, by and among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Stratos Merger Corp. and Bausch & Lomb Holdings Incorporated, originally filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed on May 31, 2013, which is incorporated by reference herein.
|
|
4.1
|
Seventh Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of September 28, 2010, among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.2
|
Sixth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of November 23, 2010, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.3
|
Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of February 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.4
|
Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of March 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.5
|
Second Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, originally filed as Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.6
|
First Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, originally filed as Exhibit 4.6 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.7
|
Indenture, dated as of July 12, 2013, between VPII Escrow Corp. and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the 6.75% Senior Notes due 2018 and the 7.50% Senior Notes due 2021, originally filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on July 12, 2013, which is incorporated by reference herein.
|
|
4.8
|
Supplemental Indenture to the Indenture, dated as of July 12, 2013, among Valeant Pharmaceuticals International, Inc., the guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the 6.75% Senior Notes due 2018 and the 7.50% Senior Notes due 2021, originally filed as Exhibit 4.2 to the Company's Current Report on Form 8-K filed on July 12, 2013, which is incorporated by reference herein.
|
|
10.1
|
Separation Agreement between Valeant Pharmaceuticals International, Inc. and Jason Hanson, dated May 8, 2013, originally filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 14, 2013, which is incorporated by reference herein.
|
|
10.2
|
Commitment Letter, dated as of May 24, 2013, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Goldman Sachs Lending Partners LLC and Goldman Sachs Bank USA, originally filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 31, 2013, which is incorporated by reference herein.
|
|
10.3*
|
Amendment No. 5, dated as of June 6, 2013, to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, among Valeant Pharmaceuticals International, Inc., certain of its subsidiaries as Guarantors, each of the lenders named therein, J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC (“GSLP”) and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A. and Morgan Stanley, as Co-Syndication Agents, JPMorgan, as Issuing Bank, GSLP, as Administrative Agent and Collateral Agent, and the other agents party thereto (the ''Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc.'').
|
|
10.4*
|
Amendment No. 6, dated June 26, 2013, to the Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc.
|
|
10.5*
|
Joinder Agreement dated August 5, 2013 relating to the Series A-2 Tranche A Term Loans, among Valeant Pharmaceuticals International, Inc., the guarantors named therein, the lenders party thereto, and GSLP, as the Administrative Agent and the Collateral Agent.
|
|
10.6*
|
Joinder Agreement dated August 5, 2013 relating to the Series E Tranche B Term Loans, among Valeant Pharmaceuticals International, Inc., the guarantors named therein, the lenders party thereto, and GSLP as the Administrative Agent and the Collateral Agent.
|
|
31.1*
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2*
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
*101.INS
|
XBRL Instance Document
|
|
*101.SCH
|
XBRL Taxonomy Extension Schema
|
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
*101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
*101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
*
|
Filed herewith.
|
|
|
Valeant Pharmaceuticals International, Inc.
(Registrant) |
|
Date: August 7, 2013
|
/s/ J. MICHAEL PEARSON
J. Michael Pearson
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
|
Date: August 7, 2013
|
/s/ HOWARD B. SCHILLER
Howard B. Schiller
Executive Vice-President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director |
|
Exhibit Number
|
Exhibit Description
|
|
2.1
|
Agreement and Plan of Merger, dated as of March 19, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Valeant Pharmaceuticals International, Inc. and Obagi Medical Products, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on March 20, 2013, which is incorporated by reference herein.
|
|
2.2
|
Amendment to Agreement and Plan of Merger, dated as of April 3, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Obagi Medical Products, Inc. and Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on April 3, 2013, which is incorporated by reference herein.
|
|
2.3
|
Agreement and Plan of Merger, dated as of May 24, 2013, by and among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Stratos Merger Corp. and Bausch & Lomb Holdings Incorporated, originally filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed on May 31, 2013, which is incorporated by reference herein.
|
|
4.1
|
Seventh Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of September 28, 2010, among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.2
|
Sixth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of November 23, 2010, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.3
|
Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of February 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.4
|
Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of March 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, originally filed as Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.5
|
Second Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, originally filed as Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.6
|
First Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, originally filed as Exhibit 4.6 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2013, which is incorporated by reference herein.
|
|
4.7
|
Indenture, dated as of July 12, 2013, between VPII Escrow Corp. and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the 6.75% Senior Notes due 2018 and the 7.50% Senior Notes due 2021, originally filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on July 12, 2013, which is incorporated by reference herein.
|
|
4.8
|
Supplemental Indenture to the Indenture, dated as of July 12, 2013, among Valeant Pharmaceuticals International, Inc., the guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the 6.75% Senior Notes due 2018 and the 7.50% Senior Notes due 2021, originally filed as Exhibit 4.2 to the Company's Current Report on Form 8-K filed on July 12, 2013, which is incorporated by reference herein.
|
|
10.1
|
Separation Agreement between Valeant Pharmaceuticals International, Inc. and Jason Hanson, dated May 8, 2013, originally filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 14, 2013, which is incorporated by reference herein.
|
|
10.2
|
Commitment Letter, dated as of May 24, 2013, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Goldman Sachs Lending Partners LLC and Goldman Sachs Bank USA, originally filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 31, 2013, which is incorporated by reference herein.
|
|
10.3*
|
Amendment No. 5, dated as of June 6, 2013, to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, among Valeant Pharmaceuticals International, Inc., certain of its subsidiaries as Guarantors, each of the lenders named therein, J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC (“GSLP”) and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A. and Morgan Stanley, as Co-Syndication Agents, JPMorgan, as Issuing Bank, GSLP, as Administrative Agent and Collateral Agent, and the other agents party thereto (the ''Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc.'').
|
|
10.4*
|
Amendment No. 6, dated June 26, 2013, to the Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc.
|
|
10.5*
|
Joinder Agreement dated August 5, 2013 relating to the Series A-2 Tranche A Term Loans, among Valeant Pharmaceuticals International, Inc., the guarantors named therein, the lenders party thereto, and GSLP, as the Administrative Agent and the Collateral Agent.
|
|
10.6*
|
Joinder Agreement dated August 5, 2013 relating to the Series E Tranche B Term Loans, among Valeant Pharmaceuticals International, Inc., the guarantors named therein, the lenders party thereto, and GSLP as the Administrative Agent and the Collateral Agent.
|
|
31.1*
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2*
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
*101.INS
|
XBRL Instance Document
|
|
*101.SCH
|
XBRL Taxonomy Extension Schema
|
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
*101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
*101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
*
|
Filed herewith.
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|