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How Valeant Pharmaceuticals’ Branded Rx Segment Performed in 1Q18

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Revenue trends

In 1Q18, Valeant Pharmaceuticals (VRX) Branded Rx segment generated revenues of $593.0 million, compared to $629.0 million in 1Q17. This reflected ~6.0% growth on a year-over-year (or YoY) basis and an ~1.0% decline quarter-over-quarter.

In 1Q18, Valeant Pharmaceuticals reported a gross profit of $503.0 million compared to $522.0 million in 1Q17, which reflected an ~4.0% YoY decline.

In 1Q18, Valeant Pharmaceuticals reported non-GAAP (generally accepted accounting principles) EBITA (earnings before interest, taxes, and amortization) and EBITA margin of $331.0 million and 56.0%, respectively, compared to $330.0 million and 52.0% in 1Q17.

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Subsegment revenue trends

In 1Q18, in Valeant Pharmaceuticals’ Branded Rx segment, Salix generated revenues of $422.0 million, compared to $302.0 million in 1Q17, which reflected ~40.0% YoY growth. The solid growth in sales of Xifaxan, Relistor, and Apriso pushed the revenue growth of Salix in 1Q18. In 1Q18, Xifaxan, Relistor, and Apriso saw 49.0%, 54.0%, and 31.0% YoY growth, respectively.

In Valeant Pharmaceuticals’ Branded Rx segment, the ortho dermatology segment reported revenues of $112.0 million in 1Q18, compared to $194.0 million in 1Q17, which is an ~42.0% YoY decline. In 1Q18, in the Branded Rx segment, the dentistry segment generated revenues of $30.0 million, compared to $28.0 million in 1Q17, which is ~7.0% YoY growth.

In 1Q18, Solta reported net revenues of $29.0 million, compared to $23.0 million in 1Q17, which is ~22.0% YoY growth. Valeant Pharmaceuticals also received FDA approval of Plenvu. Valeant anticipates launching Plenvu in 3Q18.

Expense trends

In 1Q18, Valeant Pharmaceuticals’ Branded Rx segment reported SA&P (selling, advertisement, and promotional), G&A (general and administrative), and R&D (research and development) expenses of $126.0 million, $29.0 million and $17.0 million, respectively, compared to $147.0 million, $29.0 million, and $16.0 million in 1Q17. In 1Q18, Valeant Pharmaceuticals’ Branded Rx segment had net operating expenses of $172.0 million, compared to $192.0 million in 1Q17.

Among Valeant Pharmaceuticals’ peers in the biopharmaceuticals market, Teva Pharmaceutical (TEVA), GlaxoSmithKline (GSK), and Merck (MRK) reported revenues of ~$5.1 billion, ~$10.1 billion, and ~$10.0 billion, respectively, in 1Q18.

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