Bausch Health Companies Inc. (BHC) Earnings Call Transcript & Summary

[Audio Gap] at Barclays. I am pleased to have this fireside chat today with Bausch. With us today, we have Paul Herendeen, CFO; Art Shannon, Senior Vice President and Head of Investor Relations, Sam, new CFO starting June 1. Will Woodfield, VP and Allison Ryan. I know we only have 40 minutes, so I'm just going to jump into our questions. Paul, thank you so much. And just as a sign up for me, it's been great working with you for all these years, and I wish you the best in your next endeavor.

That's a great way to start, Rishi. I want to say, too, that Barclays has been a spectacular bank for us, and we surely appreciate the help that we've got on the banking side, on the investment banking side and on the analysis side. So right back at you.

Now we're going to jump into XIFAXAN first. And then after we go through that, we'll go through RemainCo, and then we'll touch upon some of the other business segments as well. But XIFAXAN, as you can probably understand, is a clear focus for us. You've noted on the Q1 call that volumes are down because of long-term care. Now this could be a long trend, at least through the first half of this year, who knows if it continues through the second half of this year. I guess, can you just give us some insight as to what you're seeing? And then how should we think about this trend going forward? And then if I could just add another one, what percentage of your volumes come from the long-term care side with regards to XIFAXAN?

Sure. Why don't we start with the volumes and then take it from there because the long-term care segment or that setting is an important part of the XIFAXAN market. If you go back to pre COVID before COVID disturbed everything, the number of TRxs that you'd see in our long-term care setting was something like round numbers, 5 and 0s, 25%. Now interestingly, it's about 15% or was about 15% in of extended unit RXs. And so I think of EU TRx as being a better proxy for overall volume for that XIFAXAN franchise. So think of it as 15% of the volume of the XIFAXAN franchise. And as you look at how it played out in Q1 of this year versus Q1 of last year, RRX is in that space, we're off about 14%. And so they didn't go to 0, they didn't -- they're not down 50%, 60%, but they're up 14%. And it's a meaningful component of the drag on XIFAXAN and not getting back to where we had been at pre COVID days. Importantly, and I'll come back to the long-term care in a second and how that might play out. But importantly, if you look at as I do, the week-to-week to week TRx progression of XIFAXAN, we're getting back to the point where we're getting close to the pre COVID levels, for example, TRx is Q1 of '21 versus '20, we're off like 4% versus the prior year. And frankly, Q1 of 2020 was not all that affected by COVID, it was really late in the quarter. And so to get back to only minus 4 percent -- the quote, say, I'm sorry about that. to only minus 4% is pretty good, and the trend is we're closing that gap and going to get back to pre COVID levels. But in order to get back to there and then continue the growth that we've seen over an extended period of time with the franchise, we really do want to see that long-term care segment come back. And how and when will that happen? I said this on our Q1 call about -- is repeating here. Is in that long-term gear setting, it's all about the census, a number of individuals that are in that setting. That has a highly productive setting for us for, as I just pointed out, for XIFAXAN prescribing and if you don't have the individuals in that setting where there's extremely good compliance, you're going to see you're going to see the hit, as we have seen in XIFAXAN volumes and XIFAXAN prescriptions. When will that come back? I mean, we are seeing improvement in that. But I think as you can and all the participants on the call here can imagine as well, until people broadly are comfortable with the safety of putting a patient or having a patient, it could be a mother father, brother, sister, whatever, into a long-term care setting, then that census is going to come back slowly. It's surely nowhere near back. I characterize that as a deferred tailwind. It's coming back. And I have no doubt that as it comes back, we will see the return to pre cobid prescribing levels for XIFAXAN in that setting. But it's a question of when you suggest maybe -- I think it's improving. I think it will continue to improve over the course of the next -- it could be 1 year, 1.5 years. I mean I'm surely not an expert on that topic. I went pretty long there. Let's move on.

No, not always. So XIFAXAN, I think the consensus is that after the spin is affected, XIFAXAN is going to represent about 40% of EBITDA. I would love to see if you could confirm that. But based on our numbers, we're estimating that XIFAXAN over the next 6, 7 years could exceed over $2 billion of sales. The big question is what happens once we get to 2028, we know that you have a pipeline of XIFAXAN products. Is the pipeline deep enough to offset the anticipated decline once you lose exclusive in '28, can you just maybe frame that expectation for us?

Sure. And there are a whole bunch of cool things that you mentioned in there that I do want to cover 1 is XIFAXAN, I'm not going to comment on what percentage of pro forma EBITDA it is, but it is clearly material. It's clearly a material part of the revenue stream and clearly a material part of the profit stream, like all specialty pharma products, once you achieve operating leverage on your sales and promotional resources it's very profitable, very profitable, a big contributor, not just the profit, but also the cash. And so that's a very valid point. I love the way you think about the $2 billion, we surely believe that even now looking ahead from this point forward, XIFAXAN has a long, long runway to continue to be an important growth asset for Salix and once post separation for Salix as part of the Pharmaco. Now where I think you were going with this is, it's like, you look out to 2028 and say, wow, that's -- that's a lot of revenue, and that's a lot of profit. And how do I think about replacing it. And what I'll say is, even as we are sitting here right now, a high priority for us is to further develop our competency capabilities and the breadth and depth of our pipeline for our U.S. branded pharma assets generally. We -- that has been a very high priority since Joe and I got here in '16. I think you've seen some progress in certain areas on that front, and we expect to continue to make progress in building out that pipeline for what will become the Bausch pharma business. And let me talk about a couple of things that are already in there, and I'll go from there, and then I'll be quiet down and let you ask another question, but first of all, we've had favorable results for -- in a Phase II trial for our 40-milligram IR version of SSD of rifaximin. And there are a number of these rifaximin programs that are going on. So that favorable results. That essentially informs our view of how to proceed with a Phase III study for what we call RED-C in 2021. Now RED-C, if you want to think about it is you have a patient who's an he patient that the way 550 is used now it's mainly to prevent future hospitalization for somebody who's already been hospitalized. The RED-C program is meant to try to pick off that patient prior to their -- having that first episode and being hospitalized, so be a very helpful both to patient and to the health care system generally from an economic perspective, assets. So I think you can see that, that would be a very attractive asset with a large market opportunity. So it flows from OHE to the RED-C study. Separately, with a different formulation, we're working on rifaximin for -- for the indication of simple cell, I think you saw that we got the -- or thank you. The orphan drug designation for for that product for sickle cell. And so that's going to be important. That's also something we are looking to advance here in 2021. Both of those are big opportunities. And I want to say there are other opportunities with rifaximin as well. But I think from my perspective, that's -- those are the key ones. And I think we'll continue on those other fronts as well because we can have lots of irons in the fire with respect to rifaximin. Completely unrelated to rifaximin. We have amiselimod, a drug we're looking to develop for -- we're looking to get that into Phase II in the first half of this year. To be clear, that's an asset with a higher risk on the scale of regulatory and technical success. But a product that with success, can be a good value driver for us. In [indiscernible], we've definitely changed up the way we think about the pipeline for our med derm products. I mean, that market has undergone an incredible change and shift into what the market and payers particularly are willing to pay for. And so we've abandoned some projects. We've shifted our focus right now, our lead asset is being developed for the med derm space is IDP126. That's a triple combination drug being developed for acne. We had encouraging results from our second Phase III, and we look to file excuse me, an NDA for that sometime like maybe the second half of 2022. Now we're looking -- if you're thinking ahead to the Bausch pharma business, we're looking ahead to say a very, very important element of offsetting this 28 situation with XIFAXAN 550 is we need success in our pipeline. We're looking to build out that pipeline in a similar way that we built out the pipeline for our Opto Rx component of the B&L business, you look back call it, 30, 36 months ago, the pipeline there was not in good shape. And over the course of the last couple of years through what I will call clever relatively low-cost business development activity, we've been able to add to that portfolio so that as we're sitting thinking about the Opto Rx part of B&L, that business is well positioned. Well, it's that same sort of thing that we intend to do with our -- the mid derm -- excuse me, the med derm business, the GI business, frankly, the neurology business, frankly, other specialties that may be adjacencies for places where we already have a footprint and at least, we think, a competitive advantage relative to other pharma companies. So that was extremely long-winded, but we certainly need to offset what will be assuredly, a decrease in the revenues that we see from XIFAXAN 550 and 28 and the profit in 28. And the answer to that is success in building out that pipeline.

Do you think the pipeline is deep enough to be a material offset? Or do you think it's going to have to build from where we see it today to get to that point?

Well, I think it certainly needs to build from where we are today, Risi. As I said, I mean, when I talked about the success we had in OptumRx, I'd love to tell you it's because we focus solely on OptumRx, and that's -- and low and behold, that generate the opportunities, having sat in the CFO chair for a long time. I can tell you that when you go out looking for opportunities, more often than not, they turn up in the place where you weren't looking or or in an area that was not your primary area of focus. We were very fortunate OptumRx, we've had some very good opportunities in GI that simply we didn't get to the finish line on, but we need to fill out that portfolio with more shots on goal and more shots on goal that can start to help us as we approach the loss of exclusivity for XIFAXAN. Very important, though, the way people think about this is I've got a lot of people characterize it as all or nothing. It's like, oh my God, you need to offset $2 billion using your number, $2 billion of revenue in an enormous amount of operating profit in 2028. Say, one, it's not likely to be 1 asset, so it's going to be a variety of sources. And the objective is if we can offset a good chunk of that, it's a very good outcome because what we need to do from an equity perspective is demonstrate that this company has a very strongly positive terminal growth rate to ensure people that that we're not a melting ice cube here. We're a very viable, long term global, diversified pharma business.

Okay. Now moving on to the RemainCo SpinCo questions. I guess you're targeting a 6.5 to 6.7x net leverage at the time of the spin. 2 things I want to confirm, I guess, first, even if the spin happens, whether it happens in Q3, '21 or Q3 '22, the idea is that leverage is still going to be 6.5 to 6.7x and not lower if you wait longer?

Well, I mean, the leverage, I think what, by providing that range, Rishi, what we were trying to do was to provide some guidance to the debt markets about what we would be -- where we would be prepared to go forward. But you're correct. I mean, it's -- with the passage of time, it makes it easier for us to hit that target. And that's mainly -- that's an expectation of expansion of operating earnings. It's a continued deployment. Of free cash flow to reduce debt. It's the prospect of potentially completing other transactions that generate cash, when we pull the trigger and actually execute the separation into the 2 companies, you wanted to let people know, it's like, that's kind of the maximum leverage that we would entertain.

I want to spend just a few minutes going through some of the moving parts to get to that leverage number. Now you have a moon coming in, let's assume about $740 million coming in. I'm not sure if there's any taxes associated with that. But you have a coming in, you have your free cash flow that you generate this year. And then you have the 2.5 turns that you're going to -- the leverage that you're going to put on a Spinco so if you net out the difference, you need -- it seems like you need another $3.5 to $4.5 billion. Now you've talked about IPO a portion of Spinco. Because this is a tax-free spin, can you walk us through any limits that you might have on that IPO? Is it limited to 20%? Is it limited to 25%? And can you use those funds immediately or deployed immediately to pay down debt?

Yes. I mean, without getting into exact things on this business. Just suffice it to say is we'd have the capacity to sell equity in B&L, an equity of some scale to be crystal clear, as we think about preserving, first and foremost, preserving value for the shareholders of BHC, I would submit that at the time you execute say, an IPO of B&L, you're having some value leakage there because you're necessarily going to see a meaningful IPO discount, et cetera. And so there's some there's a constraint that is not related to tax. It says it's better for BHE shareholders to sell less equity and so that point you in a direction. And again, it's why I come back to why did we provide a a range of leverage on the Pharmaco, it's so that you know that we need all these things to fall into place in order to be able to execute. And when we do, this is what you could expect as the max leverage on on the PharmaCo, but we can complete a meaningful sized equity offering at B&L and then still preserve the ability to distribute those shares on a tax-free basis. And you're quite right, the 2.5x or less that we put on the B&L, that money flows directly back to the company and meaning to essentially to no Pharmaco as a direct opportunity to reduce the debt. As is the net proceeds from any equity offering that we complete.

Now. In addition, most of the tax free spins that I've seen, in addition to, say, this IPO, I believe you might also have the ability to own PharmaCo own some of Spinco and you might have to hold it for a couple of years, is that in a tent as well? Or are you intending to do that? Or is that not an option?

Well, I mean, I'm not going to speak to that. I'd say that all options will be evaluated at all times as we get closer to it. But I think a more reason approach is that the goal, as we've articulated many times now since August of last year is to set up P&L as a freestanding trading entity and in a tax-efficient manner, transition that equity to our shareholders.

Okay. So then clearly, asset sales, and you've talked about this before, are also a big part of this moving part. You've talked in the past and we've had the conversations post Q3, et cetera, in terms of the international assets, you just sold a moon, and I believe the international assets still carry significant value. You spoke about Solta. Can you just walk us through what you're thinking from an asset sales standpoint? And are you also considering any of the B&L assets as part of that process?

Sure. And without getting into specifics on any particular entity, I'll say the line that you're tired of hearing, it's like if we have an asset and we own it and someone wants to buy it, and they come up with the right amount of money, we're going to not just engage, but we're going to engage in a big way and try to find the intersection of interest and value. We have done that. We will do that. We continue to do that. And interesting, and I love the way you phrased it because people look and say, the assumption -- the operating assumption is always, well, the only assets you'd sell would be on the farmer side because people are focused on that increases the the revenue and profit concentration of XIFAXAN and that's bad. It's like, look, we have assets that are on the B&L side that are attractive as well. So I'm not going to comment on any 1 specific asset. Just to say that if we have the opportunity to accelerate the deleveraging of the company, which accelerates the time at which we could complete the IPO and still to the separation and still be swith the parameters that we have outlined. We're going to do that. And I think your expectation and the market's expectation, the equity market's expectation should be that, that's something that is on our minds and something we're actively pursuing each and every day.

And not to put you on the spot, but if you were to wait, do you think that the remaining -- just to get to your target leverage is going to come mostly from asset sales? Or do you think it would have to be the IPO?

Well, I think you missed one. I think it has on time. And the way our company today generates cash. That certainly helps us delever and number two, back to earnings expansion. I think our company, as we exit from the impacts of COVID has every opportunity to experience significant earnings expansion that accelerates our delevering, if you think about it as Holdco which accelerates the time at which we can go forward. No question in my mind, though, that the monetization of a high multiple asset absolutely brings forward the time at which you could complete this transaction.

Okay. Can we talk about free cash flow? You've said that you could delever by roughly 3/4 of a turn per year. I want to just maybe walk through those moving parts to quick just because we're getting to about half a churn. And it's a pretty sizable difference, about $400 million to $500 million. I get that post 2021, you could see EBITDA improvement because post COVID, et cetera, but can you just walk us through is how are you getting to that 3 quarters of return of delevering?

Yes. I'm not going to online build it boggle with you. But I shortly will point to the -- our Q1 call, Rishi, where we tried to outline as many factors as we quote or provide as many -- as we could that would enable you to fine-tune your models. You mentioned the piece where I suspect that maybe the disconnect here is go to the slide in our slide deck from Q1 and look at the sequential movement of our adjusted EBITDA, look at Q2, and we, like many, many, many other companies got really, really pushed down by COVID, and we were nowhere near out of the woods in Q3 and nowhere near out of the woods in Q4. Unless you thought there was some hanging thing out there that's going to cause our revenue growth to subside, there should be every expectation that we can dramatically improve our operating earnings as BHC total co here over the course of the near term. And the PharmaCo is a big part of that. Right now, we started by talking about -- by talking about XIFAXAN and XIFAXAN has been an incredible growth driver for us right up until Q1 of of 2020 when COVID derailed us. When that comes back as a growth driver, that is a big time helper. The other part is, I think that people -- it's -- again, it's in so in the deck, you can find it or you can find it by looking back at sequential decks, we've had tons and tons of losses of exclusivity that have affected our overall total company over the course of the last well, the entirety of my tenure here. And if you look at the expectations that we have for total year 2021 -- 2020, we're down to around $100 million of drag, which is still a lot of dough. But it is nowhere near the kind of revenue and profit drag that we've been experiencing and trying to work our way through as we go forward. So you kind of take that significant LOE headwind and take it away and try to think back to pre COVID how we were trending. I have every reason to believe that our operating earnings have the opportunity to expand in a meaningful way, and that obviously is going to be part of how we get to that deleveraging scenario. You can imagine, I have is, I bet my team here, access to all sorts of information in a level of detail. Pretty confident that we can delever this company pretty quickly if we prioritize free cash flow for the reduction of debt. And we do our to ensure that we optimize in the near-term our operating earnings. That doesn't mean not investing for the future. It means doing the same things that I think we've been doing since since Joe and I got here in 2016, and that's -- we deploy capital internally that that moves the needle and drives revenue, profit and cash flow. We don't do the things that we don't, how we don't need to do. And we're going to maximize that maximize that operating earnings, but do it in a way that that balances the requirement to invest for the intermediate and long-term versus the desire and need to deliver increasing and growth in operating earnings.

And I'll get to the investment in a second, but before I get to that, the proposed tax laws that we're seeing out there from and Biden, any comments or views on how that might impact Pharmaco?

Well, sure. I think that, first, I want to say, let's wait and see exactly how this sorts out, and I'm not sure what the probability is of of any just getting passed in the near term, I mean even a couple of years out, but that's a good material for debate on another day. I'd just say this, 1 of the things I'm extremely proud of is my -- is within our company, we have an incredibly well-managed global operating model and footprint. That has enabled us to have attractive tax rates relative to our peers. It's allowed us to monetize assets without having dramatic tax leakage on the play. That stuff doesn't come by accident. I've got probably 1 of the best tax guys in the business. His name is Jeremy, he's going try to hire him anybody. He's done a spectacular job of putting us in a position where whatever occurs, we have the opportunity to attempt to optimize our structure to deal with the changes. Now some of these changes whether you're talking about -- or especially, you talk about -- and all sort of things, look, it's going to impact us, and it's going to impact others as well. What I would say is, on a relative basis, I think we are better positioned than most in order to be able to manage through whatever may be thrown at us by the folks in the DC.

Just going back on your comments on investment. You've noted in the past that obviously, because of the consolidated leverage that you've had to manage through that is limited some of the R&D investment you just noted that, obviously, you're going to continue investing in the business, but you still have the same type of leverage profile with RemainCo without the growth and expansion of Spinco. So how should we think about investment? And what's the optimal leverage for RemainCo before you actually have to start thinking about diversifying the product base. And I realize that the new management team will be on, and they'll have a view as well, but just love to get your thoughts.

Sure. I mean -- and I'm not -- start by saying that for the entirety of my tenure here, about the third time I'm saying that is we've been highly levered. We've been highly levered when I first joined in a situation where as we poured through and look hard at what our future looks like, we knew we were going to see shrinking operating earnings with a very hefty debt load, and we knew we needed to manage through that. And I just said on the immediately prior one-on-one, the thing about being highly levered. This is put us in the category of a good thing about being highly levered is it makes you incredibly disciplined in the way you deploy capital, whether it's inside or outside. And it doesn't mean that you're incredibly disciplined in that you don't do the things you should do. The examples of the things I parked out at the last the last meeting was we invested in a sales force in Salix, incremental 200 person sales force, $60 million annual cost, definitionally reduced our adjusted EBITDA, but it was absolutely the right thing to do. And we did that, and then secondarily, we started the process of investing in, what I'll call, growth CapEx for our lens business so that we could develop and now introduce a daily SiHy lens. But the offset to that was we looked at the OpEx intensity way back then of our -- business and said, and we significantly change that we did cut back significantly in some other businesses in businesses as well. And so the point of the story is you get to be very, very thoughtful as you should be, all the time about how you deploy your capital internally. In R&D, we've been ramping up over a number of years in increasing that investment even though that definitionally reduces your adjusted EBITDA and slows the pace at which you could have delevered. But we are confident that we are making the investments in the right area in R&D. I articulated some of the things I'm excited about in the near term. For not just for the pharma business, but also for the B&L business in OptumRx and surgical and other areas, but we made those investments and they are going to pay off over the long term. But to be clear, think about it, day 1, you start-up this pharmaco, you're highly levered. You're right out of the, your priority is going to be to prioritize the use of free cash flow to reduce debt. Now that doesn't mean you would ignore an excellent investment opportunity, be that modest BD or an incremental investment inside just back in 2016 and '17, but it means you're really thinking long and hard about paying down that debt first. And if you could find an opportunity that is of greater long-term strategic value, you are likely to pursue it. It's got to be the same mindset when it's Pharmaco as it has been here for the last 5 years call.

Yes. Just going back to -- just going to your covenants. Now you've confirmed that the loans must be repaid or amended to facilitate the spin. And then yesterday, I think, will had also noted that the 600 have the tightest RP language. At this point, do you feel that you need to address those nodes to facilitate the spin? Or after yesterday's transaction, do you have ample RP capacity ex the loans and ex any opportunistic refis to facilitate the spin?

I'm smiling, Rishi, because 1 of the phrases, somebody called beyond, you said a lot of wood to chop there's a lot of wood to chop here in order to be able to facilitate the ultimate separation of these companies. And I think the transaction that we had yesterday was 1 more step towards that, I'll give you some numbers to frame this. When -- before that transaction, so pre that transaction hasn't closed yet. Pre that transaction, there was a roughly $9.4 billion of debt that would need to be paid off or refinanced in order to facilitate the actual separation of the 2 companies. Will did point out, yes day because someone asked the question, what's your most restrictive bond from an RP capacity perspective, and it was the 6 and 8 bonds. But in total, including our term loans, those term loans would either need to be amended or redone or refinanced in order to be able to facilitate this deal. And so there are plenty of deliverables for the team here in order to facilitate the spin. We're not there yet. And you need the proceeds from the levering of B&L. You need the proceeds from the presumption of some form of equity offering. You need cash flow from operations. Today, you need the proceeds from a moon. The net proceeds from moon, you perhaps lay some additional proceeds from another transaction in there. And you need all those things and you need to get this debt redone in order to be able to conclude this deal.

So I do have a ton of follow us. But before we get there, I want to also talk about credit ratings. As you could probably imagine, many of us on this call are extremely concerned about the corporate family rating and the unsecured rating, especially given all the parameters that they have outlined that could lead to a downgrade. And just based upon what we've seen in the past and other credits. S&P stake in action, Moody's has made some comments here and there. But how confident are you that RemainCo unsecured based on your conversations and your targets is not downgraded CCC? And are you aggressively focus on making sure that, that doesn't happen. And then just the third question is on SpinCo. Do you anticipate SpinCo will be rated IG? Or is that not even a focus for SpinCo?

Yes. Let me start with SpinCo. Like SpinCo, I'm not going to apply and say, it is, it isn't. It certainly has the opportunity to be in that range. It then I'm going to turf that 1 to partner, Sam and to deal with what the strategy out of the chute is in order to see whether that gets the IG rating or not. It certainly is in well within the range of possible outcomes. I think you referenced our ratings and our focus on our ratings. And I'd start by seeing that we, as a company, we pride ourselves on the degree to which we maintain open lines of communication with the rating agencies. And when we, for example, announced the market with our Q1 results, the leverage targets for the Pharmaco and for B&L, clearly, we had advanced discussions with the agencies in order to understand as best we could in advance what they would think of that. I think that you said that S&P took action, I put us on on negative outlook, I think they were half a notch or they were a click above where we are with Moody's. And if they do -- if they took us down a click, they'd be consistent with Moody's, who has a stable. Now those things are not -- the rating agencies, the rating agencies, they do what they do. But I think that right now, with Moody's at stable and S&P was a notch above with a watch on the negative side, I think we're okay. I want to address your question regarding, thinking about the unsecureds, we got this question a lot yesterday. We're doing -- we did a secured for secured transaction. And I think there's a lot of focus on what's your secured capacity and you're going to use all that secured capacity to do XY and Z. I say, well, an important component of that corporate family rating and that unsecured rating is how much secured debt there is on top of an unsecured debt. This is not something that's mysterious to will and myself in our discussions with the rating agencies, and we understand that there is certainly a limit. We do our best to be informed when we think about the decisions that we're making to ensure that we give ourselves the best prospect of maintaining our ratings. There are no guarantees, but I think that I love to say that when we think about our constituencies, we think about our equity holders, for sure, we think about our debt holders in the aggregate, but more importantly, we think about our debt holders, both the secured and the unsecured, and they are different. And we think about all that, and we're trying to balance it. We're trying to be as responsible as we can, and we will endeavor to ensure that we do our best to maintain the ratings.

I have 2 minutes, and I really wish I had another hour. I always do this. I missed out 1 million questions, and I realize I have 2 minutes left. Can we just quickly talk about diversified since it's a going to be a bigger component of our focus now that you post the spin, how should we think about the segment? It's been declining at roughly 15% to 20%, really high margins. I get that the LOE environment, you faced your pressures in the past, but then there are some drugs that haven't seen that level of competition yet. How should we think about that forward trend?

Yes. I mean, first of all, it's mainly -- we run out of time because I talk too much, but that just a mat. Diversified, I mean, interesting, I said this earlier about the LOE thing, that segment was -- or business within diversified was the business that was the most impacted by LOE since I got here, and that is receding as a growth drag. But to be clear, that neuro business is not going to be a grower. But it's got some nice better duration to its assets in portfolio, I think, than people give credit for. So you had a relatively high decline rate there, I might submit that that I don't think it's going to decline quite to that degree. You've got 2 other businesses in there. The dentistry business, granted has been shrinking, but we've kind of repositioned that in a way that we significantly reduced the OpEx intensity, shifted it from a kind of a branded Rx business with a -- where it was reimbursed by managed care to 1 where we now are mainly in a buy-and-bill model with dentists. And we're looking at ways that we can turn that back into a growth mode. It's not a giant business, but we've seen what businesses can do when you return them to a growth mode. And then our generics business, you got to think of as a business that has great, great days, great quarters and some great years. But generally, it is a collection of assets where you're just monetizing or capturing the economics associated with some brands that you had that lost exclusivity. So that segment, that is going to be a decliner, but I don't think it's going to be a massive decline, as you say. I know I've run out of time, but take a look at that international Rx or that international pharma business, too, you see it as a segment, diversified in every sense of the word, very little product revenue concentration that can be a nice grower for you over a long period of time with none of the -- I shouldn't say none, a very modest amount of LOE type impact that you see in the U.S. businesses. Please focus on that business is a real good one.

Okay. Paul, I can't thank you enough. This has been great. I wish you the best in Joy, and we'll definitely hopefully stay in touch.

Thanks very much, Rishi. I very much appreciate being on the conference.

Take care.

Bye-bye.