David Amsellem: Thanks. So, looking longer term, as you think about the debt maturities in 2027 and 2028 and the LOE for Xifaxan, this is – based on the settlements that are in place, how do you address that given the importance of Xifaxan to the P&L? And just help us better understand the long-term solvency of the companies in light of what you could be facing later in the decade. Thanks.
Tom Vadaketh: Yes, I won’t get into any specific long-term forecasting here on this call, but maybe just in generalities, we have a business that’s highly cash-generative. This year, as I said about $600 million. We’re investing in growth. We’re starting to see that momentum build, and we expect to see the business grow between now and say 2027 or 2028, including from Xifaxan and including from Salix. That will significantly increase the cash generation. Any revenue growth should drop right down to the bottom line. And so, we would expect to use or prioritize debt leverage as we have, as the company has for the last five or six years, and we’ll continue to do that. And so, we think we’ll knock a chunk out of that debt between now and then, David.
And then at that point, if there is any debt left over, we will have to refinance it, of course. At that time, what lenders are going to be looking at are forward-looking leverage ratios, and we are investing in a bunch of these products in the pipeline as you heard from Tom, and we would expect many of those to come to fruition. And even though, yes, Xifaxan will go generic in 2028 and we will see a drop in revenue, it will be offset by other products coming into play and growing. And so, obviously it’s a very key question. The management team and the board are focused on it and one of the things that we’re working through.
Thomas Appio: Yes, David, let me just add to that, what Tom said. And clearly, I talked about in my prepared remarks the pipeline. That’s why last quarter, this quarter continue to talk about the progress we’re making. And as you saw, the investments that we’re making in R&D and accelerating the RED-C program, and that is really an exciting program for us. Clearly, we have accelerated now and making sure that we will have, of course, if the data comes through, the product before we would lose Xifaxan. So, and we’re very, very excited about it. Of course, this is a huge patient population, much larger today than the current Xifaxan population. So, RED-C is on track. It’s accelerated. This is a global program. And so, therefore, we will have the global rights.
This will be our first global product at Bausch Health, and we’re excited about it. Of course, Amiselimod, the Phase 2 studies have completed enrollment, and we are really excited to get the data as it comes through probably at the end of the year, beginning of next year.
John O’Connor: Next question, operator.
Operator: Your next question is coming from Douglas Miehm with RBC Capital Markets.
Douglas Miehm: Yes. good morning. First question, just going back to the change, the tax-free reduction in capital. Could that be affected by moving the HoldCo from the parent that has the 38.7% in the billing and bonds to BLCO? Is that an example of what could occur or something like that, in addition to say the distribution of the remainder of the shares, the 50.1%?
Tom Vadaketh: Doug, I don’t know if I completely followed what you asked, but as I said, I think maybe to the first question, there is no change in the end result, right, in the sense that we will distribute – the plan right now is to distribute 80% or more than 80% in order to preserve the ta- free or tax-efficient nature of the spin. I don’t know if I got the whole of your question. I know we’ll have some follow-up discussion after this call. Happy to talk about it a little bit more.
Douglas Miehm: Yes, happy to go through that. Second one, Tom, maybe just has to do with RED-C. We know that you expect a complete enrollment of those two Phase 3 clinical trials in Q1 of 2024. But when do we expect the readout? When do we expect the data in our hands?
Thomas Appio: Yes. So, Doug, we’ve completed enrollment, and of course in order to get this product approved prior to Xifaxan going off patent, we’d be looking to see readout of data probably in late – maybe late 2025, early 2026. And then of course have to file. So, that would – I would say probably somewhere in the 2026 range.
Douglas Miehm: Okay. That’s great. Thanks very much.
John O’Connor: Next question
Operator: Your next question is coming from Mike Nedelcovych at TD Cowen.
