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Good evening, and welcome to Bausch + Lomb's R&D Update Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brent Saunders, Chief Executive Officer. Please go ahead.

Great. Thank you, Operator. Thank you, everyone, for joining us on such short notice. We really appreciate you getting on the call today. I'm joined with my colleagues, Yehia Hashad, our Head of R&D; and Mayssa Attar, Head of Pharmaceutical R&D. And we're looking forward to taking you through the presentation and, more importantly, taking any questions you have. So Allison, if we could jump to the next slide. Perfect.

So today, we're sharing results on 2 first-in-class programs that further reinforces why we believe in our pipeline. First, on our dual-action dry eye medicine, this is the first therapy designed to address both inflammatory and evaporative drivers of dry eye in a single treatment, and we will be moving it into Phase III. As you'll learn later throughout this conference call, Phase II showed a strong statistical significant effect at Day 15, much faster than we expected, and that gives us a clear primary endpoint and a focused design as we advance.

Second, on BL1332, our lead ocular surface pain candidate, just delivered convincing clinical validation of the TRPV1 mechanism in humans. The result strengthens our confidence heading into Phase II readout, which we expect coming in a few months, and it opens the door to a broader franchise in ocular pain beyond postsurgical indications. When taken together, these two first-in-class assets represent more than $2 billion in combined potential peak sales, meaningful upside for us beyond 2028. I'll let Yehia and Mayssa walk through the data, but I think the headline is simple. Both programs are going to move forward with conviction. Yehia, I'll turn it over to you.

Thank you, Brent. Good afternoon, everyone. We are really excited to report about these 2 programs. We will start with the dual-action, and before we dive into the details of the data, I really would like to lead with some of the key takeaways for this program. Obviously, dry eye disease is a multifactorial disease, yet today's therapy generally address one of the driver at a time. This study validates our goal to bring complementary mechanism together in a single treatment through a novel differentiated formulation that can deliver a high therapeutic effect with less dosing concepts.

The study have revealed a highly encouraging insights. The dual-action eye drops demonstrated a superior effect earlier than what we anticipated with a strong result at a prespecified Day 15 assessment. Those effects were achieved with lower lifitegrast volume and reduced dosing frequency, supporting the differentiated profile we envisioned. We are advancing to Phase III with greater conviction, a clearer endpoint strategy, and a focused development path. With that, I would like to hand over to my colleague, Mayssa, who will walk you through the details of the study results. Mayssa?

Great. Thanks, Yehia. Hello, everyone. I am thrilled to share our clinical results for our novel dual-action dry eye drop. So let's first start with our program strategy. Dry eye is a complex multifactorial disease. Patients experience similar symptoms but with different underlying causes. Tear evaporation and ocular surface inflammation are 2 important disease drivers. At Bausch + Lomb, we have 2 therapies whose pivotal trials each demonstrated treatment of both the signs and symptoms of dry eye, but their active ingredients work through different mechanisms. We believe in combination, they will deliver superior results.

Miebo forms a monolayer that reduces tear evaporation, while lifitegrast, the active ingredient in Xiidra, penetrates tissue to act as an anti-inflammatory. Combination products face steep formulation and clinical development challenges. And that's why dry eye patients and eye care practitioners don't have one on the market today. It's for this reason. We see a clear opportunity to change that, combining the Xiidra and Miebo active ingredients into the first dual-action dry eye therapy, simplifying treatment for eye care professionals and delivering better outcomes for patients.

So our scientists have cleared the first hurdle by formulating the proven active ingredients in Miebo and Xiidra together in a single eye drop, and they've demonstrated those benefits of that combination in nonclinical models. On the left, you see nonclinical pharmacokinetic data comparing how much better lifitegrast, the active Xiidra, penetrates ocular tissues when formulated with the Miebo active ingredient. This matters because lifitegrast needs to penetrate ocular tissues to work as an anti-inflammatory. And drug development breakthroughs often come from finding a way to deliver the lowest effective dose.

With this formulation, lifitegrast reaches the cornea and conjunctiva to ocular surface tissues damaged by dry eye far more efficiently. This drug delivery efficiency is what led us explore in this current clinical study, reducing both the total lifitegrast dose relative to Xiidra and the dosing frequency relative to Miebo, aiming to deliver 2 complementary mechanisms of action in a single, safe, well-tolerated product. So before we get to the results, it's worth pausing on how we dose this novel drug product.

The dual-action drop delivered lifitegrast in about 1/3 of the drop volume used in the lifitegrast alone arm. So that's 12 microliters of dual-action drop versus 35 microliters of Xiidra. And we dosed the dual-action drop twice daily, so half as often as the PFHO alone arm since Miebo is indicated for use 4 times a day. So everything you're about to see, we achieved with meaningfully less drug and less frequent dosing relative to the respective monotherapy.

Okay. On to the study design. This was a 4-week randomized; double-masked, active controlled study and the first time we tested our assumptions regarding the dual-action drops performance in humans. 443 patients were randomized across 6 arms. The design included 3 active arms for statistical comparison and 3 matched vehicle controls for masking. Our prespecified primary endpoint was change from baseline in total corneal fluorescein staining at Day 29 versus lifitegrast alone. We chose Day 29 because with no prior human data on the dual-action drop, we set our primary time point earlier than the sign endpoint used in either monotherapy's own pivotal trial.

We anticipated that combining these 2 mechanisms would produce a faster effect. And so before looking at outcomes, it matters that patients enrolled across the study arms started in the same place. Corneal staining and symptom scores were well matched at baseline, and patients came in with moderate to severe disease, consistent with a registration quality dry eye patient population. Additionally, other baseline characteristics and demographics were assessed and found to be consistent across arms.

Okay. So now to the exciting part, the efficacy data. Let's start with total corneal fluorescein staining, a sign doctors used to evaluate the health of the cornea. The lower the staining, the healthier the ocular surface. So to begin, the study did not meet its Day 29 primary endpoint versus lifitegrast alone. While numerically better, it was not statistically significant. I wanted to lead with that because what we learned is the superior effect of the dual-action drop is actually faster and evident much earlier than Day 29. And so here's why we're confident.

As early as Day 8, the dual-action drop was already pulling ahead of both monotherapies. At the prespecified Day 15 time point, it showed a significant reduction in corneal staining versus lifitegrast alone with a p-value of 0.0007. That gap narrowed by Day 29, but not because our effect went away. The dual-action drops result held steady between the 2 time points. It narrowed because lifitegrast alone kept improving, which isn't surprising. Xiidra is itself an approved efficacious drug.

Ultimately, what we learned was that the dual-action eye drop had a rapid onset of effect, and now we have data to guide when to look for that effect in future studies. So now let's further evaluate the meaningfulness of this improvement in corneal staining through a responder analysis. We see 41.6% of dual-action drop treated patients achieved a clinically meaningful 3-unit improvement in corneal staining by Day 15, more than double the 18.8% treated with lifitegrast alone and ahead of the 31.6% treated with PFHO alone, even though PFHO was dosed twice as often.

This result translates the group averages you just saw on the previous slide into individual patients, and more of them experienced a meaningful improvement in corneal health with the dual-action drop than with either of the monotherapies. Again, this was at a fraction of the dose of Xiidra and less frequent dosing than Miebo. So now let's examine another responder analysis that tells us how patients feel on Day 15. We know it's the symptoms of dry eye that bring patients into the eye care practitioner's office.

A pattern emerges across these individual symptoms we tested using complete symptom resolution. So on a visual analog scale score of 0, which for a dry eye patient equates with total relief, the dual-action outperformed numerically lifitegrast alone on every symptom listed in this table: itching, light sensitivity, blurred vision, irritation, burning, and foreign body sensation. Now against PFHO alone, the active ingredient in Miebo, results are more mixed, better on some measures, comparable or slightly behind on others, but that's still a meaningful result.

PFHO is a highly effective treatment and a tough-to-beat active comparator. There's a reason we don't see active comparators in dry eye trials. And in this trial, we are getting to our results against PFHO while dosing the dual-action drop only twice daily versus PFHOs 4 times daily. This head-to-head comparison is exactly the kind of data that will inform the design of our next clinical study. So with respect to safety and tolerability, there are no new safety signals that were observed with the dual-action drop or the monotherapy.

Overall, adverse events rates were consistent with the established profiles of these 2 approved medicines. And on 2 specific measures, the dual-action drop looks favorable relative to lifitegrast alone. Instillation site irritation was 11.9% versus 21.2%, and dysgeusia, the altered taste some patients report with lifitegrast, was 10.9% versus 15.2%. Okay. So how do these findings inform our next steps? This first-in-human study didn't meet its Day 29 primary endpoint against lifitegrast alone, but it showed that the dual-action drop works even faster, a significant improvement in corneal staining at the prespecified Day 15 time point with a p-value of 0.0007 with the highest responder rate among any arm.

That early effect extended to symptom resolution across multiple measures, and we achieved all of this with roughly 65% lifitegrast drop volume than Xiidra and half the dosing frequency of Miebo, meaning we still have room to optimize our dosing paradigm. This clear fast effect on corneal staining, one of the most important signs of ocular surface health, was achieved at the fraction of the dose and frequency of the 2 proven drugs, Xiidra and Miebo, respectively. That's why we have high conviction to advance into the next stage of development with a well-defined path to demonstrate superiority over both individual therapies. With that, I'm going to hand off to Yehia again.

Thank you, Mayssa. Let me transition to the ocular surface pain, a significant and often underrecognized condition across ocular diseases and procedures. BL1332 was built around a powerful scientific premise. Selectively blocking TRPV1 receptors, one of the primary sensors of ocular pain, may interrupt pain signaling at its source. This Phase Ib study that we are reporting results met its primary endpoint and demonstrated a statistically significant reduction in pain intensity.

This validates the mechanism in humans and strengthen our confidence in BL1332's potential as a first-in-class neurosensory therapy of ocular surface pain with unlocking the potential for multiple indications in the future. I'll now turn it back again to Mayssa to walk you through the results of the study.

Thanks. Okay. So the ocular surface and particularly the cornea is the most densely innervated tissue in the body. That means it's one of the area's most sensitive to pain. On the cornea and conjunctiva in the terminals of sensory neurons, the TRPV1 nociceptor is a primary sensor of ocular pain. By blocking, also known as antagonizing, TRPV1, we stop the signaling cascade that leads to pain. This is in contrast to the activity of a recently approved dry eye neurosensory agonist, which activates neural signaling.

Bausch + Lomb has 2 distinct TRPV1 antagonist molecules. BL1312 is a first-generation molecule that achieved clinical proof of concept in reducing ocular pain in postsurgical patients. And BL1332, which is 100x more potent water-soluble molecule. Now let me share with you data that informed our development strategy. BL1312's clinical experience directly shapes how we develop BL1332. The graph on the far left simulates human corneal drug levels from 2 BL1312 dosing regimen.

The higher regimen effectively relieved postsurgical pain, but a lower exposure regimen depicted by the lower red line tested in a chronic pain population did not. That taught us 2 things. First, we need a more potent molecule to guarantee sufficient tissue exposure, which is exactly what BL1332 is being roughly 100x more potent. Second, we needed to test that potency beyond the postsurgical setting. Immediately after surgery, the corneal natural barrier is temporarily compromised, which makes drug penetration easier.

But outside that setting, with the barrier intact, penetration is harder, which is exactly the scenario a more potent molecule needs to prove itself in. So starting with potency. The center chart here shows why it matters. In a nonclinical capsaicin-induced pain model, BL1332 block the pain response significantly better than both vehicle and BL1312. And to derisk the second issue we just discussed, we needed to test BL1332 in human subjects who hadn't just undergone surgery. Those are the clinical data we're going to share today.

So this was a 2-part Phase Ib study in healthy volunteers. Capsaicin-induced pain was rated on a 0 to 10 scale, where 0 is no pain and 10 is the worst possible pain. Part A in 6 healthy participants identified the capsaicin concentration that reliably produced a target pain response between 5 and 8. Part B then randomized 22 participants into a double-masked 2-period crossover. So each person experienced both BL1332 and vehicle on separate occasions, a within subject design that gives us strong statistical power from this small sample size. And this is the most precise proof of mechanism study design that can be achieved in humans.

Okay. And the result was unambiguous. Our primary endpoint, pain intensity, 5 seconds after capsaicin challenge showed a highly significant difference favoring BL1332 with a mean score of 0.6 versus 6.1 for vehicle. This is the first clinical confirmation that BL1332's potent TRPV1 blockade meaningfully reduces ocular pain in humans. And importantly, this pain was induced directly on an intact ocular surface, not a postsurgical eye.

Next, I will go through the exploratory endpoints that all tell the same story. 68.2% of participants on BL1332 had complete resolution of pain, a score of 0 compared to none on vehicle, again, with a p-value of less than 0.0001. Now looking at severe pain. Not 1 participant on BL1332 reported high pain, a score of 7 or higher compared to over 1/3 reporting high pain on vehicle.

And even looking at the worst moment across the first 30 seconds, not just the 5-second mark, the result holds. The same magnitude of difference, still significant. And now this graph brings it all together. It tracks pain intensity from before capsaicin through 10 minutes after. Pain in vehicle-treated patients spikes sharply and takes minutes to fully resolve. BL1332, the blue bottom line stays essentially flat the entire time. In practical terms, mean pain duration was 1.6 seconds on BL1332 versus 37.8 seconds on vehicle.

Pain that would otherwise last over half a minute was essentially eliminated. Every time point from 5 seconds through 2 minutes was significant. This is the clearest single picture of what target engagement in humans looks like. So in my career, spanning more than a quarter century, I rarely see efficacy results like this, like a Botox or an EYLEA with such powerful pharmacology that translates to patients. This is where you look to expand to multiple indications where a drug can help patients. BL1332 is that type of drug.

So on to safety. 0 treatment-emergent adverse events were measured in either arm. No serious events, no discontinuation. And at this potency level, that's about the best safety readout we could ask for. It's worth noting that earlier systemic TRPV1 antagonists developed for pain were discontinued due to hyperthermia. Given that history, BL1332 completed a Phase I studied specifically designed to evaluate systemic exposure and thermoregulatory safety, and it was well tolerated with no hyperthermia observed.

And that's consistent with what we'd expect. Topical ocular dosing produces ultra-low systemic BL1332 concentrations, well below what would be needed to engage the thermoregulatory pathway responsible for hyperthermia in those earlier systemic programs. So now what does this study add beyond the Phase 2 we already have underway in postsurgical pain that will read out later this year. Capsaicin is a deliberately etiology-agnostic pain challenge. It isn't tied to any particular disease or injury process.

It tests whether blocking TRPV1 reduces the nerve pain signaling pathway itself. So unlike steroids and NSAIDs, which treat inflammation to indirectly reduce pain. And that's exactly why this result is so strategically useful. Every endpoint we measured, primary and exploratory, was significant, which gives us real confidence this mechanism generalizes across pain indication. It supports evaluating BL1332, not just in postsurgical pain, but across other pain conditions where patients today have limited options, including pain associated with dry eye disease and other acute and chronic ocular surface conditions.

This study, in combination with the upcoming Phase II data readout, is what will give us the conviction to pursue that broader opportunity and fully realize BL1332 and TRPV1 antagonism's potential across the full range of ocular pain conditions patients face. I'm going to hand it off to Yehia again.

Thanks, Mayssa. Just stepping back, these 2 programs share a common theme. Each addresses a significant unmet need through differentiated science. The dual-action program had generated clinical evidence that supports a rapid treatment effect and a dose effect relationship that we can build on it with confidence in the next stage of development. BL1332 has delivered clinical proof of mechanism, demonstrating that targeting TRPV1 can significantly reduce ocular pain. Together, these assets reinforce our strategy of translating differentiated science into a value for patients, eye care professionals, and the shareholders. We believe they can become important future growth drivers and further strengthen our leadership in eye health.

Next. Before we open up for questions, I really would like to recognize the patients that participated in both clinical studies. They really committed to advance science, especially in the first-in-human 2 molecules. Second, I really would like also to acknowledge our investigators with all what they have done in efforts to recruit these patients and keep them in the study for the duration of treatment. Actually, their efforts have allowed us to come up with the results about 4 months ahead of the schedule.

And lastly, but not the least, I would like to thank my colleagues in R&D and clinical development for a well-designed and executed study that we were able to give us answers and inform us about how we can move to the next step of development. With that, I would like to actually open up for the questions. Operator, up to you.

[Operator Instructions]

And the first question today is coming from Patrick Wood from UBS.

I've got 2. I'll just ask them upfront. Firstly, I guess, how are you thinking about 15-day response times as it relates to patients and marketing and that go-to-market on that side? How critical that speed of relief is relative to 29-day efficacy? That's question 1. And then question 2, you sort of hinted in dual-action for you might be able to tinker with the dosing plan. Any thoughts around strategy around that as you move forward and how you're thinking about dosing?

Sure. Thanks, Patrick. So maybe I'll start, and then I'll turn it over to Mayssa and Yehia to weigh in, at least on the first part of the question with how it stacks up commercially. So Day 29, which was the primary, was an ambitious time point for an anti-inflammatory. As you know, the 2 significant anti-inflammatories are lifitegrast and cyclosporine, and both can take a month or months to show effect. And so when you see a statistically significant effect at Day 15, which was surprising to us, that is important.

And that's the results, I think, that matter most to patients and eye care professionals. If you think about dry eye patients don't want to wait around for months to decide if a drop is working. They tend to quit early if they don't feel relief. And so a therapy like what we're demonstrating here that shows real measurable benefit at 2 weeks solves an adherence problem that's plagued the category for years. And so I think as a patient or an ECP, this would be a very valuable tool in the toolbox with rapid relief. Mayssa or Yehia, you want to.

I think I just -- a couple of things, Patrick. I think, one, we need to recognize that the corneal fluorescein staining is, as Mayssa mentioned, indicating the health of the corneal surface. The more inflammation and the more damage to the corneal surface, the more is the fluorescein staining. So less fluorescein staining is meaning that the cornea started to get back to the healthy condition. With the effect that's happening at Day 15, that's great achievement, meaning a very rapid onset for healing of the cornea back to its normal state.

Obviously, this is supported as well with the responder analysis that we have seen at this time point of Day 15, 3-point change in the cornea fluorescein staining give us, again, another great confidence that this is a great news for patients that they can actually be treated and have a symptom and sign relief at an earlier stage. The second important part clinically, you have to remember that the anti-inflammatories in particular, take time until they work. I'm speaking now about the monotherapy, the single agents.

So we know from the data on Xiidra, and we know the data from other anti-inflammatory that they could start to work starting from 4 weeks and they could have a peak effect at a later time point. This actually have resulted in many -- sometimes patients can drop off the treatment if they are just waiting for 1 week, 2 weeks, 3 weeks and they still don't see a response, some of them could be dropping off from the treatment. Having this now that we can see this effect at Day 15 will be, again, another good reason that the patients have a good compliance on this type of treatment and continue on it. So clinically, it's a very relevant and it's a very good endpoint. And actually, for our positive surprise, it came even earlier than what we have anticipated in terms of onset of action.

Mayssa, do you want to talk about the FDA. The strategy around formulation. Yes, the dosing.

Sure. Happy to do that. So let's take a step back. It's important to remember, and this is why you have -- it's a great question. The results we shared today, we achieved with roughly 1/3 the dose of Xiidra and half the dosing frequency of Miebo. That's what the dual-action drop was able to do. So if you look at the clinical evidence that's been generated in this study, if you just look at corneal staining, in the first 2 weeks, numerically, the dual-action eye drop is numerically better than both these approved medicines. And for the first month, it's numerically better than Xiidra.

So that's a fantastic result. And then we showed additional efficacy results that give us high conviction with the performance of the dual-action drop. Another point is that when you look at the tolerability, it's very acceptable. In fact, in some numbers, we're numerically better than Xiidra. So when we look at that evidence, we know that moving forward, there's many levers we can pull. We can think about the dose of lifitegrast and would we want to optimize for that.

And there's also the dose frequency. We have a lot of flexibility to amplify those efficacy results that we saw. We'll share that final Phase III study design at a later date. Right now, we're taking these data as well as previous clinical experience and using a modeling and simulation strategy to optimize the dose and dose frequency we'll take into Phase III.

The next question will be from Larry Biegelsen from Wells Fargo.

This is Simran on for Larry. Maybe just to kind of go along the lines of the prior question around how you're thinking about commercialization. As you move into Phase III, how are you thinking about differentiating this combination from Xiidra and Miebo individually in the eyes of both physicians and payers? And does that positioning give you added confidence in the program?

Yes, it does. And I think, obviously, we have to produce more data. But with the data we have today, I think it's quite clear to me how we would position this initially, which is against the anti-inflammatory category, both Xiidra and the cyclosporine medicines that exist out there. If you think about the rapid onset, you think about the tolerability and then you think about the combination, that would be the best place for us to promote to patients, because they would get the most immediate and rapid benefit from this type of medicine.

I think over time, as managed care and access is built, and remember, by design, these are superiority studies or contribution of elements studies. So payer discussions should be more straightforward, but that will still take some time. I think our goal would be to make this first-line therapy and standard of care. As a health care professional in this space would tell you, they'd love to have both an evaporative and anti-inflammatory on board with compliance and persistence. And this medicine should be designed to give them exactly what they want.

And the next question will be from Joanne Wuensch from Citibank.

Two quick questions. It was unclear to me what the control arm was in the BL1332 you described as vehicle. I was hoping you could clarify that for me. And then I'll give the second 1 upfront. A very elaborate analyst meeting in the fall talked about a 3-year plan. How do each of these products sort of fit into that? And is -- are those contributing before the 3-year plan, supportive of it? Or is this post that plan?

Yes, absolutely. So maybe I'll take the second part first and then ask Mayssa and Yehia to talk about the control in 1332. So Joanne, you're right. We did put out our 3-year plan last November at Investor Day. And to be fair and to be clear, these programs won't launch until after we have achieved or exceeded that plan.

And so the only real impact during that period of time is the cost of the clinical development, which we anticipated and had planned for success. And so this changes nothing in our 3-year plan. But more importantly, I think it shows that beyond the 3-year plan, there's strong durability in our pharmaceutical business and big upside of growth with these 2 assets coming soon after the plan is completed. Does that answer your question, Joanne?

Yes.

So the control arm...

Mayssa, would you like to comment on the control arms and just the masking purposes for that?

Sure. So in BL1332, the ocular pain study, the vehicle was essentially a placebo. So what it was, was everything in the BL1332 eye drop, except the active. And as you know, in pain, it's notorious for a placebo response. So that really underscores the power of BL1332 that it wasn't hindered by any placebo response. It was a truly differentiated in pain relief.

The next question will be from Aidan Leahy from Bank of America.

I guess on the first 1 to level set, can you confirm that your conversation with the FDA given you confidence that they're fine with a 15-day endpoint for the Phase III? And I'll ask my second one upfront. I guess, while a fixed-dose combination offers the convenience benefit, how big of a deal is it for physicians to be able to flexibly manage each dose independently? And is that something that you think will be completely overcome by the convenience factor of the dosage and the earlier impact?

Yes. So Yehia, do you want to talk about the 15-day?

Yes, sure. So let me speak about the 15-day very clearly. So I guess there are 2 points here. 1 is the total cornea fluorescein staining being changed from baseline is an approvable endpoint? The answer is yes, has been used in a lot of products that got to the market approval, and it's a very common endpoint to be used. Second, have any product have been approved before using 15 days? Yes. But the 15 days with the corneal fluorescein staining actually will be the first time. And this is actually because no product before had achieved total corneal fluorescein staining as early as 15 days.

If I could, I would say the reason people don't do it is it's a really high bar to get to 15 days, which is why we were so surprised -- pleasantly surprised by it.

Yes. Majority of the 15 days were symptoms before. You could expect in 15 days, you should have a little bit of improvement in symptoms, but it's the first time to demonstrate corneal fluorescein staining with a responder analysis of 3 or more step better at a 15-day, which makes us -- again, we will speak with the FDA, but I don't think that the FDA will have issues with having something like this.

Yes. Again, from a patient's perspective, that's what they want. With -- the second part was on a fixed-dose versus the individual elements. First, for those doctors or professionals that want to do it, they will always have the 2 individual drugs to use. That being said, having been in this space for a long time at my predecessor company and here, I can tell you overwhelmingly, what ECPs want is a fixed-dose combination.

No different than many other conditions where -- whether it be hypertension or glaucoma or COPD or asthma, where you have multifactorial diseases with different etiology, they want to solve the problem for patients in the most efficient, effective way that ensures compliance and persistence. And a fixed-dose combination is that easy button for this disease.

And the next question will be from Tom Stephan from Stifel.

I'll keep it to one. So just on dry eye, I mean, I get the comparisons against Xiidra, but the dual-action dry eye data, I mean, it's generally either, I think, in line or worse than Miebo, which obviously has seen some really solid success over the years. So I mean, Brent, maybe for you, what's the value prop of this combo drug if it isn't meaningfully better than Miebo, including from a rapid onset of action standpoint. I think we've seen some data on that front from you guys. Is it the twice daily dosing? Maybe talk about just where this product fits if it's not really better than Miebo.

Yes. So I guess I would -- I don't want to take issue, but I would say that the framing of the question perhaps is a little off with all due respect. So look, Miebo is a terrific drug. And obviously, you see it in the numbers of TRxs every week. It's -- Andrew and his team have done an amazing job with that and patients and ECPs love Miebo. But Miebo is not solving the entire spectrum of the disease. It stopped -- it's creating a healthier tear film by preventing evaporation, but most patients still have inflammation. And so this is a way to solve both of those in 1 easy-to-use medicine. And so it is better than Miebo in that it's solving inflammation where Miebo is not. But I would ask Yehia to weigh in, too.

No, I think that's absolutely right, Brent. I think there's also a very important point to realize here is we know very well that Miebo is really superior when it comes to the effects, efficacy when it comes to the single monotherapy treatments. And in order that we get the dual-action drop to get approved, we will have to demonstrate superiority over Miebo. The good news in this study that the results before this study, we didn't have any information on the fixed-dose combination because this is the first time we see it in human.

And we didn't have a hypothesis on where it can be superior over Miebo. What came up clearly in this that there is a potential because there is a numerically better endpoint that shows that consistently dual-action is better performing than Miebo numerically despite being at half of the dose. So it validates our hypothesis that if we increase the dose frequency for that, we could achieve the statistical superiority of the dual versus Miebo. And by the way, this is a requirement for the approval in Phase III. So the product will come out will be better than Miebo.

[Operator Instructions]

The next question is coming from Robbie Marcus from JPMorgan.

This is Lily on for Robbie. To follow up on one of the earlier questions, with the new dual-action dry eye product, you'll have 3 pharmaceutical dry eye solutions. So how does the dual-action product fit in with both Miebo and Xiidra in the portfolio? Is there a place for all 3 of them? And how cannibalistic versus incremental is the $700 million in peak sales?

Yes. So great question, Lily. So there is a place for all 3. I think it goes back to Aidan's question earlier. There will be some doctors that want to manage just one aspect of the disease, and there'll be others that want to treat for more of the entirety of the disease with dual-action. And our initial approach will be to promote to the anti-inflammatory segment of the market and then ultimately to the entire market.

What we know about this market is it's an underpenetrated prescription market. It's a growing market, and it's promotionally sensitive. And so there is a lot of room for growth in this market. Every new -- I was with Restasis when it was alone and Xiidra came in and that expanded the market. Miebo expanded the market and Tyrvaya has expanded the market. And so each new entrant here has expanded the market. Could there be some cannibalization? It's possible. But I think that most of this will come from incremental new growth in the marketplace.

And the next question today is coming from Yi Chen from H.C. Wainwright.

Considering the fact that Xiidra's pivotal trial efficacy was measured at Day 84, Miebo's pivotal trial efficacy was measured at Day 59. I'm just curious, in the next trial for this dual-action dry eye disease eye drop, even though you are going to pick Day 15 as the primary endpoint measurement, will you still measure the efficacy at 1 month, 2 months and 3 months just to show how the efficacy trend and whether the therapy is suitable for long-term use.

So it's a great question, and thank you, actually. I just would like to take it because when we started this clinical trial, this is exactly the data that we looked at. We looked at the individual components time points. And we knew from the preclinical data that our formulation based on the novel formulation that we developed that it should be acting faster and it should be acting better when it comes to dose. So our assumption was that Xiidra was working at Day 84. If it acts faster, this is -- we selected Day 29, we said it will be much faster than Xiidra original pivotal studies.

But we never anticipated it will be even more positively faster, which is at Day 15. So obviously, the Day 15 will be selected as the endpoint as we are moving forward because we think that this is great results showing their data going all in one direction at Day 15 from a responder analysis as well as responder analysis on the symptoms as well. So Day 15 will be selected as the primary. Nevertheless, I think that as is the routine with all clinical trials, we will be assessing further time points, especially when it comes to safety and other things to see also how the efficacy react, but the primary endpoints will be selected at Day 15.

This concludes our question-and-answer session. I would now like to hand the call back to Brent Saunders for closing remarks.

Yes. So again, thank you, everyone. I know there's a lot of data to digest, but we thank you for joining us. We are certainly available as you digest this for further dialogue with you. Just contact George and Yehia, Mayssa and I or Andrew or others can meet with you to help with any questions you may have. But I hope that after you saw the results of these 2 first-in-class programs, you share our excitement and confidence in our pipeline and the durability of growth of our company. Thank you again so much for your time, and we look forward to keeping you updated.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to Bausch + Lomb's Second Quarter 2026 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to George Gadkowski, Vice President of Investor Relations and Business Insights. Please go ahead.

Thank you. Good morning, everyone, and welcome to our second quarter 2026 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer, Mr. Brent Saunders; Chief Financial Officer, Mr. Sam Eldessouky; and President of Surgical, Mr. Luc Bonnefoy. In addition to this live webcast, a copy of today's slide presentation and a replay of this conference call will be available on our website under the Investor Relations section.

Before we begin, I would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation as it contains important information.

This presentation contains non-GAAP financial measures and ratios. For more information about these measures and ratios, please refer to Slide 1 of the presentation. Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website. The financial guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter unless required by law and not to update or affirm guidance other than through broadly disseminated public disclosure. With that, it's my pleasure to turn the call over to Brent.

Thank you, George, and thanks to everyone joining us today, especially my colleagues around the world whose commitment and passion are at the heart of everything we achieve.

Today's presentation will follow a familiar format. I'll start with an overview of the quarter, and Sam will walk through the details of another beat and raise. We'll then cover growth drivers by segment, including an update from our Surgical President, Luc Bonnefoy. But the format won't be the only thing that sounds familiar. Leverage in the P&L, margin expansion, broad-based revenue growth, improved cash flow generation. These have been themes since we unveiled our three-year plan for growth at Investor Day last November. And in the second quarter, progress continued at an accelerated pace.

You see that here, 8% constant currency revenue growth once again reflects consistent performance across our Pharmaceuticals, Vision Care and Surgical segments. Continued momentum from each business creates a stronger, more resilient company and more durable growth profile over time. 28% adjusted EBITDA growth and 17.6% adjusted EBITDA margin demonstrate the quality of the growth we referenced last quarter building on the operating leverage and margin expansion that began in the second half of 2025. Of note, SG&A continues to decline as a percentage of revenue, which Sam will cover later.

If you're wondering where our confidence in meeting or exceeding our three-year plan comes from, look no further than these charts. On the left, you see the story we've been telling, constant currency revenue growth accelerating from 6% in the first quarter to 8% in the second and adjusted EBITDA margin expanding from 16.1% to 17.6%, an increase of 150 basis points, growth and margin moving in the same direction quarter after quarter.

But the more important story is on the right because expanding margins only matter if they translate into cash, and they are. Adjusted cash flow from operations more than tripled from $45 million in the first quarter to $161 million in the second. Year-to-date cash conversion is approximately 46%, in line with our expectations. Stronger cash generation translated into meaningful balance sheet progress, helping us lower our leverage by a full turn from this point last year.

Credibility doesn't come from making bold promises. It comes from making the right commitments and delivering on them quarter after quarter, year after year. That's been our approach from day one. We communicate our priorities, align our teams behind them and execute with discipline. The say-do mentality has helped us build trust with stakeholders and more importantly, has positioned us to create sustainable long-term value.

In other words, companies earn credibility through consistency. You see that discipline reflected across these pillars. Second quarter growth was broad-based with standout double-digit performance from Pharmaceuticals and Surgical. The top-line momentum translated directly into profitability. $246 million in adjusted EBITDA, up 28% year-over-year. Again, growth and margin working together, consistent with the operating model we outlined.

Our selling and operational execution is showing up in the numbers, too. In Surgical, the accelerating mix shift towards premium IOLs is expanding both revenue and margin. In Pharmaceuticals, Miebo and Xiidra both delivered strong revenue growth, the result of a refreshed market access approach and disciplined commercial execution.

Last quarter, we laid the groundwork for the introduction of Orphia, an AI-powered digital health platform designed to reduce the operational burden between physicians and their patients. Orphia was built to serve every eye care provider, no matter what they prescribe or what products they use. It fills a real void and it's already generating encouraging feedback within the eye care community.

In our third pillar, what you're seeing is a pipeline delivering on two time horizons at once. In the near term, we have concrete milestones expected to land this year. We filed our FDA submission for our ELIOS implant-free MIGS excimer laser in the second quarter and readouts for our dual-action dry eye candidate and ocular surface pain candidate are expected in the second half of this year. Looking further out, we have programs that are expected to extend our runway well into the next decade and into categories where the unmet need is only growing.

We've been in this business long enough to know that not every program will make it to the finish line. That's the nature of innovation in eye health. But that's precisely why we built the pipeline the way we have. Breadth and depth aren't buzzwords for us. They're a deliberate design choice. A robust diversified pipeline means we're never dependent on any single asset to deliver, and it's what gives us confidence in sustained cadence of milestones quarter after quarter, year after year.

You see that breadth and depth here. Rather than the linear pipeline timeline you're used to seeing from us, this view organizes our assets by category from dry eye disease and surgical to consumer eye health, contact lenses, retinal disease and increasingly AI and computational biology. We believe this distinguishes Bausch + Lomb among eye care companies.

But depth of portfolio is only half the story. The other half is where the world is heading, an aging global population, the rapid rise of childhood myopia, longer screen time across every age group, a growing prevalence of dry eye and retinal disease. These aren't temporary tailwinds. They're structural shifts in demand, and each of the programs you see here is designed to meet one of them.

As a reminder, we're expanding EBITDA margins while increasing our R&D spend, which is another way of saying we're not sacrificing innovation for metrics. This is what balance looks like. Every segment growing, every segment contributing. Surgical revenue up 16% on a constant currency basis. Pharmaceuticals up 14%. Vision Care up 4%. The headline isn't just the numbers are strong. It's that they're coming from everywhere.

Pharmaceuticals continued its momentum with Miebo and Xiidra once again anchoring the segment's growth. Vision Care delivered another quarter of dependable performance with contact lenses up 5% on a constant currency basis, powered by ongoing strength in our daily SiHy portfolio.

I'd like to spend a moment on Surgical. Last quarter, we said the U.S. field force rebuild was the right strategic decision and that the business would strengthen sequentially through the balance of the year. One quarter later, 16% constant currency revenue growth and 17% versus 2Q '24, our premium IOL portfolio delivered 175% reported revenue growth and premium mix continued to expand both in the U.S. and globally. Every one of the leading signals we pointed to last quarter, productivity, execution, sales trajectory is now translating directly into results.

The results support the strategic actions we took. We expect Surgical to remain a meaningful growth driver from here, and we're entering the second half of the year with real momentum behind us. Sam, over to you for financial drivers and our refreshed outlook.

Thank you, Brent, and good morning, everyone. Before we begin, please note that all of my comments today will be focused on growth expressed on a constant currency basis, unless specifically indicated otherwise. In addition, all references to adjusted EBITDA will exclude acquired IPR&D.

Q2 was another strong quarter and further evidence of the momentum across the business. We delivered meaningful top-line growth and margin expansion. We also generated strong operating leverage with adjusted EBITDA up 28% on a reported basis.

Revenue growth and margin expansion are now also translating into stronger cash generation and deleveraging to strengthen the balance sheet. This is the progression we outlined. First, rejuvenating revenue growth; second, expanding margins and now converting the stronger earnings into cash and improving our leverage. We are doing this while continuing to invest in the R&D pipeline. Stepping back, this is the fourth consecutive quarter of delivering on our priorities. This strengthens our confidence that we remain on track to achieve our three-year targets.

Turning now to our financial results on Slide 9. Total company revenue for the quarter was $1.394 billion, up 8%, driven by broad-based growth across all our segments. Foreign exchange was a tailwind to revenue of approximately $12 million in the second quarter.

Now let's dive into each of our segments in more detail. Vision Care second quarter revenue of $784 million increased by 4% with growth in both consumer and contact lenses. Let me go over a few highlights in our Vision Care segment. The consumer business grew 3% in the quarter. The consumer dry eye portfolio delivered $123 million of revenue in the second quarter, up 5%. Growth was driven by Blink, which was up 12% and Artelac, which was up 3%. LUMIFY generated $63 million of revenue, up 2%. Eye vitamins, PreserVision and Ocuvitedelivered $104 million of revenue in the quarter, up 1% on a reported basis. Overall, we saw consumer demand strengthened through the quarter with healthy consumption trends exiting Q2 and continuing into July.

Contact lens revenue grew 5% in the second quarter, driven by broad-based performance across all key product families and all geographies. Across the product families, Daily SiHy grew 16%, Biotrue was up 13% and ULTRA was up 9%. The business delivered balanced growth across geographies, with the U.S. up 5% and international up 6%. The international performance was strong across all regions. EMEA at 11%, Latin America at 7%, Canada 11% and Asia Pac 3%.

Moving now to the Surgical segment. Second quarter revenue was $256 million, up 16% versus prior year. To better frame the underlying growth trajectory, we're also comparing surgical performance to the second quarter of 2024, which represents the pre-recall baseline. Versus that baseline, revenue was up 17%. Implantables delivered 64% growth. Premium IOLs were a significant contributor, growing at 175% in the quarter. This reflects the continued transition of the portfolio towards higher-margin premium categories.

Consumables were up 4% in the second quarter and equipment revenue was up 2%. Revenue in the Pharma segment was $354 million in Q2, an increase of 14%. Our U.S. Pharma business delivered 17% growth in the quarter, mainly driven by continued strength in dry eye. The dry eye franchise grew 23% with both Miebo and Xiidra contributing to the performance.

Miebo delivered another strong quarter and remains on an impressive growth trajectory. In Q2, revenue was $91 million, up 44%. Average weekly TRxs increased by 29% year-over-year, which speaks to the continued momentum we are seeing behind the brand. Xiidra also delivered solid growth in the quarter. Consistent with our commitment to deliver Xiidra revenue growth, Q2 Xiidra revenue was $87 million, up 6%. International Pharma grew 8% in Q2, adding to the segment's broad-based performance.

Now let me walk through some of the key non-GAAP line items on Slide 10. Adjusted gross margin in the second quarter was 62.2%, up 160 basis points year-over-year. The expansion was driven by favorable mix from higher-margin parts of the portfolio, including in Pharma and Surgical as well as continued benefits from productivity initiatives. This builds on the progress we saw in Q1 and demonstrates continuous execution against our strategy.

In Q2, we invested $114 million in adjusted R&D, an increase of 19% year-over-year. This investment reflects our continued focus on advancing a deep and diversified pipeline designed to capture substantial growth opportunities. In Q2, adjusted SG&A margin improved by approximately 130 basis points, adding to the significant progress delivered in Q1. It reinforces the durability of the structural changes implemented in 2025 and our ability to drive growth with a lower fixed cost structure.

Second quarter adjusted EBITDA was $246 million, up 28% year-over-year on a reported basis, and adjusted EBITDA margin was 17.6%, up 260 basis points year-over-year. Q2 adjusted cash flow from operations was $161 million, while CapEx was $71 million and adjusted free cash flow was $90 million.

We are seeing the benefits of our revenue growth and margin expansion translate into healthy cash flow generation. This is exactly the progression we have previously outlined, delivering on the top line, expanding margins and converting that operating performance into cash.

Net leverage as of the end of Q2 was approximately 4.7x. This reflects a full turn reduction since our Investor Day. Net interest expense was $89 million for the quarter. Adjusted EPS, excluding acquired IPR&D was $0.16 in Q2 compared with $0.07 in the prior year quarter.

Slide 12 brings together the key message from the first half of the year. We are delivering meaningful margin expansion while continuing to invest in the pipeline and future growth. In the first half of the year, adjusted EBITDA margin increased by approximately 370 basis points versus the prior year. This reflects meaningful progress across both gross margin and operating efficiencies.

Gross margin expansion continues to be driven by favorable mix in premium areas of the portfolio, together with manufacturing and productivity initiatives. These drivers contributed approximately 170 basis points of year-to-date adjusted EBITDA margin expansion.

At the same time, we are generating strong operating leverage. The structural changes implemented in 2025 are enabling us to deliver growth with a lower fixed cost structure, contributing approximately 250 basis points of year-to-date adjusted EBITDA margin improvement.

Importantly, we are continuing to invest for the future. We increased R&D investments by 50 basis points, supporting our deep and diversified pipeline and the substantial opportunities we see across the portfolio. The takeaway is clear. Our strategy is converting into strong financial results. We are expanding margins through mix, productivity and operating discipline and driving cash flow. We are doing this while continuing to invest in innovation and sustainable long-term growth.

Now turning to our 2026 guidance on Slide 14. We continue to see solid momentum, supported by strong business fundamentals and a healthy eye care market. Following a strong first half, we are increasingly confident in our ability to deliver over the balance of the year. We are raising our full year revenue guidance by $20 million to a range of $5.440 billion to $5.540 billion, driven by stronger expectations for the underlying business. Specifically, we are increasing the business outlook by $25 million, partially offset by a $5 million reduction in expected currency tailwinds.

The updated revenue guidance reflects constant currency growth of approximately 5.8% to 7.7%, which is 50 basis points above our prior outlook. We are also raising full year adjusted EBITDA guidance by $15 million to a range of $1.025 billion to $1.075 billion. At the midpoint, this reflects an adjusted EBITDA margin of approximately 19.1% and year-over-year adjusted EBITDA growth of approximately 18%. We continue to execute our margin expansion strategy with discipline and expect meaningful operating leverage in 2026 with adjusted EBITDA growing at nearly 3x the rate of revenue.

In terms of the other key assumptions underlying our guidance, for the full year 2026, we now estimate a revenue tailwind from currency of approximately $45 million, down from approximately $50 million previously as exchange rates have moderated. We continue to expect adjusted gross margin to be approximately 62% and investments in R&D to be in the range of 7.5% to 8% of revenue.

Below the line, our expectations remain unchanged with interest expense of approximately $365 million, an adjusted tax rate of approximately 19% and full year CapEx of approximately $285 million. Our outlook continues to show earnings growing significantly faster than revenue, reflecting the operating leverage in our business and the benefits of the actions we've taken.

As we move through the remainder of the year, our focus remains on execution, and we are increasingly confident in our path to the three-year targets. And now I'll turn the call back over to Brent.

Thanks, Sam. Now Luc Bonnefoy, President of our Surgical business, will walk you through what's driving segment growth and why we're confident in what's ahead.

Thank you, Brent. I will start where the momentum is most visible, implantables. Implantables grew 64% in the quarter on a constant currency basis and 37% versus Q2 2024. That's a two-year growth story, not a one quarter print and it is the clearest signal you will see that our premium-led eyewear strategy is working exactly as designed.

In 2023, premium eyewear represented 6% of our surgical revenue, 7% in 2024, 9% in 2025 and 13% in the second quarter of this year. That curve is not just deepening, it is compounding. And every point of premium mix that move into the portfolio brings higher margin, deeper surgeon relationship and a stronger pull-through effect across the rest of the business.

In other words, this is not just growth. It is a kind of growth that transforms what the surgical business is. That transformation isn't happening by accident. It is the result of a deliberate strategy built on three pillars. First, driving growth in premium IOLs. Our premium portfolio today anchors on enVista, Aspire and Envy, the diffractive offering powering our current mix shift alongside our expanding Lux family business with LuxSmart and LuxLife in the market. Complementary LuxBoost and LuxLift are expected to launch in 2028. The cadence designed to keep the mix shift on the trajectory you just show well into the back half of the decade.

Second, launching equipment innovation, Elios, Synera, and Sinova each represents a step change in what surgeon can offer their patients and it strengthens our pull-through economics with every placement. Equipment isn't just a revenue line for us. It is a strategic asset that anchors long-term customer relationships and creates a platform for consumables and implantables growth downstream.

Third, expanding manufacturing capabilities and optimizing our network. This is a piece that doesn't always make the headline, but shows up directly in margin. As we bring more premium product in-house and streamline our supply network, while driving cost efficiency, deepening customer loyalty and reducing complexity across the manufacturing footprint. That's how we are building operating leverage into the business, not just the top line but structurally.

Put those three together and you have the engine behind what Brent described earlier, a surgical business that isn't just growing, but transforming as it grows. And with the launch calendar and innovation pipeline that extend well into 2028 and beyond, we believe the trajectory is sustainable.

Thanks, Luc. Now to the two brands doing the heavy lifting of pharmaceuticals. Miebo's revenue grew 44% to $91 million in the quarter, while Xiidra grew 6% to $87 million. Individually, those are strong numbers. Together, they tell a bigger story, Miebo and Xiidra delivering 27% combined revenue growth in the first half of this year versus the first half of 2025. That's why we're increasingly confident in what comes next.

Based on where Miebo is trending, we expect it to soon become the branded industry leader in the treatment of dry eye disease, a category with real unmet patient need and a treatment landscape that's been waiting for a differentiated option. That's the position Miebo was built to fill. Paired with Xiidra, a proven established therapy with its own loyal prescriber base, we have a dry eye portfolio that competes on both ends of the treatment paradigm. That's a structural advantage, and it's why we believe pharmaceuticals will remain one of the strongest engines of growth for this company this year and beyond.

Turning to consumer, where two recent launches are already shaping the next phase of growth for the business. Blink Triple Care preservative-free began shipping in the U.S. earlier this year, and it's already proving to be a category expander with roughly 66% of its volume coming from new users to the franchise. That's exactly what a healthy launch looks like, pulling new consumers in rather than cannibalizing what's already there. And it helped push the broader Blink franchise to 12% reported revenue growth in the quarter, continuing a long-running upward trajectory.

PreserVision AREDS3 continues to gain shelf presence and digital prominence. The expanding distribution is one of the reasons the PreserVision franchise still delivered growth even against some consumer headwinds early in the quarter that track closely to gas prices. And it's worth remembering that eye care professionals play an outsized role in recommending eye vitamins. As more ECPs become familiar with AREDS3, we expect that to help blunt any impact from private label AREDS2. Bottom line, the underlying brand health is strong. And as AREDS3 availability continues to grow, we expect PreserVision to keep gaining ground. Two franchises, two different playbooks and a consumer engine that keeps humming, reliably adding to the Bausch + Lomb growth story quarter after quarter.

Here's a closer look at what's driving contact lens performance, and the story really is broad-based. In the U.S., reported revenue grew 5%. Internationally, constant currency revenue grew 6%. That's a balanced global growth profile powered by three franchises pulling in the same direction. Our Daily SiHy portfolio was up 16%, ULTRA Monthly up 9% and Biotrue ONEday up 13%, all on a constant currency basis.

What that mix tells you is that our growth isn't concentrated in a single lens or a single modality or a single geography. It's spread across our portfolio and across our markets, which is exactly the kind of foundation you want when you're competing in a category with structural tailwinds and long product cycles.

And we're not standing still. The next wave of contact lens innovation is already in motion with a disciplined global rollout schedule and a development pipeline designed to keep this franchise growing well into the next decade. Contact lenses have been a dependable engine for Bausch + Lomb for quite some time. Based on where we sit today and where we're headed, we expect it to remain one for years to come.

A quick word on the pipeline before we open it up for questions. You've already seen the breadth and depth of the portfolio built to meet where the world is going. This slide shows the pace of progress, milestones delivered in the first half, more expected in the second and a cadence that carries us into 2027 and well beyond. Operator, let's open it up for questions.

[Operator Instructions] And the first question today is coming from Patrick Wood from UBS.

I guess maybe just to start, I had two. Just to start, big picture, thinking about the three-year plan. Obviously, this was laid out back in November, but how do you feel things have gone since then? Do you feel more confident? Is the shape of the plan coming together in the same kind of way that you had anticipated? Or are there any areas that maybe are stronger or weaker than the framework that you had originally laid out because it's obviously very unpredictable.

Yes. Great. Thank you, Patrick. Congrats on the new platform and role and great to hear from you. So yes, look, in November, we laid out an ambitious three-year plan. And I think if you look at every quarter we've printed since Investor Day, we have been proving that we can deliver on our commitments. And to be fair, I think it's really very important to me and our team at Bausch + Lomb that we do what we say we're going to do and prove it quarter after quarter, year after year.

And so if you look at where we stand and you look at the quarters printed since the November Investor Day, I think we're showing it. This quarter, 8% constant currency revenue growth, EBITDA growth of 28%, cash flow that's nearly double last year's levels of cash flow, reduced leverage by approximately one full turn since Investor Day. And so if you take all those metrics together, you see this business, Bausch + Lomb is moving very quickly and very strongly in the right direction with strong quality and broad-based growth.

And it's not really a one-quarter story, as I've mentioned, it's a multi-quarter story. We're approaching, what, three or four quarters into our commitments. We've delivered on each one, and I'm highly confident we'll continue to do that. The -- a lot of the improvements we've made through our Vision '27 are structural. They're permanent. You see it in the SG&A line. You see it in the product mix. You see it in the gross margin. These are really important.

And -- and I think what's -- what I'm most proud of is we've been able to do that and see that margin expansion while we still invest in innovation and feed the business for long-term growth. And so net-net, Patrick, the business is stronger than it's ever been. We have strong momentum. We have strong growth plans. We have a strong pipeline, and we're continuing to generate cash at a faster pace and continuing to delever. So these are all very strong proof points or evidence that we're on track, and we are going to deliver or exceed the commitments we made last November at our Investor Day.

And then just as a quick follow-up. You guys obviously touch the consumer in a bunch of different categories in a bunch of different ways. Clearly, the contact number is still under really good shape. But your overall view on the health of the consumer, particularly on the U.S. side, any signs of how things are going overall or pretty stable?

I think it's relatively stable. I think the one thing that we track very carefully, and it's -- if you look at the consumer and you look at the consumption data from retailers, it tracks very closely to the price of gasoline. And so we know what's happening with the price of gas, right? It keeps fluctuating. And we saw that in the second quarter. We started off with a little more pressure on consumption. And as prices of oil came down or the price of the pump came down, consumption grew, and we ended stronger than we started. And so we keep an eye on that.

That being said, this is a very resilient business. What we see is sometimes trade down to smaller pack sizes or more promotionally sensitive in those times. But suffice it to say, I think the consumer is relatively healthy. We do have to keep an eye on gas, but I think that our business was built to be resilient to the consumer, and we can work our way through even that.

The next question will be from Young Li from Jefferies.

I guess to start, I wanted to ask on Surgical a little bit. Pretty strong growth in the premium IOLs business [Audio Gap] but that's off of the low comps from the recall. I guess now that it's been a little bit more than a year since you resolved the recall, some of the maybe wait-and-see docs, just kind of curious if they're more comfortable with the product now? And what's the outlook, the continued outlook on growth in that franchise? And how high do you think the premium mix shift can get to in the next one to two years?

Thanks, Young, for the question. And so maybe I'll start, and then I'll ask Luc Bonnefoy since he's joined us on the call here to get his point of view on this as well. But look, I think, hopefully, this is the last time we have to talk about the recall. As you mentioned, we're a year through it. And I think the Q2 numbers are the final proof point that we need to say that we have recovered extremely well from that. And most importantly, I'm very proud of how our team worked through it and supported our customers with dedication and urgency.

That being said, I think the situation is always more complex than the numbers suggest, right? Because during a recall, surgeons didn't stop cataract surgery. They went to competitive products. And so those procedures were performed not with enVista, right, with other products. And so we had to go out and win back those customers one at a time. And the team did that, and they did that because the doctors had confidence in how we handled the recall and more importantly, in the quality control and the quality and outcomes that our enVista platform consistently delivers.

And I think when -- if you're out in the market, which I spend a lot of time with our surgeons, they don't even talk about it anymore. They talk about the great results they're getting with the enVista platform, particularly our Aspire and enVista IOLs. And so the progress to date, I think, has been significant. And more importantly, the momentum that the team has built is real. And so maybe I'll turn it over to Luc to add his color.

Thank you, Brent. Happy to share more details concerning the second quarter for Surgical. Indeed, Q2 shows that we are building real momentum with surgeons and also customers. Like you said, a big part of that is the work our field team is doing every day. The team has been rebuilt, refocused and now staying closer to customer to support them even more effectively in the field.

What is very encouraging is that the momentum is showing up in the areas that matter the most for us. And of course, I mean about premium IOLs. That data also show that customer are seeing the value in the portfolio and choosing to engage with us in a more meaningful way.

The surgical business not only grew versus last year, but also versus pre-recall levels. To put Q2 performance in context, we look at Q2 versus 2024 as a more normalized pre-recall baseline. On that basis, implantable grew 37% constant currency versus Q2 2024 and total surgical 17%. That reinforces our view that the business is not just recovering, it is strengthening and building momentum.

So the focus from here is pretty straightforward, keep showing up for customers, support surgeon in the field and build on the momentum we are seeing. And if we do that, and it is what we plan to do, Surgical will keep getting stronger and play an even bigger role in our long-term growth.

Can I follow up, I guess, a question on the competitive dynamics, specifically two products, PureSee and Tryptyr. It doesn't seem to be impacting your business much in those categories. Can you maybe comment a little bit more about what you're seeing in the market for those two launches?

Sure. Happy to. Let's take PureSee and just the premium IOL segment. I think when you look at the dynamics of the cataract market in the first half of this year, you're starting to see a transition to premium. You're seeing monofocal cataract procedure volume kind of flattish, and you're seeing the growth coming from premium. And some of that is something this industry has had -- wanted to see for a long time, and we're starting to see early green shoots of that happening. And that's because I think the IOLs are delivering better than they ever have.

And PureSee is a good IOL, and it seems to be sourcing most of its volume from their existing customer base in Alcon. And Envy is a best-in-class trifocal. So it's giving surgeons more options to give better outcomes to patients. And I think we can compete very effectively there. And obviously, we're looking forward to launching enVista Beyond later next year. And so I think we're incredibly well positioned and very competitive in the premium IOL market.

Tryptyr, it has its segment to compete in, in the dry eye market, right, and increased tear production. But frankly, the majority of the market is in inflammation and tear evaporation. And there's no doubt, I think, anymore that our franchises of Miebo and Xiidra are the ones with the most momentum, the ones that doctors turn to first when they think about treating a patient for dry eye and the ones that deliver the best results for patients.

And so there, I think we're there, I'm easy to say we're the undisputed leader with the most momentum, the largest share of voice and the best product profiles. And so I think we have a very strong position in a category that has a lot of growth yet to build.

The next question will be from Joanne Wuensch from Citi.

This is Anthony on for Joanne. Another solid quarter in contact lens. Could you maybe just characterize a bit more what you're seeing regionally, both in terms of market growth and competition?

Yes, sure. So I think I was asked at the beginning of the year, perhaps by Joanne, Anthony, where I thought contact lens market growth would be. If you look at 2025, it was about 4% for the market. I had predicted that we'd see an improvement in 2026 at perhaps closer to approximately 4.5% market growth. I think based on where we sit today, it's probably closer to 4.5% than 4% or as we have -- I guess, another six months to go. But that's where I think we're probably right.

So a bit of strengthening in the growth in the market. For us, when you look at our growth, very balanced between U.S. and international. We also saw nice growth in China at 3% in a tougher market with a tougher dynamic right now. We saw Canada up 11%, Europe up 11%, LatAm up 7%. So very balanced growth across the globe.

And I think we're very well positioned. When you look at our new products, our Daily SiHy growing at 16%, but then more mature products like Biotrue up 13% and ULTRA up 8%. It shows that this growth is being sourced in our business from a very strong geographical mix as well as a product family mix. And so I feel very good about where we are.

And then, of course, bridging to our Project Halo and Bioactive lens, hopefully launching towards the end of '28 or the back half of '28. I think this business is incredibly well positioned for strong growth for many, many years to come.

Great. And then as a quick follow-up, you have leverage down about a turn year-over-year. I guess could you give maybe updated thoughts on how you're thinking about capital allocation moving forward?

Yes. So really no change from what we've been saying on capital allocation. Clearly, delevering is our highest priority. We had said at Investor Day, we want to be 3.5x or better by the end of 2028. We're absolutely committed as I started the call to doing what we say we're going to do. And so that's a very high priority.

I think second to that is reinvesting in the business. In terms of reinvestment, we tend to look for things that are immediately accretive and fairly neutral to the leverage ratios. And that's our criteria, and we look at a lot of things. And we're very active that way, but we are going to prioritize delevering as a goal. Sam, anything you'd add to that?

No, you covered it pretty well, Brent. I think you will see that the progress with the full turn since Investor Day has really put us in a very good position as we think about the three-year targets here. So we're really moving very well with a very strong cash flow generation that's exceeding our expectations.

The next question will be from Robbie Marcus from JPMorgan.

This is Alan on for Robbie. Just a quick one on the cash flow side. As you highlighted in the prepared remarks, this really was a really strong cash flow quarter. So when I think about the outlook for the back half of the year, what gives you confidence in your ability to continue driving that kind of free cash flow and reiterating your CapEx outlook?

Yes. So I'll ask Sam to provide more detail. But I would mention one point, which is the kind of the rhythm of our business or the seasonality of the business, the back half is always stronger than the front half. So that gives us -- with good cash generation in the first half, it gives us a lot of momentum to continue to improve that in the back half, but I'll turn it to Sam for more color.

Sure. And we're very pleased with what we've seen and what we were able to do in the cash. And it's important to talk about Q2, but also I want to just step back, we really started the year in a very strong position with cash with Q1. So when you think about the second quarter, $161 million of cash, that's roughly about 87% growth in cash on a year-over-year basis for Q2 with a very nice conversion.

As the point on your point in terms of the second half, Brent touched on the seasonality, which is very important, but there's also fundamental shifts that we've done in terms of how we manage our working capital. We've taken roughly about 12 days out of our working capital on a year-over-year basis. And that's not just a onetime. You've seen it sort of steady and carrying forward with us, and we're really getting the benefit of that as we go forward.

So when you think about full year, we are -- I'll say we're moving towards our goal of the 45% cash flow to EBITDA -- adjusted EBITDA conversion. But what's more important is the three-year target that we put out, which we said 50-plus percent conversion by 2028. As we sit here today, I would say we're tracking ahead of that target. So it's really given us a lot of confidence not only in 2026, but also how we're thinking about the next three years and achieving the three-year targets being ahead of our expectation.

And I think it's important. We spend a lot of time as a management team talking about cash, and Sam is the most active of doing that at every meeting we have. But the fact that the margin expansion is translating into strengthening or improving the balance sheet is a real key criteria for us and something we hold ourselves and measure ourselves on weekly.

And then just a quick follow-up. You're looking to enter the MIGS market with ELIOS. This is a market that has become more competitive and a little bit more saturated. Your device is definitely differentiated against the other offerings on the market. But just curious your views on the competitiveness and how you're going to position that portfolio against the other MIGS competitors.

Yes. So maybe I'll ask both Luc and Yehia, who are both here to add their comments. But very quickly at a high level, I think it's highly differentiated, right? This is a best-in-class procedure. It's implant-free. The excimer is the perfect laser to provide these micro channels in the trabecular meshwork. And we're very excited to get this approval in the second half of the year and get it launched. But Luc, do you want to talk about positioning and then maybe Yehia, how it's differentiated from an efficacy and technology perspective.

In addition to what you just said, the beauty of the ELIOS is really that it can be done during the cataract surgery. So the patient is already there. 20% of the patients arriving for cataract surgery have glaucoma, probably moderated, and they can be a target for ELIOS. And the patient is there in OR, the ASC has paid the nurses, the custom pack is open and they just need five minutes additional operating time to treat the glaucoma and reduce the drops dependency. So it's not only efficient, it's better for the clinic, it's better for the patient, and it's also very good for the surgeon. So we have very good hope with this product.

Yes. The other thing I would say is before I ask Yehia to talk about the procedure itself. If you go to the surgical meetings or conventions, two things are happening that I haven't seen happen in my 13, 14 years of being in this field, which is they're talking about not just IOLs and cataract surgery, they're talking about interventional glaucoma and their responsibility in eliminating or reducing the burden of drops in glaucoma management and helping patients be drop-free or less dependent on drops where there's compliance and persistence issues that are significant. And they're talking about the health of the ocular surface prior to cataract surgery, which plays into our dry eye portfolio.

And so there's a real synergy between those two things and cataract surgery and Bausch + Lomb is incredibly well positioned to help manage both of those with ELIOS and our dry eye portfolio. And so it's a really good strategic setup for us at the right time when there's real momentum around both of these issues during cataract surgery. Yehia, you want to talk about ELIOS?

No, I think that majority of the advantages have been mentioned, but I would like really to stress on additional two things. One, it's a very easy surgery to be done. And actually, the majority of the cataract surgeons that have never done even MIGS before, we actually, when we met with them and they had tested in a wet lab, they found it very easy to adopt. And this is one of the biggest area for us as well because anybody who's doing cataract surgery and would like to get into this field, this would be the right technology for them to use.

The second part that I really also would like that we are actually through the excimer laser, which is very precise cutting these micro channels. we leave the trabecular meshwork in a very healthy way even after the procedure, which allows for the patients that if for any reason, they require additional surgery or anything like that, that still the majority of the trabecular meshwork remain intact.

And the third part is obviously, as Brent mentioned, one of the main objectives of the mix is to get the patients off their pharmacologic treatment. And what we have seen in the clinical trial results over two years that over 80% of these patients have been drop free. So this is a great achievement with regard to this treatment as well.

The next question will be from Larry Biegelsen from Wells Fargo.

It's Lei calling in for Larry. Congrats on a good quarter there. My question first is around your guidance. So you delivered 7% growth in the first half and you raised the outlook for the year. So that implies similar growth in the second half versus first half, but comps do get a bit tougher in the back half. So can you just talk about how you maintain that growth momentum against the tougher comps? And anything specific to call out in terms of Q3 versus Q4?

Lei, it's Sam. So let me take this question. So you're absolutely right. We did look -- when you look at the first half about 7%, that suggests roughly the same level of growth in the second half. A couple of things to keep in mind here. The first one is the momentum that we've seen in the first half was really good and really strong. And that sort of led us to raise the guidance not only this quarter, but also last quarter. So we've been consistently doing that for the last two quarters here.

And we're seeing that momentum continue with us in the second half. We know seasonality of the business plays a factor, and we know that the second half is stronger than the first half. So that plays a factor, but also the momentum that we're seeing around all four businesses and why we're able to deliver is very strong, and that gives us the confidence in the raised guidance and the sort of, I'll call it, carrying that momentum forward into the second half.

In terms of -- and you see that also, by the way, translate through the P&L as well. When you think about just margins because margin is very important for us. We've been talking about it. Our first half, we were just roughly about, call it, 16.9% on EBITDA margin. When you think about the second half, we're looking to accelerate to get to the 19.1% EBITDA margin I referenced in my prepared remarks. That was just talking about the 21% EBITDA margin in the second half. So you're seeing not only top-line accelerating, but also you're seeing that momentum carry with the EBITDA margin as well.

From a phasing perspective, we're -- I'll call it, in a very normal cadence of phasing. I use '25 probably as a good reference point right now. We saw that the top line was probably about a 25% achievement from our -- of our guidance. And for EBITDA, I would say it probably will be the same, maybe we'll go a little bit better. So I'll say between 25% and 26% achievement of the full year guidance that we have right now.

That's helpful. And then my other question is just around the strength of the surgical business in Q1 -- Q2, excuse me. On the Q1 call, you had talked about there were some weather and reimbursement changes that affected the performance. Was there anything to call out in Q2 as far as catch-up or reversal that you would highlight?

Not really. Q2 is a pretty typical quarter. We didn't see that clearly. The weather wasn't as big of a factor where surgery centers were closed in the U.S. in the quarter. There were also strikes in Europe, I think Spain.

Spain continue, yes, in Q2 and will probably continue until the end of the year, but it's only major events that we have in Europe.

Yes. So I think fairly typical, no, nothing spectacular to call out in Q2. I think it was just great execution across the world, across the portfolio.

The next question will be from Douglas Miehm from RBC.

First question just has to do with the commentary around Miebo. And I know that you've indicated that in 2026, this product would turn profitable. And I'm wondering if it has turned profitable or if you expect that to happen in the second half of the year?

And then the second question I have is just around the dual action dry eye drug product that you will have data readout shortly. Can you speak to anything specifically that you're looking at in terms of those IIb results? And then in the event of a positive trial, when could we see that Phase III start for a registration study and move through? And when could we see that completed? I'll leave it there.

Great. Thanks, Doug. Look, Miebo, obviously, is a powerhouse that continues to exceed our expectations. And frankly, it's a combination of great execution by the team and just great medicine, right? Its safety profile is incredibly positive and its efficacy is very, very quick in a category where most of the other treatments take weeks or a month or longer to kick in. You're looking at really almost instantaneously treating the patient dissatisfaction. And so it's really important that you not just look at the execution, but actually the quality of the underlying medicine that Miebo is.

And look, when you see 44% revenue growth on Miebo in the quarter, you see that this is a product just that has great momentum in a category that's still underpenetrated from a prescription therapy perspective and lots of room for growth. I would also say when you look at Miebo, we continue to improve coverage, Medicare coverage just increased from 71% to 88% as we picked up Humana Medicare. And so a lot of growth still to drive Miebo with.

With respect to dual action, maybe I'll turn it over to Yehia to talk about the Phase II, and we still expect a data readout in this half of the year.

Yes. So thanks, Ben. So I guess, as mentioned, we are on track to deliver the top line in the second half of the year. I think your second part of the question was related to what we are expecting to see in terms of the study. This is a Phase II study, and this is the first study that we are testing the combination therapy. So we usually look to the overall efficacy and the overall safety of the combination therapy. But we have added additional endpoints where we can look to what's called contribution of elements, something that regulators usually look for any combination treatment, which means that we need to demonstrate some superiority versus each individual components. And this is also planned within the study design.

I think --again, as mentioned, I think the study completed recruitment, and we are actually just in the terms of cleaning the data and so forth. So we should be expecting to end of quarter 3, the top lines.

And the Phase III would start depending on the result.

Third part of the question about the Phase III, obviously, depending on what you will see in this one, but we are planning to start the Phase III provided that the results support that in the coming year, '27.

And the final question for today will be coming from Tom Stephan from Stifel.

I'll just keep it to one in the interest of time. But Brent, can you maybe talk a little bit more about the update on enVista Beyond from the press release? What's kind of the likely path forward here for the product? I guess it sounds like a 2027 launch is still the base case expectation. But maybe if you can discuss those results a bit further and kind of where we go from here?

Yes. So thanks, Tom. Yes, the -- we still are anticipating a launch next year. But since Yehia is here and he's the expert, I'll let him talk a little bit more about Beyond.

Yes. So Tom, thank you for the question. So we currently actually just received the first set of data, and we're still completing our full analysis of the data set. And we shall share more additional information once the review would have been completed. However, having said that, it's important to realize that we remain confident in the strength of the overall data that we have seen so far, which demonstrated a clinically meaningful benefit for all patients that have been implanted.

And as Brent mentioned, we are still on track for the submission by the end of this year and also the approval by next year -- end of next year. So it's a one-year review period. So again, as mentioned, I think the overall data set is still not complete even, and we are -- we just received the first wave, and this is based on the first wave of what we have seen so far.

But we are excited to get this product on the market. I think it will be a very strong addition to our premium portfolio. And if you look at where the EDOFs sit in the treatment paradigm, it's an important product for us, and we're excited to get it out.

Got it. Thanks, guys.

Great. So operator, I'll just conclude by thanking everyone for joining us on the call. Hopefully, as you look at the results we delivered this quarter, and we continue to focus on delivering on our three-year commitments. This was another strong proof point that we are going to do what we say we do and deliver on our commitments to meet or exceed those targets. Our business has great momentum. Our people are committed and our product portfolio continues to expand. So our future is bright, and we look forward to continuing to keep you updated and delivering strong quarter after quarter. Thank you for joining us.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

We'll go ahead and get started. Good afternoon, everybody. Very pleased to welcome the management team here from Bausch + Lomb. Pleased to have Brent Saunders, Chief Executive Officer; and Yehia Hashad, Chief Medical Officer. Great opportunity here to dive into strategy, but also just the emerging product portfolio given what you had introduced to the investment community in November of last year at your analyst meeting, and I think the sort of multitude of product launches you have across the different businesses. So I appreciate the opportunity to be able to dive into that.

But maybe we just start, Brent, kind of contextualizing Vision 2027. You took over the company when it was still obviously under sponsor ownership. There's been a lot of investment to build the pipeline and strengthen the foundation of the company. Maybe just talk to us about where we are in that journey and how we should think about just the evolution of the business, both through 2026, but also beyond?

Yes, sure. Well, first, thanks for having us, and thanks for Goldman Sachs for hosting this. Look, so I joined, I guess, February of '23, so a little over 3 years ago. And when I came -- it was my second time or my return to Bausch + Lomb after being there prior to my run at Allergan. And it was a company I knew well and a space, eye care, that I knew well. And what I found was a company with a lot of potential.

But what I wanted to focus on first was really 3 things. And in order, it was selling excellence and getting top line growth, operational reliability. We had -- coming out of COVID, we had a lot of supply chain-related issues and then building R&D capabilities. And I think we stayed very focused on those 3 things for the first 2 years that I was here. And I think the proof is there, right? We have been a very consistent grower faster than the market, faster than our competitors since my arrival.

We -- our operations, our back orders are historical lows. We've really done a lot to stabilize and fix our operations. And then R&D under Yehia's leadership, we went out and we really focused on -- he went out and really, though I helped a little bit, focused on recruiting the best talent in eye care R&D and building capabilities across all of our different R&D organizations. And now we have 60 programs in R&D, all of them innovative. We got rid of all the me-too copycat biosimilar work that was being done prior to our arrival. And I think R&D is in a very different place.

So then last year, in beginning January 2026, I said we have to add one more component to our strategy, which is financial excellence. And that was the culmination of Vision '27, where we really wanted to focus on maintaining that growth at what we said at Investor Day, 5% to 7% top line growth, but drive our margins from basically 600 bps from 17% EBITDA margins to 23% EBITDA margins by the end of 2028. And we've been at it for well over a year. It's been a massive structural change of how we run the business. It's a permanent structural change of how we run the business, and you're starting to see the results. You've seen it really flowing through the P&L through the last 3 quarters.

And if you look at the first quarter, it's -- there's a very strong proof point that 170 basis points of margin improvement, 370 bps of SG&A leverage and good top line growth. And so it is working. We have a lot of work to do, but I want to be clear, this is not a hockey stick program. This is a very consistent roughly 200 basis points of margin improvement every year for 3 years.

And you're going to see it this year, you're going to see it next year and you're going to see it the following year. And the plans are all in place. The actions are underway, and it's happening. So I'm very pleased. And at the end of the day, it's proven to me that our team can execute of growing the business, growing the pipeline and reduce operational friction to get margin improvement. And so it's working.

And maybe it's a good opportunity to go into a little bit more detail on some of those drivers, maybe starting with the top line. You made a reference to outgrowing the markets that you serve. I think we can see that as we observe other companies in the space. But maybe you could just break down a little bit how you think -- what's driving that relative outperformance? And maybe just kind of tick through the businesses, starting with Vision Care and then go to pharmaceuticals and consumer.

Yes. So it's always multifactorial. It starts with being able to supply the market. And so I won't spend a lot of time on that because it's not very sexy. People don't like to talk about it, but really building out manufacturing capability and efficiency.

But the 2 biggest drivers are field force execution and innovation. And so there's a lot that goes in between that between medical affairs and marketing messaging and medical meetings and bringing the KOLs along. But if you boil it down to 2 things, it's feet on the street, knowing who to target with the right message, with the right offers and then having great products that look and say, this is going to help my patient. And we've done a really clinically differentiating our products and having our field force execute with excellence.

And not this Monday, but last week, you had a session on contact lenses that you broadcast to the investment community. It really struck me as I was talking about it with someone, just looks like these guys are really on offense here from a product perspective. And maybe just was my interpretation accurate? And maybe just give people a little bit of the CliffNotes from that session and what you thought some of the takeaways were?

Yes. So I'll ask Yehia to help me, but let me just set it up real quick for a second. So you're right. We really -- our focus is to be on offense to take market share. Obviously, we consider defense. But I would say the vast majority of my time and then the team's time is spent thinking about market share gains and how to take it.

And when you think about the contact lens business, right, we are playing catch-up, right, in Daily SiHy. We -- his team delivered a superior product in our daily SiHy, INFUSE or ULTRA ONEday outside the U.S. We're seeing really strong results. I think Q1 was about 23% growth in daily SiHy. We were the fastest grower in Q1 at 5% for the total contact lens market, and that's been consistent.

But ultimately, to have a step change and be on offense, we need to drive meaningful innovation into the contact lens category, and it's a category that hasn't had meaningful material innovation since 1999 when silicone hydrogel came out. And so Yehia's team, I think, has done an amazing job figuring out how to solve for one of the biggest issues, which is end-of-day discomfort or end-of-day dryness of contact lenses, which is the #1 reason people drop out of the category, about 20%, 25% of newly fit wearers drop out in the first year because of -- so he came up with Project Halo. His team came up with Project Halo, you want to talk about that?

Yes. Sure. So just speaking overall on the big picture, the guiding principles that we got from Brent once he became the CEO is that we want to invest in the 4 business areas. So we want to grow all the businesses, not focusing on one area over the other.

The second is that we had a lot of great infrastructure within Bausch + Lomb, and we need to utilize all the infrastructure from manufacturing capabilities or other capabilities in terms of research or development. And the third one was focusing on talent. Really, this is a big area for us and was focusing on the best talent in eye care research and development to bring them and attract them to work with us. And this is what we have done in principle as overall picture.

In terms of Vision Care, in particular, I think the Project Halo actually changed completely the way we look at the contact lenses because normal situations, when we put a contact lens inside the eye and the person goes all the day long, exposed to a lot of environmental factors like air conditioning, wind blowing in the eye...

Screen time.

Then the contact lens itself loses part of its moisture. It becomes more and more dry over time. And the idea that we are actually, and we developed this in our labs is to have a contact lens that is bioactive. That means it interacts with the biology of the eye to keep the moisture inside the contact lens all day long.

And this is the HA. The HA is a hyaluronic acid. It's a natural substance. It exists in our eyes. It exists in our joints. It exists in a lot of areas in our body. And it has one particular characteristic that it can actually hold water 1,000x more than any other molecule. So it can really keep as if you are putting a sponge in a water, soaked and you keep this sponge completely wet all over the time.

And this is where the innovation that happened is that we were able to produce the backbone of the contact lens is from HA to hold the moisture and the wettability all day long and addresses an important part, which is the end-of-day dryness for the contact lens, which is a very common complaint that we hear from contact lens wearers.

So basically, in testing, and we tested this in one of the external studies recently, and we found out that 99% of the moisture of the lens is maintained over 16 hours of the day. And actually, also, we saw this translating into the comfort by the patients as well as also in terms of lubricity. Just to give an idea what's lubricity, every time you blink, it's literally the interaction between the inner side of the lids and the contact lenses. We were able to show with this HA lens that it has the least lubricity among all contact lenses. So this will also translate that you're not feeling with the contact lens as you wearing it over the long day.

And I know it's still a couple of years away. Could you just remind us the remaining milestones between here and approval?

Yes. So I think we are on track on the exact milestone as we calculated from the very early beginning. We concluded one external study early this year. We are going to conduct a second external study, which is based on what we learned from the first one to optimize.

And then next year, we are going to go for the registration studies. I think one of the most important things that we want to translate all the findings and the great things that we are finding in the [indiscernible] studies into claims that we can do also for the lens as we are moving forward. Once we have the registration studies done, then we can submit and then we can get approval as planned on 2028.

Okay. I think one thing I would just mention, I think it's -- as you think about this kind of innovation, -- in 1999, silicone hydrogel, the innovation behind silicone hydrogel was oxygen permeability, right? ECPs or ODs, they wanted -- they were worried about the health of the eye, and they wanted to see more oxygen on the eye with the contact lens. And that's why we innovated around silicone hydrogel.

And so it was really -- and it's now more than half the market, right? It's the preferred or material. But we were solving for a health issue with that, and it became the standard. Here, what we're trying to solve for end-of-day comfort is both a professional issue and the consumer's issue. And so the issue we're solving for, in my humble opinion, is much more important than the issue that was solved for by silicone hydrogel.

Well, it seems this is also not just an innovation opportunity for you. Is it market expanding?

Well, that's my hope, a technology that will expand the market, bring people who perhaps were fitted and dropped out that 25% that drops out in year 1 every year and/or we can talk about pricing, but price it to make it accessible to really take market share.

Okay. And what is your latest thinking on the health of the contact lens market now that Cooper has reported and they expressed similar sort of broad trends to you around markets outside the U.S. But where do you think we are in kind of that historical 4% to 6% range that most participants have discussed?

Yes. So I think structurally, the market is fine. As you said, the market, if you look at it historically grows 4% to 6%. So the average is 5%. Last year, the market grew at 4%. So it's at the lower end. I predicted this year that at the beginning of the year, I said, I think at the JPMorgan conference in San Francisco, I expected the market to grow at about 4.5%. I think it's going to be somewhere in that zone. So it's going to be slightly better than last year, and we're going to grow faster than that.

And there's always going to be parts of the world that have macroeconomic pressure, consumer pressure that are going to be puts and takes, right? And so you're seeing that in Asia. But it's not unique to the contact lens market. It's happening through the entire consumer market in those countries. And so I think the long-term outlook is stable at 4% to 6%.

Okay. And maybe touch on surgical. Obviously, business has seen some variability over the past year with the inventory recall. Maybe just update us on where we are. I mean I think when you made a pretty sharp bounce back last year. And just maybe help us frame kind of the surgical business growth rate here going forward.

Yes. So I think surgical is a big opportunity for Bausch + Lomb. We've also had to do the most work in surgical over the last 3 years, right? When 3 years ago, we were -- we didn't really have a lot of innovation. We really did not participate at all in the premium category. We had toric lenses, but we didn't really participate in the premium segment.

And now we have a very robust portfolio of IOLs, including premium. Our premium growth is strong. First quarter was 27% premium IOL growth, so much faster than the market. And what we're hearing is our trifocal, in particular, enVista Envy, which was launched in the U.S. first is now launching globally or in Europe, is really good outcomes, good predictable refractive outcomes and great patient satisfaction. So I think we have a very strong performing lens.

But more importantly, we're building a full portfolio including equipment, packs, consumables. We'll have our Elios, our MIGS procedure launch later this year. And so we're becoming a really full-service provider to the ophthalmic surgeon.

And maybe we could dive into Elios a little bit. It's another one that you've had some news flow on and hosted an investor session. But we get a lot of questions on Elios. Is this intended to be Elios versus iStent? Or is this about market expansion? Maybe just frame your view on the positioning of Elios and how we should think about both the evolution of that product for you, but also how it fits into the market?

Yes. I mean I'll let Yehia answer a lot of it. But look, I think for us, it's about providing -- expanding the market and providing cataract surgeons with a best-in-class tool to manage IOP in patients that have cataract surgery. And it's a very elegant procedure, very effective. We have very good long-term data and reimbursement will be strong. So I think it's set up for a really nice growth product for us. It's not much in the P&L this year, but I think in next year in '28, it will be a meaningful growth driver for Bausch + Lomb. You want to talk about it clinically?

Yes, sure. So when we look first to the unmet medical need, obviously, MIGS is the one area that is expanding rapidly in the glaucoma space. And when we look to this area, in particular, there are 2 categories, either you put an implant or you leave behind a stent and to maintain the intra pressure flow out or there are some other laser technologies.

Usually, with the leaving a stent or MIGS inside, there's usually a lot of complications that could happen from a misplacement or could be some hemorrhage or a lot of surgeons would not prefer that. And then when you are without a MIGS with a laser technology, you always look how patent the holes that you are making from the laser technology will be over time.

And I think this is where Elios fits perfectly because with excimer laser, you can have a very precise clean-cut pin holes inside the trabecular meshwork. And this actually followed up patients up to 8 years now. And we have seen that the intraocular pressure lowering have been maintained and without the use of additional co-medications.

In addition, there's a lot of surgeons are very relieved that they are not leaving behind any stent inside the eye that could cause any complications on the long term or even misplacement during the insertion.

More importantly, I think the data have shown us from the pivotal studies over the 2 years period that the efficacy of intraocular pressure lowering, first is decreasing by 23% to 24% from baseline. Second, that the proportion of patients are not getting back any co-medications is about 62% or 63%, which is a big amount of patients. And third is on the safety side, we did not see a lot of the complications that could be happening with an implant.

In terms of the surgeon population, I think we are targeting the cataract surgeons. And we looked at the data, we found out that 50% of the cataract surgeons, although they can perform combined surgery, they don't perform it. And this comes back to the learning curve for some of the procedures. It takes a lot of time.

And with the Elios, we solved a lot of this problem. In fact, we trained over 170, 180 surgeons currently. The learning curve is very fast. Many of them can perfect the procedure after 2 times. And then the second is literally that many of them actually have found out that it doesn't add a lot to the surgery time, which is a very important factor for the cataract surgeon. So it's approximately 13, 14 seconds more to do create. This has added to us that this is a population that we would like really to target and start with. And this is our focus for the primary indication, which is with cataract surgery.

And as you think about -- you've talked about selling and commercial excellence is on the one hand, you might look at this and say from the outside, well, they have the surgical business, they can cross-sell here, but they also -- in another way, if you want to have deep product specialists, how are you thinking about the go-to-market strategy with Elios and how it fits with the overall franchise?

So in the first quarter, we kind of reorganized how we work in surgical with more of a practice or account management focus. And then you bring in the specialists when needed. So there'll be Elios specialists that will work with their account owners or practice rep and they'll work together. But for Elios, to be fair, it's -- I'm oversimplifying, but it's almost see one, do one. And the way this procedure lines up is very natural for a cataract surgeon to do. So it's not going to be a high hurdle, but we will have specialists for sure.

And do you go through a limited market release, a full market release process? Or are you going to use AAO as the sort of coming out party for Elios? How should we think about when we start to see commercial traction?

So it depends on the FDA, right? The file is in. We'll see when we get it approved. We'd love to use AAO, if that's possible. But we've also -- as Yehia said, we've already trained some of the top surgeons. We can't take orders yet until we have an approval, but we have a lot of inbound interest in Elios. So our team is gearing up, and we'll be ready to go as soon as we get that approval.

Excellent. Maybe just closing out on pharmaceuticals. I mean the dry eye market looks like it's getting kind of crowded. I think you've talked about Miebo's market share being sufficient to kind of achieve your objectives with that product. But how are you seeing that market unfold? And how do you think about just sustainability of that franchise as competition intensifies?

Yes. So I don't think of -- I think about it perhaps differently. I don't think the market is crowded. I think that the market is still very underpenetrated. There's still a tremendous amount of Americans who don't treat with prescription that should. We're nowhere near saturated. We're not even scratching the surface.

And I think with Miebo and Xiidra, we have the 2 best-in-class therapies that are differentiated that offer ECPs the best options to treat a patient with dry eye. And so we want the market to expand. In terms of new entrants, and it sounds weird for me to say this, but I welcome them because they expand the market. And when you have the best 2 medicines, market expansion is -- we get more than our fair share. And so Miebo is a best-in-class product and is becoming the standard of care for dry eye, and we'll keep working on that.

And then, of course, we have the combination therapy in development. We'll get data on it in the second half of the year. And so that will be the next really innovation into the market where you have a multifactorial disease, you tend to see combination therapy as standard of care.

And maybe toggle over just the broader strategy for a second. I mean if you think about your portfolio, you serve really all corners of ophthalmic health. You've also talked about M&A as an area of interest. Where are some of the categories? Or how do you think about just your broader M&A strategy and what you'd...

Yes. So first, let's just say, from a capital allocation perspective, our #1 priority is delevering and we put out a target of 3.5x leverage by end of '28. And we will meet that because that's priority #1. Look, we've been making investments in our surgical business to really vertically integrate and be able to offer a comprehensive portfolio to our customers.

And then a lot of the rest of the investment is in, frankly, intellectual property and opportunities for Yehia's team to develop new consumer products, new contact lenses we do on our own, but new -- we still have our EDOF lens coming. We have our [indiscernible], our next-generation phaco machine coming. And then, of course, pharma, we have a very rich pipeline. And in fact, hopefully, around the turn of the year or early next year, we'll be talking to you about our early retina programs in particularly geographic atrophy, which are really early, but really exciting.

And as you think about the pipeline that sits in front of you and it sort of is under that sort of, I think, umbrella of capital allocation, is that sort of -- I appreciate there's always a balance between growth and profitability, and you want to achieve the 600 basis points of margin expansion that you've set out. But how did you think about the balance between sitting on this sort of -- I think probably one of the strongest pipelines in the company's history with making sure you fully extract the value from that pipeline? Maybe it's not operating margin expansion, but how do you think about the interplay between that?

So the reality is, is Vision '27 is 650 basis points of margin improvement with 50 basis points reinvested back into R&D. The second thing that Yehia's team has done extraordinarily well is really deploy AI to shift our R&D expenditures to clinical programs. So when we arrived, we were spending, what, 70%, 80% on maintenance of business and 20%, 30% on new product development. He's turned that upside down.

We now spend 70%, 80% of our R&D budget on programs or new product development and 20%, 30% on programs because we use AI to do maintenance of business, regulatory filings, pharmacovigilance. I mean your team is deep in at labeling. And so that's where we're getting the efficiency, but we don't expect the margin improvement to come from R&D. We expect them to develop more products.

Okay. So -- I know you laid out some specific targets around kind of the shape of the P&L, but it would seem like with these new product launches, you get a good amount of gross margin leverage that funds that necessary reinvestment?

Yes. Well, first, let's be clear on the targets for 2028, the pipeline is completely incremental because the only pipeline product that's in the numbers is Elios because we hope to have it approved this year. Everything else comes in '28 and '29 and '30. And so it's all incremental growth and product.

But take a product like Project Halo because it was intentionally designed to be made on existing capital equipment -- there is no -- unlike every other big leap forward in contact lenses where you have this huge capital investment that has to be made to build capacity. We don't have to do that.

And on day 1, that lens, regardless of where we price it, will be margin accretive to the contact lens portfolio. And so it was a very -- it sounds very easy to say, but what his team accomplished was extraordinary to come through with a breakthrough material innovation that could launch at a high margin and not require capital expenditures.

It's good because this way, when you get to the 2030 LRP, you won't have all of us complaining about why can't we continue to grow 5% to 7% of things beyond that.

Yes. I mean, look, I -- we won't bat 1,000 in R&D. No one ever has. I don't -- I hope we do, but no one ever has. But we don't need to. Any one of these programs is game-changing to our top line and to our margin. And so I hope they're all successful. But even if a few don't develop as clear as 1, 2, 3 and is approved because that's never happened in my career. I think we have enough shots on goal that we're going to be successful.

And as you think about that shift in the R&D investment away from being able to be more efficient with sustaining engineering -- dollars into the new product development side, if you were to -- maybe even a little further in terms of some you hear these characterizations, incremental, substantial transformational and some consulting came up with. But how do you think about the mix of that R&D, that extra development investment?

Well, I think just from an overall picture on the investment side, I think one of the areas that we were focusing on was if we would love to have everything is a breakthrough first-in-class, nothing like. But the fact is some of it will be like that when we -- this is our focus, like, for example, the material that you mentioned, I think this will be very innovative and at the forefront of innovation. Some others will be best-in-class. And this is also one of the targets for us.

For us, important 2 things, clinical differentiation and huge unmet medical need. And these are the 2 moving needles for us or the compass for us to develop the new product. For example, we developed another program in Vision Care myopia. We're not the first one to try to hold myopia progression, which is going to be even a much bigger problem than it is currently.

By 2050, expected 50% of the population will suffer from myopia. But we are targeting here to be best-in-class. If we look to the pharma pipeline, we are trying to get also to be at the forefront of innovations. First, ocular surface pain. Pain is the most common complaint at the ophthalmic and OD clinics.

Nevertheless, there is no targeted product towards pain, always towards surroundings of the pain complaint. Second, also, if we look to glaucoma, if successful, it will be the first ever product to lower intraocular pressure and show functional improvement for glaucoma patients who lose their vision despite the use of intraocular pressure lowering.

And then obviously, some other areas like the combo therapy. It's not the first -- there are a lot of other combinations, but it's the first combination in dry eye. And for us, it's going to be the best therapy for the patients because normally, dry eye -- or it's usually a combination of different factors inside the eye. That's -- this is the concept of developing is trying to really look at differentiation and unmet medical need.

And I mean, if you listen to -- you kind of wrap this all up, there's an incredible amount of momentum that you have, both in the core business, but also what looks to be on a much longer-term basis, the potential to reshape some of the markets that you serve and take significant share.

I hate to ask a stock question. At the same time, you've got this sort of bogeyman of the retained Bausch ownership. And I know it's something -- it's not really within your direct control. But how do you kind of contextualize that for investors? And any sort of your viewpoint, how we think about this sort of accelerating momentum, but then this sort of lingering overhang?

Look, I think I hear that question in every investor meeting I'm in. So I understand it's top of mind of investors. But you're right, it's something I don't control.

What I do control is operational performance and strategy. And so my focus is the best way to support BHC is to have the best execution and grow the fastest, improve our margins and drive the pipeline. And so every day, I wake up and go to bed thinking about those things and not really worrying about the ownership.

Excellent. And that's a great place to wrap up. I very much appreciate your participation and look forward to getting the next update in July.

Great. Thanks for having us.

Thank you very much. Thank you.

Good afternoon, everybody, and thank you for joining us for this installation or installment of our Heads, Shoulders, knees and Toes series. This call is somewhat different, and I like that. This is part of the Bausch + Lomb research and development, teach-in series, particularly targeting 2 areas of contact lenses. One is the project Halo. The other one is myopia control, both of which were unveiled at their analyst meeting last fall.

I think this really provides an opportunity to dig in a little bit more on those products from an R&D perspective and take a look at their development and ultimately, the commercial impact. There is a large group of people on this call. Not only do we have CEO and CFO, Brent and Sam, we have a Head of Research and Development, Dr. Hashad; we have Vice President of Vision Care and R&D, Bryan Reed. We have Executive Director of Vision Care Clinical Development, Bill Reindel, James DiBella and last but certainly not least, physician, Mark Schaeffer, who is an optometrist in ocular diseases and contact lenses.

If I [indiscernible] anybody's, from Joanne Wuensch, I say, I'm sorry, at this stage. But I'm going to kick it off to you. There is a PowerPoint presentation we can go through. I have some questions. Should you have some questions, please e-mail them into me. You know how to find me at [email protected], and we're just going to start to rock and roll.

I pass it to you.

Joanne, thank you very much. I really -- we really appreciate the opportunity. And first of all, I would like to apologize for my voice. I just catch cold. But luckily enough, I am the least presenting today. My colleagues will do most of the presentation. But I'm very happy just to -- also to be here to present our -- some of our biggest innovations in the Contact Lens and the Vision Care area.

Just holistically, if we look to the pipeline strategy that we have started and we're actually executing on it in a very good way. It all started by investing in the 4 business areas: pharma, surgical, vision care and consumer. It's also focusing on leveraging our internal capabilities, whether it's a manufacturing plans or some research capabilities. And then, obviously, investing in areas of a very high unmet medical needs, whether there is no available treatments available or to be disruptive in the technology to reshape the therapeutic areas and reshape the treatment paradigm in these areas.

I'm very glad today that we are focusing on the Vision Care part, primarily the contact lenses. And again, as we are currently in the state of completing the geographic expansion of the SiHy and the silicon lense, which is an excellent platform which also includes that we are now having all the modalities, the multifocal, the torics, and we are expanding in all the geographic areas that we are able to launch. We looked at other areas also for the SiHy platforms. And actually, we came up that we need to have the full portfolio. So that's why we are investing in the premium FRP SiHy, which actually will be also providing unsurpassed lens comforts as it happened with the daily use.

We also looked at some of the geographies that it was very difficult to start to launch the SiHy and found out that if we are able to do lens a cutting-edge new formulation that could have a better cost management there, we could actually be able to progress in a lot of geographies that really looking forward to have the SiHy technology available at certain countries and certain locations. But today, we are focusing on 2 of the most innovative technologies that we have in the contact lenses. One is the Project Halo. It's the first of its kind bioactive contact lens, and we will explain more what do we mean by bioactive contact lens.

And actually, the second is obviously on the myopia. As everybody knows, myopia is becoming a big health care problem, especially not only in the Asian countries, which is most prevalence, but also, we started to see it in Europe and the U.S. primarily due to the use of devices and also because children most of the time are staying indoors, looking at screens and so forth. So the prevalence started to be very high and becoming really a big problem. And that's why we're looking -- while there are some available treatments there, but we're looking to be the best in class in this category. And we're going to speak more about our technology and why do we believe that this could be disruptive in being the best in class. With that, actually, I think in total, these pipeline products if they come to the market, we should be expecting more than 1.2 billion total from these 4 assets that could be actually an additional for the revenue and continuous growth of the revenue for Bausch + Lomb.

With that, I'm going to hand over to my colleague, Bryan, who's going to walk us through, first, the HA project or the Halo project.

Thanks, Yehia. First, let me frame the opportunity. There are over 140 million contact lens wearers worldwide, yet 25% of those patients drop out of contact lenses in the first year. This is unacceptable and shows a gap between what patients expect and what current lenses are delivering. The key challenges the industry needs to solve are discomfort and dryness at an affordable price. The graph on the left shows a 2025 symptom tracker and the results show that in the morning, only about 20% of patients report symptoms of dryness, but this steadily increases throughout the day to almost 70% in the evening. So people come into contact lenses for appearance and lifestyle but they determines whether they stay in lenses is that end-of-day comfort. So we are aiming to address that issue with an accessible new lens innovation that will both, number one, help keep both 25% of patients into lenses; and number two, bring excitement to the category to help attract new wearers. So we want to grow the pie, and we want to take a bigger slice of the pie.

Next slide, please. So Bausch + Lomb has been the innovator in contact lens materials. About every 28 years, we've introduced a disruptive innovation. It has been a true inflection point at how lenses are made and worn. So this started in 1971 with soft lens, the first mass-produced soft contact lens. And then again, in 1999 with the introduction of PureVision, the first silicone hydrogel lens for extended wear. And now 20 years later, we're doing it again a third time with Project Halo. So we're introducing the first bioactive category of contact lenses. Project HALO is the code name and the lenses made out of a double dose of hyaluronic acid, or HA, both the structure of the lens and in the packaging solution. So it's a fundamentally different approach to how we've made lenses to help solve that end-of-day comfort challenge.

So now I'll turn it over to Jim who will walk through the science behind this breakthrough material, it's unique materials or properties and what differentiates it from other contact lens materials.

Great. Thanks, Bryan. I'm really excited about the opportunity to talk about Project Halo today, not only because of the innovative science the team is delivering on, but because of what this project represents, and it all started with a simple question. What's next after silicone hydrogels? As Bryan just said, the previous couple of decades of research have focused on putting silicone into lenses in order to improve oxygen permeability. But with this one, we wanted to look beyond that and try to reimagine what else a lens could be. So we explored ocular biology and adjacent biomaterials, and pretty quickly, we landed on hyaluronic acid or HA, as the natural starting point to build our next lens, especially given Bausch + Lomb's heritage and success with the Biotrue solution franchise.

The key breakthrough was once we figured out how to actually polymerize HA so that it becomes part of the backbone of the lens itself. What this does is create a fundamentally different structure compared to the lenses on the market today. And that's highlighted by the images on the right, where you can see a Halo, this is a cross section of a lens and a zoomed-in picture of the polymer network. And you can see Halo has a very unique structure compared to the conventional hydrogel and silicone hydrogel materials. What this structure does is allow for the differentiated material properties, we're going to talk through next.

So as we go to the next slide. The big material property that was introduced at Investor Day is the bioactivity. So the HA that we're putting into this lens is retained with the lens until it's exposed to hyaluronidase, which is a naturally occurring enzyme in the tear. When that happens, the enzyme goes to work and starts releasing the HA from the lens for continuous hydration throughout the wearing cycle. In the graph, you can see the green line represents the enzymatic release of HA from the lens, and it's compared against the blue line, which is the amount of HA that you would expect to find in a natural tear. So you can see the continuous hydration and what we've tested out to so far is 19 hours, and we've seen HA release out through the 19 hours. So we really need to expand our testing.

The second material property is breathability. As we've already highlighted, historically in order to improve oxygen permeability, you needed to include silicon. However, as you look at this graph on the right, the bioactive lens, Halo, it compares favorably with the silicone hydrogels in the market on the right side of that graph. And the key here is Halo has no silicone. So these 2 data points really were the linchpins for the program that told us we were developing something completely new.

As we go to the next slide, the next 2 material properties we want to talk about are what the patient will actually experience and that's soft and smooth. The softness refers to the surface modulus. As highlighted by the green bar in the left graph, you can see product Halo has a significantly softer surface than the conventional and leading silicone hydrogels that we've tested. What this does is it cushions the interaction between the eye lid, lens and eye. The smoothness on the other hand, refers to the coefficient of friction. And the easiest way to think about this one is you're going to blink about 13,000 times during a wearing cycle. So minimizing the interaction or friction between the lens and the eye lid is key for patient comfort. Together, these 2 soft and smooth represent more than just marketing claims, they're engineered features that we put into this lens designed around the patient wearing experience.

And then if we go to the next slide, we didn't stop there. As Bryan said, we're also innovating in the packaging solution by introducing HA there as well. That way, as soon as the lens goes on eye, the HA can go to work, protecting the ocular surface, creating a double dose approach. When testing under drying conditions, we've shown that solutions with HA provide a protective effect for corneal and conjunctival cells. Highlighted by the graph on the left, you can see the metabolic activity is being measured for the health of the cells. The black bar represents a solution that has no HA, while the blue bar is a solution with HA and the higher the metabolic activity, the healthier the cells. When testing against oxidative stress, we see similar protective effects. These experiments are meant to represent real-world conditions such as low humidity environments and screen exposure. All of this is really trying to highlight how we're redesigning this lens from the inside out with the user experience in mind.

And with that, I'm going to turn it over to Bill, who is going to tell you about how these material properties are translating to clinical performance.

Thank, Jim. So this slide covers the first external study in the clinical development process. As part of our developing of new lenses, we conduct various internal and external clinical studies. We have a research clinic here in Rochester, New York, where we conduct very small studies, but they're important in understanding the transfer of some of the laboratory studies that Jim talked about to see if they translate into clinical outcomes. Once we get feedback on those smaller scale studies, we iterate based on what we learn. And we go through a cycle of various clinical studies, which eventually lead us to a registration study.

So our lab measured advantages are beginning to translate to on eye performance. As I mentioned, this is our first multifocal -- I'm sorry, our first multi-site external performance study in a feasibility stage. Now in this phase, we test, we learn, we iterate on both the material and the lens design. And then we work with our material researchers and our lens design individuals to improve on what we find in our first studies. So in this feasibility stage of the clinical development, the multisite external study showed strong early performance ratings. In this particular study, we had 8 external investigational sites. It was a randomized, bilateral mass design and patients wore their lenses for 8 to 16 hours per day, over about a week.

Now in this study, the investigators rated patient performance on each individual patient after a week of wear. And here, you can see that the results were very promising. With respect to the important [ wettability ] and smoothness of the surface that Jim talked about because the patient is blinking over that lens over the course of the entire day, the eye care practitioners rated smoothness and wettable surface acceptable for 98.5% of the patients. Now smoothness and wettability is also important in delivering clear vision. In terms of clear vision, the eye care practitioners rated the acceptability, 98.5% on each individual patient. And then overall satisfaction also was very acceptable for the individual patients, the acceptability was rated 86.9%. So the results of these studies build confidence and they really help us derisk the next stage in development. The results show that what we see in the lab is translating to on eye performance. And for the first external study on a large scale with 8 practitioners, these are very encouraging results.

If we go to the next slide, I wanted to talk a little bit about a study that we conducted within Rochester clinic. Here we wanted to understand the sustained hydration of the lens on eye over a 12-hour period. Now this becomes very important. We know, as Jim explained, the characteristics of hyaluronic acid and its ability to hold water. What this study showed us was that this very high moisture retention continues over the course of that 12-hour wearing period. After 12 hours of wear, the Halo lens retained 99% of its moisture. Now this compared to 94% for conventional silicone hydrogel lens. Why is this important? Well, it's important because if a lens surface or lens material begins to dehydrate, it not only can change the comfort profile of the lens, but it also can change the vision profile of the lens because as the lens dehydrates, the vision characteristics, the surface properties can change and result in kind of blurry, fluctuating vision.

So 99% retention of moisture is very impressive. In fact, it's the highest we've seen in over 10 years of testing material characteristics in our research clinic. So this really kind of supports that comfort story that Bryan talked about is tied to retention of moisture. And we intend that it will likely result in a better wearing experience as we look to grow the market, but we also look to reduce the potential for dropout. So it really ties directly to some of the biggest drivers of dropout in contact lens wear and it really supports our value proposition as well as we bring both practitioners and patients together to have a better wearing experience.

So now I turn it back to Bryan, who will discuss kind of transitioning innovation into the manufacturing.

Thanks, Bill. The challenge given by Brent was not just to invent a unique material, but to do so on our existing low-cost manufacturing platform. This approach minimizes the capital investment and also drives higher gross margins from day 1. In order to accomplish this, we need a high-performing team, and so we're using our teams in both Rochester, New York and Waterford, Ireland to support this. We're using tools as well like SVEM predictive modeling, so SVEM stands for self-validating ensemble modeling, and it essentially layers machine learning with traditional DOE or design of experiments. As you can see in the graph on the right, this allows us to balance multiple competing factors and optimize them, such as design, process and material. The overall benefits are a faster development cycle and a more robust manufacturing process and supply chain. And utilizing existing lines enables faster volume scaling for a more efficient global rollout across markets and modalities. And since we're not waiting for new lines to be built, it's ultimately a more capital-efficient path to market.

Next slide, please. Right. So here's our key takeaways for the bioactive lens. Number one, the science is tracking. The material delivers an unique combination of bioactivity, breathability, softness and low friction that directly targets end-of-day discover and dryness, the #1 cause of patient dropout. And it's also the first lens in this new bioactive category of lenses. Number two, taking a capital-efficient manufacturing approach by leveraging our existing low-cost manufacturing platform, it minimizes that upfront capital investment and drives high gross margins from day one. And lastly, our time line is intact. We have positive early clinical results that Bill highlighted before, and we're continuing to optimize the design and material. We have our second external clinical study, multisite clinical on track for the second half of this year with launch in 2028. All right.

Next slide. Okay. So now we're going to shift gears a little bit and talk about myopia control and the opportunity here. As Yehia mentioned earlier myopia prevalence is significantly increasing globally and is expected to impact over 50% of the population by 2050. Specifically, among children and adolescents, it's been rising from 24% in 1990 to 36% in 2023 and is projected to impact over 740 million kids by 2050. So what's causing this increase? Again, lifestyle shifts are the drivers. Yehia mentioned some of these earlier. So number one is kind of that near work. So increased screen time and close distance reading from tablets and phones.

Number two is less outdoor time, exposure to sunlight and kind of distance viewing. And number three, urbanization, more kids in urban environments, there's a lot less natural light and more time on screens. So we are developing a differentiated myopic control contact lens to support early and effective intervention to address this growing pediatric need.

So now Bill is going to walk through the science and why that early intervention is so important.

Thanks again, Bryan. So let's talk a little bit about the science of myopia progression and really why does intervention matter? It also hinges on axial elongation. You can see kind of on the central illustration here. Myopia with the increase in axial length, the light rays come and focus in front of the retina. And as a result, we can address that by prescribing as eye care practitioners, spectacles or contact lenses. Well, what happens in conventional lenses, what we've learned through studying the science is that the correction will focus right on the back of the retina, very sharp focus we see in that upper right-hand illustration, but the peripheral rays focus light behind the retina.

And the science indicates that, that is a signal for myopia to continued progression. Another ramifications of that are that it increases lifetime risk of serious eye diseases. Because unchecked, the progression can increase macular -- maculopathy, can have the potential for retinal detachment and glaucoma. So that's why it's so important for us to hold myopia progression in check. Now peripheral myopia to focus is really the scientific foundation for optical myopia control, or the peripheral myopia to focus signals the eye to slow axial growth.

So in this bottom right-hand illustration, we are engineering this the focus to now be in front of the retina by adding a high amount of plus power in the periphery and then this illustration, you can see that the central rays continues to be focused on the back part of the retina. And now with the higher amount of plus power, we pulled those peripheral rays in front of the retina. And this is the engineering that results in the foundational optical principles of slowing the progression of myopia. It's founded on science. The mechanism is established. And our goal is to come up with a differentiated way of how we engineer a unique option for eye care practitioners and patients.

If we go to the next slide, please. Now there are a variety of options available to practitioners and patients, we're going to focus on the optical interventions. Now in the world of optical interventions, the first soft myopic contact lens to control myopia was introduced in 2019. Since that time, there's been a convergence of science that really focuses on 3 basic principles. First of all, the higher peripheral plus power is important. Second, the larger pupil area coverage for the contact lens is important. And third, zone customization is very important. We'll talk about these a little bit. Now our design map directly to those principles.

First of all, we're looking to have a stronger myopic, de-focused signal, more so than we see in traditional soft myopic control contact lenses. We're looking for a larger treatment zone across the pupil. And we're also offering multiple zone diameters for the clinician to adjust the treatment mechanism. So it's all science-led. It's not repurposed, multifocal contact lens approach. And it's evolving across the optical world based on science, again, not a me-too multifocal repurpose.

If we go to the next slide, please. Now our investigational device is offered in 2 optical configurations. And you'll see illustrated here, we call one Z1 and the other Z2. And what we're doing is balancing the vision for the myopia progression. You'll see in the center of the lens is the distance portion, the refractive portion of the lens. And in the Z1 lens on the left, you can see it's a little bit larger on the Z2 on the right-hand side. The circular surround is where the high plus power is located. If one moves to the illustration on the right, what's critically important is that whether the lens -- the Z1 lens is -- or the Z2 lense is fit is that the high plus power is consistent across the 2 configurations.

And here, you can see a Z1 line in blue and a Z2 line in green. And what this references is where the light energy is concentrated for focusing light on the retina. So you can see a cross section of the eye where you see the yellow rays continuing to focus on the retina, the fovea. And that's the principal image of focus, plus or minus 10 degrees from that focal point. Now what drives the stop signal is the high amount of plus, which you can see in the 20 to 30-degree range on both sides which on this illustration, you can see that those rays then are focusing light in front of the retina. So our optical modeling shows that both configurations preserve the intended myopic focus mechanism.

It supports an efficient regulatory manufacturing pathway because it represents one material with 2 different designs that in particular, makes it easier path from a regulatory perspective. And it also is an easier path from a manufacturing pathway as all. So it enables the clinicians then to direct the dose adjustment without having lots of complexity in fitting the contact lens.

We can now move to the next slide where Bryan will kind of summarize our efforts in the myopia control initiative.

Thanks, Bill. So let's take a look at the final lens. So we are pairing our premium infused ultra 1 day daily disposable SiHy material which has proven to be very successful in wearing experience with our cutting-edge optical design. The optical design, which is the most important element of a myopia control contact lens is differentiated from the competitors in 3 key areas.

Number one is a high peripheral plus power. We have a unique power profile that provides an effective stop signal from myopia progression. Number two, we have multiple zone diameter configurations, which allows for customization, as Bill just explained. And number three, we have dose adjustment across the SKU range, but we are adjusting the amount of myopia treatment based on the refractive prescription. So for example, a minus 6 gets more treatment than a minus 1 patient. Overall, it's designed for kids to balance controlling their myopia progression with their daily vision needs and deliver a healthy lens with exceptional comfort.

Next slide, please. So in summary, we're targeting a best-in-class myopia lens by combining that novel design with our premium material. That material supports both comfort and compliance since it's important for kids to wear the lenses all day for high myopia efficacy, the daily disposable format supports a convenient wearing experience for kids and parents; number two, the differentiated design allows for a customized approach and it's made for kids; and as Bill explained, it's backed by the latest science to support high myopia efficacy again. And lastly, the product is going to be supported by clinical data. So we have a U.S. registration clinical study that will kick off in the next couple of months with additional studies planned in China and Japan to support the globe.

Next slide. I think I'll kick it back to Yehia to wrap up.

Thank you. Thank you, Bryan and the team. I really want to conclude here by saying that we have a very robust pipeline for the contact lenses and the Vision Care. As you can see, beyond the SiHy platform, which has been very successful and we are expanding in terms of geographies and the modalities, we are actually going to sustain this growth, and we're going to actually look at the bioactive contact lenses and the myopia contact lenses to be launching in the range of 2028 and 2029 consecutively. This will sustain the growth of the organization. And we do believe that they are addressing a huge unmet medical need and as well as will -- weather the myopia control also will be the best-in-class in its category.

I'll end up here, Joanne, because I know there's a lot of questions. And again, let's open up for the questions. And I know that the team is here as well. So I'm going to direct the questions if we need to each person.

Perfect. And if anyone wants to ask a question, you can e-mail it into me at [email protected]. I'm already seeing questions coming in on Open Exchange. We can take them in any direction. So we're just going to jump in here.

I want to talk a little bit first about Project Halo. And when I think about the progression of contact lenses over time, I think you're right. As an industry, it's been sort of stuck in this. I've got a silicone hydrogel lens and then you're like, and then what? And so what does it really take to bring Halo to market? What does the clinical trial look like that you're going to need? And how do you think about the regulatory pathway?

So let me start first and then I also may refer to Bryan, if he wants to add anything else. So I think, first of all, we wanted to confirm that we actually been successful with the materials. And I think the team have done a fantastic job as explained by having actually different formulations, and we ended up with one formulation that we were able to test and this has been very successful.

They also have conducted multiple internal studies to see if the -- start to see if the lens can hold for a short period of time, the field of getting out of the eye, inserting in the eye, but we were very confident after we saw the results of the first EXPECT study or external study, the one that we present the data from it. So the path moving from here is, obviously, we need to have all the learnings from the first EXPECT study and applied in a second EXPECT study that will be starting the second half of the year. And then we should be able, if all goes well with the second study, we start the registration study in 2027. And based on the 2027 results, we can do the submission and obviously, also the claim data and get the approval in 2028. These are the important steps in terms of the clinical study for the project Halo.

How many patients -- I just want to make sure I know how many patients you're expecting that you're going to need to have in these studies?

I think for the EXPECT study, we are expecting a very similar number to the one we have so far. But for the registration study, this number should be -- again, Bill, if you want to add what the registration study, how many patients we will include?

Yes, it can vary depending on the desired outcomes and the claims we're looking for. So it can be in the neighborhood of 130, but sometimes we can take it up higher depending on the specific characteristics that we want to feature with this particular new lens design, lens material.

And when they come to market, are you going to come to market with a lens that is and excuse me for using the word just because I start talking about just a sphere? Or will you come to market with a sphere and a toric and a multifocal or those staggered over time?

No, I think the plan is to have all modalities with this platform. Obviously, we need to come first with the monofocal and start with all the work now being done there. But the plan that we will come with all modalities on this platform, including toric, including multifocal and include all the others.

Okay. And is this -- the second half of '28 launch time frame, is that a U.S. launch? Or how do we think about international and geographic reach?

The specific date 2028 is focusing on the U.S. launch. However, obviously, once we get more closer maybe after the second EXPECT study, we will start also to think about the other regions and other countries as well.

Great. And one of the things that's happened in this industry as you have introduced new materials or new modalities, there's a price premium that goes along with it. Should we assume that this comes to market with a price premium and maybe what is similar to other new product introductions?

So I know that the commercial team is working on a lot of pricing research and doing a lot of work there. I don't want to comment on this because, obviously, this is outside the...

I'll say a word on that, Joanne. Look, I think -- because of the way we design this lens to be manufactured on existing lines, this will be a high-margin lens from the get-go. So that gives us a lot of flexibility. Our goal is to expand the market. And so we are running pricing studies in various geographies, but the goal here would be to make this a lens for everybody.

All right. And that goes right into my next question. When you say make a lens for everybody, do you anticipate this cannibalizing the current silicon hydrogel market or your current silicone hydrogel sales?

I don't think that, that would happen immediately. I think it will take a long time. There's still so much unmet need around the world and changing practice patterns and prescribing patterns. And Mark Schaeffer should jump in. We do have a KOL on the line here as well. But I don't see that as really an issue for us in cannibalization. I think this is more about expanding our market share and the market in general for contact lenses.

Mark, do you want to look on it?

Yes. I'll agree. I think there's 3 areas and 3 buckets when we talk about new materials that this should really go for. And one of those is obviously retention of patients. So when you talk about contact lens dropout, we've seen so much advancement in contact lenses since 1999 with silicone hydrogels, but we've also seen a change in how we live our world that these lenses have kept up with the times, but we're doing so at a flatter rate than I think we expected to do so.

So we still have 20% dropping out every single year, whether that's quietly or loudly in our own practices. So we want to retain those patients that are at risk for dropout. Then you also have recruitment for new patients who may be thinking that contact lenses are designed to be uncomfortable because in the last 28 years, we've had one material advancement in the backbone of the lens. And then the third is the reengagement. I think there's a lot of patients who have dropped out of lenses silently for whatever reason, who are looking for a new reason to get back.

The Contact Lens institute, which includes all 4 major manufacturers have done research on this. And 62% of the public either have no opinion or think that all contact lens are exactly the same. So I think that speaks to what we do as practitioners every day in explaining the difference because there are a lot of silicone hydrogel lenses that all perform very differently based off of their characteristics and their features. Having a new material in a new category allows for us to really elevate and talk about a brand-new lens and a brand-new material that might reengage some of those patients who have lost desire for contact lenses because they just think they're not a candidate anymore.

Is this ultimately going to be a daily lens? I just want to make sure I understood that?

Yes.

And would you therefore see people who are still wearing longer range or frequently replace lenses moving down? Is this another impetus to get more people into a daily lens?

I don't think that would be our focus. Our focus would be exactly as Mark -- we're not going to try to trade people out of if they're happy with what they have. It's about making -- bringing innovation into the category, creating energy into the category again, bringing people who Mark, I think, appropriately said, who dropped out, come back to the category or people who are sitting on the fence because they've heard from their friends or family about end-of-day dryness and now that can be solved, come into the category. So it's really about expanding, as I said before, expanding our market share, but also expanding the market.

And I think to that point, patients ultimately think that it's their fault that their contact lenses are getting dry. Like they blamed screens just like everybody else does, but having materials that are designed specifically to help with having hyaluronic acid onto the surface of the eye, whether that's in a solution or in the lens itself, helping to protect and helping to elevate that lens experience, again that changes that equation from, okay, maybe I'll stop wearing my lenses as much in the reusable space too, let me upgrade to a better wearing experience.

So I think that ultimately, yes, we want all of our patients. If you ask every eye care provider in the country, they're going to say, I want all of my patients in daily disposables. We know that's not economically feasible for every single patient. But for those on the fence that can, we want to put them in a lense, it's going to elevate, especially end of day where we have more activities and more screen time and more Zoom calls and more work that we're doing after hours that we need to account for in our day.

To the best of your knowledge, is anyone else working on a bioactive material or on a new material that will graduate from the silicone hydrogel wave?

We are not aware of anybody working on the material piece of it. There could be some other competitors or companies trying to add HA to the contact lens solution, but at least up to our knowledge, nobody is working on having a contact lens with the backbone is an HA.

Bryan, do you want to comment also maybe I'm....

Yes. Just like you said, yes, I think we're the only ones that are really making the structure out of the lens out of HA, and we have IP that's protecting that space. And IP is only part of that story as well because there's certain know-how that's required to incorporate the HA and develop and scale this up. And that's not something that's easy to replicate as well. And lastly, just we're not really kind of building just this one product here, we're really trying to build a material platform, the capability to develop future products in this bioactive category down the road.

Okay. Can we pause or double-click on the contact lens market model, not model, but the contact lens market. And what you're seeing in the market, particularly any trends that you're seeing that you can address on this call. But specifically, are there trends that you've seen over the last period of time that made you want to develop this product outside of patients complaining about end of day dryness.

It really -- it goes to what we were saying earlier that the industry has done a decent job of iterating innovation around the silicone hydrogel platform, but no one has really tried to solve the end-of-day comfort and drop out. That 20%, 25% of dropout has been pretty stable, as Mark suggested. And that's a big leaky bucket for the industry and for the practitioners. And so our goal here was to really try to close the bottom of the bucket.

Okay. And more specifically, I apologize, I am getting this question a fair bit right now. Anything that you can say about the second quarter contact lens trends? I know that wasn't the goal of this call, but I am getting that question. So here we go with that.

This is an R&D-based call, but I think the market is, I've used this word many times to describe it, typical. And that's probably as far as we should go on that here.

Joanne, can I go back to the trends? Because I do want to say something like, in our world, some of the things that I'm seeing is, and it's not just dryness, but it's also a vision, and we kind of talked about it earlier, patients want to see clearly from 4:30 a.m. when they're doing CrossFit and gym and doing all that all the way until their kids activities at 9:00, 10:00. These days, it feels like we're over scheduled, and we're on screens and phones, and we need to be going, and we need to drive late at night, and we're going back and forth.

And a friend -- a colleague of mine drove 1,700 miles in a week because they had softball tournaments in 3 different cities. And that's just what we do now. And I think that we need materials that will keep up with the hydration of the lens that maintains that vision throughout. So we're asking our lenses to do more. And again, as Brent said, we've done a good job of keeping up so that it doesn't leak too hard. But if we had PureVision original as our only option as our most advanced option, I think our dropout numbers would probably be in the 50% to 60% range as much as I would love to think how great of a material was, it's also 28 years old. So I think vision is also such a key component, but it's underrated in the fact that the lens material makes the vision work.

And I think that that's the second reason patients drop out of lenses is that the vision isn't there. And it's usually at the end of the day or towards the end of the evening or afternoon. And that's another reason why hydration matters. That 5% is the difference between 20/20 vision and 20/30 vision. That's as little as it takes for that refraction to change and 1 or 2 steps in the wrong direction. And now I can't see clearly, and I have to make some sort of consideration or swap in order for me to get through my day. And then it just makes me not want to wear my contact lenses more. So than I default to glasses and now I'm frustrated.

I hear you. I think I could go on and on talking about this product, but I do want to make sure we get some questions in on presbyopia management -- sorry, myopia management. My age is presbyopia management. But myopia management for kids. And this market, I don't think anyone that I've spoken to or any physician has ever questioned the size the opportunity. But the problem has been multifactorial in terms of the product at the right price point with the education of the parent and identifying the right kid. What makes this product check those boxes?

so first, just maybe Mark can just give an idea that what are some of the problems with children, in particular...

This is not a parenting podcast for you, kids.

Problems with Children, I don't know, I could go on, but let's focus on...

It's such like -- my wife is a child life specialist. So if you don't know what that is, like thank goodness, you don't spend a lot of time in health care. But she taught me a lot about how to balance talking to parents, talking to kids and helping to understand where they're at, both from a parent's perspective and a child's perspective. And I think it's hard when you're talking about correcting vision because parents typically -- the other thing that we're seeing is there's a lot more parental myopia, which leads genetically to child myopia. So we're seeing more parents with near-sightedness that end up passing it on to their kids that just happens with life.

But we really have to get in a mindset of -- these are our most sensitive times as a parent, if you're sitting there and having that conversation about your kids -- your child's vision is changing dramatically, and we have to do something. And then you have a child who's on the most sensitive time in their lives and any parent will tell you something like a pair of clothes can be comfortable on Monday, but on Tuesday, it's absolutely the worst thing they've ever put on. So you have to account for all of these things, whether it's vision and it needs to be clear, whether it's comfortable, whether it's easy to handle all of these things matter.

It's like whack-a-mole with my kids, it's like 1 day, it's this; the next day, it's this. You have to check all of the boxes because you have to be able to correct those objections. And so with this lens, it's designed for kids, but it also has leading technology when it comes to comfort and handling and different vision profile so we can match the patient to the vision, so they can get the best outcome. So the parent is motivated, the child is motivated and the doctor is motivated. You have to get all 3 aligned because if one of those is not, that's when the cracks happen. That's when we don't take care of our patients as well as we know that we can.

So there are other myopia -- I'm sorry, go ahead.

I was just going to say, and I think such a feedback was very important for us when we were looking for the technology because if we look for our -- it's going to be differentiated, both on the material and the optical design part. The material we're using, obviously, the SiHy that we have a great experience and it's very comfortable, and we have been used also with children.

The second, on the optical design, it's really about having the ability to titrate according to the progression of the myopia. So as actually we can control the myopia in a much bigger way. And then the second is also the clarity of vision, central vision and the higher power on the periphery that prevents the progression on the axial lens. So this is really why we think that this is going to be a differentiated. And hopefully, that this translates also a completely differentiated outcome we will see from the clinical trial.

So it's not just the identification of myopia in kids, but it's identification of a specific product for them. There was something you said when you talked about the regulatory pathway that it is easier in regulatory pathway on the Z1 versus the Z2 approach. What did you mean by that?

I think, Bryan, you said this.

I think Bill said that. But I mean basically, it kind of comes down to -- these are not really kind of 2 distinct different designs. This is basically overall design. We have multiple configurations in that, so we can provide options to the doctor with this kind of single product. It's almost kind of like a low end and high end and a multifocal, where you might start somebody in the low end and move to a high end, and so we're giving similar options to doctors and patients in this case.

Excellent. And a similar question that I asked on Halo, which is to reach a [ long stay ] in 2029, what are the steps that needs to happen.

For the myopia, I think we are starting here from -- we're starting with some of the registration study. The only thing here that it takes longer time that the regulation requires us to do 2 to 3 years the studies depending on the geography and the region. Some countries require 3 years because they need to demonstrate that we are holding the progression over 3 years time period, and then some other could actually accept 2 years. So that's why we are starting multiple studies in different regions, Japan, China and the U.S. And the whole time is going to be in the registration study, which we're starting early second half of the year.

Okay. When we think about your whole portfolio, you've got the myopia management, the bioactive, the silicone hydrogel, which is sort of a new lens also. How do you think about formulating all of those in your offering? And this is really a question for you, Dr. Schaeffer, also, which is how do you think about spending your time on which one you're going to be prescribing?

The answer is yes, right? And I think it's who's in my chair and what are their lifestyle questions? What are we talking about? What are their hobbies. What do I know about each and every lens because a lens for a 9-year-old with emergent myopia is going to be very different than a 55-year-old who wants to wear contact lenses for the first time, right? These are very different propositions for me as far as value going across the board.

But my job is to ultimately make the best recommendation that I can for the patient. And that's having state-of-the-art technologies for me to sit back and say, this is why I'm choosing this lens. So whether I'm choosing Project Halo or lens like that or choosing a silicone hydrogel because the patient has told me, listen, I can't afford a daily disposable on the front end, okay, well, let's get you something that we have a premium product at not necessarily a premium price or a child with myopia, let's talk about your options. Everything is customizable and every patient is different is the paradox that we live in, unfortunately, because you hear that we need hundreds and thousands of patients to prove that something works.

But in the exam room, a patient doesn't care if it works for 3,000 other people that doesn't work for them. And so we have to live in this in of one paradox where we need it to work, but that's where B+L is come in, it's giving us that confidence that when we pull these lenses and reach for them that we're confident in how the results work and confident in that experience in the exam line and beyond.

And maybe this is a question for you, Bryan. I'm not sure how -- or I'm not going to identify who on the Bausch + Lomb team should answer this question.

Sorry, the question on the...

Portfolio management.

Yes. So on portfolio management, I can take this, actually. In terms of portfolio management, I think we look at these opportunities as not competing internally. So these are complementary. And actually, we worked -- actually, the different teams are working. We utilize some of the -- I'm speaking from an internal perspective, we utilize some of the functions that support the development in completely different setting. So as we can proceed with all the projects at the same time.

Outside the -- or externally, obviously, they are working in different populations. So myopia is a completely different population than the one we are going to target with the HA lens. So even on a clinical trial perspective or all these types, I think they are not competing at all, but they are complementary. And again, I think we are executing very well when it comes to the milestones for each one of them.

Excellent. I think I could go on for some time, but we are at the top of the hour. I'm not sure which one of you wants to do closing remarks or thoughts.

I'm happy to do the closing remarks. I think I hope that this just was a good session on showing you our innovations in the Vision Care and the contact lenses. Obviously, we're going category by category in these [ speech ends ]. And we are very glad to do this today on the contact lenses in particular, because we are enjoying in Bausch & Lomb that Vision Care and the contact lenses is one of the most mature R&D organizations. We can do everything from ideation all the way up to post-approval support. And as you can see here, actually, the team have done a fantastic job in moving from the ideation all the way to where we are right now in a very short period of time.

And again, we have now actually a very good sense of where we're going. And I think we have already 2 platforms that can be showing the success within the coming couple -- within coming couple of years, 2028, 2029. And lastly, I just want to thank you, Joanne, as well for providing us with this opportunity and looking forward for more on other assets as well that we can present as well.

Well, this has been -- it's my pleasure to host, but it's also really been completely fascinating for me. And Bausch + Lomb team, thank you. Everyone who's listening have an absolutely fabulous day, and we'll all talk soon. Thank you.

Thank You Very much. We appreciate it. Thank you.

Thank you.

Good morning, and welcome to Bausch + Lomb's First Quarter 2026 Earnings Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to George Gadkowski, Vice President of Investor Relations and Business Insights. Please go ahead.

Thank you. Good morning, everyone, and welcome to our first quarter 2026 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer, Mr. Brent Saunders; Chief Financial Officer, Mr. Sam Eldessouky; and President of Consumer, Mr. John Ferris.

In addition to this live webcast, a copy of today's slide presentation and a replay of this conference call will be available on our website under the Investor Relations section.

Before we begin, I would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation as it contains important information.

This presentation contains non-GAAP financial measures and ratios. For more information about these measures and ratios, please refer to Slide 1 of the presentation. Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website. The financial guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter unless required by law and not to update or affirm guidance other than through broadly disseminated public disclosure.

With that, it's my pleasure to turn the call over to Brent.

Thanks, George, and good morning, good afternoon and good evening to everyone joining us today, including my colleagues from around the world.

Before we get into the quarter, I want to address the question we hear most from investors. It's not whether our markets are growing or whether we have the right portfolio. The real question is, when will our earnings consistently reflect the strength of this business? Let me start there.

Bausch + Lomb is a durable growth company. We operate in a category with long-term tailwinds, aging populations, rising myopia and a move toward premium products in cataract surgery. That demand is not in question, and you see it in our performance. We're growing consistently across Pharmaceuticals, Surgical and Vision Care. What is changing and what matters most for shareholders is the quality of that growth. Over the past 3 years, we focused on building a strong and lasting foundation, simplifying the organization, driving cost discipline, improving execution. It's a fundamental shift that started to translate into operating leverage and margin expansion in the second half of 2025.

You're seeing it in our mix as higher-margin categories like dry eye and premium IOLs become a larger part of the portfolio. You're seeing it in how we manage expenses with a much sharper focus on accountability, and you're seeing it in the consistency of our execution. We understand investors' focus on earnings consistency and leverage. We're addressing both through disciplined execution and continued adjusted EBITDA growth that supports deleveraging over time.

6% year-over-year constant currency revenue growth demonstrates the consistency I referenced earlier. More importantly, what we're proving quarter-by-quarter is that we can convert that growth into high-quality earnings with 59% adjusted EBITDA growth and 16.1% adjusted EBITDA margin in Q1, thanks to enduring structural changes. The patterns and proof points we're establishing position us well to deliver sustainable value for shareholders. Three years ago, we set a clear plan, and we've executed against it with discipline. We're not making heel turns or concentrating risk in one area. We're doing exactly what we said we would, driving sustainable growth and margin expansion, improving how we sell and operate and continuing to invest in a pipeline that will carry us forward.

On the growth front, I'd highlight an outstanding first quarter performance from Pharmaceuticals with 12% constant currency revenue growth and 14% reported revenue growth. That's a prime example of selling excellence. AI is becoming an increasingly important driver of operational excellence across the business. We're embedding it into how we work from improving sales effectiveness and enabling more targeted customer engagement to streamlining operations and reducing reliance on external vendors and utilizing AI in drug discovery. Just as importantly, we're continuing to invest in our people, making upskilling a priority so teams can use these tools in practical and impactful ways. This is not a stand-alone initiative. It's a fundamental shift in how we operate and create value.

As we said before, our pipeline isn't theoretical. It's active and progressing. We continue to deliver concrete milestones that show execution, not just ambition, which I'll touch on shortly.

Our 3-year plan for growth and meaningful margin expansion we presented at Investor Day in November is advancing with significant year-over-year improvements. One call-out is a more than 300 basis point improvement in adjusted SG&A margin, a direct result of company-wide buy-in to our Vision '27 initiative and the muscle we continue to build around financial discipline. Keep in mind, these are part of an enduring structural change I referenced earlier. The plan calls for steady acceleration of revenue growth and margin expansion through 2028, and we remain confident in our ability to meet or exceed the targets we set. This is a pipeline that's moving. In the first quarter, we filed the NDA for LUMIFY NXT, formerly LUMIFY Luxe, and completed CE Mark submission for seeLYRA, while trial recruitment remains on track. These advancements demonstrate both development and regulatory progress.

Commercialization is on full display as well, with both PreserVision AREDS3 And Blink Triple Care preservative-free shipping in the first quarter. We'll cover both later, but I can tell you anecdotally that the buzz for both products is real based on my own conversations with eye care professionals at various industry gatherings. This is what pipeline momentum looks like, consistent, visible and building. It's important to note that we delivered an impressive financial results while increasing our R&D investment by 17% in the quarter, which shows that growth and innovation are moving forward together.

The dynamics in eye health are evolving, and that's clearly working in our favor. We're the most diversified eye health company in the world with broad-based growth across key brands. It's a simple formula. The broadest portfolio leads to deeper customer, patient and consumer relationships, which drive more consistent and long-lasting performance. I referenced our standout Pharmaceutical first quarter performance earlier, but would also note that our Vision Care segment, which includes both contact lenses and consumer products, continues to deliver. Contact lens growth was a particular bright spot as it appears will once again outpace the industry, thanks in large part to 25% growth in our daily SiHy portfolio.

Our Surgical business delivered growth in the quarter, though the results came in below expectations, primarily due to temporary factors, including weather-related disruption to cataract procedures and reimbursement pressures in select markets. This also reflects a challenging comparison to Q1 2025 when the business grew 11% on a constant currency basis. More importantly, we took deliberate action to strengthen our competitive position by rebuilding our U.S. surgical field force. This was not a reactive move, but a strategic reset to ensure we have the right structure, capabilities and focus to fully capitalize on our expanding portfolio of premium products and upcoming launches. While there is some near-term transition impact, early signs are encouraging with improving execution, rising productivity and sales trends moving in the right direction. What gives us confidence is the underlying trajectory of the business. Our premium strategy continues to gain traction. In the U.S., premium products represented 26% of Q1 sales, up from 19% last year, with global mix increased to 13% from 10%. enVista U.S. sales grew 16%, with Envy up 88% year-over-year as we continue to build momentum post recall. In addition, U.S. system placements were nearly 3x higher than the prior year, position us well for future procedure growth. These are clear leading indicators of improving performance. As the new commercial structure scales and our premium mix continues to expand, we expect the Surgical business to strengthen sequentially through the year and beyond.

I'll now turn it over to Sam to unpack first quarter financial drivers and update guidance. Sam?

Thank you, Brent, and good morning, everyone. Before we begin, please note that all of my comments today will be focused on growth expressed on a constant currency basis, unless specifically indicated otherwise. In addition, all references to adjusted EBITDA will exclude Acquired IPR&D.

Q1 was a strong quarter with robust top line growth and margin expansion. We delivered meaningful operating leverage with adjusted EBITDA reported growth of 59% on a year-over-year basis. The performance highlights the structural changes we have made to drive operating leverage, which are now translating into P&L flow-through. We have simplified our operating model, streamlined indirect support to better align resources with growth opportunities and started implementing productivity initiatives across manufacturing and supply chain.

Taking a step back, we are building on our 2025 momentum and continuing to execute against the targets we outlined at Investor Day. This marks our third consecutive quarter of delivering on our priorities, and Q1 results reinforce that our focused execution is keeping us well on track to achieve our 3-year targets.

Turning now to our financial results on Slide 9. Total company revenue for the quarter was $1.244 billion, up 6% year-over-year, reflecting strong underlying demand. Foreign exchange was a tailwind of approximately $42 million in the quarter. Now let's dive into each of our segments in more detail.

Vision Care first quarter revenue of $711 million increased by 5%, driven by strong growth in both consumer and contact lenses. Let me go over a few highlights. The consumer business delivered 5% growth in the quarter. LUMIFY generated $55 million of revenue, up 15%. The consumer dry eye portfolio delivered $114 million of revenue in the first quarter, up 16%. Growth was driven by Artelac, which was up 25%; and Blink, which was up 5%. Eye vitamins, PreserVision and Ocuvite grew by 2% in the first quarter. Contact lens revenue growth was 5% in the first quarter. The growth was led by Daily SiHy and our Ultra franchises. In the first quarter, Daily SiHy was up 23% and Ultra was up 3%. The contact lens business grew in both the U.S. and international markets, with the U.S. up 6% and international up 4% in the quarter.

Moving now to the Surgical segment. First quarter revenue was $228 million, an increase of 1%, lapping 11% growth in the prior year. As Brent mentioned, the Surgical business was impacted by, among other things, onetime weather-related disruption and a rebuild of the U.S. field force, which is a strategic action designed to strengthen our execution as the year progresses. In Q1, implantables were up 3%. Our Surgical portfolio continues to transition to higher-margin premium categories with growth in premium IOLs up 27% for the quarter. Consumables were up 2% in the first quarter. Equipment revenue declined 4%, driven by a greater mix of system placements that position us well for future pull-through sales.

Revenue in the Pharma segment was $305 million in Q1, an increase of 12%. Our U.S. Pharma business was up 14% in the quarter with strong execution across Miebo and Xiidra. Miebo delivered $76 million of revenue in Q1, up an impressive 33% year-over-year as it continues to scale in line with normal seasonality. Consistent with our commitment, Xiidra delivered revenue growth in the quarter. Xiidra revenue was $87 million, up 30% on a year-over-year basis.

As we've discussed, the dry eye portfolio has moved beyond the launch phase and is now in growth mode. With the platform established, we expect increasing bottom line leverage while continuing to invest behind the highest return opportunities. We are confident in the portfolio's trajectory and expect sustained revenue growth and margin expansion from both Miebo and Xiidra.

Finally, our International Pharma business was up 7% in the quarter.

Now let me walk through some of the key non-GAAP line items on Slide 10. Adjusted gross margin for the first quarter was 61.2%, which was up 170 basis points year-over-year. In Q1, we invested $101 million in adjusted R&D, an increase of 15% year-over-year as we continue to focus on advancing the pipeline to drive the substantial opportunity ahead of us.

In the quarter, we saw approximately 340 basis points of adjusted SG&A margin improvement and delivered meaningful operating leverage. This highlights the structural changes implemented in 2025, which have been in place and effective for the last couple of quarters. We are driving SG&A efficiencies and delivering growth with a lower fixed cost structure. That discipline is translating into meaningful operating leverage, which is an outcome we expect to continue.

First quarter adjusted EBITDA was $200 million, up 59% year-over-year on a reported basis. And adjusted EBITDA margin was 16.1%, expanding 500 basis points year-over-year. Adjusted cash flow from operations was $45 million in the quarter, and CapEx for the quarter was $100 million, including capitalized interest of $7 million. This reflects the normal first half cash generation cadence. As we move through the year, we expect operating cash flow to increase driven by earnings growth and working capital efficiencies with a lighter CapEx profile in the second half.

Net interest expense was $93 million for the quarter. We remain focused on progressing towards our 3.5x net leverage target by the end of 2028. Our net leverage improved in the quarter and we expect to make continued progress over the course of the year. Adjusted EPS, excluding Acquired IPR&D, was $0.08 for the quarter compared to a loss of $0.07 in the prior year.

Now turning to our 2026 guidance on Slide 13. The fundamentals of our business and the eye care market remain strong, and the momentum we're seeing reinforces our outlook. We delivered a strong start to the year, and the Q1 results further strengthen our confidence in our ability to execute through the remainder of 2026. We are raising our full year revenue guidance by $45 million to a range of $5.42 billion to $5.52 billion. The updated revenue guidance reflects constant currency growth of approximately 5.3% to 7.2%, up roughly 30 basis points versus our prior outlook.

Turning to adjusted EBITDA. We are raising our full year guidance by $10 million to a range of $1.01 billion to $1.06 billion. This reflects a margin of approximately 19% at the midpoint of the guidance range and adjusted EBITDA growth of approximately 16% on a year-over-year basis. We are executing our margin expansion strategy with discipline and momentum and continue to expect meaningful operating leverage in 2026, with adjusted EBITDA growing at a rate of nearly 3x that of revenue.

In terms of the other key assumptions underlying our guidance, based on current exchange rates for the full year 2026, we estimate currency tailwinds of approximately $50 million to revenue. We expect adjusted gross margin to be approximately 62% and investments in R&D to be in the range of 7.5% to 8% of revenue. Below the line, we continue to expect interest expense to be approximately $365 million and our adjusted tax rate to be approximately 19%.

Full year CapEx remains unchanged and is expected to be approximately $285 million. As mentioned, CapEx is weighted to the first half of the year and spend is anticipated to be lighter in the second half of the year.

In conclusion, Q1 was our third straight quarter of delivering on our strategy, and we are firmly on the right path. We are executing against our priorities, driving operating leverage and margin expansion and seeing that discipline convert into tangible P&L results. As we move through 2026, execution will remain our top priority and the momentum we have established reinforces our confidence in achieving our 3-year targets.

And now I'll turn the call over to Brent.

Thanks, Sam. We'll now hear from John Ferris, President of our Consumer business, who will explain how we're leveraging leading brands to drive performance while broadening our reach through new product rollouts.

Thanks, Brent. Bausch + Lomb is the #1 consumer eye health company globally, anchored by our strength in the U.S., where we've built a durable portfolio of hero brands. From PreserVision, the gold standard in eye vitamins to LUMIFY, the #1 redness reliever to Blink and dry eye, we've continued our track record of growing faster than the market and winning share in the categories that matter most. And that strength extends globally, where we're building an international consumer powerhouse led by Artelac, our high-growth dry eye franchise now available in more than 40 countries.

A few call-outs on first quarter performance. Artelac delivered 34% reported revenue growth with no signs of slowing as our geographic footprint continues to expand. Blink has now grown for 7 straight quarters under Bausch + Lomb management. And with the newly available Triple Care preservative-free offering, we expect to attract new users as we continue to infuse the brand with clinically meaningful innovation.

We grew 2% in eye vitamins, a category we built and have led for decades. PreserVision increased market share during the quarter, and we're extending that leadership by significantly expanding the addressable market in AMD with the introduction of our AREDS3 formula, which incorporates B vitamin science. More on that in a moment.

And finally, LUMIFY, 15% reported revenue growth nearly 8 years after launch with a 6% share gain in the quarter. We now hold close to 70% of the U.S. redness relief market. That's what a true power brand does. It keeps building.

In consumer, innovation is the engine behind the enduring brands, and our pipeline reflects exactly that. PreserVision AREDS3 is now available nationwide on retail shelves and online with distribution continuing to build. This launch changes the game for us in the AREDS formula eye vitamin category. With the addition of our unique B vitamin complex, we're no longer limited to serving the 11 million intermediate to advanced AMD patients. We can now meaningfully address an additional 17 million early-stage patients. That's a significant expansion of our addressable market and we're building toward it the right way with professional endorsement first.

We've hosted educational events at major industry meetings, completed dedicated field force training and began detailing and sampling more than 8,000 targets earlier this month. It's early in the launch, but initial retailer orders in the first 60 days have exceeded expectations and the sales velocity on Amazon is tracking well with a 4.7 star user rating.

Turning to LUMIFY. LUMIFY is beloved by over 3 million highly satisfied users with a commanding 95% share of U.S. eye care professional recommendations. And yet we believe we've barely scratched the surface of what this brand can become. The core audience for LUMIFY, beauty enthusiasts is 100 million strong. That's a significant and largely untapped runway for growth. We've built a highly differentiated durable brand with the scale, premium positioning and professional credibility that make it increasingly difficult to displace. Later on LUMIFY NXT, expected to launch in the first half of 2027, and we believe we have a clear path to continue building one of the most enduring brands in consumer eye health.

Thanks, John. Let's turn our attention to the biggest revenue drivers in Pharmaceuticals. You'll notice that we've moved from highlighting prescription growth to focusing on revenue, aligned with our strategy as Miebo enters the next phase of growth and our refreshed Xiidra market access approach takes hold. The acceleration we're seeing in Miebo revenue, which saw a 33% increase, shouldn't come as a surprise. It's consistent with the trajectory we've been building, strong uptake, growing familiarity among prescribers and increased confidence in the product. The same is true for Xiidra, which grew 30%. We said revenue growth was a priority, and that's exactly what we delivered and [ then some ]. There's nothing sudden or unexpected here. It's the result of steady, disciplined execution against a clear plan. This is the strategy working as designed. Together, Miebo and Xiidra continue to anchor our dry eye portfolio, providing a strong and complementary foundation for growth. And with seasonality working in our favor, we expect that momentum to build as the year progresses.

Our contact lens business continues to deliver, reflecting the strength of our portfolio and reinforcing our position as a reliable performer. As noted earlier, 5% constant currency revenue growth in the category was driven by continued outperformance from our Daily SiHy lenses. We expect that momentum to continue as we execute a disciplined strategic rollout of planned SiHy offerings across the globe over the next few years.

As we continue to build momentum with our current portfolio, we remain focused on what's next. Beginning in 2028 with Project Halo, we have a new wave of disruptive lenses progressing through the pipeline that we believe position us to capture additional market share in a highly cost-effective way. It's a clear example of how we're pairing near-term execution with long-term innovation. While the overall Surgical business performance in the first quarter wasn't quite up to our standards, our premium IOL portfolio remains a bright spot with 27% constant currency revenue growth.

Our desire to develop a premium heavy IOL portfolio has been no secret, and the transition is well underway. With the early April launch of enVista Envy in Europe, our first attractive premium IOL in the region, our expansion into the higher-margin segment continues. Envy will complement our European LuxLife offering, giving surgeons optionality to meet their evolving needs. We expect continued momentum in premium IOLs as we expand globally and drive a greater mix of higher-value offerings.

We've talked about our pipeline potential. Now you're seeing the reality. Advancement is happening across multiple programs and stages with a steady cadence of milestones being achieved. Importantly, this is not a near-term peak. It's a sustained profile. This is the pipeline built to deliver year after year well into 2030 and beyond.

Now let's open things up for questions. Operator?

[Operator Instructions] And the first question today is coming from Matt Miksic from Barclays.

Great. Congratulations, Sam and Brent and team on a really strong start to the year. So I wanted to maybe start with just a question about the strategic -- some of the strategic elements that are coming together to sort of drive the leverage that you've talked about and the drop-through that you're seeing.

Apologies. We seem to have lost Matt. We will bring Matt back in when he reconnects. In the meantime, we'll move to Robbie Marcus from JPMorgan.

Congrats on a good quarter. Maybe I'll just ask my two upfront. I wanted to ask about two different markets, dry eye and contact lenses. Miebo was good. Xiidra was a lot better than expected. Maybe speak to what you're seeing there, particularly with Xiidra and what drove the pretty substantial year-over-year growth. And then I'll just ask second, contact lenses that was in line. What are you seeing there from a market perspective? We've seen over the past few quarters, the market decelerating as pricing has moderated. You put up 5% growth, 6% in the U.S., 4% outside the U.S. Just what you're seeing there in the market and how you think you're faring?

Yes. Thanks, Robbie. So let's take dry eye first. The way I think about it and really the important part of our strategy we started implementing a few years ago was to be an absolute leader in dry eye, both on the prescription and the OTC side. And strategically, the point was to be able to provide the full continuum of care for the patient wherever they are, whether that be in the OTC channel or in the prescription channel. As you know, it's a very large and underpenetrated market. And having -- and it's a multifactorial disease. And so being able to offer both the only anti-evaporative and the best anti-inflammatory treatment in the prescription market really complements one another. And so the first 2 years or so of Miebo and Xiidra, we were really focused on adoption, right? That's the launch phase that we talk about a lot. And so we made a lot of investments in making sure that prescribers and patients really understood the mechanisms, the benefits and risks of each medicine and how they work together. We had to get adoption and trial. We had to make sure clinical and medical information was well understood and of course, consumer activation with DTC and the like.

As we look at what we're doing now, and I've talked about consistently through last year was shifting from launch to growth in 2026. And what I meant by that, and I think I said it on every earnings call last year was we were going to focus on revenue growth and profitability of these franchises. And I think you're seeing that play out in the quarter. I know you described Miebo as being okay, but 33% revenue growth to me is better than okay, Robbie. Maybe you and I have a different point of view. And Xiidra at 30% growth for a brand that's been on the market for several years is very impressive.

And so we have a lot of momentum in dry eye. The category still is very underpenetrated from a prescription perspective. We're seeing the market expand. Even with some limited competition that launched last year, we're seeing more than our fair share. We're seeing market expansion. And so the market is reacting exactly as we'd expect. And given our pipeline with the dual action R&D program we have, we're committed to this category and driving innovation in it. So I think you're going to see this momentum continue to build. And the last thing I would say is, remember, there is a lot of seasonality in the dry eye market with the first quarter being the weakest and the fourth being the strongest, largely due to the way reimbursement and insurance plans work. And so to put up those kind of numbers in the first quarter, in particular, is a real testament to the team's execution and our ability to drive growth. I think you're going to see that momentum only improve as seasonality becomes a tailwind and execution continues to sharpen.

On contact lenses, data is a little harder to come by than it is in the prescription world, right, in the pharmaceutical world. But I think I told folks on the fourth quarter earnings call that we anticipated that 2025 market growth was around 4% and that I thought it was going to improve in 2026, somewhere between 4% to 5%. And I think when you look at our growth, and we know at least one competitor reported and we're more than about double their growth in the quarter, a little less than double their growth in the quarter. I think you're going to see us lead the market in growth. And what's interesting, and you pointed this out, the growth was much higher in the U.S. than outside. And the reason is we offer all the modalities in the U.S. We have the full portfolio. And it's much easier to become the lens of choice when you have the full lineup of modalities. It's much more difficult to get a prescriber to offer a lens when you don't have a toric or a multifocal in that line. And that's exactly what we're doing now. We're starting to launch the other modalities in other markets around the world. And so I do think you're going to see the rest of the world look more like the U.S. in time.

And then lastly, I would say there's always a little seasonality, not as much -- not as profound as in Pharmaceuticals, but the first quarter is always a bit slower in contact lenses as we saw first quarter of last year as well. And if you look at the pattern from last year, Robbie, our growth increased sequentially throughout the year, and we anticipate that happening this year as well. So I feel like the contact lens market is modestly improving and our performance -- our goal is to outperform the market.

Really helpful, Brent. I always talk relative 33% is a good absolute year-over-year growth.

Robbie, when you put up a 33% growth on a year 3 or year 4 of a product, that's still pretty impressive.

The next question will be from Joanne Wuensch from Citibank.

I'll put my questions upfront. I'm curious what you're seeing globally as we think about the impacts of world order on the consumer. And I'm also coming closer to home, sort of curious what you're seeing in terms of implementation of your strategy and what gives you confidence as you go through the year?

Yes. So Joanne, just to clarify, you're talking about the Middle East and the repercussions when you say consumer sentiment or...

Middle East repercussions, consumer sentiment, inflation, I'm just going to put it in the new world order.

All right. Yes. No problem. Look, I would say this, and I'm going to ask John Ferris, our Head of Consumer, who's with us here to also weigh in because he tracks this very closely as well. And then maybe, Sam, if he has any comments as well. Look, the one thing I would say that gives me great confidence to navigate through some of the world uncertainty is this team is tested and prepared and focused. And I think if you watched us deal with many different obstacles throughout the last 3 years, I hope it gives you some sense of confidence that we can do that. You look at let's just take the Middle East as an example. We have a dedicated team that focuses on looking at transportation, supplier negotiations, cost efficiencies on a weekly basis. So we plan for them. We don't react to them. I think when you look at oil and freight costs, it's probably a little too early to quantify the impact, but we don't see an impact in our numbers in the first quarter. It was quite minimal. And it wasn't really -- the impact we saw wasn't demand related. It was really logistical and making sure that we were able to get our products where they needed to be at the right cost. I think in fairness, the fix is somewhat straightforward for us on that regard. It's more planning and making sure we have inventory in the right location at the right cost with the right shipping frequency, and that's what the team is very focused on. I think finally, I'd say that being said, if we see oil costs remain persistently elevated, it could become a bit of a headwind for us. But I think it's too early to call. And if you recall, at this time last year, we were talking about tariffs and folks were asking us to quantify tariffs. And we really pushed back saying that we could manage through that. It was too early to call, and we navigated through that disruption quite well, I think. And I think we'll be able to do the same with higher energy costs as well.

Finally, I would say in terms of my view on consumer confidence, I think it's fine is the best way to say it. I think some markets are different. I think the U.S. is holding up more resilient than perhaps China and Southeast Asia at this moment in time. But overall, globally, I would say it's exactly as we predicted it to be and exactly how we think the year will play out is playing out so far. But John, any other -- you're much closer to the consumer.

Yes. I'd say we're always mindful of consumer sentiment. But that being said, our business has proven resilient through multiple cycles of macro headwinds that we think post pandemic. Brent mentioned inflation and tariffs, and now we talk about affordability. Part of that resilience comes from the need-based categories that we compete in, but a larger part comes from our execution and really the strength of our brands. So I think we've shown we can consistently grow our business faster than the market, even in challenging environments with some macro headwinds. So that gives us confidence moving forward. But I will say, hey, we're always mindful of the health of the consumer and keeping a close eye on it.

And the next question is coming from Matt Miksic from Barclays.

So maybe a follow-up on Surgical here and just one quick one on contacts. The really great growth sort of as expected. I don't want to take away from the credit, but...

Or maybe a wrong expectations.

But that's good. It's probably right. I mean at ASCRS, it seems like there was a lot of interest and traction and feedback from doctors has been very good on your lenses, your ATIOL lenses and on equipment. And so maybe just to round out some of the success you're seeing in this time last year, you had to pull some products, you got them back into the market and they're now sort of regaining that momentum. On the equipment side, I mean, the numbers would say equipment is down, but that wasn't the feedback that I got from clinicians and -- or from the conference that there was some sort of share shift in equipment. Maybe if you could talk a little bit about that. And then I had one quick follow-up.

Yes. So I think you're right. As I mentioned in the prepared remarks, there was a focused rebuild of our Surgical U.S. field force, much like we did in Pharma and in contact lenses. So we have a lot of experience in making sure that our frontline salespeople are the best in the industry, and we're doing that in Surgical as well. And so when you think about what I said in the prepared remarks, our system placements were 3x higher than they were Q1 of last year. That's probably the strongest leading indicator to support what you saw at ASCRS. And so we feel very confident that equipment and the consumable pull-through will continue to strengthen sequentially throughout the year. Our team is doing an excellent job in placing and getting trial, and that will result to higher sales as time goes. So I feel very good. I think on the premium side, 27% constant currency growth there. And very impressive, Envy up 88%. And so you see the momentum that we had in that tough first quarter comp last year where prior to recall is back, right? I think I can fully say Envy is the best trifocal in the market, providing the best outcomes for patients and doctors and surgeons are recognizing that. So I feel very good.

And the last thing I would just say, the momentum and part of my optimism of sequential improvement in surgical is while we focus on the U.S., we just launched in April in this quarter, Envy and Aspire in Europe. We're just launching our new Bi-Blade for retitrectomy in Europe this month. We're launching it in the U.S. in the third quarter. We're upgrading the entire portfolio globally to preloaded from the enVista line, which is very important to surgeons. That's just happening this quarter. And then, of course, in the second half, we expect to launch Elios within our -- and assumed approval in the second half. So a lot of really positive momentum in the surgical business to be seen throughout the year.

That's great and super helpful. And then just on some of the geographic performance in contact lenses, really strong, yes, 6% U.S., international also 4%. But I guess heading into the quarter, we had heard or maybe from some of your competitors' results to more uneven performance, particularly in Asia Pac and maybe around Japan or some of the other markets. Can you talk a little bit about what you saw there and whether that's -- you're just offsetting that with strong growth elsewhere or whether you're seeing anything like that and what it looks like in terms of trends?

Yes. So I think from a market perspective, and let's talk about our performance in that market because they do bifurcate a bit. I think in fairness, the market in the U.S. is the strongest followed by Europe and then Asia. And Asia, it's more of a China, Southeast Asia kind of softness that I'm not worried about long-term trends. I think it's more of an economic muting of the market. But I do think it will come back and long term, I think, is a very important market for us. Japan has been a flat to declining market for the last few years. But in fairness, this is where I think we bifurcate, our Japanese business was up 4% in the year. And remember, as I mentioned in the first question, we're just starting to launch the new modalities or additional modalities of our Daily SiHy portfolio into these markets. So if we can kind of perform better than the market in those even troubled or softer markets, and we're doing that organically and the new products are still on the come. I feel very good about where we're positioned to grow faster than the market and take more than our peers.

The next question will be from Young Li from Jefferies.

I guess maybe a follow-up on the [ Nigel ] question earlier that we looked at the monthly script trends for Miebo, January and February were a lot lower sequentially. March rebounded pretty strongly. I think the April weekly numbers are also looking pretty good. I think you did address some of the dynamics driving that. But I just wanted to put a finer point on it since we did get some attention from investors on that topic. I guess what drove the big decel -- sequential decel in scripts in January, February and then the subsequent rebound in March and then your confidence level on the sustainability of those improving trends for the rest of the year, especially with a big dry eye launch still ramping?

Yes. No, great question. Look, I think this is the new normal. And what I mean by that is as we've moved away from launch mode and we're a much bigger product, we're going to see the impact of true seasonality in this business for the foreseeable future. And it's all driven by the way insurance works. It's going to be totally normal. You're going to see it again next year and the year after that and the year after that. With higher co-pays, higher deductible plans and everything else, you're always going to see the January, February period be lower prescription volume as a result of people having higher co-pays and more abandonment at the pharmacy counter. And that's just the way these markets work. And that's how we plan for it and that's how we model for it. So in fairness, I -- we believe that our team is executing with excellence. You're seeing the rebound in March. I actually thought it was going to happen in April. So we're a bit ahead of what I thought would happen. And so I feel very good and optimistic about the trends we're seeing. And Miebo and Xiidra are going to be strong growth drivers throughout the year and for the foreseeable future.

Great. Very helpful. I guess another question just on the Surgical side. So you have PanOptix Pro ramping, Unity out there, PureSee is launching. I heard the 1Q comments on weather and tough comps. But just wanted to get a sense about your feeling of your product portfolio and how that compares with all these new launches. We're assuming some level of trialing from PureSee. Just wondering if you are expecting that as well in your numbers?

Yes, we are. I mean I think, look, on Unity, I don't really see any impact to us. I think they're really focused on upgrading their existing customer base. They did do some trials last year, but we don't see that as common this year so far. And so nothing I'm really worried about there. I think seeLYRA and our next-generation seeNOVA are very competitive. In fact, I hear many times that once people try seeLYRA, they view it as the most stable and best phaco machine in the marketplace even when compared to Unity. I think as we look at our next-generation equipment, it's really going to be best-in-class. And the R&D team is -- I meet with them every other week. We review the project plan. We are progressing very nicely there. So very competitive with our existing portfolio, I think poised to break out with the next generation.

I think on the IOL side, yes, we'll probably see some trial. But again, we're poised for growth. Envy is incredibly well received. There's -- a lot of times with IOLs, people wait, surgeons wait to see full year or more of results after implant, and we're seeing our data to show that we have an excellent product. And that word is spreading. I said 88% growth for Envy in the quarter, against a tough comp in the first quarter of last year. Remember, the recall is in the second quarter, not the first quarter. And so I feel very confident given the outcomes, given the penetration, given the growth opportunity and our rebuilt Surgical field force, we are primed for sequential improvement in growth throughout the year.

The next question will be from Larry Biegelsen from Wells Fargo.

It's Lei calling in for Larry. Good start to the year. Just two questions. First, you raised your sales growth guidance, looks a little bit conservative. Your EBITDA raise of $10 million is slightly below the beat in Q1. So can you just talk about how much conservatism is built into that outlook? And if there's anything to call out in the marketplace that you want to flag concerning, for example, contact lens in China, Southeast Asia, cataract reimbursement change, any of those things affect your outlook -- your updated outlook?

And my second question, I'll ask that as well, just phasing for the rest of the year in terms of sales growth and EBITDA. You had a pretty easy comp in 2Q in terms of the top line growth, but that does get tougher in the second half of the year.

Yes. Great question, Lei. Look, honestly, I expect that -- expected that question because I think investors look at the quarter and look at how our team has executed and have higher expectations, and that makes sense to us. But the fact is, look, we're raising guidance. We feel good about that. But I'll be pretty direct on this. We raise guidance when we have conviction, not when we have optimism alone. And so we're only 1 quarter into the year, and I agree, our momentum is real. I think 6% constant currency revenue growth and 59% adjusted EBITDA growth. Margin expansion of 500 basis points on a year-over-year is a real sign that the team is executing, and we intend to keep that up. But I also think we have to recognize that it's a -- I think Joanne raised this, there are a lot of other variables. We're early in the year. And so I think we have to take this one step at a time. But I'll say this, we have a lot of momentum. We expect that momentum to continue. I think you can tell by my answers, I'm very excited about what the rest of the year looks like. And so just stay tuned as we continue to deliver, we'll adjust the guidance appropriately. Sam, do you want to?

Yes. And no, you covered it pretty well here, Brent. And I think also maybe to add to what Brent said and give you a little bit more color. I think one of the things that when we think about the guidance, again, as Brent said, we're excited about what we put forward in the initial guidance and also with the upgrade to our guidance right now. I think you have to keep in mind that there's a fundamental shift also we're taking within the company right now with our operating leverage, right? We've seen the improvement on the -- both the product mix and the gross margin. We're seeing it also with the 340 basis points in the SG&A and really pulling that through into where we expect from a full year guidance is really something we're very excited about. This gives us the confidence not only in this guidance for this year, but also in the 3-year targets that we put out on Investor Day.

I think you had another question regarding the phasing. So let me take the phasing question as well. So as we think about the phasing, I would say that the phasing for us in '26 is very similar to what we saw in 2025 from a cadence perspective. So when you think -- and maybe I'll just focus on Q2 here to just give you a point of reference. You saw Q2 last year was roughly about 25% on the revenue achievement from the midpoint, from the revenue. That's probably in line with what we expect if you take that as a 25% over achievement from the midpoint of our guidance for revenue. When it comes to EBITDA, I think we are adding the benefit of all the work that we're seeing in terms of the leverage pulling through with a higher achievement rate on the EBITDA. So last year it was roughly about a 21.5% achievement. In Q2, we expect this year to be probably about 22.5% achievement if you take off the midpoint of our guidance. So we're seeing that progress and the pull-through and the leverage in the P&L playing out also in the phasing.

The next question will be from David Roman from Goldman Sachs.

This is Marco on for David. I wanted to ask more on the sales force rebuild. I appreciate that this is a deliberate action, but can you help us frame this more concretely? How should we think about the magnitude of reps being added versus current headcount and I guess, expectations for the new productivity?

Yes. So the principle -- I think we said last year that we had brought in a new head of the U.S. He came in and very -- he's a pro, he quickly diagnosed that we needed to organize the field force differently and really focus more on account management as you think about the breadth of the portfolio, and really partnering with practices to ensure more -- better outcomes and better productivity in the office and ASC. And so what that caused us to do is realign territories, and that always means breaking and renewing relationships and surgical is still very much a relationship business. But Sam and I track it weekly with our leadership team. And I would say, as we look 1 month into the second quarter, we're seeing really positive signs of productivity improvement among that field force. We will continue to look at adding to that and in particular, as we get ready to launch Elios in the second half of the year as well. And so it was not just about adding more, it was also making sure we had the right structure to best service the customer.

The next question will be from Doug Miehm from RBC Capital Markets.

I'd like to expand on the Xiidra outperformance for the quarter, up over 30% or so. And I'm just curious, you had guided that product given the changes that were occurring on the insurance front and reimbursement to about mid-single digits. And while we may expect the 30% to moderate. Number one, I'm wondering if there was any onetime benefit in Q1 due to inventory changes. And then as we think about the rest of the year, how should we be thinking about gross to nets and the growth for this product because it could have a material impact on your operations? And if this is a new norm, I'm curious as to why you didn't do it earlier? And I'll leave it there.

Great question, [ Marco ]. So look, Xiidra was a great performance and great execution from our team. The biggest change for us was walking away from the CVS contract. We discussed that last year, and we told you it was going to happen. and that you would see TRxs decline, but revenue increase. So it played out exactly as we had told everyone last year we would do. And the reason we didn't walk away from it earlier, it was a contract that we inherited from Novartis and it lasted until this year. And so we had to wait for the contract with CVS to end. We did try to renegotiate, but we couldn't get to an acceptable rate with them. Our relationship with CVS is good, and we'll revisit it again next year. If we can get to a good spot, we would. But I would remind you, coverage for both Xiidra and Miebo still remain industry-leading in the mid-70s percent coverage. So most patients are covered. And so it was the right decision to make.

I think the other part of your question was what's the future of Xiidra. I think you're right, we're comping a softer quarter. Q1, because of the seasonality, I've said several times on this call, shows Xiidra at 30% growth. I wouldn't expect that level of growth throughout the year. But I do think low double-digit growth should be the new norm for the rest of the year, and then we'll see where we are to set guidance for the following year. But Xiidra will be a revenue and profit driver as will Miebo, and that's just the new phase we're in.

Yes. And Doug, just to follow up on the last part of your question on the gross to net, we're expecting -- we said it should be about the low 70s from a gross to net.

So it switched from high -- when we got rid of CBS, we moved from high 70s to low 70s, which is why you see the revenue growth.

Yes, yes. Okay. Great. And then just the last question as a follow-up. Around PreserVision and Ocuvite, an important portfolio for you. And with the introduction of AREDS3, I'd expect growth to accelerate certainly from what we saw in Q1. Is this something that could be mid- to high single-digit type of business portfolio for you? Or would you expect it to stay in the lower single digits?

Yes. I'll ask John to weigh in, but I would just say that I think AREDS3 is a big opportunity for us. It will take some time to build because it's a -- unlike a lot of our other consumer brands, it's very reliant on physician recommendation. And so we need to get a build of medical communication, medical information, sales reps, samples and the like. But John, do you want to take it from there?

Sure, Brent. So we're very excited about the long-term potential of AREDS3. But as Brent said, it's important to emphasize that this is going to be a multiyear opportunity. As I said in my remarks, we've built and led this market for over 20 years. So we understand both the science and how to execute here. So we are confident that we'll deliver on that opportunity. That being said, it does start with the eye care professionals first, and that's where we're focusing our efforts today. I would -- we've seen one data point that's very encouraging. We've seen already 12% of eye care professionals in the U.S. reporting that they're recommending PreserVision AREDS3 to their patients. That's a really strong number this early in the launch. I've launched multiple consumer products, including PreserVision AREDS2, and that number really reflects strong interest and is really impressive for us.

I'd say we're on shelf in retailers now and that distribution is continuing to build, and that will build and ramp up through second quarter. And it's at that point that we'll layer on our consumer marketing efforts on the back half of the year. And that's when we anticipate we'll see ramp-up in our consumption, which will be then reflected in our results. When we think about the long-term potential for this brand and we think about the growth we've seen in our eye vitamin franchise, mid-single digit to slightly higher growth is certainly within our expectations, and we're confident in our ability to deliver upon that. I just say it's going to take some time to ramp this up, but we're starting with the eye care professional and again, seeing some really good early indicators.

And we have time for one last question today, and that's coming from Tom Stephan from Stifel.

I wanted to go back to Miebo -- Xiidra. Brent, can you talk about the script growth you're seeing year-to-date? Just as we think about underlying fundamentals of that product, particularly as we try to consider growth beyond '26?

Yes. So when you look at prescription growth, it's actually declining, and we knew that as a result of the CVS contract termination. We told you that last year, but that to expect revenue growth. And so it's playing out exactly as we thought. Our goal is to stabilize that throughout the year. I think we -- our team is best-in-class. And so I think we'll get there. But we've pivoted to really focus on revenue and profitability versus just trying to get broad TRx growth. And I think that's given the life of where we are and the fact that we have the combination coming, I think we're doing this the right way. And I think we're poised for being a leader and a growth driver of this market for more than decades ahead, given our portfolio. So playing out exactly as we expected, and we're very confident for a strong year.

That's great. And then one quick follow-up, if I can. Just on contact lens performance, Brent, to go back to an earlier comment, I think you said that you expect sequential acceleration throughout the year. Is that right? And if so, what drives that notably as 1Q was the easiest comp of the year?

Yes. So I think if you look at -- so let me back up. So yes, I did say that you'll see sequential improvement. In part, some of that is just seasonality. It's not again as profound of seasonality as we see in the prescription market, but there is some seasonality in contact lenses. But I think for us, more importantly, it's a focus on selling the whole portfolio, making sure that we obviously lead with our daily SiHy, but that we pull through our Ultra and our FRP offerings as well. There are different markets throughout the world that have different needs and different economics. And we have the full portfolio to sell the right product to the right consumer in the right market.

The other thing I mentioned a few times is we're launching other modalities in other markets around the world. And we know based on what we saw in the U.S., our Daily SiHy portfolio performs best when we have the full portfolio of modalities. That is not true in other parts of the world. And so as those launches come online this year, we're going to see much better performance of our Daily SiHy in the markets with more modalities. And so just net-net, I think the best way to look at it, Tom, is look at the pattern that we had in 2025, the sequential growth of the contact lens business, and I expect that to play out more or less the same this year, which would show sequential improvement.

So I believe that was our last question. So let me just conclude with a couple of thoughts to wrap up the call. First, thanks, everyone, for participation. Most importantly, I want to thank my colleagues around the world for delivering a great quarter, and we're excited to watch what the team can do throughout the year.

When I joined here 3 years ago, I talked a lot about selling excellence and creating revenue growth. And I think we've shown that over the last 3 years, we've created a very durable revenue growth story with 6% constant currency revenue growth in the quarter. We talked about pipeline innovation being important. We've really invested in the talent and capabilities of our R&D team. And now we have 60-plus programs advancing through the clinic. We didn't get a lot of questions for Yehia, who's here on the call, but we have a lot of data readouts in the second half of the year. We're very excited to see how our products are performing in clinical trials, and we'll release that information as soon as it becomes available in the second half, but expect a pretty steady cadence of news in the second half of the year related to the pipeline.

We actually are doing an R&D Teach-in on contact lenses on June 1, as you can see on the screen. So hopefully, everybody can join us there. We also talked about operational excellence and making sure that our supply chain was reliable and of high quality. And I think we've hit every metric there. And now we're pivoting to gross margin improvement and efficiency in the supply chain.

And then lastly, at Investor Day, we announced financial excellence as the fourth pillar of our strategy. And I think this is the third quarter where we've shown financial excellence on full display. When you see 6% constant currency growth and 59% EBITDA growth, and you see that leverage in the P&L. I think it's another proof point that we're focused on executing financial excellence quarter-by-quarter. As our new guidance suggests, you're going to see adjusted EBITDA grow at 3x that of revenue. And we do expect that we'll meet or exceed our financial goals that we outlined at Investor Day in November with nearly -- or more than 600% -- 600 basis points EBITDA margin improvement by 2028.

Everything is on track. There is a lot of momentum inside the business. The team is focused and executing. And so we feel very good about the year, and we look forward to keeping you all updated, and we thank you again for joining us. Thank you, operator.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Please note, today's call is being recorded.

Good afternoon. I'm Larry Biegelsen, the medical device analyst at Wells Fargo. Welcome to the next call in our 2026 MedTech Innovation Spotlight Call Series. I'm pleased to have the management team from Bausch + Lomb. Speakers for this call will include Dr. Yehia Hashad, Executive Vice President of R&D and Chief Medical Officer; Dr. Mayssa Attar, Senior Vice President of Pharmaceuticals and Consumer R&D; Dr. Kelly Swaim, Senior Vice President of Surgical R&D; and Dr. Cathleen McCabe, an ophthalmologist and cataract surgeon who is a Strategic Medical Adviser to Bausch + Lomb.

Additional participants from the company include Brent Saunders, Chairman and CEO; Sam Eldessouky, Executive Vice President and CFO; and Andrew Stewart, Global Pharmaceuticals and International Consumer President. On today's call, we will focus on Bausch + Lomb's exciting glaucoma pipeline, specifically BL-1107, its alpha-2b agonist and ELIOS, an excimer laser for glaucoma.

We'll start with a presentation by the company that summarizes the overall market and opportunity, the products and their Mechanism of Action and development updates. We'll then proceed to Q&A. And if anyone has a question they want me to ask on their behalf, please e-mail it to me. So everyone on the line from Bausch + Lomb, thank you for the opportunity to host this call. At this time, I'd like to turn the call over to Dr. Hashad.

Thank you very much, Larry, for the opportunity and for hosting us. I actually will start by a very brief introduction, then I will hand over to my colleagues to give you the details about the projects. Can we go for the next slide, please? I think we covered who will be attending. I'd just remind everyone, obviously, end of last year at the Investor Day, we presented our pipeline. Earlier this year at JPMorgan Healthcare, we also presented the key milestones that we will have in 2026 for our robust portfolio of pipeline.

I think today, we are going to focus on the glaucoma assets, which are highlighted here in yellow. One is related to BL-1107, the first glaucoma anti-protective -- neuroprotective product, lowering intraocular pressure and addressing also functional outcome. And then ELIOS, the laser trabeculostomy, we will explain also and its targeted approval also in the second half of this year. The rest of all other products are tracking well for this year towards achieving their corresponding timelines and milestones. Next slide, please. Before I turn it over to my colleagues, I just would like to give a very brief information on glaucoma.

So what is glaucoma, what are the types of glaucoma, how we manage glaucoma and also speaking about some numbers related to the prevalence and incidence. So, glaucoma is defined as a chronic neurodegenerative condition. In fact, this even considered a new definition because in the past, glaucoma was defined in relation to intraocular pressure. But what happened is that we found out that there is a lot of people that could be also having a normal intraocular pressure, but still have neurodegenerative condition that is very similar to what we see with the elevated intraocular pressure.

So that's why it became the intraocular pressure as a risk factor that caused neurodegenerative changes at the level of the retina, primarily at the level of the photoreceptors, the nerve fiber layer, and the optic nerve. And these results in a late functional disability. In other words, the glaucoma progresses very slowly to the extent that the majority of patients are not aware of glaucoma at the early stages. And they usually -- when they are aware of the symptom, it's too late because about 40% to 60% of the neurodegeneration have already been happened.

So the key part of the treating glaucoma is to try to treat the glaucoma at the earliest stage possible, before the complete damage happened. How glaucoma is being developed? Well, we know very well that the intraocular pressure is maintained by a fluid inside the eye, we call it aqueous humor. This fluid is produced by area. If you look to the upper right corner picture image, it's a magnified image showing a structure called the ciliary body.

The ciliary body has ciliary processes. These are the area where the production of aqueous happened. Then the aqueous travel, if you follow the arrows on the same picture, they release from the ciliary body, they go in front of the lens, they cross to the pupil over the iris. And then they go through a multiple channels, starting from what is called trabecular meshwork, then canal of Schlemm, then collecting canals, then to the venous system. And this is -- aqueous fluid is responsible for the pressure inside the eye.

In other words, if there is an increased production of aqueous from the ciliary body, this can result in an increased intraocular pressure or more commonly, there is a normal secretion of aqueous, but the outflow at the trabecular meshwork and the other areas is being obstructed. -- or actually is reduced. So that's why the majority of treatments for glaucoma are focusing on 1 of 2 things. Either you try to reduce the production of intra or aqueous humor through addressing the ciliary body or try to facilitate the outflow of aqueous from the eye through multiple procedures or treatments that addresses the enhancement of the outflow from the eye.

There are 2 types of glaucoma, what we call open-angle glaucoma or angle-closure glaucoma. Luckily enough, the angle-closure glaucoma is a very severe condition. It's an emergency. And really, it's -- this is the one that is associated with a lot of systemic even symptoms in the form of headache, nausea, vomiting. And it's -- as I mentioned, it's an emergency. It requires immediate presence in the ER. There are some procedures need to be done in order to reduce immediately the intraocular pressure.

And later, majority of these patients require surgical intervention. But the most more common type is what we call open angle. And when we speak about the angle, it's the angle between the back of the cornea and the iris. The more is this angle is narrow, the more patients are liable to increase intraocular pressure and forming glaucoma. So that's -- the 2 types are known primary open-angle glaucoma and the angle-closure glaucoma. How we manage it? I mentioned, the concept is really very simple. Either we try to reduce the production of aqueous or try to facilitate the outflow of aqueous from the eye.

And we can do both by either medical eye drops, for example, or sometimes now we can use eye implants inside the anterior chamber to reduce the intraocular pressure or we do laser and the laser treatment usually focusing towards the trabecular meshwork to create like small holes where it can add to the outflow of aqueous from the eye or also MIGS. And the MIGS, this is the area that witnessed a lot of innovation over the last, I would say, 7, 8 years because it is characterized by not -- it's characterized by simple operations by a very good safety profile for majority of the mix.

But more importantly, they are divided also about whether we are following the same outflow of the eye from -- through the trabecular meshwork, which actually should be the best way or try to create an alternative channels. So in other words, you make bridges from inside the eye to the outside in order that the aqueous can exit the eye. And then we have also major surgical interventions like trabeculectomy. This is the one is known as the gold standard from surgical procedure. And in very severe cases, we have also shunt operations, which really -- it's for final stages when all the other measures have failed.

Next slide. The last point I want to address is the prevalence and the incidence. Glaucoma is a very common disease. And as I mentioned, they call it the thief of sight because majority of the patients don't really know and they lose vision very gradually, and they don't feel it because it does not affect the visual acuity, it affects visual field. So majority of patients could hold good visual acuity up to late stages. And only the visual field restriction happened from the sites goes very gradually so they don't realize it.

However, those patients that reach to the irreversible damage or reach to a late-stage of visual affections is about 35% -- and the best way to treat these patients that have visual acuity is to try to treat them early. Thanks now to a lot of diagnostic modalities like OCT, like many other things, we can diagnose anatomical changes before the functional changes happen. And consequently, we can target the 4.2 million population before they get to the late-stage of the visual affection because half of this 35% patients of glaucoma with vision affection, half of them have an irreversible damage and probably irreversible vision loss. So that's why we need to focus more on the earlier stages before reaching. And unfortunately, also, we don't know which patient will move into those are having the severe visual affection. So that's really where we are trying to play with the glaucoma neuroprotection. That's why you will hear glaucoma neuroprotection became one of the major unmet medical need in glaucoma. And many -- now we're trying, but I think we are having the advantage. It's going to be the only product with a dual-mechanism of action, lowering intraocular pressure, as well as affecting the neurodegenerative component of the eye.

Now I will hand over to my colleague, Mayssa Attar, to tell you about the BL-1107 and how we will address that.

Great. Thanks, Yehia. So where I want to start is talking a little more and building on what Yehia just talked about and why we think BL-1107 is the right therapeutic strategy. So glaucoma, as we've heard, is a multifactorial optic neuropathy that's characterized by distinct pathological pathways that all converge on neurodegeneration. So what that means is retinal ganglion cells and their axons sustain injury from various physiological insults.

And as we just heard, the risk factor we most commonly recognize is elevated intraocular pressure, which causes mechanical damage, but there are other important disease pathways as depicted on the right of this slide, for which there is no treatment. And these pathological pathways lead to cellular dysfunction and ultimately, when left untreated, the cells die. And because the neurons cannot regenerate, the resulting vision loss is permanent, making glaucoma a leading cause of irreversible blindness worldwide.

Preclinical and clinical data suggests that alpha-2 adrenergic agonists may help treat injured cells before the damage becomes irreversible. Under normal conditions, activation of alpha-2 adrenergic receptors helps regulate the sympathetic nervous system by reducing release of neurotransmitters, such as norepinephrine that's released during stress responses. An alpha-2 agonist drug leverages this natural mechanism, and in glaucoma specifically, may help suppress these neurodegenerative pathways to support neuronal survival and functioning.

So, again, while today, we treat the risk factor of elevated IOP, glaucoma is ultimately a neurodegenerative disease. And studies have shown that most patients with mild-to-moderate glaucoma have macular damage and difficulty seen in low light. So what that means, as Yehia has just said, you want to intervene earlier. So this is the stage where you might have injured cells, so you can still see that they're not functioning as well. And there is no therapy approved to treat or prevent this vision loss associated with glaucoma.

Now the LoGTS study showed that glaucoma patients treated with brimonidine were less likely to develop visual field loss compared to those patients treated with timolol, even when IOP was decreased to the same extent. Brimonidine is an alpha-2 adrenergic receptor agonist. And alpha-2 adrenergic receptor agonists are thought to preserve and improve vision via 2 mechanisms: first, neurofunctional enhancement; and second, neuroprotection. Our goal with BL-1107, which is a next-generation alpha-2 agonist, is to fully realize the potential of these mechanisms. BL-1107 is a molecule that's designed to treat and target vision-threatening disease.

The graphs at the top of the slide show nonclinical pharmacokinetic data that demonstrate when BL-1107 is administered as an eye drop, we detect the prodrug and little active drug in the tears. That means the prodrug is available to penetrate deep into ocular tissues, delivering the active drug to the retina as shown in the second graph, where you see the majority of the drug detected in the retina is the active moiety. Another BL-1107 attribute is its receptor cell activity and potency, which is depicted at the bottom of the slide.

The lower graphs compare potency to 2 different alpha-adrenergic receptors, alpha-2A and alpha-2B for BL-1107 versus brimonidine. BL-1107 is more selective and potent to alpha-2B, while brimonidine is more selective and potent to alpha-2A. And this is important since alpha-2B is the most widely expressed alpha receptor in the retina, where we need the drug to act to improve and protect vision. So it's BL-1107's molecular attributes of enhanced retinal penetration, combined with selective and potent alpha-2B agonism that should maximize vision benefits.

So to that end, Bausch + Lomb scientists have continued to generate data to demonstrate how the active moiety of BL-1107 protects retinal cells from neurodegeneration. What you're seeing here in this slide are data from an animal model where rats are exposed to a phototoxic blue light, and we're able to assess the effects of this injury with and without BL-1107 active drug. If we focus on the graph in the middle of the slide, we are monitoring structural effects on the retina using Spectral Domain OCT. The Y-axis of the graph measures retinal thickness, and the first column with the gray dots depicts normal thickness in rats retina when they have no blue-light exposure.

The next column shows structural damage after blue-light exposure, which shows up as a thinning of the retina. In the last column, we see that when we have BL-1107 active drug on board, the retina is able to maintain normal thickness. So it protects those neurons in the retina. If we move to the graph on the far-right, this depicts a functional measure. Specifically here, we're measuring electrical signaling in the retina, and the Y-axis depicts the amplitude, or the strength of that signal. The top gray line shows normal signaling when no blue-light exposure is experienced.

And if you look at the very bottom green line, it depicts the diminished signal after blue-light exposure with no active BL-1107. And the green line that's just below the normal gray line depicts how signaling is maintained when active BL-1107 is on board. So what these data demonstrate is that BL-1107 active drug preserves both retinal structure and function following a blue-light damage. And so these mechanistic data that I just walked through underlie the positive proof-of-concept clinical data we've seen in glaucoma patients treated with BL-1107.

So in addition to lowering IOP, for the first time, we have clinical data that showed 15-letter gains, which again is an approvable endpoint. The graphs on the left show that under low-light conditions, patients treated with BL-1107 show a greater proportion of 15-letter gainers than patients treated with timolol, in both the study eye and the treated fellow eye. The top graph depicts the study eye and the lower graphs are the treated fellow eye. And you can see the green bars that represent two BL-1107 doses on day 1, 4 and 14, you can see that the percentage of patients gaining vision and the gray bars represent vision gains with timolol.

And what you can clearly see is more patients are gaining vision with BL-1107 treatment. And if we move to the graph to the right, we see that patients treated with BL-1107 showed statistically significant improvement in visual field mean deviation on Day 14 as compared to timolol. Recall, Yehia said this is one of those early functional measures that you would see. And here, we're seeing BL-1107 again being protected. These unprecedented data led us to run a larger Phase II study, which is ongoing to demonstrate these visual neuroenhancement effects.

The ongoing study is a randomized, double-masked, parallel-group study with approximately 159 patients. It's a Phase II study that's designed to replicate the clinical POC data with refined study elements such as powering for vision endpoints. We anticipate in the second half of the year to have data from this study. And these data will guide the Phase III study design. If approved, BL-1107 could define an entirely new category of glaucoma therapy. It would be the first with a neuroenhancement mechanism of action aimed at protecting and improving vision while also lowering IOP.

And BL-1107 has a robust future. Like we said, the Phase II study will run -- that we're currently running read out at the end of this -- the second half of this year. And with this powerful pharmacology, we are also exploring indication expansion opportunities for BL-1107, such as in retina. And to that end, there's ongoing efforts to develop an intraocular sustained-release BL-1107 formulation. So the key takeaways are there are no current glaucoma therapies that address the underlying neurodegenerative pathology that threatens vision.

And BL-1107 has the potential to establish a completely new class of treatment, the first therapy with neuroenhancement mechanism of action in addition to IOP lowering. The clinical proof-of-concept has already shown BL-1107 improves vision in glaucoma patients, and the ongoing Phase II trial, where we will replicate those findings is expected to read out in the second half of this year. Thanks. At this point, I want to hand off to my colleague, Kelly Swaim.

Thank you, Mayssa. As Yehia mentioned at the beginning of this presentation on the anatomy and physiology, I'll dive a little bit more into detail on the MIGS procedures. So, MIGS procedures lower intraocular pressure by enhancing the eye's natural aqueous humor outflow pathways, either through the trabecular meshwork, into the suprachoroidal space or into the subconjunctival space. There are also some approaches that reduce aqueous production via ciliary body treatment, as Yehia mentioned. As we'll discuss further, ELIOS, our laser procedure, works through the trabecular meshwork.

MIGS generally are characterized by a favorable safety profile with minimal tissue disruption compared to traditional, more intense glaucoma surgeries, and a meaningful IOP lowering effect that is relatively easy for both patients and physicians. And to that end, I'd like to ask Dr. McCabe how MIGS has changed for treatment of cataract patients who have glaucoma.

Yes. Thank you, Kelly. It's been a game-changer in how we view cataract surgery along with the whole picture of a patient who has glaucoma. So now that we have highly safe and efficacious treatments to use at the same time as cataract surgery that also address a patient's risk of going on to having further vision loss with glaucoma, it becomes part of the paradigm of how we intend to treat those patients. We don't just view them as something that we need to do to improve their vision with cataract surgery, but we can also improve their quality of life and their risk profile for progression with glaucoma by addressing their glaucoma with a MIGS procedure.

Thank you. So go to the next slide. ELIOS is well positioned to expand this market, particularly since around 20% of patients who have cataract surgery also have glaucoma and currently less than half of all cataract surgeons are performing minimally invasive surgery for glaucoma. As mentioned earlier, ELIOS will be our first clinically-validated excimer laser in this space and will provide new options for physicians and patients. And again, Dr. McCabe, if you don't mind, as more physicians adopt MIGS procedures, how do you think they will decide which procedures will be best for their patients?

It's going to be looking at the 2 most important things, which are efficacy and safety, along with their ability to quickly and effectively adopt the surgical procedure that's needed. So I think these are all areas where ELIOS will help expand the number of surgeons who feel comfortable with the procedure, because the techniques that are needed to be effective are readily available techniques to anterior segment cataract surgeons and because we don't have to worry so much about positioning in the proper space a device that needs to be left behind. And I know you're going to cover that a little bit more, but that's a key part of the differentiation of this technology.

Perfect. Let's go right to the next slide. We can talk about that. So our excimer laser provides a precise, implant-free approach with several features that do distinguish it from other MIGS. One is the ablative laser creates 10 micro-channels in the trabecular meshwork to decrease restrictive outflow. Two, the implant-free procedure reduces the risk of poor placement and leaves the trabecular meshwork largely intact to preserve its biomechanics.

And as we mentioned previously in the Investor Day in November, this innovative approach offers an opportunity for cataract surgeons who were not previously performing this procedure to do so relatively easily. And then finally, the procedure allows for further interventions for refractive cases because you have -- as mentioned before, that anatomy is largely intact. And I guess, Dr. McCabe, which of these features -- you mentioned a little briefly, but which of these features do you think resonates most with surgeons?

Yes. I've been involved in the MIGS space since pretty much it was developed, and I've helped bring different technologies to market and teach a lot of different surgeons how to use different devices and things. And there are a few things that are part of the hurdles that block adoption. And one of those is really where do I put an implant? Most of the MIGS procedures that were early to the market involve leaving something in the eye. And the problem with that is if you don't put it in the right place or you don't put it in the right way, it's not effective.

And beyond that, you can actually have some more long-term effects of leaving it in the wrong place. So doctors don't want to complicate something that they feel very successful with already, which is cataract surgery. And I think having something that's implant-free that's readily adoptable in an area that they understand the trabecular meshwork and most can identify very readily I think those kinds of things that simplicity of the procedure are really the things that are going to decrease some of the barriers that surgeons currently feel.

Thank you. And if we go to the next slide, as you've seen in the press release this morning, we're very pleased to announce positive data from our U.S. pivotal study where we met our primary endpoints, which is very exciting. As you can see on the left, there was sustained IOP reduction by over 20% over the course of 2 years. And on the right, you can see the reduction in medication burden as well with over 80% of patients that were medication-free. Obviously, we're pleased with these results, and they are consistent with other studies in the EU, where we have 8 years of long-term data showing the durability of effect as well.

So this is all very consistent data with what we've seen before, but we're very excited for this controlled -- well-controlled study to read out positive and we'll have full results that will be published and released in the coming months. Related to this, Kathy, if you'd like to talk about the data and what's most impressive to you, that would be great.

Yes. There's 2 kind of things that we look for. Of course, we want rigorous data that's collected in a clinical trial setting and showing that there is meaningful and effective pressure-lowering and medication reduction. The thing that matters most to patients is medication reduction really. That's what changes their lifestyle. That's what changes compliance and therefore, efficacy. But the other thing is what happens in a real-world setting?

And is that durable? Is that something that's going to last longer than the 2 years that we currently think you can even get an effective pressure lowering from cataract surgery alone. And what we see is not only is the amount and effectiveness that we see at the 2-year data mirrored by what we see in that 8-year data, but it is durable across the 8 years. So I think this is really exciting data. I think people will really be moved by that. Some of the data that we currently have for other devices really goes up to 5 years. So having 8-year data already is very meaningful.

Great. Go to the next slide. The key takeaways I'll highlight again is, we really know Elios is positioned to expand the MIGS market by providing a glaucoma intervention that can be performed with cataract surgery. We also know that fewer than 50% of cataract surgeons are performing MIGS today, and so there's a huge opportunity there. And of course, we have our first clinically validated excimer laser, offering a highly precise implant-free approach now with 2-year data, and we expect U.S. approval in second half 2026.

And if we go to the next slide, I think I'll turn it back to Yehia.

Thank you. So obviously, just to conclude on these two products, obviously, glaucoma, we still have a lot of unmet medical need that we need to look at the neuroprotective and the neurodegenerative part of the disease. And this is where BL1107 really hopefully, if the results come as we wish, that could change the way we are treating the glaucoma from a medical perspective.

Similarly, on the Elios side, it's going to be the first to clinically validated implant-free excimer laser technology, which again, addresses a lot of areas, especially with relation to the technology itself that currently does not exist on the market. And so far, we are on track actually for the launch dates for Elios as well as for the data top line on the second half of this year for the BL1107.

So with that, actually, I will give it back to you, Larry, if you want to discuss the questions, if there are questions on both programs, and I would be very happy to answer with the team here.

Great. Thanks, Yehia, and thank you to the team here for the excellent overview. Again, if anyone has a question, they want me to ask on their behalf, please e-mail it to me.

I thought I would start with BL1107 and then go into elios. So starting with BL1107, what have you learned from the proof-of-concept study that gives you confidence in the Phase II study? And what are the study design elements that you refined for Phase II?

Yes, maybe this question, I will direct it to Mayssa, if you would like to comment on this.

Sure. So our confidence is really based on the clinical findings that demonstrate beyond reduced IOP. BL1107 treated patients showed statistically significant improvement in visual field mean deviation when compared to timolol. And importantly, we also saw those 15-letter gains, which are clinically meaningful. And if this is reproduced in a Phase III study, it's an endpoint that supports approvability. And so under the -- if you recall, under the low light conditions, we saw that patients treated with BL1107, a higher proportion achieved 15-letter gains than those treated with timolol. And so those two findings with the understanding of how this drug is designed to achieve the findings as well as mechanistically the way it's supposed to work gives us a lot of confidence.

That's helpful. Did you want to add, Yehia...

Yes. I was just going to say also -- overall, I think there has been in the past long history, multiple attempts to address this area. But currently, there has been a lot of new innovations in diagnosis as well as new endpoints like the low luminance endpoints, those are we can detect patients at an earlier stage. So this gives us a bigger opportunity now with the characteristics of the product that makes us a plus the data we have from preclinical and clinical to make that this product can work in a better way, so -- or a better population. So we hope that this also translate into our results that we are hoping for all.

And when can we see the Phase II readout, it sounds top line in the second half of the year? I don't know a full presentation maybe at AAO? And how quickly can you move to Phase III?

Again, Mayssa can answer how quickly we'll move to Phase III. And then obviously, for the top line, yes, second half. And hopefully, by the academy, hopefully, we will have some results there, yes.

Yes. We obviously recognize that this would be a tremendous opportunity for patients. And so after the data readout, our goal would be to implement the new tools we have at Bausch + Lomb to get into Phase III as soon as possible. So you would see us back in the clinic within a quarter or two of the study readout.

Got it. And what is the regulatory pathway and broad strokes the time line you've shared with us in the past?

Do you want me take it? Okay. In terms of the rate, it's a new drug application pathway that we would take through -- to go through that. Now having said that, we also recognize that glaucoma is a serious vision-threatening disease. And when a glaucoma expectation experience is vision loss, it's irreversible. So we would actually also consider, depending on the data that come out filing for breakthrough designation. And why that's important is if we're able to do that, we'll be able to have an even faster development pathway. So right now, with a normal pathway, we are anticipating -- I believe we've communicated 2031. But our goal, again, depending on these -- the data that we receive is to accelerate this in every way possible.

Got it. How much if you've breakthrough, Yehia, how much time does that save?

Well, the evaluation by the FDA itself could be approximately 6 months saving from the whole evaluation process. It would normally take 1 year. So it could be like 6 months, a rapid review cycle. And obviously, with the breakthrough technology, you have to do only one study. So this can also save some time because if doing one study versus two pivotal could be a big difference in terms of recruitment time and things like that. So we could see some time there as well.

Okay. So broad strokes maybe potentially saving 2 years in total? Is that...

Yes, this will be a little bit of a stretch, but around, yes, maybe 1 year, 1.5 years, I could say that.

Okay. And you showed some impressive data from the proof-of-concept study, put that into context for us in terms of how it compares to other glaucoma drops in terms of efficacy and safety. And obviously, there's -- you talked about Brimonidine, another Alpha-A2 agonist. I know it's not an Alpha-2B agonist. But how does it compare? That's Alphagan and Combigan, the brand names that are on the market. How would this compare?

Mayssa, would you like to comment on that?

So that's a great question. So Brimonidine is a drug that's been on the market for a long time, and it's always had hints of neuroprotection, right? But it's been unsuccessful because the clinical effect size is small to actually gain it as an indication, right? And so how BL1107 compares to Brimonidine and for that matter, to any other drug is that in addition to lowering IOP, which it does, just like any of the other IOP-lowering drugs, it actually has -- because of its design, it's able to elicit clinically meaningful, statistically significant effects on vision. That is unprecedented. So nothing compares like BL1107, including Brimonidine. Because BL1107, it's design -- it's a better design to treat vision-threatening disease than Brimonidine, although it does harness the same pharmacology but more effectively.

Can I add a little bit to that as well as just that I want to say how important it is a 15-letter improvement in vision. And clinically, if you think about that, that's 3 lines. That's like taking somebody who sees their best corrected vision 2025, which is near perfect in the way we think about vision and then having them if they're 2050, a 3-line worsening, they will be no longer able to pass the driver's test. So hugely impactful on their independence. And if we can instead bring them back to 2025 vision and improvement in 15 letters or 3 lines, they then have all that functionality again. So a 3-line improvement is a massive improvement in how it affects their quality of life.

Yes. And I think Mayssa mentioned it during the presentation as well, but I really would like to emphasize, we do believe that our molecule because of being a prodrug. And the prodrug has a lot of advantages because the normal drugs when you just pass through the cornea, the majority is being absorbed by the cornea. So the amount reaching to the eye itself usually is much less -- here with the prodrug, the active drug happens inside the eye. So it really gives you a much better targeting and focus inside the eye for the target tissue. And additionally, we said also, I think Mayssa mentioned, the potency of this product is really pretty impressive on the retinal cells. At least this is what we saw from the preclinical data on animals. We hope this translate as well into the human, but the preliminary one from the clinical study still showing that. So that's the difference.

I was surprised to see a 15-line improvement in vision by day 14. I think about glaucoma as a slow progressive disease. How do you show an improvement in vision so early, so quickly?

You would like to comment on this? This is a great question. So Mayssa, would you like...

It's a great question. So this goes back to this concept of neurofunctional enhancement. If you recall, the reason you lose vision is, first, the cells experience because of these neurodegenerative stressors, they become sick, right? They become -- they have cellular dysfunction. And if it's left untreated, they go on to die and then you can't do anything. What our data suggests is we're intervening early enough that we are treating those sick cells to turn down those stressed pathways so that they can go back to functioning and seeing again. So essentially, that's the neurofunctional enhancement aspect. And if you're doing that chronically, what it will do is it will protect the cells from dying. And so that's the neuroprotection aspect. So that's how we are able to see it so early.

So nonfunctioning cells are not necessarily dead cells. They may become dead cells, but if we can bring them back to function, they won't.

Yes. You think of them as lazy cells, they are unable to perform the function. You want to prevent them from being -- moving from lazy to dead cells. And you're trying to catch them at the lazy stage where you just try to activate them to be just the normal cells again. That's really what we are trying in a very simple terms.

Okay. That's super helpful. So we've got about 17 minutes left. Maybe we can transition to Elios. And if we have time, we'll come back to BL1107. Elios is the more near-term opportunity. Obviously, I'm primarily a device analyst. This is probably a little bit closer to home for me. Maybe let's start with where you see Elios being positioned in the current treatment landscape. I don't know if that's a question for Dr. McCabe or whoever...

I think Dr. McCabe would be the best to answer this one.

Yes. And I'm happy to answer it because I see Elios as the go-to interventional glaucoma device that surgeons are going to use in conjunction with cataract surgery. And we really have a mindset that's changed a lot over the last years, in that if we have the opportunity to get a patient to have IOP control with minimal medicine intervention, that decreases their burden, cost and compliance-wise and increases the likelihood of efficacy and protection from further visual loss in the future. Because Elios has excimer laser, which is very precise, and we really feel that. We use excimer laser for Lasik. We understand how precise it is. We know it's a nonthermal laser. And it creates more openings in the trabecular meshwork than any other thing that we have while preserving normal tissue for further intervention, and the technique needed to do that is very accessible. I think it will be the go-to device that -- we usually think about let's have one thing in our back pocket that we really feel good about that we know we're going to be able to effectively do that we're going to have the least side effects, the least risk of complications. And I think this will be the device that people look to do that.

And there are other laser technologies out in the market today for glaucoma, SLT, for example, how is this different?

I'm happy to take that, and Yehia if you want to jump into. DSLT is different. It's a different market. It's for earlier intervention. It's an in-office procedure and has more of a variable response. I think the -- one of the things we're most excited about Elios is the short learning curve that Cathy spoken about as well as even for those who are not as experienced with MIGS procedures and the favorable reimbursement profile of this product. So we're excited for that. And as mentioned before, the precision with the excimer laser itself.

Got it. And you showed the 2-year -- Kelly, you showed 2-year data today for the first time. I haven't had a chance to look and see how that compares to the other MIGS. There's a lot out there. I mean I think people are probably most interested in iStent since that's the biggest. But if you want to put that into context, with goniotomy, canaloplasty, et cetera, that would be helpful.

Absolutely. So happy to give a little bit of overview and reinforce some of those points, and then Yehia please jump in and Dr. McCabe as well. So -- as mentioned, we shared the positive 24-month data on Elios today. The safety and effectiveness of this data is similar to that of other MIGS devices, but without leaving an implant behind. So I think that's one of the really exciting things about this data.

We met our primary effectiveness end points, demonstrating both statistically significant and clinically meaningful IOP reduction. The unmedicated diurnal IOP was reduced by 20% or greater in 76% of the patients. So the majority of patients saw that effect. Patients experienced an average of 7.4 millimeter mercury's decrease in unmedicated diurnal IOP. And the average number of medications went from 1.5 at screening down to 0.3 at 23 months, so a very large reduction there.

No interoperative complications seen to the procedure and a similar postoperative adverse event profile from cataract surgery alone. So I think all in all, the data is consistent with what we've seen outside of the U.S., but even more reinforced with the well-controlled study that was running.

And then Dr. McCabe anything to add or...

Yes. The only thing I would also add is that the 2-year data that we see in that 8-year published real-world data is very, very similar. And one of the things we saw early on with stent based MIGS interventions was it looked like sometimes the efficacy was not quite as good, and that's because a lot of those stents you can actually put in the eye, they'll stay in the eye, but they aren't necessarily in the tissue they're supposed to be. So I think one of the things that's going to be a real advantage to this is it is a more direct application right to the trabecular meshwork, where you know that you've done the treatment where it needs to be, and you have 10 rather than 1, 2 or 3 fenestrations that you've created -- but without destroying all of the anatomy, which is what a large goniotomy does.

Dr. McCabe, what's the learning curve here? You talked about it earlier. You said efficacy and safety are really important, but so is ease of use, and I'm paraphrasing what you said. How does that the easy to use and the learning curve stack up to other MIGS procedures?

Yes. And I've had the opportunity to do a lot of training on lots of different MIGS devices, but I've observed a lot of people who have used Elios as the first time that they've used. And it could be very experienced glaucoma surgeons, experienced in the angle, some of those doctors were doctors who had started off with stents and then just gave up on it because they didn't feel comfortable with it. And then other doctors that I observed were new users in the angle of MIGS procedures. And all of them found that it was very accessible, very similar to other things that we need to do as far as how you move the instruments in the eye. It's just simply a probe. We use probes for lots of things. And you just need to identify the trabecular meshwork, which is easily identifiable. So every single one of the doctors I observed and myself, as I learned this procedure as well, found it to be very, very straightforward. So I think the learning curve is going to be very easy.

That's helpful. And maybe another one for Kelly. How confident are you in obtaining regulatory approval and launching Elios in the second half of this year?

We remain confident and look forward to the launch, yes, second half.

Okay. You talked about reimbursement. Somebody mentioned reimbursement. This is a space that has a lot of volatility to put it mildly. Forgive me, I don't -- on the pivotal trial, was it a single ARM trial? Or was it an RCT? What's the -- how do you expect the reimbursement to shake out compared to other MIGS?

Actually, I think it has a specific reimbursement codes as a procedure. So that's actually one of the biggest things that we always look at. And Elios has already won. I think the trial to your answer this question, it was actually a trial that had a single arm. So it was a single arm of doing combined cataract and glaucoma surgery. And I think we have a very good reimbursement structure so far at present. I actually -- again, I wish that we had somebody from the commercial to speak more to this. But generally speaking, I think the reimbursement is based on even the trial that we have. So we think we have a very good chance to achieve the desired reimbursement for the product.

So we have a strong reimbursement team that understands procedural codes and understands procedures such as this. We have confidence in the procedural code that we will use that launch, and so we know that this will be a competitive product within the space and certainly competitive with all the other MIGS devices that exist today.

Okay. I mean, I guess -- is there anyone -- do you have with this code that you have, do you have any advantages on the reimbursement side compared to other technology that we should be aware of? Do you think it to be competitive, Yehia, to other like iStent or do you have the advantages on the physician fee...

I know it's -- I cannot comment to the competitive part, but I know it's going to be very good in terms of the reimbursement part for Elios.

That's R&D call. So we'll work on all [indiscernible] on the...

I think that's the best way, yes.

But we all know on this call how important the reimbursement is in this space.

I would just say that the reimbursement we anticipate, we'll be able to support the enthusiasm that we expect surgeons to have for the technology. And sometimes it's a barrier. We don't think reimbursement will be a barrier -- we'll just support that enthusiasm.

That's great. That's good to hear. Is there an opportunity here as a stand-alone procedure for Elios? Or do you imagine this mostly as a done in combo cataract?

Yes. For now, it's a combo cataract that sort of study didn't.

Is there a plan or hope to study it as a standalone procedure going forward?

So right now, we don't have plans for that, but we are looking into that as a future development.

Got it. And before I go back to BL1107, just the $175 million peak sales, would anybody care to kind of characterize how to think about the ramp? Is this -- are there any analogues you would point to, Yehia, just going to be fast, slow? Any comment?

Yes, Larry, maybe I'll answer that one. I'll jump in here. So we do anticipate the approval in the back half of this year. I really think you're going to see the impact in our P&L in '27, and ramped nicely in '27 into '28. I think given the learning curve that Dr. McCabe described, I think will ramp more quickly than other MIGS, but it will still really be a '27 P&L impact for us in a positive way. Yes.

Got it. That's helpful. And then going back to BL1107, we didn't talk about the sustained release formulation. There's a lot of excitement with the success iDose is having. We have [ Durysta ] out there. Talked about the status of the sustained relief formulation and how it might compare to the incumbents.

Yes. I think I will hand over also to Mayssa to give an overview of this. But before I hand over to Mayssa, I just would like to mention if the study results by the second half of the year comes as we expect, this will open the door for multiple other indications. So it's important for us also to start to think about other formulations other than the eye drop, and this is where we also started to focus on drug delivery system long acting, and I think I'll just hand over to Mayssa to give you also a perspective on this program that we are doing.

So in terms of our work on the sustained release, it's -- the data so far in our hands are very promising and support entering development at the end of this coming year -- sorry, at the end of this year, 2026. And how we compare, I think it's inherent to the molecule that we're formulating. So if you recall, we also have a partnership with Ripple that really has best-in-class approach for long-acting injectables. And because this would be the first molecule that's being formulated to lower IOP as well as protect cells in the retina. Nothing can compare with it and the doors it could open, it could be a long-acting glaucoma treatment. It could be a long-acting retina-like geographic atrophy treatment. So there are so many things we could do with a formulation that was long acting. And so again, I don't think there's anything like it right now, and it really comes back to what we see in this first clinical study that's going to read out later on this year to confirm mechanistically it's doing what we have seen it do so far. And then we are very excited at the opportunities that will open for us.

And then maybe lastly, could someone talk about the IP and the patents you have around BL1107, please? And how long they go out?

Yes. I think for the BL1107, we actually have numerous pending families around the world with several have been issued. We also have a lot of new applications for composition of matter, pharmaceutical composition of claims, methods of treatments, new mechanisms, potential other indications. So we have a very wide patent portfolio for BL1107. It goes all the way up to 2046. And actually, we are -- actually, some of them are pending, but some of them have been already granted. So that's -- we are moving in a very good direction with this one in terms of patent.

I think Brent mentioned also at the JP Health Morgan (sic) [ JPMorgan Health ] that one of the areas that we're focusing on across all our new pipeline is patents. And this is an area we have seen a dramatic increase unprecedented number of new patents we have applied for all our products during the last year and this year, we continue to do the same. So for BL1107, in particular, we are very confident, and it goes up all the way up to 2046.

That's helpful. So 3 minutes left. I wanted Yehia to give you kind of an opportunity to add anything that we didn't discuss that you want to highlight or to summarize. If I do the math here, these two assets, it's about $1 billion peak, $800 million, I think, you have for BL1107. $175 million for Elios. I'm rounding up a little bit. But obviously, a big opportunity here for Bausch + Lomb. Thank you again for the opportunity to host us. Yehia, I'll give you the last couple of minutes here.

Thank you very much. We really appreciate the opportunity, Larry. And again, we are really very excited about our pipeline overall. I think we are really trying to target areas that have been known to be a high unmet medical need. There is not a lot of approved treatments currently. If we speak about the neuroprotection piece, we think that this is an area. Obviously, a lot of companies looking, but this will be the first product that has dual mechanism of action to address the IOP as well as the neuroprotection piece of glaucoma.

And similarly, also, I think for the cataract surgeons that are looking for a quick fast MIGS procedure without leaving an implant behind with a very high precision, a very rapid process and also a very effective for a very long period of time, the Elios is a great approach to that. And I think we are actually trying to find out even more to increase our pipeline with such things that are unique, differentiated and addressing big areas of unmet medical need that we are still not addressing. So that's really where we are focusing with our pipeline. And I -- we will have more sessions like this for other products, I hope in the near future as well.

Sounds good. Well, with that, we'll end it. Appreciate everybody's time today, and I hope everybody on the line found it useful. So with that, we'll end the call and see everybody soon. Thank you.

Thank you.

Thank you.

Good morning, and welcome to Bausch + Lomb's Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to George Gadkowski, Vice President of Investor Relations and Business Insights. Please go ahead.

Thank you. Good morning, everyone, and welcome to our fourth quarter 2025 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer, Mr. Brent Saunders; Chief Financial Officer, Mr. Sam Eldessouky; and President of Global Pharmaceuticals and International Consumer, Mr. Andrew Stewart.

In addition to this live webcast, a copy of today's slide presentation and a replay of this conference call will be available on our website under the Investor Relations section. Before we begin, I would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation as it contains important information.

This presentation contains non-GAAP financial measures and ratios. For more information about these measures and ratios, please refer to Slide 1 of the presentation. Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website. The financial guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter unless required by law and not to update or affirm guidance other than through broadly disseminated public disclosure.

With that, it's my pleasure to turn the call over to Brent.

Thank you, George, and good morning. I'm going to start by highlighting Q4 and full year results, which show we don't just talk about strategy. we execute it. Sam will put more context around our performance and provide 2026 guidance, and Andrew will cover opportunities to expand our leadership in dry eye. I'll close with a look at why we continue to be so excited about 2026 and beyond.

When you hear me talk about execution today, this is exactly what I mean. In the fourth quarter, we didn't just grow. We grew smarter and faster than the market. When you see 7% constant currency revenue growth and 27% adjusted EBITDA growth that's real operating leverage and a clear sign of our commitment to financial excellence.

The discipline we built into the organization is paying off. This isn't a onetime exercise. It's the direct result of teams making better decisions, a fundamental shift in our cost structure and executing consistently across our businesses. We plan to harness that momentum to deliver on our 3-year plan. Results don't come from slides or strategy decks. They come from people who believe in what they're doing, take ownership and execute every day. That mindset across our company is what made our record performance in the fourth quarter possible, and it's a privilege to lead a global team committed to winning together.

I highlighted fourth quarter growth on the previous slide, but would note that both $1.4 billion in revenue and $330 million adjusted EBITDA are a high watermark for our company that's been around for quite some time. While it's important to remember that there is seasonality to our business, which is especially true as our Pharmaceutical segment becomes more prominent, we did what we said we would do in the quarter.

Our ongoing focus on selling excellence is best illustrated by our continuously expanding dry eye portfolio with Miebo generating $112 million in the fourth quarter revenue. We continue to be impressed by Miebo's trajectory and turn towards profitability as we exit the launch phase. The latest demonstration of our commitment to operational excellence and staying nimble to drive sustained profitable growth comes from our surgical business, where we made several strategic fourth quarter moves to position us for margin improvement.

Finally, as I shared at Investor Day, our pipeline isn't theatrical. It's active in delivering from the imminent launches to active recruitment for forthcoming trials, we're translating R&D into revenue and impact. That's what builds confidence in future growth. If there are any skeptics of our 3-year plan coming out of Investor Day, this slide is for you. We didn't overpromise in 2025, we executed and the outcomes speak for themselves, 6% constant currency revenue growth, excluding the Investor recall, was faster than the market and at the midpoint of our planned CAGR through 2028.

Adjusted EBITDA margin came in at 17.5%, with an impressive 23.5% in the fourth quarter. Importantly, margin expansion steadily increased throughout the year, putting us on a path to achieve margin targets in 2026 and beyond. You've heard me and Sam reference say-do mentality before. Here it is on paper. Financial discipline is no longer a onetime effort or a cost savings program. We've built the muscle around planning, prioritization and accountability, which puts us in a much stronger position to drive sustained margin improvement over time.

People hear pipeline and think long term. What they should think is momentum because something meaningful is happening across our portfolio at all times. PreserVision AREDS3 started to ship on February 2, and Blink triple care preservative-free is expected to ship on March 1. CE Mark submission for, our next-generation pemtosecond laser is expected to take place next week with anticipated approval in the second half of the year.

All trial recruitment is on schedule, and we recently received top line data from our first external study for our new bioactive contact lens material. We're pleased to report the study met our expectations and heightens our probability of success. Our in-house R&D team has started its analysis, which will allow us to make improvements to the lens, and we remain on track for our second external study and plan 2028 launch.

When it comes to our pipeline, the future isn't waiting, it's already underway. This 2025 performance summary highlights the breadth of our offerings and shows why diversification is a competitive advantage. We've built a company that covers eye health end-to-end, and today, every part of the business is contributing. That's what durable growth looks like. The spotlight products drive that point home. They can be found behind the pharmacy counter, in the operating room or a few clicks away. Some, like have demonstrated strong growth in important markets outside the U.S., as we implement our strategy to focus on core formulations. Others like LUMIFY are prime for additional exposure and opportunity as next-generation offerings are introduced.

I'll now turn it over to Sam for a deeper dive on Q4 and full year financial metrics including cash flow figures that I know he is particularly proud of. They'll also provide 2026 guidance, which is aligned with our 3-year growth plan. Sam?

Thank you, Brent, and good morning, everyone. Before we begin, please note that all of my comments today will be focused on growth expressed on a constant currency basis, unless specifically indicated otherwise. In addition, all of my references to adjusted EBITDA will exclude acquired IPR&D.

As Brent mentioned, Q4 was a record quarter. We delivered the highest revenue and the highest adjusted EBITDA in the history of Bausch + Lomb. We also delivered an adjusted EBITDA margin of 23.5%, which is the highest level we have achieved as a stand-alone company since our IPO. In the quarter, we drove meaningful operating leverage with adjusted EBITDA growth of 27% on a year-over-year basis. Building on our strong third quarter performance, in Q4, we continued to deliver on the commitments we outlined at Investor Day and showed how our relentless execution will set us up to achieve the 3-year targets we outlined in November.

Turning now to our financial results on Slides 9 and 10. Total company revenue for the quarter was $1.405 billion, up 7%. Full year revenue was $5.101 billion, up 5% and up 6% excluding the investor recall. We saw revenue growth across all our segments, both in the quarter and the full year. Currency was a tailwind to revenue of approximately $37 million in the fourth quarter and approximately $58 million for the full year.

Now, let's dive into each of our segments in more detail. Vision Care fourth quarter revenue of $778 million increased by 5%, driven by growth in both consumer and contact lenses. Full year Vision Care revenue was $2.923 billion, up 6%. Let me go over a few highlights. Following double-digit growth in Q4 in the prior year, the Consumer business delivered 3% growth in the quarter. For the full year, the Consumer business grew 5%. LUMIFY generated $63 million of revenue, up 24% in Q4, and $221 million of revenue for the full year, up 16%.

The consumer dry eye portfolio delivered $116 million of revenue in the fourth quarter, up 6%. The growth was led by Blink, which grew 33%. Full year Consumer dry eye revenue was $436 million, up 14%. Eye vitamins, PreserVision and Accubid grew by 2% in the fourth quarter and 2% for the full year. Contact lens revenue growth was 8% in the fourth quarter and 7% for the full year. The growth was again led by SiHy, which was up 17% in the fourth quarter and 28% for the full year.

Additionally, Ultra was up 16% in the fourth quarter and 9% for the full year. In Q4, our contact lens business saw growth in both the U.S. and international markets. The U.S. was up 11% and international was up 6% in the quarter. For the full year, the U.S. was up 9% and international was up 5%. In China, contact lenses continued to perform well and grew by 7% in the quarter and 8% for the full year.

Moving now to the Surgical segment. Fourth quarter revenue was $249 million, an increase of 3%. Excluding the impact of the investor recall, Q4 revenue growth was 6%. For the full year, Surgical revenue was $894 million, up 4% and up 10% excluding the recall. In Q4, implantables were up 5% and 24% sequentially. For the full year, implantables were up 4%. Premium IOLs were up 20% for Q4 and 26% for the full year. Consumables were up 4% in the fourth quarter and 5% for the full year. Finally, equipment was up 2% in Q4 and 3% for the full year.

Revenue in the Pharma segment was $378 million in Q4, which is an increase of 14%. For the full year, Pharma revenue was $1.284 billion, up 6%. Our U.S. Branded Rx business was up 21% in the quarter and 13% for the full year. Strong Miebo execution once again led the growth. Miebo delivered $112 million of revenue in Q4, an increase of 111% year-over-year and 33% sequentially. For the full year, Miebo revenue was $316 million, which represents impressive growth of 84%. Zidar continues to track in line with our expectations, and our team is executing our strategy. In the quarter, Xiidra revenue was $95 million and $331 million for the full year.

Our international pharma business was up 5% in the quarter and 6% for the full year. Finally, we are seeing meaningful progress in our U.S. generics business, where we saw growth sequentially and on a year-over-year basis. In the fourth quarter, U.S. Generics was up 4% on a year-over-year basis and 24% sequentially.

Now, let me walk through some of the key non-GAAP line items on Slides 11 and 12. Adjusted gross margin for the fourth quarter was 62.1%. This absorbs an impact of approximately 80 basis points related to tariffs. For the full year, adjusted gross margin was 61%. In Q4, we invested $94 million in adjusted R&D in line with Q4 2024. Full year adjusted R&D was $371 million, up 8%. Fourth quarter adjusted EBITDA was $330 million, up 27% on a reported basis. The adjusted EBITDA margin was 23.5% in Q4, which represents year-over-year expansion of 330 basis points.

As I previewed at Investor Day, we are continuing to focus on efficiencies and SG&A, and we are seeing the benefits in operating leverage. Full year adjusted EBITDA was $891 million. We are pleased with the work we've done on cash flow optimization. Adjusted cash flow from operations was $152 million in the quarter and $381 million for the full year. Adjusted free cash flow for the quarter was approximately $76 million and $32 million for the full year. CapEx for the full year was $349 million, which includes approximately $30 million of capitalized interest. Net interest expense was $95 million for the quarter and $376 million for the full year excluding a $33 million charge related to refinancing fees.

The full year 2025 adjusted tax rate was 10%, which is lower than our previous guidance of approximately 15%. The lower tax rate was mainly driven by the impact of the investor recall and other onetime adjustments. Adjusted EPS, excluding acquired IP R&D was $0.32 for the quarter and $0.51 for the full year. Adjusted EPS in Q4 includes a onetime noncash charge of $0.08 related to a revaluation of stock-based compensation to reflect our strong performance and favorable long-term outlook for the company. Excluding this charge, EPS for the quarter was $0.40 and $0.59 for the full year.

Now, turning to our 2026 guidance on Slide 16. For 2026, we expect to build on the results we have delivered in 2025 and to continue to execute to achieve our 3-year financial targets outlined at Investor Day. The fundamentals of our business and the eye care market remains strong. We expect our revenue to once again grow faster than the market, and we expect each of our segments to deliver growth in 2026. We expect full year revenue to be in the range of $5.375 billion to $5.475 billion, which represents constant currency growth of 5% to 7%.

Based on current exchange rates, for the full year 2026, we estimate currency tailwinds of approximately $30 million to revenue. We expect to continue to execute our margin expansion strategy. We are setting our adjusted EBITDA guidance in the range of $1 billion to $1.50 billion. This reflects a margin of approximately 19% at the midpoint of the guidance range and adjusted EBITDA growth of approximately 15% on a year-over-year basis.

We expect to drive meaningful operating leverage in 2026, with adjusted EBITDA growing at a rate of nearly 3x debt of revenue. In terms of the other key assumptions underlying our guidance, we expect adjusted gross margin to be approximately 62%, and we expect investments in R&D to be in the range of 7.5% to 8% of revenue. Throughout 2025, we've taken steps to address our debt maturities and cost of debt. We expect interest expense to be approximately $365 million. We expect our adjusted tax rate to be approximately 19%, and we expect our full year CapEx to be approximately $285 million.

In terms of our quarterly phasing, we continue to expect the natural seasonality of our business with the first quarter being the lowest and the fourth quarter being the highest. This seasonality is expected to become more pronounced as the dry eye franchise continues to grow.

To conclude, we have laid the foundation for revenue growth and margin expansion. We started seeing early results in Q3 2025 and delivered a record quarter in Q4. This gives us a clear signal that the strategy is working. The business is proving to be on a solid path to delivering our long-term targets, and our focus for 2026 will remain on execution.

And now I'll turn the call back to Brent.

Thanks, Sam. I'm now going to turn it over to Andrew Stewart for a look at Miebo and Xiidra performance and an overview of the immense opportunity in dry eye.

Thanks, Brent. Miebo performance in 2025 was exceptional, with 113% year-over-year prescription growth that generated $316 million in revenue. We hit a significant milestone on January 2, crossing the $2 million prescription mark. Going forward, we expect a steady increase in prescription growth and profitability as more patients experience the therapeutic benefit of Miebo and our level of investment stabilizes.

With broad market access and natural progression in the medication life cycle, we anticipate normal seasonality from Miebo prescriptions, similar to what we see for Xiidra and other branded medications in the category. We previously shared that Miebo peak sales could reach $500 million. Based on its success, less than 3 years since launch, we now believe peak sales could exceed $600 million. I'm going to pick up on Brent's theme around execution.

When describing Xiidra's 2025 performance, we said we would drive prescription growth, and that's exactly what we did. Total prescriptions grew 6% year-over-year in the fourth quarter, marking the highest quarterly total since launch. In 2026, we anticipate revenue growth and higher profitability, as we evolve our market access strategy. Xiidra and Miebo continue to have best-in-class commercial and Medicare coverage with 4 out of 5 patients covered.

Ultimately, we expect both of our flagship dry eye medications to be even bigger contributors to the bottom line in 2026. Dry eye disease is one of the largest and most underpenetrated categories in eye health. Today, approximately 1 in 10 patients are actively treated with prescription therapy, leaving substantial runway for increased adoption. The global market is expected to nearly double in the next 4 years and much of the recent prescription growth can be attributed to Miebo.

For the past 2 years, eye care professionals have been able to more effectively treat patients with the first therapeutic product that can manage a evaporated dry eye. This has helped lead to a 5x increase in year-over-year average weekly dry eye prescribers. The overall dry eye market continues to expand due to several factors, most notably an aging population, environmental factors and a dramatic increase in screen time. From over-the-counter products that provide symptomatic relief, prescription therapies that treat both signs and symptoms and diagnostic tools that help eye care professionals better serve their patients.

Our comprehensive portfolio of dry eye products is second to none and positions Bausch + Lomb to be the biggest beneficiary as more consumers and patients receive treatment. We're not just participating in dry eye we're leading it. We have the broadest portfolio, the deepest expertise and the strongest presence in the category and in one of the fastest-growing areas of eye health. That's exactly where you want to be.

Thanks, Andrew. Earlier, I mentioned 2 imminent consumer launches, which tell very different but equally powerful stories. One is about evolution, taking a proven product and unlocking a much larger opportunity. The other is about acceleration. A brand we brought back to life that's now growing faster than ever. Two distinct paths, both driving meaningful upside.

Let's start with PreserVision, the #1 ivitamin brand. We partnered with the National Eye Institute for decades to help reduce the risk of progression in moderate to advanced AMD, which has led to continuous evolution of the product. The latest and most advanced iteration is AREDS3, which incorporates B vitamin Science. This new formulation allows us to engage patients earlier when the population is significantly larger and the opportunity is greatest. It transforms our role from treating progression to supporting the full continuum of care.

Blink is a great example of what focused execution can do. We revitalized the franchise and built real momentum with 38% constant currency revenue growth in 2025, but we're not standing still. We're building on that success with an advanced preservative-free lipid-based formulation of triple care to reach even more consumers as demand continues to rise. These launches show how we create growth from strength, science and momentum.

Our contact lens business has outperformed the global market for 2 straight years with 9% average constant currency revenue growth over 2024 and 2025 compared to mid-single-digit growth for the industry. Where others have faced significant headwinds, the impact for Bausch + Lomb has been less pronounced. China is a prime example. While there is some consumer softness, our lens business there grew 7% on a constant currency basis in the fourth quarter.

Our consistency comes from disciplined execution and a steady, deliberate global rollout of innovation. Activity in the first half of this year drives that point home. In January alone, we launched daily multifocal lenses in several European countries with an anticipated April launch in France. The same offering launched in Korea and New Zealand this month.

In Surgical, I'm happy to report that this will be the last time we proactively referenced the voluntary Investor recall at earnings, and here's why. When we returned to market in late April, we said our plan was to reach Q1 2025 levels by Q1 2026. We met that goal in the fourth quarter, well ahead of schedule and the strong uptake we're seeing is the result of great execution, trust and offering a product surgeons genuinely prefer. What did that mean for our premium IOL portfolio last quarter? It helped drive 20% constant currency revenue growth, contributing to 5% constant currency revenue growth in our implantables business.

The fact that implantables grew despite the recall is particularly noteworthy and speaks to the potential in this category. We expect to build on that momentum in 2026 and beyond as our existing premium offerings become further entrenched and new options are introduced around the world.

As made clear by fourth quarter and full year 2025 results, we're not just talking about execution, we're proving it. We said what we were going to do, and then, we went out and did it product by product, milestone by milestone, business by business. The results are real and measurable. We view our progress to date as a foundation, not a finish line. The most important chapters of this story are yet to be rated, but our commitment to execution makes us confident in what comes next. Our pipeline is the envy of the industry and puts Bausch + Lomb firmly on the path to sustained growth and long-term success.

Let's take your questions. Operator?

[Operator Instructions] Your first question for today is from Patrick Wood with Morgan Stanley. .

Perfect. I guess, first one, just big picture when we're looking forward into '26 and the growth guide that we have, how are you guys thinking about the composition of that? Brent, from your perspective, what are the key areas to execute on to make that happen? And should we look at the strong momentum as we exited '25 by product line is a good influence for like where we should be hitting in terms of growth by category for '26?

Yes. Thanks, Patrick. Look, you heard me in the presentation using the word execution. You heard me probably mention the word execution, at least a dozen times throughout the prepared remarks. And let me just try to take a step back and then come at your question. Look, as you just heard, in Q4 '25, we delivered 7% growth and the highest revenue and highest EBITDA in the history of our company, right, 172 plus years.

More importantly, we delivered 27% EBITDA growth and 23.5% EBITDA margin. Yes, Q4 is seasonally our strongest quarter, but seasonality alone, right, doesn't produce that level of operating leverage. What you're actually seeing is real structural improvement in the P&L. The quarter reflects the impact of Vision 27, our program that we put in place at the beginning of the year, and we're shifting mix towards higher-margin products, improving pricing discipline, driving productivity across the organization and operating with a more fixed cost infrastructure. That means growth now drops through at a higher rate. So when we grow, we see it in the bottom line.

Remember, we're only 1 year into the 3-year program that of Vision 27. So what Q4 shows is what disciplined execution can do. It's not a one-off result. It really is evidence of the foundational change we now have in how we run this company. Execution really isn't a slogan. It's really about the daily work of aligning the organization around clear priorities, making trade-offs and following through. It's focusing on the few things that matter and doing them consistently well. And over time, that builds consistency, and it builds credibility both internally and externally with all you and our shareholders.

Look, I get trust is earned quarter-by-quarter. When we say we'll improve margins, we're going to improve margins. When we commit to advancing the R&D pipeline, we hit those milestones. And so that steady drumbeat of delivery is how we change perceptions, and most importantly, create long-term value. So as we continue to progress the pipeline, where we're making strong scientific and clinical progress, really the financial model becomes more compelling if you take a step back and think about it.

We now have a platform in Bausch + Lomb that can absorb the innovation and scale it efficiently. So I think, Patrick, when you look at it, Q4 really demonstrates what strong good execution looks like, and it shows our culture is changing, our model is improving and our leverage in the P&L is real. And most importantly, we're really early in the journey. I really do believe our best days are ahead because of the foundation we have built is stronger than it's ever been. And so look, as I think about '26 Q4 showed a lot of momentum, and we're going to ride that momentum into this year.

Super clear. And then just as a quick follow-up. Miebo now potentially $600 million, everyone was bullish about this when it first came into the market. But I would guess it's come in quite a bit ahead of certainly where we expected, probably where you guys expected to. Are there any like key lessons for that when you're thinking about your pipeline going forward, the surprise of how well Miebo done? What do you put that down to? And what are the kind of lessons associated with that, that you then can use for the rest of the pipeline?

Yes. I'll take a shot at it and then maybe Andrew wants to add a few thoughts as well since we have him on the call for the first time. Look, when I arrived, Miebo was finishing its as being filed and waiting approval. And you're right, the organization had good plans for it, but nothing -- its peak sales were lower than current sales are today, right? And what we did is we upgraded the team, right? Talent matters across the whole organization, including the field force, most importantly. We made some big investments, which some investors were skeptical of, right, because it did impact the P&L. But we said, look, we have a really good medicine here. We have a great category that's untapped. And we think that we can do something special with this Miebo because of its benefit risk profile is so positive. And we made very strategic smart, thoughtful investment. And now, it's time to harness that. And keep in mind, Patrick, the $600 million is not $600 million. It exceeds $600 million, right? We're not satisfied at $600 million, right? That's just our latest, I guess, elevation of peak sales. But I think this thing can keep going from there. And so we have what we need. The table is set, right? We have our fixed -- as I mentioned in the previous answer, we have a fixed cost infrastructure. It's now getting leverage through that. And so don't take away from this that we're not investing in Miebo. What we are is we're holding our investments steady. So the benefit of all the growth flows through the P&L to the bottom line.

But Andrew, anything else you'd add?

Yes. Look, 2 things, Brian. I think, one, when you take a great medicine, as you mentioned, something that has a phenomenal safety profile with an extremely fast, rapid onset in terms of efficacy for patients and you marry that to great execution, best-in-class field force execution and a marketing approach that I think has been second to none in the dry eye space. You put those 2 ingredients together and you have great success. And I think when we look at our pipeline for the future, taking those types of execution successes forward will be a key to how we move forward with the company.

Your next question is from Young Lee with Jefferies.

All right. Great. I guess, first one, maybe a follow-up on viable, really strong results and up the big. Sounded like you're sort of holding the investments on that side, relatively steady. Can you maybe comment a little bit more about the -- how that impacts the growth trajectory of Miebo? Heard the comment on steady growth, but we'd love to hear a little bit more about that. .

Yes. So I mean, I think what you're going to see is continued strong growth of Miebo. I would -- Sam and I both said in the prepared remarks, I think as you think about particularly modeling 2026 or any -- frankly, any year on a go-forward basis, you have to think about the seasonality, right? Just the way copays and deductibles work in the prescription market make Q1 the softest and Q4 the strongest. And so where in the past, when you're in launch mode, you see kind of quarter-by-quarter continuous improvement, you're going to see more seasonality on a go-forward basis there. But if you look at Miebo for the year, we have big expectations for growth in Miebo and profitability.

I don't know, Sam or Andrew, if you want to add anything.

That's exactly right. And I think Young, 1 of the key things we talked about at Investor Day, and hopefully, you guys have seen it in our results in Q3 and then also you've seen in Q4 is that we said we're going to be focused with more targeted investments. We build the infrastructure around the dry eye franchise and really shifting from what we refer to as the launch phase to the growth phase, which is really continuing to invest behind the franchise as a whole and making sure we're targeted with these investments to continue to drive the top line growth.

Look, I think another key theme for 2026 is as we think about our access and affordability strategy. We're coming to a point of steady state. We're comfortable with the access that we have. We're nearly 4 out of 5 patients for both commercial, and Medicare have access to Miebo. And so that puts us in a great position to continuing to support patients and physicians as they get more experience with the product and add more patients to Miebo's growth through the year.

Young, did you have a second question?

Yes. That was very helpful. Yes, that would be great if I can ask the second one. I wanted to get your thoughts on sort of the state of the market as well as the competitive dynamics your portfolio right now has improved significantly since the IPO. You've got a really robust pipeline of products. But for this year, there's players that's coming with more supply on the contracting side, this new entrant on U.S. IOLs, recent launches that's ramping for premium vials, dry eye drugs. So just wanted to hear your thoughts on how that can impact '26? And maybe which segment faces the toughest competitive challenges?

Yes. So look, I think we take all competition seriously. I think if we break it down into kind of the 3 markets you just discussed, I think pharma, while we have a real competitor there from a very strong company, I think we feel very good about our position, right? We have the #1 and #2 brand. Andrew mentioned we have very strong access for patients, and we have a lot of momentum. And we have frankly, for evaporative inflammatory dry eye, which are the largest 2 components of the market, we have the best medicines for patients. And so I think we're established very well there in competition. .

If you take contact lens second, I think when you look at the state of the market in '25, the market probably grew -- data is not perfect in contact lens. It's a little harder to put together, but our numbers suggest that the market grew somewhere around 4% in 2025. For the full year, we grew 7% and 8% in the fourth quarter. So fourth quarter almost doubled market growth. A lot of that is based off of 2 things. It's our daily SiHy putting up incredible growth, right, 17% in the quarter, 28% for the year, I believe, in the numbers. And that's driven by continued launch of modalities. And in the prepared remarks, I mentioned we're still -- the only market that has the 3 main modalities is the U.S. The rest of the world is still in launch mode. And so you're going to see a continuous speed over the next year or 2 of launching those modalities and driving growth.

But Ultra was still up in the fourth quarter, 16%. So we're not creating a leaky bucket. We're doing what we need to do. And, yes, the industry saw some weakness in Asia and China as an example, we grew lens 7% in China in Q4 and 8% for the year. So our DTC model, we're direct with the fully integrated direct-to-consumer model in China gives us a lot of flexibility to meet the consumer where they need to be and where they're purchasing. Southeast Asia still remains a little flat. But I suspect the market is going to grow a little better and improve overall in '26, maybe 4.5% or better. And so I think we're in a strong position.

And then, of course, we're moving full steam ahead with new product launches in 2028 that we're pretty excited about. So I think our cycle of growth in the competitive state in the lens -- contact lens market is, I think we're in a strong position.

Surgical, probably the most competitive market of the 3. But again, I look at our execution and the quality of the products we have. I mean, 4% implantable growth in 2025 is pretty damn impressive when you consider we had a significant recall of our entire Investa platform in the year, right? And so I'm not excluding anything to get the 4%. That is the actual growth. And when you look at what happened in the quarter, you have 20% premium IOL growth and 26% full year premium growth. And so that -- what I mentioned in the prepared remarks, this move to higher-margin mix products is happening in surgical.

We know that surgeons do like the Envista platform and really do like our trifocal envy. We're also launching Lux products outside the U.S., premium brands. And of course, enVista Beyond is completing its clinical trial. So we have a steady cycle of new launches and continued execution there. And I feel pretty good we can grow faster than market in all 3 businesses. And that's why we're putting up top line numbers that are faster than the market.

Your next question for today is from Joanne Wuensch with Citibank.

You gave us a little, I think they're called Easter eggs, but I'm going to call it a nugget out early like that. I'm seasonally moving forward. about the clinical data that you saw for the new material for the contact lenses, could you expand on that a little bit? And what did you see that increased your confidence?

Yes, Joanne, thank you. I'm going to turn it over to Yehia in a second, but I'm going to steal that Easter egg thing that I feel like I'm playing a video game. So that's awesome. No, look, we got the top line. The team just got it right before earlier, I think late last week or there about. So we're still going through the data. It's quite an immense amount of data, but we're pleased. And I'll just say this, and then, turn it over to Yehia, getting the way you develop contact lenses are different than a lot of other products. And I think we told you at Investor Day, we plan to do one external clinical study to get data to iterate. We'll do a second external study, and then, we'll do the registration and claim studies for a 2028 launch. So we're exactly where we need to be. But every time you pass 1 of these thresholds, your confidence about the fact you have a real product that can make a difference increases. And that's why I'm so excited about where we are right now. But let me turn it over to you here.

Yes. Thank you, Brent, and good morning, Joanne. Yes, we are really pleased to share the early highlights from the first clinical evaluation of our Halo daily disposable contact lens. Actually, this study was designed to assess the overall clinical performance, safety and tolerability in a controlled setting. The study enrolled about 130 participants, all of whom have completed the study. And importantly, there were no adverse events or device deficiencies have been reported. But the most important thing, this is the first time we actually apply our optical system to this, and all participants, the majority -- the vast majority of them experienced very good visual acuity.

Based on the investigators even they agree that the lens has delivered a clear vision in almost 98.5% of subjects. So currently, we are -- as Brent mentioned, we are actually just got the results, and it's even ahead of schedule. And we are taking deeper analysis -- doing deeper analysis to inform further optimization and also the lens design for the next external study. As Brent mentioned, we remain on track with our development time line and targeting 2028 launch, and actually, this study increased our confidence in the platform as we are moving forward.

Yes. I think, Joanne, our probability of success that this is real, and a real product is significantly higher than it was at Investor Day, which is why we're excited.

Excellent. I'll ask my second question, which is you're making progress on pulling the financial levers for EBITDA expansion. As you look throughout 2026, and we think about setting up our models, is there anything we should think about the progression throughout the 4 quarters?

Yes. Absolutely. I'll turn it over to Sam. But I said it in the prepared remarks, I think as you look at phasing, right, we've always had seasonality as long as I've been here since the IPO of Q1 being the weakest, Q4 being the highest. But I think you're going to see that be more pronounced now as a lot of that seasonality is driven by the prescription dry eye business. And as we continue to have great success with Miebo and Xiidra, they become a bigger part of our overall sales and profitability. And so that will have a larger impact on seasonality than we've seen in years past. But Sam, you want to add.

Yes. Thank you, Brent. And Joanne, let me give you a little bit more details on the phasing. But it's just important to highlight the point that Brent made which is the whole aspect of Q1 being the lowest Q4 as being the highest that the natural business. And again, as we see the progress that we're making to drive our franchise, that's going to be even more pronounced as we go forward. So that's a very important framework as we think about phasing. But what's important here with all the work that we've done in the -- especially in the second half of 2025, setting up our, I'll call it, building blocks for our leverage, operating leverage as we go forward, both in Q3 and Q4, and we're seeing that work.

We expect that sort of to carry forward with us in 2026. So when you think about from a revenue perspective, we usually start our first quarter achievement on revenue roughly about 22% of the midpoint of the guidance. That probably remains a good starting point for 2026. On EBITDA, we -- if you look at last year, achievement at midpoint was about 14%. We expect this year with all the work that will be about 18% achievement of the midpoint of the guide. So we're seeing a nice improvement because when you step back and reflect on the guidance, we're growing our -- the guidance that we provided this morning. Midpoint of that is about 6% on the top line, but it's about 15% growth in EBITDA at the midpoint. So we're seeing that really leverage full throughout the next 2026, especially in the first half of the year.

Yes. I mean I think 1 of the things I'm most proud about what we're starting to do is that leverage in the first slide in the deck, right? In the quarter, right, 7% top line and 27% bottom line guidance, midpoint of 16% -- 6% on the top line and 15% on the bottom, right? So you're seeing like leverage or better in the P&L. And that's financial excellence in action, right? And so we said we're going to focus on financial excellence, and now, we're going to deliver it.

Your next question is from Larry Biegelsen with Wells Fargo.

This is Ray Collin for Larry. Can you hear me okay?

Yes, we hear you.

My first question is on Xiidra. It looks like 2025 played out as you expected. There was some volume growth, but you had headwinds like RA and such. How should we think about Xiidra performance in '26? You had the recent payer change at the start of the year, can we think about maybe -- but you also expect net price to be better in '26. So can we think something along the lines of maybe mid-single-digit sales growth? There's price improvement offset by volume decline. And then I have a follow-up.

Yes. So, I think I'll ask Andrew to make a comment here, too. But I think you're exactly right. 2025 for Xiidra was setting a new base between a onetime payment for managed care in the IRA, right? We kind of set that new base. And now it's important to grow off that base. And I think we will. I think that mid-single digit is exactly how we're thinking about it. But Andrew, do you want to add some comments on Xiidra '26?

Yes. Look, Brent, I think you covered the operational aspects of '25 versus what our expectations are in '26, exactly right. When we think about the totality of coverage, we're very happy there with the rates that we're able to achieve across all of our different commercial and Medicare stakeholders.

Look, when you think about CVS, specifically when we're talking about coverage, they're a really important customer. We'll continue to find ways to partner with them as we do in our consumer portfolio, as they manage a large number of Medicare lives today. And when it comes to the commercial book of business, we're eager to find ways that we can continue to work together. And right now, we have to always balance the affordability of the asset versus our ability to invest long term for the stakeholders of P&L.

But I think it's fair to say you'll see slower TRx growth as a result of that, but higher revenue growth.

That's correct.

Yes.

And maybe just I'll add a couple of data points to what Andrew and Brent said and just to help you as you think about your modeling and how you guys think well about Xiidra. So as a starting point, it did play out exactly as we expected in 2025. But what's more important is we knew that as we start jumping into 2026, the net revenue for will drop. So we're expecting that growth -- to see that growth. How that growth will come through is, as Brent said, it will be an element that we see a slower TRxs, but we'll see a much better net pricing. We usually talk about our, call it, gross to net roughly about the mid-70s. We start seeing that to step down to closer to the low 70s. So that net benefit you'll start seeing it into how will play out between '25 and '26 .

That's very helpful. And then just 1 follow-up is your -- is on EBITDA margin. So at Investor Day, you talked about roughly 600 basis points of EBITDA margin through '28 to get to roughly 23% margin. That's roughly 200 basis points a year. So you guided to roughly 19% for this year. Can you just talk about your confidence for -- through 2028 on the margin? And how we think about maybe just the next couple of years if we should think about fairly equal steps of margin improvement?

Yes. So I think we feel very confident about what we presented at the 3-year plan at Investor Day. In fact, I would say sitting here almost, what, 8 weeks later, I feel more confident than I did. And the reason being is you saw execution improvement in the fourth quarter. Now, there's some seasonality, as I mentioned, but still you're seeing that foundational change in the P&L and the leverage that it can drive as we continue. So I think that's right. We've got a running start, right? We thought we'd end the year at around 17%. We got to 17.5%. And so we're going into the year with a running start. And there's nothing better than momentum.

But I would say this. When I think about my 13,000 colleagues in Bausch + Lomb around the world, they all know our goal on this one, and everyone is focused on it. We have very disciplined project teams, many of them, lots of people working on margin improvement from commercial teams to supply chain. This is a full court press with a lot of focus inside the company. We are going to do everything we can to make sure we not only meet but potentially exceed those margin goals.

[Operator Instructions] Your next question for today is from Matt Miksic with Barclays.

Congrats on a strong quarter here. I had 1 question on IOLs. So bounced back pretty nicely from the recall. It seems like 20% growth in AT-IOLs, and the feedback we get from clinicians is positive on the enVista line. Maybe if you could talk about any puts and takes that you're still kind of working through with respect to the recall? And what we should expect in terms of folks getting back on board with that launch that had pretty strong momentum into the end of '24 and early '25, but kind of obviously stopped there for several months in the middle of last year?

Yes, great question. So if you really dig into it and look at what happened as a result of the recall. And as I said in the prepared remarks, hopefully, this is the last time we talk about the voluntary recall. The fact that we got back to the market the way we did, the way we communicated with customers and surgeons so openly and transparently, I think really created a bond of trust with our customers. But the reality of the market is those patients were implanted with different IOLs during the period we were out of the market, right? You don't get those patients back. You have to earn each implant back 1 by 1 doctor by doctor.

And so what happens in this market, as you may know, is for the premium IOLs, you have a much more instant sales cycle, right, a lot of surgeons can buy whatever premium IOL they want. But for monofocal, they tend to contract. And so the bounce back came faster for and aspire to some degree. But for the base monofocal lens, we still have some work to do because when we were out a lot of ASCs and practices signed contracts for monofocals that we have to wait until they expire to get that business back. And so there is still a little bit of a hangover in the monofocal portion of the market, but we'll earn that back this year.

And so I think we feel very confident that it's clearly in the rearview mirror, and now, it's back on our front foot and winning trust with doctors and patients day by day.

Your next question is from David Roman with Goldman Sachs.

I want to just actually maybe to focus a little bit on the consumer business. If you kind of look across the different product families there, we do see kind of a divergence in trends across a number of the different categories. Can you maybe help us think about just the direction of travel in the consumer franchise? And what we should -- how we should expect some of these different LUMIFY driving growth? Or how we should think about some of the different factors in '26 in that franchise? .

Yes. So for the full year, we grew about 5%. There was probably about 100 basis points of destocking, remember, throughout the year. It started with as a kind of impact of tariffs, right, as retailers made room for -- in their warehouses for products that were tariff impacted. They destocked roughly about 2 weeks across the board and virtually across all customer classes. And so we absorbed that in the year. And so consumption in '25 was higher than sales, which is obviously a sign of destocking.

I think when you look at the brands, LUMIFY, obviously, up 16% for the year. We launched preservative free. And of course, we're getting ready to file LUMIFY Lux for a launch next year. So we have a nice continuous innovation stream there.

Blink, a brand that we brought back to life, was up about 14% for the year, right? I think that's the number, Sam, right. So really good growth. We're launching the preservative-free for triple care in the second quarter or late this quarter. So again, innovation helps drive growth. But I think the area where we saw kind of a little bit more flatness is in our largest product line, PreserVision or vitamins, which were only up 2% in the quarter and in the year. And to be fair, when you think about PreserVision, right, it's a very large category. We have roughly 90-plus percent market share, so we kind of are the category.

There's been no innovation there for 13 years. And the way to get growth back into that category, and I hope, significant growth over time is through innovation. So AREDS 3, which started to ship to retailers within the last week or 2, and you'll start to see really launching throughout this quarter and next, is really going to revive that market and bring it back to growth again. And I think you'll see that really play out in the back half of the year, as we build the foundation with ECPs first and then turn on consumer. And the fact that we're expanding the market, almost tripling the size of the market of who should be recommended vision, I think, gives us a lot of optimism that, that category can grow again, meaningfully.

Our final question is coming from Robbie Marcus with JPMorgan.

This is Lily on for Robbie. I want to circle back to the EBITDA guidance. Can you help give a bit more color on bridges to the 19% EBITDA margin this year and walk through some of the pieces on operating expenses, especially that get you there? When I look at the fourth quarter, gross margin was a bit softer than what we were thinking, you have R&D increasing as a percentage of sales this year. And so what's driving all that SG&A leverage this year? And what gives you the confidence and visibility in that improvement?

Yes. Well, I think Sam is probably best to answer this. Sam?

Sure. So Lily, when you think about the components of how we think about the leverage and expansion EBIT margin, it's really the building blocks for this is a couple of areas. One is we talked about the SG&A and the leverage that we talk in terms around the efficiency around our fixed cost structure and how we're bringing the fixed cost structure down. And we saw that play out very nice for us in Q4. Starting Q2, so that it in Q4, that will continue with us as we think about '26.

We also talked about the operating leverage within sort of shifting from the growth from the launch to the growth mode, and you're seeing that with the targeted investments that we're doing around selling in A&P. So as you think about where -- as we end 2025, just keep in mind, we -- you mentioned gross margin is soft. It does absorb roughly about 80 basis points of tariffs that we're seeing. So when you look at that on a comparable basis to '24, you have to factor that in. But now pivoting and looking forward to 2026, we're projecting roughly about 200 basis point improvement coming -- 100 basis points coming from the gross margin moving from about 61% to 62%. Also the SG&A will probably yield another 100 basis points of improvement. Offsetting that would be about 50 basis points of increasing our R&D investment moving up from about 7% to roughly towards the 7.5%. So you'll see that movement in sort of taking and that gives you the -- really the 150 basis point that we'll see jumping from our 17.5% EBITDA in 2025 to about 19% EBITDA in 2026 margin.

The other thing I would say, Lily, is as you think about the fourth quarter, delivering 7% top line and 27% EBITDA growth, what -- if you really peel that onion 1 more step, what makes me so proud that we could deliver those results as we did it with about 500 fewer colleagues than we had in the same quarter of the year before. And so you're really seeing a change in the foundational structure of our company being more efficient and really focusing on driving that leverage in the P&L to get that margin improvement.

Great. That's helpful. And then, just as a quick follow-up, can you talk about how you're thinking about reported free cash flow this year on a reported basis in 2025. I think that was about $66 million. So how should we be thinking about that trending in 2026? And what are some of the puts and takes we should be keeping in mind?

Yes. So we're very pleased with the work that we've done throughout '25 on the cash flow in general. And I'll tell you, when we -- how we think about sort of cash flow where we ended the year roughly about 42% conversion. And keep in mind that the business has been growing throughout 2025. And with that growth that we've seen in the business, we've taken roughly about 12 days out of working capital in terms of operationally throughout 2025. So that's really helped us with driving both on the cash flow from operation that I referenced in my prepared remarks, $152 million in the quarter, that's $381 million for the full year and also being a positive from a free cash flow this year.

So as we look forward to 2026, that progress will continue. So I expect we're going to be progressing towards the -- about 45% or so of conversion. Keep in mind, we targeted 50-plus conversion by 2028. So we're really making nice strides and nice progress towards that target. And more importantly, our CapEx is also stepping down as we communicated at Investor Day. So roughly in '25, our CapEx was roughly about anywhere between 6% to 7% of revenue. As we look into 2026, we expected that to be about 5% to 6%. So you're seeing that step down in CapEx spend, which provides even more support around the free cash flow. So it's really a lot of great work that's been done by the team here, and we're very proud of it, and it's a nice progress in the right direction.

Your final question for today is from Douglas Miehm with RBC.

Brent, this is a question that has more to do -- I believe that you're going to have a strong 3 years ahead of you. Margins are going to continue to increase, et cetera, et cetera. But as we think about valuation and the multiple that should be assigned to this company over time, especially given the strength in the operations, the various businesses, your execution, et cetera, et cetera, 1 thing that's going to likely hold the company back in terms of that multiple expansion is the float. And is there anything that you can speak to us today about how you're hoping to resolve that situation? Because it looks like you're going to have a lot of good news on the operational front. But I'm just thinking from a market perspective, how you'd like to guide us.

Yes. So look, I agree with you. And I think 1 point I'll make, and then, I'll answer the question. As I said in the -- I think it was in the first question from Patrick, what's really exciting about the R&D pipeline that really starts to kick in meaningfully in '28 and beyond is that we actually have the structure or platform that allows us to absorb that innovation and scale, right, and flow through to the bottom line much more rapidly than it would have otherwise, right? The pipeline was built to enhance our existing markets and selling infrastructure. And so that really is strategically important for us as we think about launching those products in the future. .

But you're right, I think obviously, we hear from investors about the float. I fully agree with you. It's something that has to be resolved in time. Unfortunately, as I've mentioned many times, it's not within our control. It's a BHC issue. But if you listen to their commentary at JPMorgan earlier in January, they do plan to sell shares in time. I just don't have a time line to provide and maybe you want to get on their call tomorrow or today end of day -- end of day to day. It feels like that's a day away. But at the end of the day today and ask them as well because it's really their decision. But I do expect it to happen. I just can't give a time line.

So operator, I'll just make a quick closing remark. Thank everyone for joining us. Most importantly, I'd like to thank my colleagues from Bausch & Lomb around the world for their great execution in 2025, and we look forward to watching them execute and build our company in 2026. But look, as I mentioned at the beginning, I think Q4 really is another proof point in what good execution looks like. And it shows that we are immensely focused on execution. It is really part of our culture now. And we have all the building blocks we need in our bag today to deliver on our 3-year plan, and we are immensely focused on getting it right and delivering. So we look forward to keeping you updated, and we will obviously always available to answer any questions if you need us. Thank you. .

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, everyone. I hope you enjoyed your lunch. I'm Robbie Marcus, the med tech analyst at JPMorgan. Very happy to present our next speaker, Brent Saunders, the CEO of Bausch + Lomb. Brent will do a presentation followed by some Q&A. Brent?

Good afternoon, and thank you for joining us here today. The JPMorgan Healthcare Conference brings together companies that are not only competing in health care, but shaping where the industry is going and we're very proud to be part of the conversation. Special thank you, Robbie, for hosting us here today.

As we shared at our Investor Day in November, we are transforming Bausch + Lomb with a clear strategy, disciplined execution and a relentless focus on innovation grounded in patient needs. The world's demand for eye health solution continues to grow, and we believe we are uniquely positioned to meet it through the breadth of our portfolio, the depth of our pipeline and the strength of our brand trusted for nearly two centuries. So today, we'll show you some of the momentum we've built, some of the bold steps we're taking to drive our next chapter of growth and beyond. And here it is. Now, I'll spare you the details on this slide.

So before we get into the specifics, let me remind you of the cultural shifts that we've helped us to rebuild our company to win. Over the last few years, we've been very intentional about bringing in leaders and teams who are not only highly skilled, but have the mindset, urgency and accountability required to win. We surrounded ourselves with A players whose work habits are infectious.

We also brought back the innovation mindset. This isn't innovation for innovation's sake. We're investing where we believe we can lead across all of our businesses. We're advancing meaningful products and platforms that solve real problems, not incremental ones. We've built a faster, more focused development engine. Decision-making is sharper, time lines are tighter, and the organization is aligned around moving good ideas to the market with speed and agility.

Finally, technology is only enabling our strategy, it's accelerating it. From R&D platforms to manufacturing to digital tools, technology is now a competitive advantage for us. It's not an afterthought. We've modernized how we operate, better systems, better analytics, better connectivity across the enterprise. That means smarter decisions, improved efficiency and better outcomes for our customers and patients.

Over the past few years, we've seen a dramatic increase in the number of patents we filed. In 2025, we filed the most patent since last year of my first stint as CEO back in 2013 which was more than a decade ago. That's not an academic and it's not an accident, it's not cosmetic. It's the clearest evidence that our R&D organization is now operating at a different level of creativity, productivity and strategic focus, and it's also a leading indicator of durable growth.

But the increase in patents isn't just an R&D story. It's a company-wide mind shift. Teams across Bausch + Lomb now think differently, more curious, more inventive, more collaborative and more focused on what's next. Innovation is no longer confined to our labs. It shows up in our product design, digital capabilities, manufacturing technology, customer engagement and essentially how we run the business. We've built a culture that encourages people to push boundaries challenge assumptions and bring bold ideas forward. That patient trajectory, that pattern trajectory proves it, and it speaks to how fundamentally different and stronger Bausch + Lomb is.

The growth over the next few years, in particular, margin expansion will come from execution, strengthening the core business to drive revenue growth and predictable performance while continuing to advance our pipeline, better cost discipline, supply reliability and technology-enabled efficiency, capital allocation focused solely on creating value.

To borrow a line that my CFO, Sam says, "This is our say-do moment, consistently delivering what we say we will deliver." In 2028 and beyond, we expect to introduce transformative value drivers as our pipeline converts into commercial reality. It's important to understand that our pipeline isn't building toward a onetime peak. Our innovation mindset and plans to expand addressable markets are expected to unlock long-term revenue potential. That's made clear by this time line, which shows our pipeline is designed for durability and not just a moment of growth. Our opportunity to spend consumer, surgical, contact lens and pharmaceuticals, reducing dependency on any single asset and creating multiple shots on goals.

As we shared at Investor Day, when our R&D leaders took the stage, these aren't science projects. Our pipeline products are purpose-built to solve meaningful patient and eye care professional challenges with clear commercial pathways. It's a simple formula, really. Innovation grounded in real clinical and market need, plus an intentionally balanced time and risk profile equals long-term shareholder value creation. This pipeline gives us great confidence, not only in the next chapter, but in the chapters after that. So let's take a look at the opportunities in each business in the same way we looked at broader expectations. Near-term growth drivers on the left, pipeline upside on the right and we'll start with consumer.

Bausch + Lomb is #1 overall in global OTC eye health position. Our position is built on scale, trust and clinical credibility across consumer categories including eye vitamins, redness relief and dry eye. While 7% constant currency revenue growth over the last 12 months speaks to our momentum, our consumer business is where we'll see the most immediate pipeline impact. The anticipated launch of Blink triple care preservative-free drops in the first half of 2026, will enhance a thriving brilliant franchise and provide new optionality for consumers and eye care professionals in a fast-growing segment.

We also expect to launch PreserVision AREDS3 in the next few months, which incorporates B Vitamin Science to support retinal Health and reduce the risk of developing age-related macular degeneration. Treating early AMD will significantly expand the addressable market.

Finally, we'll elevate a category-defining brand with the anticipated launch of LUMIFY Lux, which is a working name in the first half of 2027. By combining brimonidine's proven redness relief with the moisture retaining properties of hyaluronic acid, will improve comfort and offer a smoother, more premium experience for our consumer.

While we show expected peak sales by franchise, we expect each of these innovations to play a significant role in reaching those milestones. Growth over the next few years in our contact lens business is expected to be driven by strategic introduction of new daily SiHy offerings around the world. There's no one-size-fits-all approach, but we continue to see a category lift by country and region as our suite of lens offering expands, and we provide eye care professionals with more optionality.

When it comes to contact lens pipeline, one of the highlights from our Investor Day was introducing Project Halo, the development of the first-of-its-kind bioactive contact lens. There hasn't been a contact lens material breakthrough since 1999, which means this new lens, bioengineered with a double dose of hyaluronic acid wouldn't just disrupt the market, it should create an entirely new category. This technology was developed by our in-house R&D team and importantly, can be mass produced on existing lines, meeting minimal capital expenditures.

Other lenses under the development are expected to launch in 2029 following the anticipated 2028 launch of the bioactive lens have all have significant upside potential. A second daily disposable SiHy offering, a premium frequent SiHy option and a cutting-edge SiHy product designed to slow the progression of myopia in children. Expected peak sales from these lenses under development totals $1.25 billion which would roughly double the size of our contact lens business.

Turning to pharma. The focus in our pharmaceuticals continues to be Miebo and Xiidra, and rightfully so, given both are significant revenue contributors. Miebo growth continues to exceed expectations, which is essentially especially encouraging, given we moved beyond our heavy launch investment phase. Our resurrection of Xiidra has gone according to plan with consistent performance aligned with growth expectations. Both medications are expected to drive top line growth with margin improvement over the next several years.

The future of our pharmaceutical business model is about bold science, meaningful innovation and category defining first medications that elevate the standard of care and create lasting value. We're developing the first dual action eye drop to treat dry eye combining the distinct mechanisms of the active ingredients of Miebo and Xiidra to address tier evaporation and inflammation in a single therapy. Our glaucoma pipeline asset would be the first to lower intraocular pressure and improved visual acuity, resetting the treatment for this market.

Current options don't sufficiently address ocular discomfort and pain. The #1 reason patients visit eye care professionals. Our neurosensory agent under development and has shown promise to change that. And in fact, we just completed a Phase I study in healthy volunteers, where we showed no dose toxicity limitations with the tested doses no effect on corneal sensation, and there were no AEs reported at the highest tested dose. Looking further out, game changers in AMD and geographic atrophy could generate more than $1 billion of peak sales putting total peak sales opportunity for our pharmaceutical pipeline at approximately $3.9 billion.

Turning to Surgical. We anticipate the premium intraocular lenses will continue to be the primary growth driver for our Surgical business, and we believe we are well positioned to capture market share following significant portfolio expansion over the last few years. That expansion is expected to be across our enVista and Lux platforms, allowing us to cover all segments in a category that continues to rise in popularity.

Similar to our consumer business, our Surgical business is expected to see pipeline benefits in the not-too-distant future, beginning in the second half of this year 2026. Elios , the first clinically validated excimer laser for minimally invasive glaucoma surgery or MIGS has already proven successful in Europe with an anticipated U.S. approval later this year, will provide surgeons with a differentiated treatment option for the leading cause of irreversible blindness. SeeLyra, our next-generation femtosecond laser was designed to improve the clinical experience for cataract and refractive surgeons through greater efficiency and more optionality.

enVista Beyond, an extended depth of focus Iowa will round out the enVista family and provide a one-stop shop for surgeons who have grown to love the enVista platform.

Continuing the theme of developing products based on input and specific needs of surgeons, seeNOVA, a new phaco vitret platform will offer enhanced fluidics and multifunctional handpieces to make surgery more efficient. Expected peak sales from these products with the anticipated launches dates through 2028 or nearly $1 billion.

I'd like to refer to this slide as walking the walk slide. We're not just talking about M&A innovation, we have real meaningful clinical milestones expected in 2026 in addition to the anticipated product launches I covered earlier. These milestones, which again touch all of our business represent tangible progress, not theoretical opportunity. Our pipeline is advancing with ideas being converted into clinical value in real time. You'll be able to see not just here the impact of the work we've done to rebuild and strengthen our innovation engine. Each milestone reinforces that this is a different Bausch + Lomb than it was just a few years ago. faster, sharper and more disciplined in advancing high-value opportunities. Stay tuned for more updates throughout the year.

In October, we introduced a new metric to measure our progress, financial excellence. We earned the right by making significant headway in the three categories of focus we committed to when I rejoined the company three years ago, selling excellence, operational excellence and disruptive innovation. Financial excellence means growth that outperforms the market, meaningful margin expansion, solid cash generation and a strong balance sheet. It's not an aspiration. It's our operating expectation. This is our scorecard. And when we are presenting at this conference in three years, I'm confident we will have met or exceeded each of these goals.

So before we do the Q&A, Robbie, just three quick takeaways. First, reflecting new muscle developed under the past few years, operational rigor, accountability and a relentless focus on results. They've moved us from stability and potential to performance and delivery. Second, we're unlocking real value through efficiency gains, cost discipline, operational excellence, driving top line momentum and bottom line upside. Third, we're shaping the future of eye health with innovation that matters clinically, commercially and competitively.

Bausch + Lomb is fundamentally stronger than it has been in years. We're delivering today, building momentum for tomorrow and working to create meaningful long-term value well into the future.

Robbie, if you want to come up, we'll do some Q&A. Thank you all.

Well, great. Maybe if we start off, you had your Analyst Day in November, you went through the whole pipeline, you reiterate a lot of stuff and highlighted here in the slides. As we're sitting here, January 2026, you had a lot of new product launches coming over the next 12 months. How would you rank order the most important, both to the top and bottom line for Bausch + Lomb that people should be focused on?

For 2026?

Yes.

Yes. So I think there are 3 in total -- of size, too. I think I would highlight. I think AREDS3 in consumer is a very important launch for us. We've built a very nice business with PreserVision, working with the NIE and clinical data for patients suffering with AMD. But what AREDS3 does, it allows us to expand to the more moderate population, effectively tripling the size of the target market. So a really important launch with great science behind it.

The other is Elios, our MIGS procedure for glaucoma surgery in the second half of the year. It's a procedure that's been around for about 8 years. Great data, it's -- patients do very well. Surgeons can be easily trained and so I think it's a real paradigm change for glaucoma surgery when we get it approved this year.

I started my career in biotech, spec pharma and peak sales was a very common term that we would see there all the time. In medtech, it's a little less common. Maybe just for those not as familiar, when you put up peak sales, is that what you're forecasting Bausch + Lomb sales can be at the highest level? Or is that closer to an addressable market?

Do you want to take it?

Yes. It tends to be more on what could be our peak sales based on where we operate in the addressable market. So it does really looks when you get the product out in the market and you invest behind it and the potential of what this asset could do, they'll be in that range.

Got it. Just a helpful clarification for some. Maybe if we dive into some of the markets. You talked about -- I think it's mid-single digit, if not better, for contact lenses. That's a market we've seen slowdown at a lot of competitors, not so much at Bausch + Lomb. Whether it's sort of consumer confidence or trade down or we'll see in 2026, really what's driving it. But it has taken a step down, but again, not for Bausch + Lomb. What are you expecting this year for contact lens market growth? And maybe just help out with your positioning in the market and how you feel about contact lenses overall?

Yes. So I would say that historically, the market grows somewhere between 4% to 6%. 2025 was probably on the lower end of that range, closer to 4%. I think there were a lot of factors, but two most important that I would say is it was a little bit of a slowdown in the private label part of the market and some destocking by big retailers. And the second was some weakness in Asia, particularly China, just not related to contact lens, but the entire Chinese consumer. And so that probably put some pressure on the growth rate. I do expect it to be a little better in 2025, maybe 4.5% or thereabout is my prediction. But I don't think there's anything secular or worrisome about the long-term prospects for the market. I think that 4% to 6% is going to hold, and we're going to trend sometimes at 5% and sometimes at 4.5% and sometimes it's 6%.

How do you feel about the ability for price in that market with consumer confidence where it is? Do you think -- I would say, a, the market is able to take price and, b, as Bausch + Lomb...

Yes. So I think the market -- I think it's pretty typical. It would be the word I'd use. I don't think there's anything extraordinarily different about the pricing environment. And I would say that the consumer is strong. It just depends on where. And so in the U.S., the low-end consumer is challenged, but the middle and higher thriving. I think '26 is going to be a good year for the U.S. economy. I think when you look at markets like China, the same thing, but you're seeing it -- GDP slow a little bit. So you're seeing a little bit of a pullback. But overall, I think that price is very typical. I don't see any real change there. And we're going to continue doing what we do very disciplined and measured, but I don't see it as an issue.

And your daily silicon hydrogel since it's launched, has taken a good amount of share. Is that a trend you expect to continue in '26?

We do because as you think about a contact lens launch, you have to launch all the modalities. And most importantly, the toric is quite important. And we haven't done that except in the U.S. market. So the next two years as we wait for the bioactive lens to come online, we really have a lot of growth still left in our SiHy platform because we're going to launch all the modalities in different geographies around the world.

We've done a number of doc checks and they're actually really excited for that lens. It could be very differentiated. Are you past the point of proof of concept? Is it -- are you at the point now where it -- you got the lens, it's locked and it's now just in clinical trials and approval process?

So lens development doesn't quite work that way, it's a little bit more iterative. So we've done about -- Yehia's team has done about 10 internal clinical studies in our Rochester facility. We are now enrolling in our first large-scale external study. And you may have to do that again or you may have great results from that and go right to registration. Typically, there's always little iterations you learn. Maybe you need to smooth an edge or other things like that. So we'll get data in a few months, and we'll know. But we're pretty confident, but I think the data from this study would really solidify our confidence in that product...

Yes. very fair, I think.

So we'll know later in 2026 if you're...

Not too late. Yes, I think in a few months.

Okay. Great. Maybe if we move on to IOLs. It seems like you've successfully brought enVista back to market and relaunched, what's been the reception since the relaunch? And do you feel like you're on track now in all the geographies around the world?

Yes. So we are on track. Clearly, the recall was an unfortunate, but I think, well-handled situation. We did the right thing for patients and for surgeons. No one really talks about it anymore. So I think it's in the rearview mirror. A few investors ask us about it, but we don't hear it from doctors or surgeons anymore. So that's a good thing. It's on track to do exactly what we said. We're back to where we were in the first quarter. of '25, by the first quarter '26, we feel very good about that. And I think adoption is really starting to take off.

When you launch an IOL, there are always surgeons who want to try new things, docs who want to try the next thing from B + L. But the larger surgeon population tends to want to wait to see performance. And they generally want to see about 1 year of data. So we're at the 1-year mark, and the data looks good. The feedback from surgeons is very positive. And so we're seeing more adopters come in and saying, "Hey, I heard great things. I'd like to try enVista." So I feel very strongly. We're just in the process of launching in Europe in the first half of this year. And so I think it's going to be a very important lens for us but also for surgeons, for patients.

If I go back to the Analyst Day or even the slides you had up here recapping a lot of what you said. The pipeline is really deep on the surgical side, both on the hardware side and the implantable side. If you look at the margins, and you disclosed the margins, your surgical margin is single digits, well below the rest of the company. Maybe walk me through, a, is the pipeline going to help with margins? And then, b, overall, as you think about the 600 basis points of EBITDA expansion you've committed to over the next 3 years, how much is coming from the surgical business getting better?

Yes. Maybe I'll start and Sam, you can weigh in. But look, the most opportunity for margin improvement is in our Surgical business for the reasons you stated. And we've been well aware of this opportunity for a couple of years now. And the way I think about it is simply there's two levers for us to pull. One is transition to higher-margin products like premium IOLs, and that's happening. And so that's underway and that's real. And the second is to improve our manufacturing COGS and efficiency, particularly around the consumables business, which is the largest part of our surgical is and that's happening. A lot of work over the last 1.5 years to do that. You'll start to see probably by midyear or end of this year, real improvement on that part of it. And the combination of the two of those is very powerful margin improvement.

And if I can add more detail on this. So when you think about the margin here, Robbie, there's about 250 basis points out of the 600, is going to be coming and impacting what I refer to as the gross margin line item. And majority of that impact is coming in from the two elements that Brent discussed, which is the first one is the product mix and product mix, especially in the surgical business, it will play a big factor as we shift more into the premium category and with the launches that we've talked about.

The other part of it is going to be around the efficiencies in the manufacturing supply chain. And that's an area we've been investing in. I think we are feeling confident where we are today in terms of having all the pieces together and execution is on its way to be able to get many of the vertical integration that we need to do within our surgical business.

And many of those premium products are coming towards the later years in the long-range plan. So do we think of the margin contribution is more back-end loaded from surgical relative to some of the other businesses?

Not really. I think you will start to see that margin -- you're going to start seeing that. You didn't see much in '25 because of how we're actually stepping out of the voluntary recall, but you start seeing that into '26, '27.

Great. Maybe moving on in pharma. Your dry eye business has done exceptionally well. Miebo has been a great launch. How much more is there to go here? I mean it's probably one of the more successful 4 times a day drugs that I can remember over the years, but the fast mechanism of action has really generated a lot of interest.

Yes. Look, First, we're very pleased with the performance, too. But I don't think there's any end in sight at this point. Miebo is becoming the medicine of choice for ECPs running for dry eye. It works quickly, and it's risk profile is very beneficial. So it's a really good option. Most people do have evaporative dry eye, then inflammatory then those are the two biggest markets. So with Xiidra and Miebo, we really cover most of the needs of a dry eye patient. The combination that kind of sets it up to R&D, right, but the combination then becomes the perfect solution for a physician and their patients.

So you had key opinion leaders at your Analyst Day. There are some combo products in development that they were very excited about, and we kind of hear that in our own checks. Maybe walk us through sort of how you rank order the most important or potentially the most impactful pipeline products in the dry eye space?

We'll let Yehia, since he runs R&D, pick his favorites on this one, Robbie.

So as I mentioned, I think we have great opportunities with a very high potential of upside. But just to be specific, I think the two that are most advancing now, one is related to the combination between Xiidra and Miebo and the potential here is really related to the very innovative formulation that we created with the potential that we get even much more symptom and science relief than what's currently each product separately can do. And then obviously, we think also where the dry eye market is going is really there is a potential of high unmet medical need because many patients does not require one single treatment for their dry eye and it becomes a compliance issue when you have multiple eye drops in your pocket, you need to put this one 3x, 4x. So a combination therapy, we think there is a great place to be and this is most advancing. And we are having reading of the data by the second half of this year. It's a Phase IIb study, and it's large enough that could be considered as one of the pivotal studies.

The tie to it is another glaucoma neuroprotection one. As Brent mentioned in the presentation, all the treatments available currently focus on reduction in intraocular pressure, which is the right thing to do However, glaucoma is not only an IOP. Glaucoma affects ganglion cells affect optic nerve affects all the retina and we think that a lot of patients reduce their functional activity with chronic glaucoma. With this product, it will be the first product that we can reduce the intraocular pressure, but it has also a neuroprotective mechanism of action. And we are confident in this because we have some preclinical data as well as clinical data. So we had a proof-of-concept study that demonstrated for the first time in these glaucoma patients that we can improve 15 letters in low luminance visual acuity. So those are -- and we also have a second confirmatory study that is already ongoing now, and we will have read out towards the back end of the year from this study.

Great. As we think about Xiidra, it's been impacted a bit by some of the government pricing actions. Is that an asset you think you can grow on a dollar basis in 2026?

We do. And in fact, I think '25 is kind of a rebasing. I think what you'll see in '26 is the way we've dealt with managed care in particular, our CVS contract, is you're going to see TRx growth perhaps come down a little bit, but revenue go up. And so you're going to see better -- lower gross nets driving higher revenue growth.

Now a couple of years into the deal, is this a deal you still like the returns on? It's hard for us to see on the outside. Is this one that hit your model?

Yes. So -- yes and no, right, just to be completely transparent. It hasn't quite hit the model because of the managed care, gross to nets. That being said, Miebo wouldn't be Miebo without Xiidra. We wouldn't have been able to make the investment in the field force and then the promotion, and we wouldn't have the ocular pain program. And so I think if you are measuring this at the 2-year mark, you'd probably give it a B perhaps. But my hope is, like all deals, you should measure probably at the 5- or 7-year mark and it could be still become an A.

Great. We touched on surgical margins. If you think about consumer and you think about pharma, how should those play out to get to the 600 basis points? And what are the key drivers of expansion there?

Yes. You'll see a margin lift in -- across all of our businesses. So maybe the best probably way I would frame it is, if you look at where we are today, we're seeing roughly about 17% EBITDA margin. expectation based on the targets that Brent shared on the slide here today and what we shared at our Investor Day, is 23% EBITDA margin by 2028. That's about 600 basis point. 250 basis points of that we already discussed, which what we'll see in the gross margin, that leaves roughly about 400 basis points that will be coming from the SG&A. And that's really where you're going to see the lift through across all of the businesses, both on reduction of our fixed cost as we think about it within sort of operating, and that's through the program we launched earlier in the year called Vision '27, but also driving leverage through how we reposition our investments around our businesses, especially in selling and A&P and driving leverage through the P&L.

I imagine none of that's touching the physician-facing field force, it's more on the backside of the investments?

That's exactly. We're definitely prioritizing around what we need to do on the front line and really look at the back office or I'll call it, back support expenses. But more importantly, also how we are deploying and being more efficient and effective in how we're deploying our A&P dollars.

And using AI and generative AI for production and placement of ads.

So we have the top line, we have EBITDA. We'll walk it down to EPS. How should people think about over that time horizon, interest, tax and EPS growth?

So interest for us and the capital structure in general has been a really good story, especially with the work that we did in '25. We did a refinancing in the middle of the year. In the beginning of this year, we just did the repricing of almost $2.8 billion for term loan B. So it's really setting us up well to start bringing the cost down of our interest expense and the cost of debt. That's not factoring in what we'll see hopefully from the Fed as we start working through. So that will be an incremental benefit for us as we go forward.

So where we are right now, I think I'm very optimistic about what we have seen in terms of the interest expense in 2025, which is roughly about 8%. That will be below that as we go into '26, and we'll provide more as we guide for '26.

Taxes is also a good story for us because we have a very efficient and effective tax structure. We've been running roughly about, call it, a 15% tax rate. We did guide to -- by 2028, there will be about 19% to 20% tax rate and that's really just a factor of what we're seeing in terms of actually expanding the margins and increasing the profitability within our business. So you're seeing that step up as we go forward.

And so as we think about EPS growth, is that faster or slower you think than EBITDA growth?

It will be faster. We said it will be double digits.

Double digit. Okay. On an average per year, double digit?

Correct.

Okay. Are you willing to comment on 2026 at this point, double-digit EPS growth?

In about 5 weeks.

Well we'll talk to it more specifically when we give guidance.

I gotta try. Free cash flow has been one area that I think investors pay a lot of attention to. I know you talked about adjusted free cash flow. I think a lot of investors care more about reported free cash flow. How do you think about reported free cash flow during your long-range plan? And what are the key programs or improvements you're putting in place to capture that?

Yes. So I think the delta between the reported and adjusted free cash flow, that's -- or adjusted cash flow that will be something it was done deliberate as we were actually investing behind Vision '27 in the last 12 months or so. You'll see that continue to decline and sort of migrate to much closer gap as we go forward. But when you take a step back and just look at our actions around cash flow and liquidity in general. We've been very focused on trying to drive working capital. And I think the results really in the third quarter for us was really the outcome of many of that work, where we had roughly about 66% conversion of our adjusted cash flow to adjusted EBITDA. So as we go forward, I think we guided for 2028 to be 50% plus conversion, and I think we're really feeling good about how we're thinking about those targets based on the actions we've done so far.

And what are the key drivers of the improved free cash flow?

It's multiple factors, but really, I'll call it back to basics around working capital initiatives, magic inventory, managing all the different elements of working capital.

How do we think about CapEx within that improvement?

We will see a meaningful impact also coming from CapEx. So again, CapEx was an area where we invested, I'll call it, higher investments in the last couple of years, especially to build up the capacity around our lens business which we've seen the growth of the 24% on infusing. You're seeing that capacity come into play. So we are roughly about 6% of revenue in terms of our investment in CapEx.

As we go forward, I think there's two inflection points the way I'd probably describe it here, Robbie. The first one is the investment has already taken place. So we're going to start seeing sort of a pullback in terms of the CapEx spend. And more importantly, the bioactive lens, which is coming into 2028, it's not going to require demand the same level of CapEx that we've had with infuse. So we expect that to drop roughly to be about 4% to 4.5% of revenue in terms of CapEx spend.

At the Analyst Day, I think you highlighted reinvestment, M&A and reduction in leverage as the key priorities for capital allocation. How do you think about them in order of 1, 2, 3?

I'll start with -- again, maybe I'll use or steal what he has said, they're all important, but I'll focus on the balance sheet. Strengthen the balance sheet, lowering the leverage. So I think our target is 3.5x. I think that's going to be our main focus. I think we're going to be also continuing to invest in the business and also focus more also in terms of, I'll call it, opportunistic M&A.

I think as you think about M&A, we're in a very enviable position. We have a very strong plan for the next 3 years that really doesn't require a lot of new product launches. And we have a deep pipeline of product launches sitting right outside of that horizon. So our growth is quite durable. So M&A for us is only -- there's no hole to fill, right? It's only if we see something exceptional to do. And it would be an accretive tuck-in or perhaps some IP or science. But nothing big that we have to do at this point.

Well, great. Unfortunately, we're out of time. I appreciate the great discussion. Thanks, everyone, for coming.

Great. Thank you.

Hello, and good morning, everybody, to day 2 of the Citibank Global Healthcare Conference here in Miami. And I am Joanne Wuensch, the medical technology analyst here. And I'm thrilled that we're going to start this session with the management of Bausch + Lomb, Brent Saunders, Chairman and CEO; and Sam, I'm going to clear your last name, sorry.

Eldessouky.

I feel like with Wuensch, I get away with doing that.

Anyway, I remember when Bausch + Lomb was spun out several years ago in its IPO, and a lot has changed. And we were just talking before we started this presentation about your Analyst Day, which sort of like gave us the catch-up speech. But I'd like to get each of your opinion on what you're seeing as the company today and how it's evolved?

Yes. So great question. I came back as CEO and I think it was February of '23. So what was that about 9 months or 10 months after the separation from BHC. And what I saw was a company that I knew well because I've been CEO before and a space I knew well because ophthalmology, even Allergan was a big player, but that kind of was stuck in neutral. So it wasn't necessarily a turnaround, but it was a revival. And so by design, in my head, I said the first thing we need to do is really focus on a couple of quick things. We have to focus on selling excellence and get to growing faster than the market. We need to focus on operational excellence because our supply chain was a big problem for us, particularly coming out of COVID and some of the supply disruptions. And when you can't supply your products, it's hard to have selling excellence.

And then third was build innovation. The covers were bare, right? There wasn't much in the pipeline and the lifeblood of any health care company is innovation. And so we focused on those for the first 2.5, 3 years, and you saw some of the output of that in the presentation. And so what I would say is I'm very proud of what we've accomplished in transforming Bausch + Lomb into a high-performance competitor. But the last piece of the puzzle is financial excellence. And we do need to get our margins and more specifically our EBITDA margins in line with our competitors or even better than our competitors.

And so the beginning of this year, we started our Vision '27 program, which was a very massive program encompassing hundreds of programs and projects around the company, thousands of people working on it to really improve OpEx, improve gross margin and thereby improve gross margin, and Sam can walk you through how we're thinking about that. But we are also very pleased to announce a 3-year plan at our Analyst Day that shows a very thoughtful story around margin improvement, sales growth faster than the market and a deep innovation cycle. And so if we can pull off all those things, which I'm highly confident we will, then I think Bausch + Lomb can start to argue that we're the most dynamic, exciting company in the eye health space. And so I think we're -- we've come a long way. We have a lot more work to do, but I feel really excited and positive about where we are.

I don't know, Sam, would you?

I completely agree with you, Brent. And I think the work that happened over the last couple of years, especially this past year in 2025, we're putting the building blocks for what we need to accomplish going forward to 2028. And I think that was with the kickoff of Vision '27, which is really was focused on how we can manage our fixed costs within the P&L, how you can drive leverage in the P&L. And really that transition as we saw in Q3 with the margin expansion we saw in Q3 puts us in a very strong position to be able to push that forward into the rest of this year and into 2026 and beyond.

But I think, Joanne, to one more point I'd make, some people may say, well, why didn't you start financial excellence, when you started? And in my experience, and maybe there are people have other answers, but it's really hard to get people to focus on cost cutting when you don't have growth. It's much more dynamic and exciting for the 13,000 colleagues to have the wind at their back in terms of selling excellence, the supply chain working and of course, getting really excited about innovation in the future and then say, okay, guys, now let's all lock arms and really get disciplined around how we spend.

I think my early notes on the company referenced it as crawl, walk, run. And I don't hear you using those phrases now, which tells me you're well past crawl and maybe moving somewhere between walking and running at this stage.

I think that's accurate. And I hope -- my hope is in '26, you'll start to see us jogging and moving to running, right? Because you're starting to see some of the real output, right? You see a pipeline that's deep and diverse filled with really great opportunities to change the standard of care across all of our businesses. You see the sales growth now for several quarters being faster than the market. And you're starting to see that margin improvement. You saw really good signs of that in the third quarter. We expect you'll see it in the fourth quarter and so on and so forth. So you're starting to see actual output. It's not just us saying it, it's actually happening.

One of the things that comes up very frequently as I'm talking with investors is the ownership structure of Bausch + Lomb and the 88% that's owned by Bausch Health. Very frankly, I would have thought that would have not been 88% these years later. How should we think about that liquidity increasing?

Yes. So I agree with you. I didn't think it would be either. That being said, I think both companies and both boards are committed to solving it. The time line is really out of our control. It's more of a BHC Board question. But they are -- I think they're very -- they're a good board. They're very serious about trying to solve for it, but I think they need some more time still.

I want to talk about the financial slides, which you put up and the 5% to 7% revenue LRP. What were the components that got you there? Because some of the investor pushback that I received was like they're already there as if it was like that was easy, they already got there. But I'm curious what went into that number or that range? And is that a stretch goal? Or is that just sort of something you're quite comfortable with?

Yes. So maybe I'll start and then Sam. So obviously, when you do a 3-year LRP, right, it's hard to predict the future with perfect accuracy, right? We know what we can control. What we don't know is what we can't control. A good example is economic environment, things like tariffs and other things that we dealt with this year, right, that throw us curve balls. But based on what we know today, we feel pretty confident about what we gave. I think it's very balanced is a way to think about it. And then, of course, it's not mutually exclusive. We're going to give annual guidance every year in the normal course. And that could be at the higher end, Hopefully, if the world is working the way we anticipated working or it could be in the middle of that range. I don't suspect we'll see us towards the low end of the range. I don't know.

And Joanne, I think when you have to think about the 5% to 7%, you also have to put in perspective with the market -- overall market, right? We're a market that's growing at mid-single digits. And the work and the strategy that Brent outlined for us in the last couple of years was how can you grow faster than the market. And I think what you see in the 5% to 7% is demonstration of the execution around growing faster than the market. Really, our guidance, and you've seen it in how we gave guidance in the last 2 years, we're quite balanced with our guidance. So we've tried to put a guidance that we understand that there's always opportunities that you see -- if you look at this guidance and say there's different parts of the business. We have 4 businesses. Each one of those businesses have opportunities to be able to outperform from their respective point of view. And I think that's -- again, it's a long-term guidance. So I think we'll take it as we go along for the next 3 years. But it's a very well-balanced guidance.

So one of the things which you've also been doing over the last couple of years is very selective tuck-in M&A. And I'm curious your philosophy of what is tuck-in, what is M&A? And at what stage, given the pipeline that you do have that we saw unveiled at the November 13 Analyst Meeting, do you really need much more? Or how do you think about that?

Yes. So I would say right now, we don't need anything. And in fact, the 3-year plan we provided contemplates no M&A, right? This is all organic. Anything we did would be additive to that. Look, we also want to improve our balance sheet, and that's important, and we hope to be at 3.5x net leverage by '28 as well or frankly, better. And so that's also a consideration that we have to play into it. I think to the extent we do tuck-in, the way I think about tuck-in is 1 of 2 things. It's something that, frankly, is smallest, right? And it's something we can drop right into our infrastructure and get leverage and accretion almost immediately, if not immediately, right? Or its intellectual property that helps make the pipeline that much stronger.

So for example, we did a deal with a very small deal, but an important deal with Ripple Therapeutics to get access to a drug delivery technology, to use our alpha-2 antagonist for -- potentially for geographic atrophy. That's an IP tuck-in for R&D. And we bring a great technology, great expertise in sustained delivery, and we don't have to build it ourselves internally. We leverage a great partner like Ripple.

And when you think about investing in that situation, it was more in the pharma family, how do you think about which area to put your money to work in?

Yes. So obviously, we want to support all of our businesses. I think the ones that require the most outside help are probably pharma and Surgical. Contact lenses, like we discussed with Project Halo, we have a deep R&D from beginning to end, fully vertigrated, we can do that ourselves. And then consumer, we can do ourselves. And so I think to be fair, you tend to want to look at supporting the businesses that can really thrive from external partnerships and relationships and can build a broader portfolio and service our customers, most importantly, as robustly as they can. And Surgical and pharma are probably the areas we tend to bias towards a little bit more there.

So let's -- we'll start with contact lenses. You do have a couple of products that are in there. The new material that you're excited about. Is there anything that you can flesh out about the timing of bringing that to market? What makes this new material so special?

Sure. So we announced Project Halo. And so this is a bioactive platform. And so what our scientists were able to do is to create a novel material, first time in 25 years that can have -- that can deliver enzymes or proteins to the eye that are beneficial via the platform. So we're starting with hyaluronic acid, but there are other ones that are sitting behind it. And what we found is one of the biggest problems in contact lens wearing is 70% of contact lens consumers report end-of-day dryness. And so that's important solve for if it's that big of a problem, right? And it's not just because we want to create the best product, which we do, but it's also about expanding the market because you have a lot of dropout because of that end-of-day dryness. And so if we can solve both of those things, I think that's a win for us and it's a win for the practitioners, right, the ECPs as well to keep people in their contact lenses and expand the market.

What we love about this product is that end-of-day comfort. The way that the hyaluronic acid works with the enzymes in the eye creates this environment in the eye that has continuous release of HA that's interacting with your ocular enzymes to create comfort throughout the day and even at the end of the day. And the data is compelling. We've done about 10 internal clinical studies on patients, and the data was great. We're in the full external study right now and we should have data by mid next year, and then we'll do the registration label claim study and launch in '28 or perhaps maybe a little earlier if we can keep the -- the enrollment is going really well. So we're so far, so good.

And so when you bring a new product like this to market, my memory is the last time we had a big step-up in material was the introduction of silicone hydrogel, and that was 20 years ago?

Yes, and we never want to do that again. So to be fair, my second day when I returned in February of '23, I went up to Rochester and meet with the contact lens R&D team. They're a great team. And they did a poster session for me during lunch where I walked around and a lot of the scientists presented what they were working on via a poster. I spent 10 minutes like at each poster. And I got to the one on the bioactive platform. And I immediately called our Head of R&D, and I said, "This is really cool, can we do this?" And so we got everybody together the next week. And I said, but here's the deal. We'll greenlight this. And I'll support it, and I'm going to meet with you every other Friday and review progress. But you have to be able to make it on an existing platform. We're not going to spend another $1 billion plus on capital.

And to their credit, and you heard Byan Reed at Investor Day to say that made the challenge monumental, right? Because normally, when you have a new material, you have to create a whole new manufacturing environment. But to their credit, they crack that code. And so we can make this on our existing lines. The capital expenditures here will be minimal. And what that means for us is a high-margin lens from the get-go and we shouldn't have capacity constraints at the get-go, right? And so this is -- it would be the first time we can launch a lens in a robust way at a very high margin in 2028. So it's super exciting from that perspective.

The contact lens market has slowed. We look at our contact lens market model, it looks like in the first half of the year, it was about 4%. Waiting for the last one tomorrow night to seal out the third quarter. Why has it slowed?

Yes. I think it's a complicated story. I agree with you. It's probably in that 4%-ish range. We're growing obviously faster than that. I think it's coming from a variety of different things. I think one is you see a little bit of a slowdown in Asia, Southeast Asia and China, in particular. Those are still very strong viable markets for the future. I think they're just going through some economic difficulties. If you look at October data from China, growth was 2.9% and October off of a year that's going to be about 4%. So it's growing, but it's slowing, right?

Consumer sentiment in China still remains pretty robust. But if you look at it more globally, you're seeing a bifurcation where the lower end consumer is feeling more strapped and the middle and the high are still spending robustly. And so I think you're seeing more of an impact on the private label. We're seeing it actually even in lens care, the private label is more challenged than the branded, which is very odd, right? And I think you see it in contact lenses as well. So it doesn't impact us as much, but it is an issue. I think it will get solved in time. Hopefully, '26 will be a better year for the U.S. and Europe still seems pretty okay. But I suspect that the '26, we could see the contact lens market shift back to something higher than 4%, maybe it's 5% or it's somewhere in between, but I think it's going to be in that zone.

What percentage of the market right now is private label?

Do you know that?

I don't have that percentage.

I'd have to get that for you Joanne. I get it for you.

Because it keeps -- for a while, it's just...

We don't participate in it. That's why I don't know.

Here you go. Okay. That's a good one. I'm going to switch a little bit over to consumer then. And I want to ask about some of your brand name products. I mean, PreserVision has been around forever. LUMIFY has -- continues to take strides. Outside of these 2, am I missing like a key product there like, no, Joanne, I make sure you focus on it?

Blink. The Blink we brought in, and it has been a strong double-digit grower in our hands. And what we did with Blink is we positioned it a little bit differently than the market leading drops -- lubricating drops, and it's designed more for the modern user, the younger user, the gamer, the social media, people staring TikTok users, people staring at their screen. And it's -- our team has done a phenomenal job of driving real growth. And we have some innovation coming, not only the preservative preformulations, but the new beat the blink delivery system. I'm an avid user of Blink. I use it 4 or 5 times a day, but I'm a horrible dropper in the eye. It runs on my cheek, I missed...

Streaming like you're...

Yes. And I've had many ophthalmologists and optometrists try to teach me how to do it better. I still think it. But beat the blink, I tried it. It is so cool. I think it's not going to work. I'm going to blink when I click it. And...

Is it like a spray?

It's a spray, and you just hold it right in front of your eye and you click and it does the beat the blink every time and goes right in seamlessly. And so it's a really cool consumer experience upgrade. And ultimately, I think we can even use it in our pharmaceuticals.

That's more of a drug delivery sort of...

It is, but for a consumer, it's a straightforward 1, 2, 3 kind of thing. For pharmaceuticals, we have to do some more clinical work.

And how do you leverage the products that are more mature, the PreserVisions of the world?

Yes. So PreserVision is the market leader, very strong market share. But it's very limited to people with advanced AMD is where it tends to get promoted and doctor recommend it, which is so important in that brand. And with AREDS3 coming out next year, we open up to the all-comers. So we expand the market. But for us, by almost 3x to almost all 28 million AMD sufferers no matter where they are in their journey. And so that's really a huge opportunity to expand the market and give people, right, with a very serious disease, something that they can do until they hit the advanced stage and they have to get injections, right? And so that's why it's such an important part of the therapeutic regimen for patients with AMD. And really excited to have the AREDS3.

And LUMIFY?

LUMIFY has been a home run product. It's probably our one product that's not technically just an eye care product. It's a beauty product. And we have done a lot. The team is really -- to their credit, has really moved into the digital world with LUMIFY. It's now available on the TikTok shop. It's eligible for influencer, the system that they use for influencers to promote it in the TikTok shop. But we also have innovation coming, right? We finished the Phase III study for LUMIFY Lux is the working title we're using until we get the brand approved. And adding HA changes the consumer experience.

So we have a great eye whitener, the best eye whitener, right? And I use it, my wife uses it, all my friends use it, and it really makes your eye look beautiful and white. But any really good beauty consumer product, which I have a lot of experience from Allergan doing also should have a luxurious feel. And adding HA really creates that comforting, luxury silky smooth is what we heard a lot from the study participants. And the data from the study was terrific. We hit every primary and secondary endpoint with strong statistical significance. So the NDA is being filed, and we'll get that out probably in about a year.

So Sam, I'm going to ask you before we get into some other products. How do you help work or manage your budget for research and development? Because there's a big pipeline here that I keep hearing about.

Yes. And it's interesting because when you look back in the last couple of years, we didn't have that pipeline. So I think we were very deliberate about how we actually allocate investment in R&D over the last couple of years. And we spent a fair amount of time, Brent and I talking with Yehia, who's the head of our R&D in terms of how do you -- which programs you allocate also the funds to. So we've been running roughly about 7% or so of revenue in terms of R&D. We extended that up to like about -- now we're approaching about 7.5%. And as we touching the 8% or so to continue to fund those programs.

So I think one of the key elements is we really focus on the science behind the program, the TAM or the total addressable market that we're actually about to enter with the pipeline. And more importantly, how are we going to be able to position this within our commercial team as we go forward. So a lot of discussions that goes on behind the scenes on those aspects, but we've been focused more of like really how you can actually allocate where you're going to get your return, what's the science behind it? And are we anchoring into science for now?

The other thing I would say, Joanne, is for Vision '27, R&D had to participate even though their budget is expanding. And their goal was to move -- if you think about our oversimplify how you think about an R&D organization, it's kind of the maintenance of business and infrastructure of R&D and then it's programs. And their goal was to reduce the amount of money they spend on maintenance of business and the administration of R&D and shift their allocation more towards programs. And so that's a pretty meaningful shift inside of our R&D organization using AI, using just better management and efficiency to reduce the burden on the day-to-day running of R&D and allocate more money towards actual programs, which become products, which become sales, right? And so that's where a healthy R&D organization should be overallocated towards programs and less to the administration side.

Excellent. I want to go back to products here and talk about dry eye. And we've spent a fair amount of time over time talking about Miebo and Xiidra. How do we think about those 2 different products ramping forward? And how do we think about the collective of what's really happening in the dry eye market because I can count on, well, probably 2 hands, but definitely one hand, different dry eye products, whether it's more mechanical or whether it's more drop-like pharmaceuticals that are coming to market.

Yes. I mean I think, look, I've been in the dry eye space for a long time, having had RESTASIS at Allergan and now Xiidra and Miebo. I can tell you, I think we have the best portfolio of products for patients. I think if you survey doctors, ECPs, they would say that for most dry eye patients, Xiidra and Miebo are the gold standard for solving or alleviating symptoms of the disease or treating the disease, I should say, is a better way of saying it. And so I think we're in the pole position. We're in the leadership position. Most dry eye disease is evaporative. We have the only evaporative drug in Miebo. And then inflammatory is the second biggest category, and we have the best inflammatory agent in Xiidra. So we have the best.

I think when you look at our -- the competitors out there, they're niche competitors. They fill a smaller niche void like increased tear production or nothing is working, so let's just try something else kind of solution or cost, right? And so I think we're in a great spot. And then ultimately, what we announced with our Phase II program on the combination of lifitegrast and Miebo, I think, is kind of the best-in-class because this is a multifactorial disease. Patients sometimes need both an anti-inflammatory and anti-evaporative. It's hard for many ECPs to diagnose what's driving that dry eye disease. Giving people multiple drops leads to both cost and compliance issues, right, persistence and compliance issues. And so having a combination therapy for a multifactorial disease, is what we've always done in this industry. And so this is the first of that kind, and we're super excited about it.

So if right now, I go in with dry eye, am I walking out with 2 prescriptions?

Unlikely.

Unlikely. I'm going to walk out with one. That's going to work or not work, and then I'm going to go back and they're going to give me a second one?

That's right.

And then if you offer a combination product, does that -- is that your third leg of it?

No. I think the position for the combination will be first-line therapy because it's the easy body, right? It's going to provide instant hopefully, we'll have to back it up with data, but it should -- the product profile and what we believe from the scientists is it should provide immediate and enduring relief from dry eye.

And in the area of glaucoma, you have some products that you've sort of said you have, but without a lot of detail.

Yes. So we do have a -- we're repeating a larger robust Phase II study for our glaucoma product, what we saw in the first Phase II study, so we have data on this, is a very potent alpha-2 agonist that works differently than the others that are out there, and we explained that in the R&D Day. I'm happy to dive deeper on that or someone can watch the replay. But what we saw and what was so exciting about this is a game changer in the treatment of glaucoma is functional improvement. So most glaucoma patients, even when they control their IOP still lose vision. And that shouldn't be, right? We need to stop just managing a symptom of the disease, intraocular pressure and actually help preserve and provide some nerve protection to preserve vision. And we saw about 15 line gains at low luminance in the Phase II study. We're actively enrolling in the broader Phase IIb study. And if that data is replicated, this is a game changer, right? This will be -- if you have glaucoma, this will be the best option for you.

It will be an eye drop?

It will be an eyedrop.

That will replace other eyedrops, in theory.

Yes, because it controls IOP as well as the current therapies, but has the added benefit of what patients care about is their vision, and ECPs too, right? The whole community is built around preserving or restoring vision symptoms.

And when are we likely to see that data?

We should see that data towards the end of next year.

Okay. In '26.

Yes. Back half of '26.

Okay. Excellent. I want to spend a little bit of time on your Surgical business. And I think it's funny that I'm coming to that business last when I think you and I were talking a couple of years ago, that's where we would have started. And walk me through -- you had a recall earlier this year. And by all measures from what we can gather, you regained footing very quickly. And if you could just talk a little bit about the impact, what you learned and where do you think you are now?

Yes. So exactly right. So we -- enVista has been around for 11 or 12 years, right? It's a great lens, glistening free, very stable in the eye and doctors do love the material. What we did was we wanted to move into the premium category. And so we launched enVista Envy, which was our trifocal. As soon as we launched it, we have saw great acceptance. Doctors really fell in love with the outcomes. And then we had a recall. We saw tests across the entire enVista platform. And we did -- we move with speed and purpose to do the right thing. It was very difficult. It was one of the hardest things I was involved in, in the last several years. But we are very committed to finding the root cause and getting back on the market. We did that, I think, faster than people expected. It was a lot, a lot of work by a lot of people to get there.

But I think it's not the reason we did it. Obviously, you never want to go through this, but I think we established a lot of trust that we're always going to do the right thing for patients. We're always going to put patient safety at the top of the list. And what you see now is patients -- or doctors are coming back to enVista as quickly as they can because they trust the lens, they trust the company and they get great outcomes with Envy. And so you saw in the third quarter, Envy was growing very quickly. I forget the exact number off the top of my head, but it was pretty high growth in the third quarter. And what we had said when we returned to market is we would be back to where we were in first quarter or by first quarter. I think we can very confidently say that that's true today. Momentum is really good. And the last piece of the puzzle is enVista Beyond, the EDOF, and that trial has finished enrolling. And so we expect to have that in about a year.

In the United States as well as IOLs?

Yes.

And what will enVista Beyond be?

The EDOF?

Just specifically, what will its parameters be? Or what will -- it will be an ATIOL but...

Yes. And so if you think about a trifocal versus an EDOF, the easiest way to think about it is there are a number of ophthalmologists or cataract surgeons that like to do trifocals and feel very comfortable with the trifocal. But there's a much larger group of ophthalmologists who like an EDOF. And so I think beyond -- and you've heard Eric Donnenfeld on our panel, a noted very respected ophthalmic surgeon say he thinks the EDOF -- he's in the study, too. So he has a little advantage, right? But he's been around forever, and he's tried every lens out there said, he thinks that enVista Beyond is going to be the best and biggest lens from Bausch + Lomb.

And so the growth in the IOL category, how do you think about that? I mean, is that just riding the aging population? Or is that...

Yes, it's feels very consistent, right, and predictable. Does that not mean there'll be a little variability from quarter-to-quarter market to market? Sure. Right now, you're seeing the U.K. cut reimbursement for cataract surgery. So that -- those types of things are going to happen. But demand is very consistent with an aging population. And so I have no worries about demand. If you look at it on a 2-, 3-, 5-year basis, it's very robust. You just have to think about reimbursement pressures as the variable there. But I feel very good at mid-single-digit growth there.

And how do you...

For the market. I think we'll do better.

You think you'll do better. And then how do we think about sort of the economic environment and individual's choice?

Yes. I mean I think to be fair, there are -- the aging population is more active than they've ever been, right? And they are using iPhones and they want to be able to read and they want to be able to watch TV and they want to be able to drive at night. They want their independence, and they want spectacle independence. And so I think the amount of money that they have to pay for premium IOL is a good investment. And I think many of them see it as a good investment to maintain an active lifestyle. And so I feel that, that's not an impediment to our growth at all. In fact, I think there's some tailwinds there as well.

And what do you think at this stage, investors are missing about the Bausch + Lomb story?

I think they were missing a lot. That's why we did the Investor Day. I think people didn't realize the pipeline. I think that's becoming emerging story about us. And we were talking with George and Sam earlier that we're going to start to do quarterly R&D deep dives. We'll ask you to host on it, hopefully. But we want to start to educate our investors more about the opportunities in the pipeline because we quantified that as over $7 billion of potential revenue. It's pretty important. And I think it's a massive growth opportunity.

That being said, the LRP or the 3-year plan we gave really has very few pipeline products in it for growth. There's a few like Elios or AREDS3 or LUMIFY Lux but there's not that many, right? And enVista Beyond. Those are the 4 that are in -- that have to come through the '28 period. But it's really an exciting part. I think the second thing that was missing is that financial excellence component, that margin improvement. And Sam certainly can give some details, but we didn't just give you a hockey stick and say, it's all coming in 2028. We tried to say, okay, roughly 200 basis points a year of consistent building of margin improvement throughout the next 3 years.

Yes. And I want to emphasize a couple of points you made here, Brent, because the first part I'll emphasize is the building blocks of what we need to deliver on our financial targets to 2028, is already in action right now. So it's not -- we're not waiting for a pipeline launch or we're waiting for something -- a product or something that we don't have yet to be able to deliver those targets. So that's a very important aspect of it. And that's when you think about, again, the entirety of our financial excellence, we talked a lot about the 5% to 7% growing faster than the market. But what we didn't talk about is the couple of other areas, which is the margin and the 600 basis point improvement.

And again, it's -- we're coming from a position of strength with that margin because we've seen already the actions we've taken throughout 2025. We've seen the results already -- early results in Q3. We are coming in from a position where we're seeing that momentum continue into 2026. And that's where we said there's about 200 basis point improvement on a year-to-year basis as you go into 2026 from our guidance. And then the 400 basis points is coming in gradual as you go into '27, '28. And the balancing of the margin part of it also, which is very important, it's not coming in from just one element or one driver. I think we've been seeing a lot of the product mix shift that we've been taking with the launch of the dry eye portfolio for us to push on our Daily SiHy and also many of the efficiencies we're doing in our manufacturing, which you see mainly in our Surgical business, and that's driving that 250 basis points on the gross margin.

And on the Vision '27, which is a key element of managing our fixed costs and driving the leverage in the P&L, that's where you see the 400 basis points coming through the SG&A. And one element, and I mentioned it during the Investor Day, which is as you think about that part of the SG&A, I think about it as probably 2 parts about split equally between selling and A&P and the G&A side. And it's very important to think about it this way because we are exiting our 2-year launch phase of the dry eye, which is really at the right time for us to be able to be very targeted with our selling and A&P, but also driving that leverage in the P&L and managing the fixed cost through Vision '27. So we feel very confident where we are. And I think we spend a fair amount of time preparing -- as we're preparing for Investor Day about we are coming really from a position of strength in terms of how we're outlining our 3-year targets.

Excellent. I think our time is up. So Brent and Sam, thank you so much for joining us, and I hope you have a great day.

Thank you for having us. It's been terrific.

So good morning, everyone. Thank you for joining us here. To those joining us via the webcast, thank you for also joining us. This is a very important day for us at Bausch + Lomb and a defining moment in our journey to becoming the best eye health company in the world.

You'll notice as -- as I slip the slides, you'll notice that this isn't your typical opening slide for an Investor Day, and that's quite intentional. Since I returned to Bausch + Lomb in 2023, one thing has been clear, we don't accept the status quo. We've changed how we operate, how we make decisions and how we compete. That mindset extends to also how we innovate. We're not chasing marginal gains. We're developing products and technologies that can truly change the standard of care and eye health.

Our pipeline today is the strongest and most forward-looking it's ever been, built on real science and a clear sense of purpose. You hear from me plenty throughout the year. So I'm not going to do a lot of the talking today. This meeting isn't about me. It's about the exceptional team we have driving Bausch + Lomb forward. You'll hear directly from the scientists and commercial leaders shaping the future of our company. And I think you'll see why I am so confident in where we're headed. Of course, I'll be back at the end of the session to take your questions. But from now, I want you to hear from the people building our momentum every day.

And before we get started, I wanted to highlight one critical theme you'll hear throughout the entire day, financial excellence. It is not a buzzword. It's a discipline and commitment that underpins everything we do. Sam will walk you through how we are driving execution, controlling costs and expanding margins to create sustainable value through 2028 and beyond. Thank you for being here and for your continued interest in Bausch + Lomb.

With that, I'll invite Sam Eldessouky, our CFO, to come up and kick things off. Sam?

Thank you, Brenton. Good morning, everyone, and thank you for joining us today. We've made significant progress in the past 2 years, strengthening how we operate, guided by a purpose and driven by innovation to create durable value. You'll hear a lot more today about this. Over the next 15 minutes, I'll take you deeper into how we think about value creation and what that means for our future from driving our growth to meaningfully expanding our margin and to driving innovation in R&D that will set us apart. The story ahead is one of momentum and opportunity.

First, let me start with the top line. We've delivered above-market growth and built on a strong momentum that we've seen across all our businesses with a strong product portfolio and execution with excellence, we are confident that we'll continue with that trend as we go forward. Second, we are at an inflection point in our margin expansion journey. As we move into the next phase, we will deliver meaningful margin expansion, supported by product portfolio, manufacturing and supply chain transformation and a focus on operational excellence and disciplined cost management. And third, the heart of our story is innovation. Our pipeline has never been stronger. We've built a robust pipeline of breakthrough differentiated products that we expect to deliver a meaningful value beyond 2028. You will hear more today from our team about how we think about the innovation and how it's shaping our future.

So let me get into the details. On this slide, you'll see our 2028 financial plan targets, which reflect the confidence and momentum across our business. Let's start with the top line growth. But before I do that, I just want to frame the market for you. We operate in a market that's durable, that is growing at mid-single digits. So as I mentioned, we've been consistent in delivering above-market revenue growth, and we fully expect that momentum will continue. Building on our strong position, we expect continued above-market revenue growth with a CAGR of 5% to 7% through 2028. This growth reflects the momentum and strength of our durable businesses. In just a few minutes, I'll walk you through how we see the revenue growth playing out across each of our businesses.

Next, let me turn to margin expansion, which is also a critical pillar of the value creation of our strategy. As I mentioned, we've reached an inflection point in our margin expansion journey. Our 2028 adjusted EBITDA margin target is 23%, which reflects approximately 600 basis points improvement from the midpoint of our 2025 guidance. Over the past 2 years, we've laid the foundation for margin expansion by launching new products and expanding our premium high-margin portfolio. We've also been driving operating leverage in our P&L through disciplined cost management. We've already begun to see the benefits in our Q3 results, which is a clear signal that our strategy is working. In the next few slides, I'll share more insights with you how we think about planning and building blocks for our margin expansion targeted by 2028.

Building our above-market revenue growth and our margin expansion targets, we expect to deliver double-digit EPS growth. We continue to make strong progress on cash flow generation, we expect our cash flow conversion to continue to improve, reaching more than 50% by 2028. We've already seen the early signs of improvement in our Q3 results, which reinforce the confidence in the path ahead. Finally, maintaining strong balance sheet and improving net leverage remains a key priority for us. With our strong operational performance, expanding margins and growing cash generation, we expect net leverage to improve to 3.5x by the end of 2028. So in summary, our 2028 financial plan targets reflects the confidence and momentum we have in our business. And by the way, we included a slide in the -- of key financial assumptions in the appendix for you to inform your models as you update your models going forward.

So now let me start by reaffirming our 2025 guidance, which you can see on this slide. As you think about our financial targets over the next 3 years, let's take a closer look at our initial view for 2026, which builds on the strong momentum we're seeing in 2025. We expect our revenues to once again grow faster than the market at 5% to 7% rate. This reflects the strength of our portfolio, our solid execution and durability of the markets we serve. We also anticipate continued margin expansion with an adjusted EBITDA margin of about 19% in 2026, which represent nearly 200 basis points of improvement from the midpoint of our 2025 guidance range. Looking ahead to 2028, we expect to continue to deliver above-market revenue growth and further margin expansion, which positions us well to achieve our 2028 adjusted EBITDA margin target of 23%. So together, our outlook reflects a business that's not only growing faster than the market, but also expanding profitability and building on a strong foundation of sustainable long-term value creation.

On this slide, I want to go deeper into revenue growth in each of our 4 businesses. I'll start with consumer. Our consumer business has been solid with durable brands that leading their categories with a strong consumption trends. We expect this business to continue to perform well with a 5% to 7% CAGR. We expect to expand our leadership in high redness relief with the launch of LUMIFY Lux and strengthen our #1 position in eye vitamins with launch of AREDS3. We also expect our consumer drive portfolio to continue its market-leading growth with Artelac and new formulations of Blink. You will hear more about the consumer business from John and Mayssa later today. Our contact lens business is already the fastest growing in the market, led by our Daily SiHy franchise. We're very excited about our contact lens innovation, which will be manufactured on our existing lines and expect to have a meaningful impact beyond 2028. I know that Yang and Bryan are very excited to share with you the future innovation in our lens business.

And over the past 2 years, we have transformed our pharma business. Today, we are the market leader in dry eye disease with 2 very strong brands: MIEBO and XIIDRA. MIEBO is continuing its exceptional performance, and our international pharma business is delivering durable growth. Andrew and Mayssa will share more details with you on this opportunity. And it was very exciting why you'll hear on the pipeline from them later today. Finally, we see the highest trajectory in our surgical business, driven by our premium IOL portfolio, new product launches and increasing consumables pull-through. Luc and Kelly will share with you more insights on our surgical business. So taken together, our story is about delivering consistent above-market revenue growth in each of our 4 businesses. We have accomplished that in the past 2 years, and we are excited to continue the trend in the next 3 years.

Now let me spend some time on how we think about margin and expanding our margins. We've been laying the foundation for this margin expansion over the past 2 years. So this is not something that just started today. There's been ongoing work for the past number of years. And as we demonstrated in our Q3, we're seeing early results. So we're clearly just getting started with our margin expansion story. We expect to drive margin expansion from product mix and manufacturing efficiencies and operating efficiencies and P&L leverage. We're doing that while we're continuing to invest in R&D and pipeline. So let me break this down for you.

First, we expect product mix and manufacturing efficiencies to drive approximately 250 basis points of margin expansion. Our strategy has been focused on shifting our portfolio towards high-growth, high-margin products. One example of that is in our pharma business with the launch of MIEBO, also our shift to a premium IOLs in our surgical business and in our consumer and lens businesses, the expansion of our brands as well as the scaling of our Daily SiHy lenses. Our second lever is operating efficiencies and P&L leverage. That's mainly impacting the SG&A line item. So for anyone who's doing their models on the fly, you can adjust your SG&A line items, which we expect to drive approximately 400 basis points of margin expansion. This is an area where we have significant opportunity ahead of us as we transition from our launch phase to growth phase, with our products while maintaining a disciplined cost management and executing our Vision '27 initiatives, which is a very important part of our story. We kicked off the work around Vision '27 in the beginning of the year. Brent announced it over the summer, and that's an area where we're actually executing and driving part of that 400 basis points.

So we'll continue to focus on advancing our R&D pipeline, which has a substantial opportunity ahead. We expect our R&D investments to modestly increase over time by approximately 8% of revenue. Now I want to move to cash. We've been very deliberate in our actions to drive stronger cash flow performance. Our Q3 results clearly demonstrates the impact of that focus, reflecting the success of our working capital initiatives, which delivered a significant increase in adjusted cash from operations and a strong cash flow to EBITDA conversion. Looking ahead, we expect to continue this progress with adjusted operating cash flow to EBITDA conversion reaching more than 50% by 2028. The strength in cash generation is driven by disciplined execution, improved earnings growth, efficient working capital management and a continued focus on operational access.

Now moving to our leverage, reaching investment grade also remains a key priority for us. As we continue to deliver above-market revenue growth, expand our margins and increase our cash flow, we expect to reduce net leverage to around 3.5x by the end of 2028. So in summary, our strategy and financial targets are built to deliver profitable growth, strong cash generation and a clear path to delevering the balance sheet. Our capital allocation strategy is designed to drive long-term value. We have 3 clear priorities. First, as you know, we're focused on strength of our balance sheet by continuing to delever. Our goal remains achieving an investment-grade rating over time. Second, we are continuing to invest in our business, driving commercial and operational excellence, expanding capacity and advancing our R&D pipeline. And third, we are focused on strategic M&A and business development opportunities. We will pursue opportunities that make strategic and financial sense. This can be new innovation, category expansion or geographic reach.

So taken together, this disciplined capital allocation framework gives us a transparent road map for our long-term value creation, balancing financial strength and innovation like growth to deliver sustainable returns. I want to take a minute to reflect on this slide because what truly sets us apart at Bausch + Lomb is the significant value ahead of us. In the next 3 years, we are building our momentum. We are executing to deliver above-market revenue growth and driving adjusted EBITDA margin expansion of around 600 basis points. And most importantly, we are unlocking the next wave of value creation through R&D innovation with a potential peak sales of $7 billion. This pipeline isn't something that happened overnight. It's a result of years of disciplined execution and innovation and a testament to the strength of our strategy and our team. So over the next couple of hours, our team will dive deeper into the pipeline. As you will see, the scale of the opportunity here is remarkable.

Now let me leave you with 3 key takeaways. First, we are delivering durable above-market revenue growth built on the strength of our brands, our global scale and our ability to execute with excellence. Second, we are focused on meaningful margin expansion through disciplined cost management, increased premium mix and improved operating leverage. And third, we have a significant upside potential beyond 2028, fueled by R&D innovation that can transform our growth profile. So in short, we are moving from a position of strength. We're unlocking greater profitability and investing in innovation that will drive growth as we change the standard of care and eye health. We are confident in where we stand today, and we're even more confident in where we're heading next.

So now, let me turn it over to Dr. Yehia Hashad, our Head of R&D and Chief Medical Officer, to discuss R&D innovation in more detail. And I'll be back for Q&A at the end of the session. Thank you.

So good morning, everyone. I'm Yehia Hashad, the Head of R&D and Chief Medical Officer. In case I look a little bit more aged than this picture. I just would like really to start by saying it's a very rewarding day for me because the incredible work of my colleagues over the past 2 years is today being highlighted. And I actually -- we might have spoken in several conferences about some of our opportunities. But today, we are thrilled to share with you the science and the data behind our pipeline assets and how we believe that they can disrupt the way we are treating many eye diseases. We also have our commercial colleagues that they will speak to the market opportunity of these assets.

But first, I would like to briefly explain to you how we transformed our R&D organization to build the future of eye care and bring meaningful solutions to the patients around the world faster. Rebuilding the R&D organization was a significant undertaking over the past couple of years with several imperatives. First, recruiting and hiring the best, brightest minds in the eye care industry. They are owned and grounded -- they are down to the promise of groundbreaking work. and have a longer track record of bringing innovations to the market. You will be hearing for some of them today about these technologies. Second, we launched new R&D innovation and the external evaluation hubs to evaluate opportunities at their earliest stage and included also a disease biology group that are able to do evaluation and run quick validation tests for any science we like. We also strengthened our formulation group, and we strengthened our material innovation group.

With that, we were able to move from just simple formulation eye drops into a much more complex eye drops like combination therapies. We also introduced drug delivery systems, and on the innovation -- material innovation side, to be able to work beyond the standard work of material. We enhanced our portfolio analytics, and we can focus our investments where they have the highest return and the most impact to our patients. Our R&D organization now is a growth engine with approximately 1,000 scientists, engineers and clinicians across global 12 sites, and we are all united by one purpose, helping people see better, to live better.

Over the past 2 years, we delivered more than 20 new launches, the highest in our history in Bausch + Lomb. And currently, we have more than 60 active programs in different stages of development with many of them are true game-changing potential. Our strategy is simple but impactful. First, we accelerate launches to sustain growth from now through 2032 and get innovations to the patients around the world faster. Second, we reload the pipeline with projects that have a true disruptive potential, not incremental advantages over current therapies, but truly redefining the segments. And we have a holistic view on our businesses. So we look at the opportunities that can help ensuring the growth of each business unit.

I will give you just a brief and a preview of what you will be hearing in detail today, and we will go business by business. On the consumer side, brand extension with science-backed clinically differentiated products is best represented by our consumer. So the first one is our newest PreserVision formulation AREDS3, which is a prime example of advancing science to benefit patients by targeting all stages of age-related macular degeneration. AREDS2 were approved for the intermediates and the late-stage, age-related macular degeneration. With AREDS3, we are able even to expand the population into the early stage, which is a much bigger population for that, still in collaboration scientifically with the National Eye Institute.

Moving to LUMIFY, one of our best brands and products. I'm sure we have in the audience here many LUMIFY users, which shouldn't be a surprise, noting how popular and have its sustained popularity existing. But we plan to build on this success with a new formulation that incorporates hyaluronic acid. LUMIFY by itself is the #1 redness relief product. By adding the hyaluronic acid, it will have the luxurious feel, the much thicker feel of the eye drop once the user is putting it into the eye.

And then on the Blink franchise, we are not only expanding the Blink franchise by preservative-free formulations, but we are also working on introducing a new bottle technology that would improve dosing precision and significantly upgrade the user experience. If you know how difficult sometimes to put eyedrops for many patients, it is difficult, try to put the eye drops and not have the drop falling on your sheet or aside. This technology will help for more precision of the dose.

Now moving to pharma. And please here notice a very intentional theme. First, as I mentioned, we are not interested in incremental improvements to existing therapies. We are focused on elevating the standard of care. We are developing first-in-class dual action, fixed dose combination, eye drop that combining the active ingredients present in XIIDRA and MIEBO to address both the inflammatory and the evaporative components of the dry eye. You will hear more about the innovation in the technology on the formulation and also how we are going to address this from an unmet medical need.

Second one is strangely that one of the most commonly presented symptom at the ophthalmologists or ODs is pain, whether this pain is postoperative, whether this pain is associated with dry eye disease, whether pain is due to ulcer or scratch in the cornea, but it's one of the most commonly presented symptoms. And until now, we do not have an approved treatment for neurosensory pain -- to address neurosensory pain, apart inside the operating room where we can use anesthetics. We aim to change this by introducing the first neurosensory target therapy for ocular surface pain for this area, expanding our also ocular surface segment.

Moving to glaucoma. We all know about the glaucoma diseases actually as we have to lower the intraocular pressure, which is the right thing to do because it's the only modifiable risk factor. However, glaucoma is also a neurodegenerative disease because the rise in the intraocular pressure can affect the ganglion cells and can affect the photoreceptors in the retina. And this is a big problem because even patients that lower their IOP, they still lose vision, and they still lose visual field. We aim to change that as well. By introducing the first product that in addition to lowering the intraocular pressure have shown in a proof-of-concept study that we will show you some very exciting data that can improve low luminance visual acuity and improve visual fields.

Moving to retina. One of the biggest investments area overall. And actually, despite of the presence of many great products, still there are huge unmet medical needs in retina. We are focusing on geographic atrophy and intermediate AMD. And geographic atrophy in particular, there are 2 approved treatment, but none of them have shown the potential for functional improvement. And this is one of the target areas that we are working on. And the second area also, frequent injection is still a burden for the patients and burden for the health care system. And we are addressing this as well by long-acting delivery system that is unique and biodegradable and polymer-free.

For the geographic atrophy and the intermediate AMD, intermediate AMD has no available treatments until now. And we aim to introduce the first precision medicine as well as gene silencing that can be used in ocular use through our small interference RNA platform and also the collaboration with Character Bio on the precision medicine. This is another example of how we are bringing cutting-edge science to the ophthalmology community.

Moving to the surgical. Again, with the great success we had with the introduction of our premium IOLs, we are expanding on this segment by the introduction of enVista Beyond or EDOF, extended depth of focus. This is a pure refractive optics and has no diffractive rings, which results in a much better clarity on vision and less dysphotopsia. This will be a great addition to our premium segment.

The second one, we are expanding into new disease areas, glaucoma. And we are expanding with ELIOS, which should bring a truly implant-free approach to the minimally invasive glaucoma surgery. We're simplifying the surgery to be even used in with the cataract surgeons during the cataract surgery and does not add time to the surgery as well as it can be very easily done as well. I think our KOLs will speak more about this part. Some of them have used it already.

Moving to our new phaco and vitreoretinal platform. It offers an enhanced fluidics. What does this mean? Enhanced fluidics, if you ask the surgeons, and I hope they are going to speak about that is the most important things during the surgery because it maintains the pressure inside the eye constant and you can operate in a much relaxed way during the surgery. It has also a lot of multifunction hand pieces to make the surgery much more efficient. We're having an equipment outside that's seeNOVA. If you would like to have a look on it, actually, it's present in outside booth.

And then moving also to seeLyra, which combines the femtosecond precision with live optical coherence tomography or what we call live OCT, which give a lot of guidance to the surgeon during the surgery, and it also has a soft docking, which is great for accuracy and for patient comfort. Each of these technologies were done with the surgeon and the patient in mind and focusing on 3 goals: one, smarter surgery; two, fewer compromises; and three, better visual outcomes for patients. Does anybody recognize this sound? Believe it or not, this is -- was the sound when we dial to the Internet in 1999. Also, in 1999, sounds like a long time ago, these were some of the popular things that you see here on the screen. This should make some of us, like myself, feel significantly aged. Although I must say the Backstreet Boys have made quite a comeback. But don't worry, I'm not going to sing. I won't that way.

So the point here I want to make that believe it or not, since 1999, we have not witnessed any new contact lens material breakthrough innovations. It's a quite very long time. And actually, we are aiming to change that. So we plan to introduce our new bioactive technology platform, with the introduction of the first material breakthrough in over 25 years. We call it Project Halo and Yang and Bryan will actually tell you more and will reveal more data and where we are with this program. It's a very exciting program for us. And while it is very exciting, but it's not the extent of our pipeline in the contact lens. While the opposites, we are concurrently working on 3 extensions of our highly successful silicon hydrogel portfolio, each targeting different audience. So we have our cost competitive daily disposable SiHy lens would provide the eye care professionals with a new option for price-conscious patients and also expansion geographically to some countries that really looking for such innovations. It's easy to say this, but actually, it was a substantial work from our R&D colleagues to come up with such a solution.

Second, we are also introducing our premium frequent replacement lens offering, which would introduce a new level of comfort in a category that has maintained steady growth. And finally, myopia. Myopia is one of the rising pandemics especially in the Asia region, but it's also here. And it's widely now coming up because of the use of tablets and the continuously looking at the screens in front of us. We don't have much time to look beyond the screens. And it's a big issue for the younger generation because progression of myopia can start as early as 4, 5 years old and continues all the way up to adolescence. And there are some treatments and modalities that can treat this, but still we are lacking the best-in-class, especially that we are dealing with a very specialized population, which are children. So we aim actually to come with the best-in-class by our contact lens technology that is tailored for the children and actually have different dioptric powers that matches the progression of the disease for the children.

As you can see, all the technologies I mentioned in our pipeline on the contact lenses are all produced on our current manufacturing lines, which was an additional challenge that we gave to the R&D team, and they manage and succeed to overcome it. What does this mean? It means that we also have the potential for a lot of cost savings and margin expansions on the site. Earlier, I mentioned that we have built an innovation engine that can sustain our growth through 2032. This slide helps you to paint the picture well. The cadence of the anticipated launches is very much by design with new product introduction on a regular basis that will keep the attention of patients, customers and consumers and fuel the growth for Bausch + Lomb. I also mentioned here, which is clear, the holistic nature of our pipeline by investing on all business segments.

I want to leave you with 3 main takeaways. The transformation of R&D organization has undergone. It's just not about creating new products. It's about redefining what's possible in eye care. Our focus will remain on these 3 pillars. Investments in talents and capabilities. Second, innovations that elevate the standard of care in eye health. And third, sustained growth through steady rhythm of launches across all categories as illustrated in my prior slide.

And now I would like to invite my colleagues, John Ferris, Mayssa Attar, to give you more details about the consumer products that you will be hearing.

All right. Good morning, everyone, and thank you, Yehia. I'm John Ferris, President of our Consumer Business Unit, and I'm here this morning with Mayssa Attar, my colleague, who leads our pharmaceutical and consumer R&D organization. And we're going to review how our disciplined strategy, strong execution and trusted brands are enabling this business to drive customer loyalty and deliver steady, consistent growth. Okay.

Our consumer business is firing on all cylinders as we leverage our history of innovation and deep consumer trust in the Bausch + Lomb brand. Today, we are the #1 global consumer eye health company. And we continue to outperform the market, growing faster than our peer group, whether consumer eye care or more broadly OTC companies in general. We operate in an attractive category with tailwinds for durable mid-single-digit growth, including a growing consumer interest in self-care, an aging global population and an increasing prevalence of eye conditions, including dry eye. Importantly, looking forward, we are well positioned to continue to lead in this space. Winning in a consumer business happens at the brand level, and we have a best-in-class portfolio of category-leading brands with strong momentum. And I believe we have the best team in the business, with the commercial and scientific capabilities to execute our winning playbook.

Our brands are backed by superior vision science and are highly recommended by eye care professionals and pharmacists. And in fact, PreserVision, LUMIFY and Biotrue are all #1 doctor-recommended brands in the must-win U.S. market. And fueled by innovation that creates premium value, we employ a modern brand building approach that combines clinical proof with social proof and digital commerce, all of which are now increasingly powered by AI to drive loyalty and growth. So today, we're going to highlight 3 of our most important growth brands for you, PreserVision, LUMIFY and Blink.

Okay. So starting with PreserVision, our largest consumer brand. And it's important to remember that this brand is much more than a vitamin. It's the standard of care for supporting vision health in people with age-related macular degeneration or AMD, which is the leading cause of vision loss in older Americans. We created and have led this category for more than 2 decades. And today, we have a commanding market share over 90%, even several years after the entry of private label store brands. Our leadership here can be traced to a long-standing collaboration with the National Eye Institute and 2 landmark clinical studies AREDS and AREDS2. These studies led to the formulation of PreserVision, the most studied and most recommended brand in the category. And even with our significant market share, though, we still have a meaningful opportunity to serve millions of more patients with AMD.

First, more than 60% of the 11 million people in the current target market of intermediate to advanced AMD are not yet using AREDS2 vitamins. And second, based on previous science, AREDS2 vitamins aren't widely recommended for the 17 million people with early-stage AMD. So combined, our addressable market here could be almost tripled in size to 28 million people. That's why we're launching PreserVision AREDS3, our next-gen formula next year in 2026 to meet the needs of people at all stages of this condition, early, intermediate and advanced and Mayssa will now share more about the science behind this innovation.

Thank you, John. I'm thrilled to be here to represent the efforts of our consumer and pharmaceutical R&D scientists. Late-stage AMD is a vision-threatening disease. And when patients progress to the late stages, the treatment burden is high. It involves intraocular injections. These can be as frequent as every month. With PreserVision, we aim to slow progression to the late stage.

Nutrition is a critical modifiable risk factor that has been shown to slow the progression of AMD. With PreserVision AREDS3, we aim to incorporate the latest nutritional science. PreserVision AREDS3 combines AREDS2 plus our proprietary vitamin B complex. This vitamin B complex that we have designed with specific vitamin Bs at specific levels is designed to help AREDS2 work even better so that we can expand the patient population that can benefit. Research suggests that B vitamins offer extra support. This includes boosting cell metabolism, supporting a healthier immune response and reducing oxidative stress. The scientific literature teaches us that these actions should improve overall retinal health and reduce the risk of AMD. The science we've generated to date behind PreserVision AREDS3 is compelling. And so I am so excited to share with you what our scientists have discovered.

Okay. So we have 2 lines of evidence that indicate human genetics supports the inclusion of B vitamins in AREDS3. Let's focus on the 3 graphs here at the top. We tested the effects of AREDS3 on human retinal cells from AMD patients. And if you compare these 3 graphs that depict the gene expression profile after exposing retinal cells to different supplements, what you see if you start on the left, after B vitamins alone, then AREDS2 alone and finally, AREDS2 plus the B vitamin complex. What you're seeing are very distinct transcriptomic signatures. This means different genes are being turned up or being turned down. And importantly, we see a synergistic effect on the differential gene expression if you look at AREDS2 plus B vitamins compared to either supplement alone. And these changes in gene expression are related to retinal health.

The second line of evidence comes from our partnership with Character Bio. You'll hear more about that partnership later. Human genetic analysis using their proprietary database identified a genome-wide significant association implicating vitamin D biology in AMD progression. This supports a protective role for vitamin D against this disease. We plan to work with the National Eye Institute to test these beneficial effects that we've characterized in patients with the novel AREDS3 formula as part of the AREDS3 clinical program.

Okay. Thanks, Mayssa. Now let's shift to a category where we're not just the leader, we completely disrupted the status quo. LUMIFY truly is a redness reliever like no other. I'd like to say there's literally magic in the bottle, helping eyes look whiter, brighter and more beautiful. And when you think about it, who doesn't want that. With its novel mechanism of action and favorable safety profile, LUMIFY has redefined this category and become a staple in beauty routines embraced by millions of consumers that we call beauty enthusiasts.

And that's been a key part of our value creation here. Rather than position LUMIFY as a traditional redness reliever, our insights-led marketing team saw a much larger opportunity. They built a premium-priced, beauty-oriented brand that's powered by our always-on marketing engine with influencer collaborations, beauty partnerships and, of course, digital commerce. Today, LUMIFY is the #1 doctor-recommended brand and currently holds well over 60% market share. Yet with all that success, only 3% of the addressable market of beauty enthusiasts has yet discovered LUMIFY and our ambition is to reach all of them.

That's why we recently launched a preservative-free version and our next-gen product, working named LUMIFY Lux will further drive market penetration. If you haven't tried LUMIFY yet, you don't know what you're missing, and we do have samples outside the room. I know you'll love it because we hear it every day from doctors, celebrities, influencers and most importantly, everyday consumers. But you don't have to take it from me.

Here's a short video to show you in their own words how consumers love LUMIFY.

[Presentation]

Okay. So as Brent opened this morning, we're always looking to push beyond good enough. In this case, that means taking something that's magical and trying to make it even better. LUMIFY Lux is -- builds on our current formulation by adding hyaluronic acid for a more luxurious feeling drop. So helping your eyes not only look their best, but feel their best as well. We're developing this product to appeal to both loyal LUMIFY users and those who haven't yet tried LUMIFY, giving us even more runway for growth.

Okay.

So our novel LUMIFY formulation combines our proven redness-relieving molecule, brimonidine with hyaluronic acid. As with LUMIFY and LUMIFY preservative-free, low-dose brimonidine acts to constrict blood vessels to relieve redness quickly with a long-lasting effect. And because safety is critical as we innovate an ocular aesthetics product, it's important to note, brimonidine is backed by nearly 30 years of safe patient experience. We've added hyaluronic acid to the new formulation.

Hyaluronic acid is a natural component in tears. It attracts 1,000x its weight in water, which helps keep the eye moisturized. Hyaluronic acid also provides viscosity and elasticity, which helps protect the eye from the mechanical stress of blinking. The constituents of this new formulation have allowed us to reduce the preservatives by 60% and these scientific insights that we've gained during the development and manufacturing of the novel LUMIFY formulation have enabled us to file for patent protection.

So how does this novel formulation perform into consumers? To answer that question, we have successfully completed a Phase III randomized controlled trial. It was a robust study with 578 participants, of which 289 were treated with the new LUMIFY formulation. The study was 4 weeks long with a 1-week follow-up conducted at 11 sites and the data reveal a best-in-class outcome. That was so I could warm you guys out. There we go. All right.

We observed redness relief as early as 30 seconds with sustained redness relief through 10 hours when comparing to baseline redness. And when we asked about the feel of the formulation, remember, that's what we were going for here. We were thrilled that 84% of study participants indicated that comfortable, cool or refreshing would be the first word they would use to describe the feel of this new product. These data demonstrate a compelling clinical profile and support NDA submission in the first half of 2026.

All right. Thanks, Mayssa. Now let's turn to dry eye, one of the fastest-growing and largest consumer eye health categories, driven by an aging global population, environmental and lifestyle factors, including heavy digital device use and looking around this room, I can see that I'm not the only one who may be as guilty of that.

So in the U.S. alone, over 150 million adults experience dry eye symptoms. Yet data shows only about 1/3 are currently treating those symptoms with over-the-counter products. And consumers often turn to OTC products as the first line of treatment, so making this a prime space for innovation. But they're looking for more than just symptom relief. They want solutions that fit seamlessly into their lives, okay?

Today, we are the fastest-growing OTC dry eye company globally, anchored by our Blink brand in North America and our well-developed Artelac brand in international markets. And although we are relatively new to this space in North America, in just 24 months since the acquisition of Blink, we've successfully repositioned this brand as a modern dry eye brand for the modern causes of dry eye. And this strategic shift has paid off.

Blink is now the fastest major growing OTC dry eye brand in the U.S. market. But as a consumer insights-driven company, we're also thinking about the user experience. Data indicates 40% of consumers struggle to administer eye drops. And I know I'm one of those that Yehia was describing with the eye drops running down his face. So that's why we're developing an innovative delivery solution that can be used with Blink and all of our eye drops. Again, challenging the status quo is just not being good enough for patients.

Okay. So as John mentioned, within the dry eye consumer space, we're introducing new formulas to address the needs of different segments of this heterogeneous dry eye population. From our Blink line of eye drops, we have Blink Triple Care preservative-free, our most advanced OTC dry eye drop formulation. Blink Triple Care combined hyaluronic acid with nano emulsion lipids to help address the symptoms from both aqueous deficient and evaporative dry eye. This innovative, clinically proven formula delivers long-lasting and immediate hydration to help maintain eye comfort throughout the day.

In addition to this new formulation, we are also exploring innovative new delivery technology to further improve the consumer experience. More than 70% of consumers surveyed expressed interest in improved packaging and delivery systems. So we're developing a new bottle that improves dosing precision and helps patients to beat the blink reflex, making it easier to get the product in the eye. This delivery technology has potential to become a platform across multiple consumer and pharmaceutical products.

Okay. So to sum up, with our clinically differentiated innovation, we expect our consumer business to continue our track record of market outperformance with these new products driving growth for our 3 most important brands and delivering peak sales in excess of $1.3 billion on these brands alone.

So in closing, here are 3 key takeaways I want to be sure you take away from this talk today. First, we have a proven ability to execute and deliver durable growth above the market in this business. Second, we have an industry best portfolio of winning consumer brands with clear runway for growth. And third, our pipeline is strong with meaningful near-term innovation designed to address the unmet needs of millions of more patients.

Now thank you. And now please welcome Andrew Stewart to join Mayssa on stage and provide an update on our Pharmaceuticals business.

Thank you, John. Good morning, everyone. I'm Andrew Stewart. I'm our Global President of the Pharmaceutical business here at Bausch + Lomb. And together, my colleague and I, Mayssa, are going to take you through what I believe is a really exciting transformation, not only within our pharmaceutical business, but within our company.

Today, we're going to talk about new innovative therapies in dry eye, in ocular surface pain, in glaucoma and advancing the science within retinal disease. But first, let me take a step back and talk a little bit about our heritage as a global leader in ocular surface. Today, in the pharmaceutical business, we already offer 2 very compelling solutions in both MIEBO and XIIDRA. And now we're going to advance that dry eye business with the first dual-action therapy that can target both inflammation and evaporation in a single drop.

In ocular surface pain, we're pioneering a first-of-its-kind neurosensory therapeutic. For back of the eye and glaucoma, Yehia mentioned before, we're moving beyond traditional approaches. And we have many great solutions for lowering IOP, but the first-in-kind product to help with visual acuity associated with glaucoma. And in retina, first-in-class therapeutics with novel targets in both intermediate AMD and geographic atrophy. We have multiple programs transforming how retinal disease is treated today and will truly help GA patients see better to live better and will underscore the depth of our R&D information, our pipeline and our science.

Our commercial execution continues to be a real differentiator at Bausch + Lomb. We have the highest-rated field force recognized for both expertise and consistency. MIEBO continues its exciting journey with record-breaking quarter-over-quarter acceleration in growth. It's been one of the fastest launches in eye care history, and it remains the only product clinically studied with diagnosed patients with meibomian gland dysfunction, has unparalleled coverage for the treatment of a dry eye and for evaporation. And last week alone, more than 30,000 people picked up a prescription for MIEBO. This reflects both strong prescriber adoption and best-in-class field force execution. Patient feedback for MIEBO continues to be consistent.

Recently, we just published a Phase IV study. And in that Phase IV study, patients and physicians have the same consistent remark. It works immediately, and it is both silky and smooth. XIIDRA remains on a solid growth path with more than 8% TRx growth year-over-year and steady volume gains, supported by clear promotion and field force execution as one of the primary drugs designed on the ocular surface for inflammation.

Our work as the unquestioned leader in dry eye isn't done yet, and we're going to continue to grow this market responsibly. We're excited about the momentum and the benefits we're seeing from these efforts. Together, they demonstrate how our commercial model isn't just performing, but it's scaling and positions us to replicate our success in dry eye across the expanding pharma pipeline. Dry eye disease, and let's take a step back and expand a little bit on the comments that you heard from John just a few minutes ago. Dry eye disease remains one of the largest opportunities for Bausch + Lomb, and it's a highly underpenetrated category.

Nearly 150 million U.S. adults have symptoms of dry eye, yet only about 7% of those will actually be diagnosed and receive a prescription therapy. Well, that means 93% of patients are living with dry eye. They're either undertreated or they're not satisfied with the current options that they have with over-the-counter products. And even among those who are treated with a prescription, 90% of those will discontinue therapy within a year, underscoring the need for a better tolerated, more effective solution.

And looking ahead, this market is going to double by 2030 and a lot for the reasons that you heard about earlier, certainly, an aging population, definitely increased screen time. But in addition to that, pollution factors, travel, all of the different environmental concerns that all of you should never feel your eyes, and our dry eye solutions have the ability to help you by growing awareness for this condition.

With our comprehensive platform, including both prescription and over-the-counter products, we're uniquely positioned to continue leading this market and to help grow it as we move forward in the future. Now before I turn this over to Mayssa, we've had the pleasure of working together for more than 10 years. And the revolution and transformation happening at Bausch + Lomb is more than just the products, the pipeline and the portfolio. It's truly about the people, and you'll hear that when Mayssa walks you through the science and what we have to share with you today.

Thank you, Andrew. You can see we have a great team and great colleagues here. So dry eye is a complex multifactorial disease. Patients can experience similar symptoms but with very different underlying causes. Tear evaporation and ocular inflammation are key disease drivers. At Bausch + Lomb, we have MIEBO and XIIDRA, the only 2 eye drops approved on the basis of Phase III studies in which they demonstrated a statistically significant effect on both a dry eye sign and a symptom.

The active ingredients in these drugs work in very different ways. MIEBO forms a monolayer on the surface of the eye and is thought to reduce tear evaporation, while lifitegrast, the active in the XIIDRA formulation needs to penetrate tissues to exert its anti-inflammatory effects. Current eye drops only address a single cause of the disease. There is no therapy that tackles multiple disease drivers at once in a single drop.

To be clear, there's a reason for this. As with any combination therapy, it's not just enough to show regulators that each component part delivers a therapeutic effect when combined. Rather, clinical data must show and characterize the contribution of specific elements to an overall advanced therapeutic effect that is superior to either component. For this reason, we see a clear opportunity to elevate the standard of care, formulating a combination of XIIDRA and MIEBO active ingredients to introduce the first dual-action dry eye drop. This will simplify treatment for eye care professionals and deliver better outcomes for patients.

Specifically, we anticipate faster and more effective relief for greater improvement in the signs and symptoms of dry eye. So how are we going to do this? The first technical challenge was to formulate the true proven active ingredients in MIEBO and XIIDRA together in a single eye drop. Our scientists have accomplished this, and they've begun to characterize the benefits in preclinical models. On the left in the slide here, you see nonclinical pharmacokinetic data, comparing how much better the active ingredient in XIIDRA, lifitegrast penetrates ocular tissues when formulated with the MIEBO active ingredient.

Why does this matter? Recall, lifitegrast needs to penetrate tissues to exert its anti-inflammatory effect and drug development breakthroughs often involve discovering a way to deliver the lowest effective dose for a therapeutic effect. With this new formulation in the cornea and even more so in the conjunctiva, lifitegrast is delivered far more efficiently into ocular tissues. The unique properties of this new formulation allow us to reduce the total lifitegrast dose by delivering it in a smaller drop. This reduces the potential for side effects related to the XIIDRA active ingredient while delivering 2 mechanisms of action in a single drop.

Together, in an unprecedented manner, these actions will help heal the ocular surface damage caused by dry eye. That is why we will be the first to demonstrate contribution of elements to enable approval of a combination dry eye therapeutic.

Overall, this uniquely formulated combination therapy is designed for superior efficacy to XIIDRA or MIEBO alone. And for that matter, any other eye drop -- dry eye drop that exists today. Today, we are testing these attributes in an ongoing Phase II study with a data readout anticipated in the second half of 2026.

Now I'm going to go through 2 different disease areas for ocular pain and glaucoma, where we're developing novel therapeutics to address important unmet needs. First, ocular pain, leading reason why patients will visit an eye care professional today. Treatment options are limited. Many patients with chronic ocular surface pain and including 20% to 30% of patients with either dry eye disease or corneal disease will often show up within an ECP's practice and another 5% to 15% postsurgical patients who are inadequately treated.

Patients cycle through multiple different therapies without meaningful relief. And about 10% to 15% of those patients will also have acute ocular surface pain after cataract, after refractive surgery. And for those patients and others with short-term conditions like corneal abrasions, infections, dry eye flares, current options like steroids, NSAIDs, they're just not sufficient and they're not getting at the root cause of eye pain. Both acute and chronic ocular surface pain represent significant unmet needs and an opportunity for Bausch + Lomb to do better, providing longer-lasting and more effective solutions.

Next, turning to glaucoma. And I mentioned earlier, there's great therapies today that lower intraocular pressure and help with glaucoma. However, no currently approved therapies impact the neurodegenerative aspects of this disease. They don't help with vision. And so that's the most important part of why an ECP will want to treat a patient, help a patient and continue them on their journey to better eye health. And while there's 4.2 million Americans with glaucoma, there are 35% of that population that have vision impacting glaucoma, which creates the biggest challenge. And Mayssa is going to take you through both those programs now.

All right. Thanks, Andrew. The ocular surface and particularly your cornea is the most densely innovated tissue in the body. That means it's one of the areas most sensitive to pain. On the cornea and the conjunctiva in the terminals of sensory neurons, the TRPV1 nociceptor is a primary sensor for ocular pain. By blocking, also known as antagonizing TRPV1, we stop the signaling cascade that leads to pain. This is in contrast to the activity of a recently approved dry eye neurosensory agent, which activates neural signaling. Here, our tactic is to block it.

At Bausch + Lomb, we have 2 distinct TRPV1 antagonist molecules. BL1312 is a first-generation molecule that achieved clinical proof of concept in reducing ocular pain in postsurgical patients. In a second study that was somewhat different, it failed to replicate the efficacy. So we're going to talk a little bit about that. We have a second molecule, BL1332. It's 100x more potent and it's water soluble. So now I'd like to share with you the data that informed our development strategy and specifically how we're using BL1312 clinical data to guide our strategy to maximize efficacy with BL1332.

Let's look at some data. So the graph on the left simulates human corneal concentrations of BL1312, so the first molecule after topical ocular administration with dose regimens used in the 2 different clinical studies. The teal top line in the graph shows corneal levels after 2.5% BL1312 was administered 4 times per day. This was the dose regimen that was effective in ocular pain relief in postsurgical patients. And this successful proof-of-concept study validates that blocking the TRPV1 pathway does work to relieve ocular pain.

The lower red dash line depicts BL1312 concentrations in the cornea from the second study that explored a lower dose of 1.5% and a lower dose frequency of only 2 times per day. And this dose regimen was not effective in treating pain relief.

These results teach us that to maximize pain relief, we need to maximize delivery of TRPV1 blocking activity to ocular tissues. This is achieved with a more potent molecule. That is why we are developing BL1332. So now let's examine the graph in the middle of the slide, which presents data from a nonclinical study to evaluate pain relief. In this animal study, we applied capsaicin, the active and pepper spray to induce an eye wiping response as a surrogate response for pain. The Y-axis that you're seeing depicts the eye wipe response to a capsaicin challenge in the presence of different eye drops. You can see BL1332 is significantly more effective at blocking the pain response than either the placebo vehicle or BL1312. This confirms that increased potency of BL1332 translates to increased in vivo efficacy.

The next step is to test this finding in patients. So to that end, we have successfully completed a Phase I study for BL1332, where the highest dose was safe and well tolerated. This sets us up to initiate our Phase II proof-of-concept study in patients, which we will do in the first half of 2026.

Now let's move to glaucoma. As both Yehia and Andrew mentioned, today, we treat the risk factor of IOP, but glaucoma is ultimately a neurodegenerative disease. The loss of retinal cells and optic nerve injury is what causes glaucoma-associated vision loss. Studies have shown that most patients with mild to moderate glaucoma have macular damage and difficulty seeing in low light. And there is no therapy approved to treat or prevent vision loss associated with glaucoma.

The LoGTS study showed that patients treated with brimonidine were less likely to develop visual field loss compared to those treated with timolol, even when IOP was decreased to the same extent. Brimonidine is an alpha-2 adrenergic agonist. Alpha-2 adrenergic agonists are thought to preserve and improve vision via 2 mechanisms: Neurofunctional enhancement and neuroprotection. Our goal is to fully realize the potential of these mechanisms with BL1107. So why is BL1107 better than brimonidine to realize the beneficial vision effects of alpha-2 pharmacology. It's because BL1107 is designed to target vision-threatening disease.

Let me tell you why I say that. First, BL1107 is a prodrug that is lipophilic, which helps it penetrate tissues deep in the eye. The graph at the top shows nonclinical pharmacokinetic data that demonstrate when BL1107 is administered as an eye drop, we detect the prodrug and little active drug in the tears. That means the prodrug is available to penetrate deep into ocular tissues, delivering the active drug to the retina as shown in the second graph, where we see the majority of drug detected in the retina is the active moiety.

Another BL1107 attribute is its receptor selectivity and potency. The lower graphs compare 2 different alpha adrenergic receptors, alpha-2A and alpha-2B for BL1107 versus brimonidine. BL107 is more selective and potent to alpha-2B, while brimonidine is more selective and potent to alpha-2A. This is important since alpha-2B is the most widely expressed alpha receptor in the retina, where we need the drug to work to improve and protect vision.

Overall, it's BL1107's molecular attributes of enhanced retinal penetration combined with selective and potent alpha-2B agonism that should maximize vision effects. And so that's why today, for the first time, we are really excited to present positive proof-of-concept data in glaucoma patients treated with BL1107.

In addition to lowering IOP, for the first time, we show 15 letter gains, which is an approvable endpoint after treatment with an eye drop. The graph on the left show that under low light conditions, patients treated with BL1107 show a greater proportion of 15-letter gainers than patients treated with timolol in both the study eye and the treated fellow eye. The top graphs depict the study eye and the lower graphs are the treated fellow eye. What you see, the green bars represent 2 BL1107 doses on days 1, 4 and 14, and they depict the percentage of patients gaining vision, while the gray bars represent vision gains with timolol. You can see in the study eye, there were no patients that gained vision with timolol. This is remarkable.

Today, we treat IOP. If approved, everyone will treat with BL1107. Let me show you another piece of data. Moving to the graph to the right, we see that patients treated with BL1107 showed statistically significant improvement in visual field mean deviation on day 14 compared to timolol. Currently, we have a larger Phase II study ongoing that is powered to demonstrate these visual neuroenhancement effects with data anticipated in the second half of 2026. These data will guide our Phase III study design.

If approved, BL1107 could define an entirely new category of glaucoma therapy, the first with a neuroenhancement mechanism of action aimed at protecting and improving vision while also lowering IOP.

Next, we're going to move into our retina pipeline and our programs that are in early-stage intermediate and advanced age-related macular degeneration. AMD is another major unmet need. More than 17 million Americans have early-stage AMD, about 1.5 million have late-stage AMD. And we know today, nearly 1 million patients with some form of geographic atrophy will show up in a retinal practice.

As AMD progresses to geographic atrophy, patients lose central vision. That's the most important part needed for reading, recognizing faces, living independently and effective therapies for early intervention and disease modification in AMD remain limited with a significant opportunity for innovation. And while there are 2 approved therapies today for geographic atrophy, they're only available in the United States. These drugs were approved because they do help slow the progression of lesion growth, but they do have a high treatment burden, and they don't really have a meaningful impact on vision. And vision is really what matters to patients and physicians treating these diseases.

For this reason, there is still a critical need for treatments to help reduce injection burden, so patients will be motivated to continue with therapy. And that's the opportunity that we're pushing for, developing the next-generation AMD therapies that are improving vision, not just slowing disease progression.

Okay. So let me share with you our strategy for how we're approaching AMD and its complexity. Why is AMD complex? It's a heterogeneous patient population with many implicated disease mechanisms, no animal model that fully replicates the disease biology, and it's a very slow progressing disease. All of these factors have made it challenging to select pharmacological targets that ultimately impact the disease in patients. And finding out whether the preclinical science translates to human patients is slow and expensive. And that's a big problem. Since we all know, lack of translation is the single biggest reason most experimental drugs fail and don't make it to market.

So for this reason, we knew our strategy had to start with human data. That would be the way to successfully elevate the standard of care in both intermediate AMD and GA. By starting with human data, we would be able to identify pharmacological targets that were most likely to help patients. Only then once we had selected targets based on human patient data, would we design the optimal molecule and combine it with a best-in-class drug delivery.

To further our strategy, we sought out partners that could provide complementary technologies to enable our strategy. The first partnership I'll discuss is Character Bio. We believe precision medicine will transform how age-related macular degeneration is treated by helping us to better match therapies with patients. Our partnership with Character Bio provides exclusive access to their integrated patient data platform and AI-powered analytical engine to drive novel intermediate AMD and GA discovery and development.

This one-of-a-kind platform is a strategic advantage. It includes multimodal data -- multimodal imaging data like OCT and fundus photography as well as electronic health records and genomics for thousands of patients. The patient data are longitudinal, which means we track patients' disease progression over years. And by applying machine learning to these data, we're able to discover drugs linked to biological pathways associated with specific types of disease progression. And we have made great progress to date. We've identified more than 100 novel gene locations representing potential pharmacological targets associated with AMD progression.

In 2026, we anticipate committing to specific targets and beginning to design therapeutics with the goal of choosing our first development candidate in 2027. And it's important to note that the development candidates we identify will be differentiated with an accelerated development pathway. I say this for 2 reasons. First, these development candidates are more likely to succeed in the clinic since their selection is based on actual human patient data. So the #1 reason drugs fail, preclinical science not translating to patients is greatly derisked.

Second, the data platform enables accelerated clinical development since trial enrollment is streamlined through our ability to recontact patients and eye care professionals already in the database.

Additionally, we can use this platform to support our other efforts in AMD to realize the benefits of these proprietary insights across our efforts at Bausch + Lomb, as you saw earlier with the AREDS3 program.

Our next partnership is with City Therapeutics, which has deep expertise in the emerging therapeutic modality of RNA interference. We're combining our disease biology and ocular drug development expertise with City's ability to engineer differentiated small interfering RNA drugs.

So why do we like this modality as our entry point into genetic medicine? Within cells, RNA interference naturally regulates genes by interfering with messenger RNA. And messenger RNA carry instructions to make proteins. RNA interference can silence disease-associated genes by stopping the synthesis of the proteins they encode. RNA interference therapeutics harness the power of this process by delivering specially designed small interfering RNA drugs or siRNAs that selectively target and degrade the mRNA proteins involved in disease.

We believe the eye is an ideal for RNA interference therapeutics because it's a small, confined space. This allows for localized delivery via a direct injection, so we're ensured good target engagement, while we are also able to minimize systemic exposure and the accompanying side effects. City's technology addresses historical challenges we've seen with siRNA drugs. They design molecules that are more potent, specific and efficient. And importantly, and this is really important, their targeting ligand technology enables better delivery to target tissues.

So let's now look at the power of this technology by focusing on the bottom of the slide. Here, you see histology data from a mouse eye that received intravitreal administration of one of our prototype molecules. In the first panel, you see the different layers of retina following saline administration. While in the second panel, you start to see some red staining indicating drug distribution after the novel siRNA alone molecule was administered. And in the last panel, you see staining after administration of a molecule that combines the novel siRNA molecule with its targeting ligand. And this is important because you can see broad staining because the drug is well distributed across all layers of the retina.

Better distribution of the siRNA drug throughout the retina enables better silencing of genes that cause GA. This should result in better efficacy. We expect to select our development candidate in the second half of 2026, which will be an important step toward bringing this next-generation genetic medicine into the clinic.

Finally, I want to share our BL1107 sustained release implant program. In geographic atrophy, we've heard patients need treatments that are more efficacious. That means therapeutics with better anatomical outcomes like greater reduction in the slowing of GA lesion growth and even more importantly, therapeutics that preserve vision. Patients also need therapeutics with a lower treatment burden, therapeutics with longer intervals between doses with fewer safety risks than today's options. In 2 clinical trials, brimonidine slowed lesion growth, but the treatment effect was small, and alpha-2 adrenergic agonist like BL1107 that has better retinal penetration and more selective and potent alpha-2B agonism should have a better treatment effect.

Additionally, BL-1107 can be formulated as a sustained release implant, delivering the therapy for 3 months or more. And we're developing this implant in partnership with a best-in-class long-acting delivery company, Ripple Therapeutics. Their technology can chemically engineer BL-1107 into a controlled release implant without the use of polymers. These properties ensure consistent, safe and durable drug release. We anticipate identifying a development candidate in 2026. This program positions Bausch + Lomb at the forefront of next-generation long-acting ocular therapeutics. Thanks.

Thanks, Mayssa. So you've heard a lot about our science this morning and really our enthusiasm and our excitement for our pipeline and our portfolio from the front to the back of the eye. As we change the culture of our company, not only do we have the assets that you heard about today, but also the people capable of delivering this transformation. Together, our assets in development can exceed $4 billion in sales.

More importantly, they position us to deliver sustainable, high-margin growth through this decade and into the next. I'd like to leave you with 3 key takeaways. So first, as I mentioned when I started my presentation, explaining the strength of our commercial footprint and extending our franchise leadership as the unquestioned leader in dry eye from nutraceuticals and over-the-counter global products that you heard about from John earlier through prescription therapies, diagnostics that you'll have a chance to see in the back of the room later, we are setting the stage for future enhancements in next-generation therapies from consumer through prescription.

Second, we're expanding from our front-of-the-eye platforms into breakthrough innovations that treat ocular surface pain and glaucoma, programs that go beyond symptom control and really address the underlying disease biology. We've mentioned this in a couple of different times. Changing the paradigm to vision impacting glaucoma is an absolute game changer for patients and physicians who treat them.

Third, we're building a powerful platform in retina from precision medicine in AMD and siRNA long-acting implants and advancing multiple programs with the potential to shift the standard of care. Together, this is how Bausch + Lomb is advancing the science in every aspect of eye health. With that, we're going to pause here. We're going to take a short break. When you go outside, there are some product displays where you'll have an opportunity to interact with several of our products, not exactly the surgical ones, but we'll have a chance to interact with the products a little bit further, and we'll be back here in about 30 minutes.

[Break]

Ladies and gentlemen, please welcome to the stage Vision Care President, Yang Yang and Vision Care R&D Vice President, Bryan Reed.

So welcome back. We hope those of you in the room get a chance to explore our product showcase during the break. Let's move on to Vision Care. My name is Yang Yang, President of Global Vision Care. Joining me on stage is Bryan Reed, Vice President of Vision Care R&D.

So consistent with our company goal, Bausch + Lomb Vision Care also strives to deliver above-market growth. And we have been demonstrating that as the fastest-growing company in the industry with our existing portfolio. Today, we will focus on how we're going to build on that success with exciting developments in our pipeline, which will be meaningful for eye care professionals and patients and position Bausch + Lomb for long-term sustainable growth. You heard it here earlier this morning, there hasn't been a breakthrough innovation in lens material in over 25 years. Historically, the product cycle in lenses has been very long.

In fact, the last major innovation of lens material happens before the turn of the 21st century. However, although innovation has been slow and deliberate, Bausch + Lomb has always led the way, setting the standards for material science and wear experience. Now we are changing the game again, introducing Project Halo, the first bioactive contact lens material.

[Presentation]

Okay. As you've just seen in the video, our history in contact lens innovation started in 1971 when Bausch + Lomb launched the first mass-produced soft contact lens. Then in 1999, Bausch + Lomb introduced the first silicone hydrogel lens known today as a SiHy lens designed to increase the oxygen flow to the eye and support extended lens wear. Now we are creating a bio -- new bioactive contact lens, which will be a platform that offers the benefits of bioactivities. And our first offering on this new material platform will be Project Halo made with hyaluronic acid or HA. What we're trying to accomplish here is not just a coating on the lens. This is also not us just soaking the lens in the HA solution. This will be an entirely new change to the structure of the lens material by polymerizing HA into its backbone. There will also be HA in the solution, and that's exactly how you get the benefit of double-dosed bioengineered HA, which will provide the ultimate wearing experience. It's truly one-of-a-kind technology that creates a new segment of contact lenses.

Thanks Yang. And creating a first-of-its-kind technology was no small feat. This project started as an idea at a poster session innovation that Brent attended shortly after rejoining Bausch + Lomb. He was very excited about the concept and challenged our team to develop this breakthrough technology and to do so on an existing manufacturing platform, which made the challenge even more daunting. I appreciate Brent's commitment to innovation and the faith that he and Yehia put into our highly capable internal development team to transform that idea into the bioactive lens today. Along the way, we've overcome numerous challenges by thinking outside the box. And we have used predictive modeling validated by over 10 internal clinical studies to optimize the material and the design to where it is today.

Now before we get into the benefits of the lens, let's first talk about HA as a molecule. HA is a high molecular weight polysaccharide that acts as nature of sponge. And as Mayssa mentioned earlier, holds up to 1,000x its weight in water. To help put that in perspective, a quarter teaspoon of HA can hold 1.5 gallons of water. HA is so naturally throughout the body, including in the eyes and helps to keep everything hydrated and lubricated. Because of these amazing properties, it's often used in moisturizing creams, lotions and ointments. It is also used in other Bausch + Lomb products like our multipurpose solutions, our dry eye drops, as you heard earlier, our latest LUMIFY product.

Going back to that sponge analogy, if you think of the lens like a sponge, we're making the structure of the lens out of HA and then we are soaking that lens in HA. So this double dose of HA gives the lens some very unique properties that we will talk about next.

So you probably heard us refer to this lens previously as the biomimetic lens because we are intentionally building a lens out of bioengineered HA to help mimic the naturally occurring molecule in the body. However, this lens is designed not just to mimic the body, but to actively interact with its biology. The lower graph here shows us the latest in vitro data for this lens. Initially, HA is fully retained within the lens matrix until exposed to a natural enzyme in our eye called hyaluronidase. Upon exposure, there is a steady linear release of HA from the lens surface, continuing out through 19 hours of testing. So why is this important? Recent studies show that up to 70% of contact lens wearers experience dryness symptoms after wearing their lenses all day. This lens provides a controlled wave of hydration all day long and supports end-of-day comfort when patients need it most. The unique properties of this lens go beyond hydration to address other user needs. The upper graph shows that in lab studies, corneal epithelial cells conditioned with HA-containing solutions maintained their metabolic activity after exposure to dry conditions and were more protected than solutions without HA. This double dose of HA also supports tear film stability by reducing evaporation to help fight dryness symptoms and improve comfort.

As we saw earlier, 25 years ago, material innovation was about improving patient health by incorporating silicone to boost the oxygen permeability of lenses. However, with the lens structure made out of HA, this bioactive lens achieves a 65% higher oxygen permeability than you'd predict based on a traditional hydrogel. As you can see from the graph on the lower right, the percentage of oxygen available in the cornea, this lens is delivering a healthy oxygen permeability that patients expect. It is comparable to leading SiHy lenses on the right side of the graph, and it is better than traditional hydrogels on the left side of the graph. And the ingenious part is that our scientists have figured out a way to do this without requiring any silicone. The data further supports that this lens doesn't fit into any existing category. It creates a new category of its own.

And there's one more feature that sets this lens apart. The bioactive lens is the lowest coefficient of friction that we've ever measured at Bausch + Lomb, which is a measure of resistance to movement. So why does that matter? The average person blinks 14 times per minute or more than 13,000 times in a 16-hour day, reducing friction between the eyelid and the lens surface on each one of those blinks is key to long-term comfort. The graph shows how other Bausch + Lomb and competitive products compare this bioactive lens. This shows all other lenses show an increase of 50% to over 100% more friction.

So in summary, you can see that we're delivering on everything that today's lenses have to offer, but we're adding the added benefit of bioactivity as we continue to innovate what a new lens could be. And this is just the beginning. Project Halo will be the first lens in this new bioactive category. We're very excited to announce that we've just started our first external performance clinical study in October.

This is a very exciting milestone for Project Halo, indicates the product is on track to be available in 2028. And it really leveraged our nearly 2 centuries heritage in Vision Care by combining our superior optic expertise with breakthrough material innovation. So eye care professionals and patients will have a lens that is designed not just for vision, but for comfort, performance and biology.

And there is one breaking piece I cannot miss to mention here is that we will manufacturing this lens on our existing production lines. To bring forward a material as innovative as this one, typically, it requires significant capital investment. In our case, we don't need to, making this lens a high-impact, high-margin product at launch. I hope you are just excited as we are about this new material and what it could mean for the Vision Care market.

Now while the new material is incredibly exciting, it's not the full extent of our pipeline. Our pipeline is designed to drive sustained revenue growth across all market categories with multiple shots on goal. To that end, we're working on 3 additions to our highly successful SiHy material. Number one, we are developing a next-generation SiHy disposable lens. The goal is to bring an accessible innovation to the world. Number two, we're working on a premium monthly SiHy. And that will provide unmatched comfort for the 30-day lens wearers. Number three, we're working on a make for kids myopia control lens and a lens designed -- especially designed to slow down the progression of myopia with comfort. And just like the HA lens, all of this product will be manufactured on our existing platform, requiring minimum capital investment and driving margin expansion.

Our total assets in development represents a revenue opportunity of about $1.3 billion, doubling the size of our contact lens business today. So let's take a closer look at each. At Bausch + Lomb, our portfolio is designed to address a wide range of unmet needs around the world. If you take a look at the daily SiHy market, it's projected to grow at 10% CAGR through 2028, shows strong patient interest in the benefits of a daily SiHy lens. So the purpose of our next-generation daily disposable SiHy lens is to provide an affordable option to those patients and consumers around the world. And thanks to our R&D and manufacturing colleagues, we will be able to make this lens our existing platform, making the lens a lot more accessible, expanding our global reach and profitability.

Well, Yang makes this sound easy, but striking the balance between high performance and a low-cost SiHy product and being able to produce it on our existing manufacturing platform was an enormous challenge. It required multiple iterations of materials and predictive modeling until we hit a breakthrough, resulting in a chemistry with high surface wettability that delivers exceptional comfort and performance. In addition, we are also leveraging the homeostasis benefits from our INFUSE ULTRA ONEday lens, which includes moisturizers, electrolytes and osmoprotectants to support a comfortable wearing experience all day long. We plan to begin our first excellent performance clinical study next year with launch planned in 2029.

Let's move to our next product. Although there has been a big shift of contact lens wearers from FRP offerings to daily disposables. Insights show roughly 60% of the contact lens wearers entering the market end up with an FRP offering. And that -- but if you look at the satisfaction of our patients, there's still a gap between the comfort the patient feels on the last day of the month and the beginning of the month. So following our design philosophy of serving a wide range of patients and consumers. We wanted to offer a lens that performs as well as on day 30 as it does on day 1. So we are working to develop a premium SiHy monthly lens to provide unsurpassed the comfort over the full 30 days with the goal of becoming the premium monthly lens in the market.

Bausch + Lomb is known for its proven optical designs and they've been applied to this lens to deliver crisp, clear and stable vision for the wearer. But what really sets this lens apart is that the material is optimized to balance hydration and breathability and most importantly, resist deposits, which are a main contributor to reduced comfort at the end of the month.

The other unique part of this lens is we specifically engineered it to seamlessly integrate with our lens care products, allowing the wearer to recharge their lenses with comfort-enhancing ingredients each night throughout the month. Our first external performance clinical study is scheduled for next year with launch planned in 2029.

Finally, myopia where near sightedness is increasingly referred as a global pandemic. It's projected to affect over 50% of the global population by 2050, especially among children and adolescents, driven by increased screen time and reduced outdoor activities. While we're designing this lens, we wanted to make sure this is a lens designed for kids. Unlike some of the existing offerings in the marketplace today, this lens is especially designed to address the unique needs of this vulnerable population. So we will pair our cutting-edge optical designs with our existing premium daily SiHy material, which has been overwhelmingly successful with lens wearing experience. The goal is to provide a healthy daily disposable myopia control lens with exceptional comfort. It will effectively slow down the progression of near sightedness for children and adolescents, at the same time, provide them with clear vision without compromising their daily activities.

So aside from our premium material, our cutting edge design is special because it's designed specifically for kids with a customizable approach that balances their myopia control needs with their daily vision needs. It's a novel 2-zone design with a central zone for clear vision to meet the dynamic needs of children and a peripheral zone that contains the therapeutic plus power with the stop signal to stop the progression of myopia. It is differentiated from competitors in 2 key areas in the optical design.

First, it offers the customization of 2 lens options with different zone diameters. The eye care practitioner can use these to optimize clear vision while maintaining myopia efficacy. No other soft contact lens for myopia control offers this option. Second, dose adjustment is built directly into the lens. This means that we are adjusting the amount of plus power in the peripheral zone based on a patient's refractive correction. As a result, the lens delivers an appropriate myopia stop signal across the entire power range without compromising vision. With this premium offering and optical design, children can continue enjoying an active lifestyle while helping to reduce the risk of the complications from myopia progression. The first registration clinical trial for this lens is planned to begin next year in the first half with market entry in 2029.

So as I said at the top of the presentation, one of the goals of Bausch + Lomb Vision Care is to deliver above-market revenue growth. And we have done so consistently with our existing portfolio in the last 6 quarters. Our team continues to drive momentum in Daily SiHy while maintaining strong performance across our legacy products. But there is so much more to come. In the fastest-growing Daily SiHy market, we're still in the early stage of our growth journey with significant amount of opportunities ahead from geographic expansion and the line extension. As you just heard, we're building a powerful and a meaningful portfolio to lead the next wave of innovation. We're driving segment creating material innovation. We're entering new categories, and we're addressing all wearers needs with our comprehensive portfolio. All of this will support our long-term durable leading growth.

Okay. In summary, Bausch + Lomb Vision Care is well positioned to lead the next wave of innovation. We're creating a new category of contact lenses, and we're building a comprehensive portfolio. Each pipeline product is purposely designed to address unmet needs and to unlock new growth in Vision Care. And we're doing it all efficiently, leveraging our existing manufacturing capabilities to expand margin and to maximize return on investment.

With that, I'll turn it over to Luc and Kelly to discuss Surgical. Thank you.

Thank you. Thank you, Yang and Bryan. Good morning, everyone. I'm Luc Bonnefoy, President of Bausch + Lomb Surgical, and I'm here together with Kelly, my partner, Head of R&D. Today, we will cover how we are transforming the surgical business. This includes developing innovative new equipment and delivering those products reliably to the market. Our goal is to be the best. In many cases, we are or are developing best-in-class products. Now we are innovating around how we go to market, focusing on reliability, premium service and speed. The goal is for surgeons to view us as a reliable and dependable partner to cover their needs.

Our Surgical business has a proven track record of strong performance and above market growth. We'll maintain our lead by providing superior service, reliability and best-in-class product. Our large product offering set us apart from competitors. We are a one-stop shop for all of surgeon needs, helping drive loyalty, retention, but also recovering revenue streams. As we move into more premium category with upcoming launches, we streamlined our manufacturing supply chain, we will position -- we will be positioned to deliver better service for customers as well as also margin benefits.

Let's start with our one-stop shop approach. Bausch + Lomb and Alcon are the only 2 companies that provide a full spectrum of devices for cataract surgery. Our capital equipment offerings enable us to enter a practice from a position of strength. For example, when we place a piece of equipment in one OR, we have a captive market for at least 5 years. This allow us to establish and reinforce relationship between the sales reps and the surgeon, helping us to build a competitive moat. While in OR, supporting our piece of equipment, we help to demonstrate a suite of best-in-class products, reinforcing Bausch + Lomb as go-to brand. To build and maintain the trust and confidence of surgeon, it is not enough to have the best product today. We also have to deliver new products to meet their evolving needs.

Looking at 2028 and beyond, we expect a steady stream of launches, bringing not only incremental sales but also higher profitability. First, by expanding in premium category where we were not playing before. Second, entering new high profitability segments and also by launching next-generation product with best-in-class potential. Together, all these efforts position Bausch + Lomb Surgical to continue to owns the OR. Kelly will provide in a moment a little bit more insight about the innovations.

Like I said in the introduction of this presentation, we want to change how we go to market, and we want to improve our service to surgeons. While driving growth and EBITDA margin expansion across our portfolio, we established a comprehensive strategy to build a more durable, reliable, resilient and robust supply chain. This includes transition machine packs, assembly and custom packs to a low-cost supply base. At the same time, we streamlined production capacity and optimize partnership of select products. Together, we believe these efforts will drive cost efficiencies, increase pull-through sales and strengthen our level of service to increase customer loyalty.

Going back now to the first pillar of our margin expansion strategy. We are expanding our premium IOL offering, that is a pure incremental business for us and because we want to benefit from a market with a projected CAGR growth of 10% through 2030. These efforts mean we will soon have the most comprehensive premium IOL portfolio in the industry. The last piece of the puzzle to complete our comprehensive IOL portfolio that is today under development is enVista Beyond. Let me turn it over to Kelly to speak more about this innovation.

Thank you, Luc. As Luc mentioned, Beyond is the final piece of our premium offering, and we're very excited to announce today that we've completed enrollment in the clinical studies. It's an extended depth of focus, premium lens that allows enVista Beyond to deliver better depth of field compared to monofocal lenses. With its pure refractive technology, enVista Beyond delivers greater performance versus Vivity and Symfony to the patient with fewer dysphatopsias like Halos. Not only that, this IOL performs better versus Vivity and Symfony with less desentration or displacement of the IOL from the optical axis of the eye and tilt or angular misalignment of the IOL to the optical axis. This allows for better tolerance in surgical technique for the physician. Moving forward, we will continue to explore early opportunities in accommodating and adjustable IOLs as our premium lenses come to market.

Next, I'd like to talk about another significant growth opportunity for us. Elios is the first clinically validated excimer laser system that enables surgeons to perform minimally invasive glaucoma surgery. We know glaucoma is a huge unmet medical need. Approximately 80 million people around the world are living with this disease and many of whom don't even know they have it, with less than half of all cataract surgeons performing minimally invasive surgery for glaucoma today. Elios has potential to change this paradigm. This innovative product offers opportunity for cataract surgeons who were not previously performing this procedure to do so with ease. It takes only 2 to 4 cases before a surgeon is proficient in using it. In fact, you'll hear later from the panel discussion from physicians who have already had this experience. Elios is implant-free and delivers lasting results with a safety advantage compared to other products due to its nonthermal laser ablation. With 10 simple micro channels in the trabecular meshwork, we see lasting IOP reduction and improvement in medication burden. All of these factors result in a novel, easy-to-use product with a better experience for patients and surgeons.

Thankfully, we don't have to rely only on limited data to know Elios works. We have years of experience as it's already been on the market in Europe, where its success is backed by extensive clinical data, including 8 years of follow-up. As you can see on the left-hand graph, we have sustained reduction of IOP over 20% post procedure over years. In the middle, you can see immediate and long-term medication reduction after Elios. Up to 80% of patients no longer need medication, and a picture is worth a thousand words. You can see on the right here, microchannels that remain in the trabecular meshwork so we know it continues to work.

Next, we have a short video that will show you how and why Elios is the next generation of glaucoma technology.

[Presentation]

Moving from glaucoma into cataract surgery, we have another innovative product in our pipeline, seeNOVA. Those of you in the room here today have seen this machine on display in the back, where we have already begun preliminary testing and are really excited about the progress to date. We know our current system is reliable and provides great results for patients and physicians, including features like adaptive fluidics to maintain the IOP in the eye. Building on that legacy, our new best-in-class cataract and retina combo system will expand the physician market with key new features.

Just to highlight a few, dual-mode aspiration means the same vacuum control that B&L users know and love, but will also add a flow control option for surgeons who are initially trained on this or for which it is the preferred mode. This can be switched mid-surgery for -- to allow for better physician choice. Another feature is the laser-based illumination, which will be noticeably brighter and improve contrast compared to current options like halogen, xenon or LEDs. We've received very positive feedback on this from doctors already. This new platform will allow for future innovation, of course, whether it's improving the Trocar System and blades or adding new features to change the phaco paradigm. We anticipate securing approvals in the EU, U.S. and Canada in 2028. To learn more about this innovative technology around seeNOVA and why it's different and better than what's existing in the market, let's watch another short video.

[Presentation]

Before I hand it back to Luc, I want to touch on seeLYRA, our next-generation Femtosecond Laser. seeLYRA builds on 15 years of experience with Victus, driving better patient outcomes, greater workflow efficiency and use of space in the OR and enhanced safety, thanks to better visibility for surgeons. In particular, seeLYRA ensures perfect optical beam alignment under all operating conditions with an active beam steering system. All necessary optical beam lines are highly integrated into the Femtosecond Laser, the OCT and the visible camera. For workflow purposes, it has a smaller footprint, less than half of that of previous generations and no longer has a fixed patient bed. The flexible supporting arm has been tested to show durability with mechanical, electrical and optical stability over the expected service life of 10 years. We expect to secure EU approval for seeLYRA in the second half of 2026. And this is just the beginning. The next evolution of this machine will include a combination Femtosecond Laser and phaco machine that will integrate the systems perfect for in-office surgeries.

Now I'll pass it back to Luc to talk about the commercial opportunity for these products.

Thank you. Lots of innovation in all our segments. In all our segments, we have big product to come and not in a long period of time. These premium products are all on track to launch in the next few years with Elios and seeLYRA expected to come to the market in -- sorry, with seeLYRA expecting to come to the market in '26 and beyond in '27 as well as seeNOVA in '28. With the addition of enVista Beyond to our Bausch + Lomb [ IWeb ] portfolio, we expect enVista platform to reach a potential of $300 million. We see potential peak sales also for Elios reaching $175 million as this innovative technology we expect to expand the numbers of surgeons offering minimal invasive glaucoma surgery together with cataract. seeNOVA is expected to reinforce our phaco equipment share and reach potential peak sales of $450 million as surgeons increasingly adopt this best-in-class system.

Finally, seeLYRA is expected to reach a potential of $50 million as we believe its superior ease of use and safety combined together with better patient outcomes will drive adoption.

In summary, 3 points to take away today for the Surgical business. Number one, we are driving growth in Surgical by building a one-stop shop portfolio. Number two, we are delivering on a steady stream of planned premium launches. And number three, we are driving margin expansion with a comprehensive strategy to optimize manufacturing as well as supply. Thank you.

With that, it's my pleasure to welcome Dr. Cathleen McCabe [indiscernible] together with our panel of specialist.

Good afternoon, everyone. It's a thrill to be here with all of you today and especially exciting to be up here with such a distinguished panel of colleagues and friends who are all globally known thought leaders in eye care as well as having many accolades and awards among them.

So I'm joined by Dr. Mark Schaeffer, who is a Doctor of Optometry, practicing in Birmingham, Alabama, a thought leader himself, a mentor, educator, scientist. Then we have Dr. Eric Donnenfeld here locally, Long Island, New York. cornea, cataract, refractive dry eye Specialist known globally, also named the #1 ophthalmologist in the United States 4 times in a row just recently, and we're honored to have him with us today. We have Dr. Lejla Vajzovic, who is a doctor or a professor of ophthalmology at Duke University, a retina specialist, clinician, scientist, educator mentor, all of the things that are wonderful about Lejla. And then Dr. Bill Trattler, who everyone also knows, global educator, cataract cornea refractive specialist from Miami, Florida, just south of me. And I am Dr. Cathleen McCabe. I am a cataract refractive surgeon on the West Coast of Florida. I also serve as the strategic medical adviser for Bausch + Lomb. So very, very happy to be here.

And the incoming President of ASCRS next year, okay?

Yes. And many, many other things I can say about all of us. But thank you, Eric, yes. So I'm so excited about what you have all heard. I mean, really, what is going on in the pipeline for Bausch + Lomb is incredible. I think there are so many things that we could have taken away from that and understand will really help our patients in our daily practice. But I want to kind of go from left to right and all around and hear from you, what did you find most exciting about what you just heard? And how is that going to impact your ability to take care of patients? And I'll start with you, Mark.

Thank you. So thank you for having us and letting us sit up here and just talk about what we do every single day and using your products continuously. But I'm in a practice where I'm in primary care, eye care, patients that come in are here for their comprehensive exams for glasses and contact lenses. So the majority of my day is getting patients seeing well in their exam lens. So what excites me most is the new bioactive lens. So seeing a new contact lens that's really a breakthrough in new materials, something that we haven't seen in a very long time, something that continues to deliver on the promise of we need a lens that works continuously that continues to push that comfort as we get to the end of the day because our days are getting longer, our hours are getting stretched, our time in front of screens, phones, devices. All of this contributes to a lack of homeostasis on the ocular surface, which leads to problems later on down the road, which leads to more issues. So having the ability to have a lens that's going to continuously provide hyaluronic acid onto the surface so that we can continue that comfort and that ability to see clearly and not actually feel the lens and feel that comfort, especially as we get to the end of the day, is really exciting for me.

Yes. I mean I think it kind of stands on its head when we think about contact lenses. We always think about the risk of contact lenses, how that may be actually a problem when patients are misusing their contact lenses or using them longer in the day. I think that now makes it something where maybe it's a solution for a lot of our ocular surface needs. And that's really a different paradigm entirely, isn't it?

I think so, too. I think dramatically so. And the reason why is because when we have a lens that's degrading as the day goes on, it provides more opportunity for that inflammation, that irritation so that patients either come out of their lenses. But when you have something that is so known and well known to help lubricate the surface like hyaluronic acid, when that is built into the material and the solution, it's going to continue that, especially as we get to hours 12, 14, 16, 18. I've got young kids so like I love being able to stay up late at night and read them bedtime stories that I don't want to have to think about taking out my lenses in order to do that.

So speaking of kids, let's just touch really quickly on myopia control. Like how important do you think that's going to be in the future?

It's so huge because it allows for us to protect their eyes not only from keeping their vision from getting worse, but also reducing the risk of things like glaucoma, macular degeneration, retinal detachments, things that keep them out of Lejla's chair and keeps them in my chair from out. Honestly, I like taking away your business because it's going to protect eyes. And nothing is more important to us as parents as protecting our kids. And if we can do that with a lens to keep them at a minus 1 or a minus 2 instead of a minus 6, a minus 8, that is absolutely game-changing for us so that we can help protect these patients long term.

Yes, we want to make them aware of it. We unlocked a new fear or Brent did on his interview this morning about myopia and myopia control for kids. Eric, what did you -- what did you take away as most exciting for you?

Well, that's great. I was so extraordinarily impressed. For years, I've worked with all the companies in ophthalmology. And for decades, Bausch + Lomb has been a sleeping giant. I would actually say that was probably hyperbolic, Bausch + Lomb was actually comatose. And to see the innovation that's taking place today is extraordinary that Brent and his entire team that you saw up here today has really invigorated and empowered and resuscitated Bausch + Lomb to a point right now where it's the most dynamic company in ophthalmology. And I'm just extraordinarily impressed by what I saw today and what I see for the future. And as an ophthalmologist, I'm the managing partner of a group of 170 ophthalmologists. I've been at leadership positions in ophthalmology. A strong Bausch + Lomb is extraordinarily important for the entire field of ophthalmology and optometry. I think it's -- they go hand in hand. So I was impressed by everything. But as a cataract, refractive and corneal specialist, I know that vision starts with a tear film. And without a good ocular surface, we're not going to have the quality vision that patients need. Every year, 2 million to 4 million contact lens wearers stop wearing contact lenses because of dry eye. Now your contact lens is going to make that a better -- less of a problem. But right now, Bausch + Lomb, by far and away, is the most important company in all of dry eye, which is one of the most important parts of ophthalmology and optometry. The most common reason why people come into eye doctors' offices, Miebo has been a game changer. Xiidra, I've been using for years was involved in the original FDA trials. And to combine both of them into one product is going to be extraordinary. And I'll go ahead [ and Lomb ] and Brent, I'll wag just some money on this. Your estimate of $700 million in sales top line, that's low. I mean that's way low. And I think that you're going to be seeing an extraordinary product. It's the only product that will address 2 parts of dry eye. It will treat the entire spectrum of dry eye, which is aqueous deficiency and meibomian gland disease. So kudos. This is going to be an extraordinary product, and I think will be the most important product in dry eye for the next decade.

Mark, do you agree?

I do. I think it's really important for us because when we're in that chair and we see a patient with ocular surface disease, a lot of times, it not just one cut and dry answer of what dry eye is. It's multifactorial. We typically see aqueous deficiency and evaporation and inflammation and all of the things. And so for us, it's really important to have the ability to have choice, but also be able to address it in multiple ways. And so right now, we have that difficulty of which one do we choose first. And so do we choose Miebo? Do we choose a Xiidra? Do we choose something else? Do we choose a procedure? Having the ability to have something that does both in one gives us the ability to choose something that's going to address multiple different areas of that so we can get our patients feeling better and seeing better and experiencing that quickly.

I think it's a fundamental thing of everything needs to be the easy button. And if we have the easy button for dry eye, which has been very, very complex with all the number of different treatments that we have, it's definitely going to be a winner.

Is there something else that you were particularly excited about, Mark? And then we're going to move on to Lejla.

Yes, the neuro-protection there and the glaucoma medication. So for us, glaucoma disease is usually something where once we have a diagnosis, it's praying that the vision doesn't go away in a manner which is too quickly, right? Our job is to slow that down to a creep so that we can protect that patient's vision as they go on and as they age in life so that when they have the disease, are they going to affect their vision to where they can't drop to where they can't do the things they need to do and take away their function of life, having the ability to have a drop that's going to not only protect that, but improve that, I think, is something that we'll see dramatically address the way we're proactive against glaucoma and proactive in treating it, but also in making sure that our patients can continue to live full lives without having to think about a silent killer of vision.

I think having treatments for these diseases that we know robust a vision without having anything that's been able to improve vision in certain settings, glaucoma is one of them, but so is geographic atrophy. Do you have any thoughts on what was presented around that, Lejla?

Super exciting. First of all, as a retina specialist practicing in Academic Institution to [ Kai Center ], I very much appreciate not only the retina intervention innovations I saw today, but very much the entire portfolio. I'm just absolutely wowed by the innovation happening today at Bausch + Lomb.

Focusing specifically on retina because I am a retina specialist, I find that my #1 unmet need in my clinic is exactly this AMD, intermediate to geographic atrophy. And yes, we do have now approved therapies for advanced AMD, geographic atrophy, which are quite burdensome. They do decrease the progression, but they do not save the vision or improve the vision. So I'm excited to see that Bausch is working on exactly that, preserving and improving vision.

I'm excited to see that AREDS2, the #1 multivitamin that I prescribe as a retina specialist to my patients is now going to be expanded to AREDS3 to include vitamin B complex with this really genetic makeup or really precision medicine that is being looked at and seeing that vitamin B does help not only inflammatory portion, but also cell preservation. I'm excited to have that addition as a center and as an individual who was involved in NEI trials for AREDS2 formula and one that very much contributed to that. I'm excited to now be involved in AREDS2 and bring that to the market to all our patients.

And then geographic atrophy. Now I hate the fact that the options we have currently involve monthly injections. That is such a burdensome option for our patients. We need longer duration options. We need biodegradable implants, and I'm excited to see that Bausch is working on that. We need also to address this from a genetic standpoint. I think some of the key partnerships that I saw today to address really genetic makeup, but also precision medicine is very applicable to multifactorial disease such as AMD. We need to really be better at understanding this disease at the biomarkers and what exactly along that disease pathway is really leading to progression and having data to analyze that and really target drug development based on that data is really promising. So I'm excited about the precision medicine that is taking place today.

And lastly, I want to point out that, yes, gene therapy or gene therapy in ophthalmology has only exploded. I personally involved in over 10 clinical trials with gene therapy being developed for common retinal diseases. But all of those therapies are looking at viral vectors, which we know do cause inflammation in the eye, and we are trying to address that with various options. I am excited to see that we are genetically addressing that at Bausch, but looking at a different picture, looking at a small molecule such as interferon mRNAs and delivering that not in the operating, but actually in clinic with intravitreal approach. So lots of exciting options. GA is unmet need for sure, and I'm excited that, that's being addressed by even broader picture of intermediate AMD.

And I know we may have covered a lot of things you were excited about, Bill, but are there other things that really stood out to you in the portfolio as well?

Yes. So first of all, again, congratulations. There's so much innovation. We're seeing some key themes. The combination, again, of MIEBO and Xiidra is just -- works so well together. And if you think of another combination, which is the LUMIFY Lux, which is the combination of LUMIFY, which is so important as a medication for our patients, along with hyaluronic acid. And it's just a way for patients who have red eyes or coming and complain that their eyes are irritated and bothered, you can treat them with one drop and they feel more comfortable, but also the redness will go away.

That's a major stigma for our patients. They tell us sometimes that they're going to the office and their eyes are red and they're told, is there something wrong with you? Do you have -- are you sick? Do you have a conjunctivitis? And so it is a problem. So having a great treatment that's now going to also be comfortable and lubricating should be really nice for our patients.

So talking about comfort, what -- can you tell us how are you anticipating having something to treat chronic ocular pain, such an unmet need. And can you speak a little bit to that?

Absolutely. So this is a huge innovation. So another thing that our patients come in all the time complain that their eyes are bothersome, they're irritated, they're uncomfortable. It could be an acute situation like a corneal abrasion. It could be dry eye and other situations, and they're coming in, they are uncomfortable, and we don't have a good treatment right now. We cannot give them anesthetics, that's delays healing and causes complications. And we just don't have a therapy for these patients right now. So if we can get a therapy that actually worked is effective, that could blunt and stop ocular surface pain, whether it's acute or chronic, it's going to be huge for our patients and huge for both optometry and ophthalmology.

So I wanted to go back to talking about more surgical things. And Eric, what about this Excimer Laser? I know you're an expert with Excimer Laser on the surface of the eye. What about using that precision and technology for MIGS procedures?

Well, I think one of the great misconceptions is that patients take their eye drops. Eye drops are not an effective way of managing glaucoma. It's important to have eye drops, and I think it's really -- I think the neuroprotective eye drop looks really exciting coming down, but patients just don't use them. And the model of having patients taking the eye drops with the problems of compliance, the problem of ocular surface disease. In Europe, it has already taken place. It's transformed Europe, and we have what's called interventional glaucoma.

Interventional glaucoma means the doctor takes control of the glaucoma patient. We don't trust the patient. We trust ourselves. I know that if I deliver a treatment to a patient, they're going to get the desired effect. And the ELIOS machine is extraordinarily exciting. It's tissue -- it just makes 10 pulses into the trabecular meshwork. It allows outflow to improve. It's easy to perform. Every ophthalmologist can do this. And it's something that I think will change the way that glaucoma is managed. It's an extraordinarily effective treatment. We have a long track record. It's been in Europe for years, and we look very much forward to the launch here in the United States. And I think it will transform the way glaucoma is managed.

And Bill, I know you had a chance to go down to Panama and get your hands on it, too. And what did you think about how quickly or accessible it's going to be? How quickly it will be adopted?

Yes, absolutely. So interventional glaucoma is so important, but it is a challenge right now. Our devices we're using are very difficult at times to use and you have to get a lot of practice and it doesn't always go smoothly. And my experience is just so positive. It's such an easy procedure because it's just intuitive. You just place the probe right way you want to have it, step on the pedal and it makes a perfect opening in trabecular meshwork. And that, again, we have the long-term results that it works so nicely. So it's easy for the surgeon. So I think this will be adopted by surgeons much more easily than some of the other technologies that we have now.

And really, when you think about it, you have 10 opportunities to make a fenestration that's actually significantly larger than the 3 stents we might have been putting in there, each one of those. Instead of being 81 microns, it's 210 microns and you have 10 opportunities. So it makes sense. It would be very efficacious.

And I know, Eric, you were in the BEYOND study for enVista, which we heard Kelly present to us that data and where we are with that. What do you think -- I know you're part of the study, but how do you think that fits into the portfolio? And what does it do for the entire breadth of the portfolio of IOLs?

Well, for those of you who aren't familiar with the different categories of IOLs, enVista Beyond is what's called an EDOF lens, extended depth of focus. It's a premium lens. Bausch + Lomb will charge a premium price for it. The doctors will do the same, and the patients will get a lens that gives them the ability to far away and mid-range vision with mono vision, maybe even a little bit more than that. But the key aspect of the BEYOND lens having put in about 25 or 30 of these lenses is that you know which patient got them in the FDA trial is that -- the problem with presbyopic lenses is they are wonderful for some patients, except when they're not.

And what a presbyopic lens will do is they'll give them good vision, but they will have problems in certain number of cases of dysphotopsias, glare, halo, inability to drive at night. The enVista Beyond is the safest lens you can offer to a patient that will give them distance and good mid-range vision, even a close vision without the sacrifice of losing that distance quality of vision. The lenses we have in this category now are from other companies just aren't very good. This lens will transform the market.

And the key for the enVista Beyond is that it will almost certainly bring in all the ophthalmologists who are not using presbyopic lenses but they'll feel the safety and the quality of vision that will grow the market. Right now, 7% of patients in the United States or about 350,000 patients a year get presbyopic IOLs. I could see that number doubling over the next 5 years as these lenses transform the way surgeons take care of patients.

And when you think about putting in a certain lens type, we often will go with one design and it has different optics in it. So how important is it that there's such a wide variety, and I'm going to ask that to Bill, within Bausch + Lomb kind of from the basic monofocal, what are the features of that entire platform that you think are important?

I just gives us confidence as a surgeon. So right now, you have the monofocal lens, it's a high-definition lens that gives beautiful vision for distance. And the enVista platform is also very forgiving. So some patients may have some irregularities in the cornea. But with this lens, the high-definition it gives -- makes patients see really, really well. And then also have, again, extending the platform to the BEYOND lens and then the enVi lens, which is the trifocal. Having all these choices is wonderful as a surgeon because, again, we can figure out what's best for each individual patient.

And then going back to BEYOND which is what Eric shared, I have a lot of patients coming in, they share with me that they only wish they had gotten a lens that gave them range of vision because some doctors don't -- haven't bought into that concept yet. So they've only been offered a monofocal. They have a monofocal lens. So they can see distance great, but the reading glasses all the time. So having a lens that's easy, that's safe and -- really, I agree with Eric, drive the interest of all the other surgeons who are on the sidelines to start using this technology more.

That's great. And now that we're talking about cataract surgery, I think one of the exciting things that we saw and we see right outside the door here is seeNOVA and how that's kind of marrying our different surgeons together here, Leila, we get you back in the in the game here with the fact that now seeNOVA also has posterior segment. So tell us about what you think was exciting about that?

Yes. Super excited about that. As a retina specialist/surgeon who operates an academic institution, I trained the next generations of surgeons as well. And I'm really excited about this system. Why? Because it has everything in one interior segment and back part. It has optimal fluidics. I think we talked about choices in lenses and having choices for the patients, but surgeons as well. Having fluid choices in terms of vacuum versus flow base is critical for comfort of the patient, safety of the patient and precision of the surgery. So I do comment on having those options in one machine.

I am a retina surgeon, so I love illumination. In order to do my job, I have to have really well led back part of the eye. And having superior illumination means I will be more precise in my retinal surgical maneuvers as well. So key superior illumination and really using laser-assisted illumination will be a game changing, I think, in this machine. And lastly, the smaller is always better in ocular surgery, and I love the fact that we're working in making instrumentation smaller and more precise for us. So overall, I think it's a complete package that's going to allow us to be more precise, safer and really ultimately delivering better care for our patients.

I love that. So I just want to say what I found really exciting about the pipeline too is precision medicine. To me, this whole concept that when drug delivery, we now start with a patient has a disease, we can start to target or find targets that make sense look at genetics, turn on and off genes using small interfering RNA. We can target the drug to the affected tissue and then we can have depot applications as well. That entire portfolio will allow us to be more efficacious and more efficient in developing drugs and treating patients. And I think it's going to be a complete paradigm shift for how we think about drug development and then drug delivery as well.

I wanted to kind of wrap up our session by saying, Bausch + Lomb has great breadth and depth of products available today, great depth and breadth of products in the pipeline that we saw. But if you remember from [indiscernible] slide, he said there are 60 projects in development. So clearly, we did not see 60 today. So there's great breadth and depth of what's going on behind the scenes as well. And that's from pharma to over-the-counter to surgical to diagnostic to vision care. And when you think of that and having an eye care partner, how does that impact the ability of Bausch + Lomb to be your best eye care partner? And if we can just go down the road, we'll end with that?

Perfect. So Bausch + Lomb makes products that changes lives period, right? So whether it's a kid getting their contact lenses and being able to see for the first time or an adult who has dry eye disease that now doesn't have to carry around 6 different drops with them throughout the day because we're actually treating their disease. It changes the way that people that live their lives, whether it's the flexibility and freedom to do the things that they want to do in experience life. And so having the products that we have now gives us that opportunity, but we're still missing some things, right?

You've seen some opportunities where patients aren't getting the things that they need in order to live a seamless life with their vision. Ultimately, they don't want to think about their eyes. They just want their vision to work for them and their eye health to work for them. So we still have products that are out there in our pipeline that are designed to address those needs. So having somebody that can do it all, that can give us opportunities, whether it's in dry eye, whether it's in glaucoma, whether it's in myopia control and other areas and geographic atrophy, whether any of those areas, we need those as partners because we can't do our jobs in exam lines if we don't have partners coming up with these products to give to our patients that they don't know exist yet.

And so it's really great for us to have this in the public sphere so that people can see what's on the horizon, but there's even more to come, and this is only the tip of the iceberg. So it's super important for me as a practitioner to know that a company has my back and has my patients as the central focus of what they're doing and what they're creating, whether it's in a lab or whether it's through mergers and acquisitions, all of these things are so patient-centric that it's really great for me to know that I have that confidence in the company.

Thanks, Mark.

Yes. Well said. I wake up every morning looking forward to going to work because I love what I do. I love taking care of patients. And at the end of the day, what I'm looking for is I'm looking forward to something that makes patient care better. I always ask myself every time I think about what I'm doing when I stand in the podium, when I do research, when I work with my partners, I say to myself, is it good for patients? And what Bausch + Lomb has done is they have made a commitment to making patient care better.

So I work with pretty much every company in ophthalmology right now, and I am converting a lot of my treatments now to Bausch + Lomb treatments because they're better products and also because I want to support a company that's supporting my profession. So thank you to Bausch + Lomb for really being innovative, for being dedicated and for having our patients' best interest at heart because you and I have a mutual commitment to providing better patient care and a company that has that commitment is a company that has my full support.

Really well said. To add to those amazing comments. I would say these are also the products I personally want to use, like we all have issues with dry eye. We will continue to have those issues, but we need better products. I'm excited to see some of the pipeline and options for that. But not only that, I take care of similarly adults and pediatric patients, and I love the fact that, Mark, you want to keep those patients in your seat and not my seat.

I similarly want to keep my children actually from having to see a retina specialist down the road. And I love the fact that you have a breadth of innovation coming on from the youngest patient to the elderly patient. So I really appreciate the innovation that's happening, and I do want to provide care to all my patients with the latest. So thank you so much for that.

Amazing comments and amazing company. So I mean, we're up here today, just so excited about the future. And Bausch + Lomb is really showing us that they have a great set of products right now that really help our patients currently, but the pipeline is just so exciting for us as surgeons, for us as doctors taking care of patients and for the future. And so I feel so lucky that you're working so hard to make these products available to us to help our patients. So thank you.

And I just want to say as a physician and still practicing physician too, that I appreciate the priority that Bausch + Lomb has put on getting feedback about what our needs are and how we can actually deliver care more effectively because so often, I see that, that part is missing early in the development phase, and it's really very, very evident that it's a partnership between Bausch + Lomb and the physician community and patients, and that's really where everybody wins. So thank you.

Thank you to our esteemed doctor panel. That was very inspiring for me to listen to. So thank you for that. So now we're going to turn it into a Q&A portion of the meeting. Sam and Yehia are up here, but the whole team is up here as well, and they have microphones. So I'll direct traffic, but we're open to taking any questions anybody has. I think we have some roaming microphones as well.

Why don't we start on this side and we can work our way through the room.

It's Patrick Wood, Morgan Stanley. One high-level one and then a nerdy follow-up. High level, obviously, a big pipeline, a lot going on. The guidance as well, 5% to 7% and then a lot on the margin side. So I guess, 2-parter. One, what's giving you the confidence on that top line growth number? You've got a lot in the pipeline. What's kind of feeding that growth confidence?

And then equally, second part on the margin side, it's a quick step-up in a short period of time. You've got a lot of investments going on. What's giving you the confidence there? Is that cost out? Is it operating leverage? A little bit more there would be great.

Yes. Thank you, Patrick. So the answer in part to both is similar. One is we have absolute confidence in the forecast that we provided, both the top line and margin. I've been doing this a long time. I wouldn't give it to you if I didn't have a strong conviction in doing it. But let me break it down a bit for you and then maybe, Sam, you could add some color. So on top line, I think our conviction comes from the fact that we've been doing it. We have been growing for at least the last 2 years above the market in that range and sometimes above that range. Even with some step backs this year with even a recall, we've managed to power through and deliver that kind of growth.

Next year, I'm very confident we can deliver the '26 numbers that Sam already provided. We'll update that to more specific guidance in normal course in February. But really, really good comments because we've been doing it, right? That's the best predictor of future performance is past performance. I think on margin, slightly different, right? By design, when I came here in '23, I really wanted to focus on 3 things, right? It was selling excellence, really driving that top line growth that we've produced. It was around stabilizing our supply chain and Al Waterhouse and his team have done a really nice job there. Our back orders are now at historic lows.

And then third was innovation, and you've seen the output of that innovation. So we've been delivering on all those things. On the third Q earnings call, I added the fourth dimension, which is financial excellence. And so that's not something that we just started in the third quarter. We started at the very beginning of the year with our Vision 27 initiative that Sam mentioned. And so we have a running start, right? We have hundreds of people that are working on tons of projects around the company to deliver that margin improvement. And we have a 3-year plan, and we're tracking it with a dedicated project management office with people that do nothing every day but track our margin improvement. And again, you're starting to see it. You see it in the third quarter.

The second thing I would say to you is we just made a promise to our shareholders, and we take that very seriously. But I don't just take it seriously. Everyone sitting up at the front of the room here takes it seriously and the several hundred colleagues listening on the webcast today also take it seriously. And so when we make a promise, it's a real commitment. And so we are all in. I think we can not only do it, but Sam will get upset, I hope we can exceed it. But it's something that is absolutely an imperative for us to deliver that margin improvement.

Yes. So Patrick, I'm going to jump into the numbers right away, but I want to step back before I get into numbers and emphasize one point that Brent made, which is, when you look at the comments in between the top line and the margin discussion that we had this morning is the fact that what is needed to deliver on both of them, it's already in our hands. So we're actually working through initiatives either to deliver on the margins that already have launched, and we're seeing some of the results -- early results in our third quarter results or when you look at the top line and what we've been really able to do in the top line, we didn't talk about the innovation is coming beyond 2028. So we're talking about the products that we have in our portfolio today, which has been happening -- the shift has been happening for the last 2 years.

So it's about execution right now for us. And we are at an inflection point with our margin, like I said. So let me now break the margin for you a little bit because when you think about the margin, it's 600 basis points, and it's a meaningful margin step up from where we are right now. And when you take that and you break it down -- I'll break it down between what we expect from the manufacturing and the product mix, and that's about 250 basis points. And we're seeing that shift in the manufacturing -- in the product mix already have taken place with the launch of MIEBO. We've seen the shift in the premium IOLs. We're scaling on SiHy. Our daily SiHy, our lens business has been the fastest growing for the last 6 quarters. So it's been really meaningful contributor to that.

But also, we're seeing the initiative Vision 27, which have an impact and elements in our manufacturing, and we call it manufacturing transformation, and that's taking place already. Those are in-flight projects and execution has already taken place that's also contributing to that 250 basis points. When you now reflect on the remainder of the 250 basis points, there's about 400 basis points sitting in what I referred to in the middle of the P&L, which is the SG&A. And it's been our, I'll call it, the say-do mindset, right, which touches on the commitment that Brent touched on. We said that we will have about a 2-year runway around our launches. And we're exiting that 2-year runway right now.

So we're exiting what we call investments in launches, investments into growth, and we're making that shift at this point. In addition to that, you're seeing also the initial 27, which we kicked off in the beginning of the year, you're seeing that start to pay dividends for us. And we're seeing that into the third quarter, and that will continue we build on as we go forward. So when you think about that 400 basis points, the way I think about it in the simplicity is about 200 basis points of that is coming from -- as we think about our efficiencies from Vision 27 and our exit of the launch to growth mode in selling and E&P. And there's probably another 200 basis points of that is coming from the G&A, which is mainly leverage as well as Vision 27.

I would also say one really important point, Patrick. The revenue growth targets with just a few exceptions, don't require any of the products that we -- most of these are '28 and beyond launches. And so we're just executing at this point, right? We're not relying on any real significant R&D risk to drive that revenue growth or that margin expansion. It's what we have today.

Okay. Let's go to the middle table here.

[Craig Gordon,] please. Brent, when you look at the totality of the pipeline, what are you particularly most excited by focused on as you think about unmet medical need, pricing power, physician adoption?

Tough question. The esteemed KOLs had a tough time picking one. I may have the same. It's like trying to pick your favorite child. Look, if I had to rattle off the top of my head, Craig, I would say in pharma, clearly, a neuroprotective glaucoma is game changing. But the combo -- fixed-dose combination dry eye is a no-brainer for us. We have the permission to win there. We are the leader. Andrew detailed it already. We have the best field force. We already work with all the KOLs around education and training. We have diagnostics. We have OTC products. We have a lot of energy in that space.

And I agree with Eric and Andrew is going to have to change his number, but that product is made for us as we are positioned today. Clearly, the retina programs much earlier and a little further out, but absolutely game changing once we bring some data over the next year or 2 into the profile of the company and what that can do to margins and everything else is just transformational. Contact lens, clearly, the innovation and Project Halo that Brian's team and Yang team talked about. I mean that was a post recession, as Brian said, I saw 3 years ago, and we challenged Brian and his team to bring that to market.

And it's just such a proud moment for me to see that moving into full development. I think, Mark, you probably have never seen -- since you look younger than you are, but you've never seen a new material as you've been a professional. All right, in 1999 when we launched. So if he remembers ChryserVision in 1999, he was probably watching the shows that you had on -- he knew the Backstreet Boys too. But honestly, it's been a category starved of real breakthrough innovation, and we need innovation to bring more wearers and to expand the market in a responsible and healthy way. And so that's super exciting.

I think enVista Beyond, as Eric and Bill mentioned, game changing for our premium IOL portfolio. And then in consumer, AREDS3, as discussed. I mean, to be able to have something for early AMD patients to slow progression is just so important. But it also, from a business perspective, really expands the market for a category where we have plus 90% market share. So big, big potential. But Yehia, any...

Well, I think you covered it well, Brent, but I have to say 2 things before I say my favorites. First, that I love all my children. So all of them, I love them very much. The second, all my children are very jealous. So if I say one is better, I am in big problem. However, I just -- again, I would like to mention that it's really the beauty of the development of products that can change lives is remarkable. And that's why we are focusing on products that is really not adding a week of duration or not adding another 10% or 5% of an improvement versus what is present.

We are trying to address things that is not being addressed now, and this is the highest unmet medical need. Having said that, ocular surface pain is still one of the areas that I feel very much -- you cannot imagine if you have an irritation in your eye, how much this can disturb your life. I also, on the surgical side, and while Brent, I 100% suffer from the different types of far distance or intermediate. But also, I must say on the equipment side, just the glaucoma, and we are able now to treat the glaucoma with a very rapid procedure and how we can just do very rapid channels with Excimer Laser that is very gentle to the tissue.

In the past, we used to create this through laser that burns, the trabecular meshwork and can cause even some fibrosis. Now to reach to this level of technology where we can use Excimer Laser with its precision and how gentle it is on the tissue is definitely a great innovation that can change a lot. And then on the contact lenses, myopia. I must say, I see a lot of children now, and I see a lot of adolescents now are a big problem. And I used to be a retina specialist. I saw a lot of complications from pathologic myopia, it's one of the worst things that you can see in a young person. He's still starting his life and just going to work and he just hit his macula with a new vascularization that is from myopia. So to be able to stop this at an earlier stage without any doubt is a great potential and option.

So if you can do it quickly, Mayssa, since many of these are your children on retina, let's just go to retina. What's your favorite?

So I want to amplify what Lejla and Cathy said. The precision medicine with the partnership with Character Bio will be transformational. It is a heterogeneous disease. Photoreceptors die for lots of different reasons. This is a way for us to really transform how we match the drug with the patient. We've already seen what this has done in oncology and immunology. AMD will be next.

Okay. Let's go to our next question at this table here.

Matt Miksic from Barclays and great overview and presentation and rundown today. Just to confirm something about the guide, obviously, margin expansion above the Street, sales growth above the Street. EPS growth on the Street right now is double digit, and that's kind of what you said. I mean it's just fair to say no reason why that upside doesn't drop down. That was just one thing to confirm...

Yes, Matt, I can definitely confirm that to you. And if you think about the margin expansion and the profitability that we have, and we put in the appendix a little bit more details for everyone to be able to update their models. But when you see the margin drop to the EPS, it is definitely a double digit. So I think if you do the math, I think based on where we are from the Street, we're probably -- again, you're probably in the range of about $0.40 or so higher than the Street.

That's great. And then on -- you mentioned M&A, disciplined M&A in the plan. I'm assuming that's baked into the leverage goals that you have, like some amount of M&A, but maybe not baked into the sales projections. Just a confirmation on that and...

That's absolutely true. And I think having sometimes been known for M&A, which I don't particularly, I'd rather be known as an operator, but it is what it is. The the best position to be in for M&A is when you don't have to do it. And there's nothing we need to do. There's only things we're excited to do because of the technology. And so there's nothing in the forecast related to any future M&A, both on the sales margin or cash flow. But I don't expect us to do big things. There'll be small IP-related kind of things.

Okay. And remiss not to ask if anything you'd share on areas of interest, areas of investment, white space or anything like that?

Yes. I mean we continue to look to find true innovation. Lately, we've been focused a lot more on our surgical business because the opportunity there, I think, is quite massive for us, and we have very ambitious goals for that business. Pharma, you see has a very robust pipeline already. Obviously, if we could find things that were quick adds to the existing bag, if you will, that would flow through right through to margin and profitability, that would be interesting.

Something that's small that we could scale with very little additional cost to us would be appealing. In Vision Care, it's loaded. I mean, Brian's team, our internal depth of R&D is immensely strong. It's hard for us to find exciting things externally. And in consumer, the team executes on everything -- what we did with Blink and what John's team did with Blink gives me a lot of confidence to find other products if we can find the right ones.

Okay. Let's try to go maybe at the back of the room, Christy, if you can...

Kevin Joaquin from Evercore here in place of Vijay. Just one on the adjusted EBITDA margin target. You presented a slide earlier talking about the efficiencies and margin contribution, specifically from the surgical business. How should we think about the margin contribution from the other businesses like consumer, pharma and contact lenses?

Yes. And when I refer to the surgical business or efficiencies, it's really focused on -- I would think about the entire margin aspect of it. You'll see the contribution from the surgical showing up mainly on the gross margin with about the 250 basis points. And I think a lot of the work that our manufacturing and supply chain team and Al is doing is building on that capability and executing on that right now. So you'll see a lot of that happening with the product mix shift as well that we're seeing to premium IOL.

So I think that surgical is going to be a big player as we think about it from a meaningful contributor to our gross margin. When you think through the SG&A side of it, it's pretty much across the board. I think you might find a little bit heavier weighting towards the pharma business because we had the most recent launches and as they sort of exit that launch phase. But really, when you look at it, it's really across the board between the different businesses as well as the, I'll call it, the G&A functions.

Okay. Why don't we go back to the middle of the room here?

Joanne Wuensch from Citibank. It strikes me the company is in a very different spot than from its IPO moment. And to quote, I think it was Dr. Donnafeld, who said this, there's a slumbering Bausch + Lomb that seems to have been woken. I'm paraphrasing. What do you think is...

I think it was more direct.

What do you think is the main driver that brought you here today? And what do you think is the real risk to executing upon this? I hear the confidence, but I think the risk is something that's worthy to address?

Yes. No, it's a great question, Joanne. Thank you. Look, I think the main driver of change is people. The talent within Bausch + Lomb that we've promoted and developed or those that we brought in over the last 3 years is really what's changing the paradigm for us. And with talent, right, comes culture. I always say this, the only investment you can make as a CEO that has unlimited compounding potential is talent. I can invest in a new pharmaceutical product that has a limited life of the intellectual property. We can put in a new IT system, but in 10 years, it will be obsolete.

But talent contributes forever because A players recruit other A players and so on and so forth. And then that impacts culture. And we spent a lot of time over the last 3 years really focusing on this idea of grid -- what we call gritty ownership and accountability, eliminating bureaucracy, making individuals accountable for delivering decisions and empowering our teams to get stuff done. And that has a big impact. It had a big impact on the sales growth, to be honest, because we really just allowed people to focus on customers rather than internal meetings.

In terms of risk, I mean, there are always the unknowns, right, like we had with tariffs, right, in the first half of the year. And so I think the biggest risk for us is just pure execution risk. I think the unknown risks are just things that could change in regulatory policies or reimbursement policies or things like that outside of our control. But the one thing I would say this year has taught us, whether it be the constant flurry of tariff changes that we've navigated quite well this year and are well prepared to deal with next year and beyond or even -- I don't like to talk about it much, but even the recall, how quickly we jumped on it, solved it and got back into the market and earned a lot of trust with customers for being so transparent and forthright about it.

So when we see an obstacle, I think we're starting to build that muscle of really being able to overcome those obstacles. So that's what really drives my confidence in our team and our ability to deliver what we had. The thing that keeps me up at night is what I don't know that just may be around the next corner, but we'll conquer it when we find it.

Okay. Thank you. We have time maybe for a couple more questions. We'll start with Young here.

Young Lee, Jefferies. I wanted to hear a little bit more about, I guess, your view on the competitive landscape over the next 3-plus years? There's lots of new products coming out from competitors as well. For example, AT-IOLs, there's a new dry drug as well. You also have a lot of much bigger competitors out there. It sounds like you might be more nimble than some of them, but I wanted to hear your view on the competitive dynamics and if that's baked in or how much that's baked into your LRP?

Yes. So obviously, we take every competitor seriously, and we monitor them in great detail. But this is really about us and executing on what we have. When I look at the competitive environment, let's just pick one you mentioned like in dry eye, yes, there was a competitive launch in the third quarter, yet you saw all-time TRx growth at a high for both of our products during that quarter. So just a proof point that competition isn't an excuse that we're going to make. We're going to continue to win around competition.

Even in surgical, right, even in the face of a recall on enVi, you see enVi still doing very well even when Alcon or others are launching improvements to their IOL portfolios as well. We continue to see good placement of capital equipment in the face of a very large competitor offering their new platform phaco equipment. And so sometimes we think of ourselves as a David and Goliath, and we're David and the underdog. But we really aren't when it comes to our product portfolio and our ability to execute in the marketplace and work with our great customers. So competition is a part of life. It inspires us to be at our best, but I don't think it worries me in terms of delivering the forecast.

Okay. Let's go to Robbie.

Robbie Marcus, JPMorgan. I feel like people are very comfortable with the top line. You've done a great job there. One of the areas that's been a little softer has been free cash flow generation. You put up a target for 50% adjusted operating cash flow to adjusted EBITDA. How do we think about that in actual dollars of free cash flow? I don't think many of us adjust it. So how do we think about maybe free cash flow over the time?

Yes. Great. I'll let Sam answer it. But remember, one thing that Sam said is more than 50 and more is important. Go ahead. I keep pushing them for higher.

I was going to start with that. So when you think about the cash flow and maybe the best thing to reflect on is the past to the future, right? And if you look at Q3, we're at probably about 66% conversion on an adjusted cash flow from operations to EBITDA. So you see the steps of the work, and we've been talking about this in terms of what we're going to be doing in terms of capital -- working capital initiatives. And again, what gives us the confidence not only in the margins and the top line, but also on the cash flow is we're seeing the work that we've been doing is paying dividends, and we're seeing those dividends coming through.

So when you reflect on the cash, there's a couple of things that I'll highlight for you. One is the working capital initiatives that we're doing is not just a short term. They are transformational. They are changing. It's a mindset. It's a change in our process, it's change in how we're operating. And that's a long-lasting effect. And that's where we get to the more than 50%. When you think about other element of this, which is our CapEx, right? Our CapEx has been -- we've been running at a higher elevated CapEx level where this year, we're just going to be just under $300 million. And we're seeing that CapEx number continue to work its way down.

And especially if you heard what Brian and Young were saying, I was probably the person having the largest smile in his face when they were talking because the fact that you're shifting your entire new innovation in the lens business to be manufactured on existing lines, that's huge, and it's very meaningful, not only from a margin perspective, but also from a cash flow perspective because one of the -- many of you guys follow lens companies and many of the challenges or the barrier to entry for those companies is the fact that they have to put CapEx upfront.

So you're not going to need to put that level of CapEx upfront as we go forward. So we feel very good about how we think about the conversion, which is more than 50% as you think about -- and you can think about the 23% EBITDA margin, you think about the average of the 50%, and that probably will give you a sense of the dollar amount.

Yes. The main element of when we think about the adjusted was maybe coming through our restructuring activities. That's the bigger player in terms of between reported and adjusted for our cash. And we were at a higher level from a restructuring point of view in 2025. Hopefully, everyone knows now why as we -- many of you guys were talking to say we are spending more restructuring, but we were actually doing a lot of work around Vision 27. I would expect that number to continue to work its way down as we move forward gradually.

All right. Thank you, everyone, for the questions. Maybe I'll hand it over to Brent for some closing remarks.

Great. Let me try to stand up here. So thank you all for coming. I really appreciate you spending this morning with us. It was an exciting day. And I really wanted to leave you with 3 things to define where we as Bausch + Lomb stand and where we're headed. First, we are executing the strategy we set in motion nearly 3 years ago. And I think it's clear it's working. The foundation we are building through our Vision 27 initiative gives us great confidence to raise the bar with a new standard financial excellence, which I started to talk about in the third quarter.

Second, we're not just growing, we're outpacing the market. The revenue and margin targets we shared today aren't aspirations, they're absolute commitments, and we're on track to deliver sustained profitable growth year after year. Third, you heard directly from our R&D and commercial leaders writing our next chapter. Our pipeline is diverse, it's differentiated, and it's really designed to reshape the eye health industry. These also are on promises. There are products, there are platforms, there are science, there are technologies that will define our leadership for the years to come.

So we've rebuilt the company, we've reignited our culture, and we certainly have restored our confidence. But the real growth story is still very much ahead of us. To my 13,000 colleagues, many who are listening on the webcast, thank you for believing in what's possible and proving every day that we can make it real. Thank you for joining us again this morning, and I hope you know that the best of Bausch + Lomb is still yet to come. Thank you so much.

Good morning, and welcome to Bausch + Lomb's Third Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to George Gadkowski, Vice President of Investor Relations and Business Insights. Please go ahead.

Thank you. Good morning, everyone, and welcome to our third quarter 2025 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer, Mr. Brent Saunders; and Chief Financial Officer, Mr. Sam Eldessouky. In addition to this live webcast, a copy of today's slide presentation and a replay of this conference call will be available on our website under the Investor Relations section.

Before we begin, I would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation as it contains important information.

This presentation contains non-GAAP financial measures and ratios. For more information about these measures and ratios, please refer to Slide 1 of the presentation. Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website.

The financial guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter unless required by law and not to update or affirm guidance other than through broadly disseminated public disclosure.

With that, it's my pleasure to turn the call over to Brent.

Thank you, George, and good morning to everyone joining us today. I'm going to provide an overview of our impressive third quarter performance and speak to how our strategy and patience is paying off. Sam will go deeper on the financials and update 2025 guidance, and I'll close with a look at products driving growth and opportunity.

I'd like to thank my 13,000 colleagues around the world upfront because without their commitment and belief in what we can achieve together, we'd be stuck in neutral. Instead, we're delivering on the vision we laid out in 2023. 6% constant currency revenue growth was once again fueled by a base business engine that continues to hump and the steady introduction of innovative products across categories.

Pharmaceuticals was a standout, thanks to $84 million in Miebo revenue. Miebo growth helped bolster our comprehensive dry eye portfolio, which is front and center for eye care professionals, patients and consumers. Effective selling has also meant more surgeons implanting enVista intraocular lenses, helping drive 27% constant currency revenue growth in premium IOLs.

Our loaded and differentiated pipeline will be on full display in just a few weeks at Investor Day. Importantly, the pipeline products we'll highlight aren't aspirational. These are clinical stage programs with anticipated launches over the next several years.

Every part of our nearly 3-year journey since I returned as CEO has been aligned to 1 or more of 3 categories you've all become familiar with: selling excellence, operational excellence and disruptive innovation. Those aren't optional. They are imperatives.

While our journey is nowhere near complete, given how far we've come, we've introduced a fourth category, financial excellence. This is our opportunity to deliver sustained profitable growth that reflects our real potential. We'll show you what that looks like at Investor Day when we share our 3-year plan. We've reached a pivotal point in our journey to becoming the best eye health company.

Being the best means elevating the standard of care in eye health, which is why our pipeline is filled with products that have the potential to be truly disruptive and reset expectations for eye care professionals, patients and consumers. You'll learn much more about the science behind our pipeline and market opportunity at Investor Day, but here's a sneak peek.

In consumer, new formulations of LUMIFY, PreserVision and Blink Triple Care will make category leaders even more appealing and are expected to unlock significantly larger audiences. In Pharmaceuticals, next-generation lifitegrast would change the dry eye disease treatment paradigm. Our ocular surface pain medication would be the first of its kind, and our glaucoma medication would be the first to improve visual acuity.

The contact lens market has been starved for innovation. There's been no material science breakthrough since 1999, which we're addressing with a first-of-its-kind bioactive lens. Our highly successful SiHy platform will expand with a cost-competitive daily disposable, a frequent replacement offering and a lens designed to slow the progression of myopia in children and young adolescents.

Finally, in Surgical, we're building on a steady stream of premium products representing consumables, equipment and implantables, the holy trinity of that business. We delivered growth across all segments in the third quarter, once again demonstrating our holistic strength.

I mentioned Pharmaceuticals as a standout earlier, but I would be remiss if I didn't recognize Vision Care, which captures contact lenses and consumer offerings. Several franchises in both categories are highlighted here, including Blink with 37% reported revenue growth, Artelac at 24%, Daily SiHy offerings at 22% and eye vitamins at 12%. Our overall contact lens portfolio grew a healthy 6% on a constant currency basis.

We'll discuss new iterations of some of the highlighted products at Investor Day as we work to make established high performers even more popular with meaningful scientific advancements.

I'll now turn it over to Sam for a closer look at the financial metrics, including significantly improved cash flow figures and an update on 2025 guidance. Sam?

Thank you, Brent, and good morning, everyone. Before we begin, please note that all of my comments today will be focused on growth expressed on a constant currency basis unless specifically indicated otherwise.

In Q3, we delivered strong performance with year-over-year revenue and adjusted EBITDA growth. We're also very pleased with our cash flow generation this quarter.

Turning now to our financial results on Slide 8. Total company revenue for the quarter was $1.281 billion, which reflects year-over-year growth of 6%. The revenue growth was across all our segments. For the third quarter, currency was a tailwind of approximately $19 million to revenue.

Now let's discuss the results of each of our segments in more detail. Vision Care third quarter revenue of $736 million increased by 6%, driven by growth in both consumer and contact lenses. The consumer business grew by 6% in Q3 as our key brands performed well and consumption trends remained steady. We delivered solid growth in the quarter while absorbing a destocking impact of approximately $6 million.

Let me go over a few highlights. Eye vitamins, PreserVision and Ocuvite grew by 11%. LUMIFY generated $48 million of revenue, up 2%. In the quarter, we continue to see strong consumption. Year-to-date, LUMIFY revenue is up 13%.

We saw strong execution in the consumer dry eye portfolio, which delivered $113 million of revenue in Q3, up 18%. Our 2 key franchises, Artelac and Blink, once again contributed to the strong performance. Artelac was up 18% and Blink was up 36%.

Contact lens revenue growth was 6%. Our contact lens business has outpaced the market, and we saw strong performance once again in the quarter. The growth was led by Daily SiHy, which was up 24%. Biotrue was up 7% and Ultra was up 4%. In Q3, our contact lens business saw growth in both U.S. and international markets. The U.S. was up 9% and international was up 4%.

Moving now to the Surgical segment where we continue to see steady market dynamics and procedure volume. Third quarter revenue was $215 million, an increase of 1%. Excluding the enVista recall, Q3 revenue growth was 7%. In Q3, implantables were up 2% and 14% sequentially. As Brent will discuss, we are continuing to make solid progress with the enVista return to market, and we are regaining momentum in premium IOLs.

Consumables were flat on a constant currency basis and up 4% on a reported basis as we lapped last year's notably strong Q3, which saw stronger volumes driven by resupply to the market. Finally, equipment was up 4%.

Revenue in the Pharma segment was $330 million in Q3, which represents an increase of 7%. Our U.S. branded Rx business was up 13% in the quarter. Miebo delivered $84 million of revenue in Q3. This represents sequential growth of 33% and a 71% increase year-over-year.

It also reflects TRx growth of 110%. Xiidra delivered $87 million of revenue in the quarter, which is in line with our expectations. Xiidra TRx growth was 8%. Our international pharma business was up 12% in the quarter. We continue to make progress in our U.S. generics business. As anticipated, we are seeing sequential growth with U.S. generics up 2% this quarter compared to Q2.

Now let me walk through some of the key non-GAAP line items on Slide 9. Adjusted gross margin for Q3 was 61.7%, which represents a 130 basis points decrease year-over-year. This was mainly driven by product mix and the onetime impact of the investor recall. In Q3, we invested $95 million in adjusted R&D, which represents an increase of approximately 13% over Q3 of 2024.

Third quarter adjusted EBITDA, excluding acquired IP R&D was $243 million, up 7% year-over-year on a reported basis. Q3 adjusted EBITDA margin, excluding acquired IP R&D was 19%, which represents a sequential increase of 400 basis points. We are continuing to execute our margin expansion strategy as we transition from the most active product launch cycle in the history of the company to a growth phase and as we remain focused on disciplined cost management.

Adjusted cash flow from operations was $161 million in the quarter, and adjusted free cash flow was $87 million. We are pleased with the continued progress of our efforts to drive cash flow optimization initiatives. Net interest expense for the quarter was $98 million. Adjusted EPS, excluding acquired IPR&D, was $0.18 for the quarter.

Now turning to our 2025 guidance on Slide 12. We are maintaining our full year revenue guidance at a range of $5.05 billion to $5.15 billion. This revenue guidance represents constant currency growth of approximately 5% to 7%.

Shifting to adjusted EBITDA. We are updating our adjusted EBITDA guidance to a range of $870 million to $910 million from a range of $860 million to $910 million. The raise in the lower end of the range is driven by the strength in the performance of the business.

In terms of the other key assumptions underlying our guidance, we continue to expect adjusted gross margin to be approximately 61.5%. For the full year, we continue to expect investments in R&D to be approximately 7.5% of revenue and interest expense to be approximately $375 million.

We continue to expect our adjusted tax rate to be approximately 15%. We now expect full year CapEx to be approximately $295 million. Consistent with our previous guidance, our current guidance excludes any potential onetime IPR&D charges that we may incur in 2025.

Finally, a brief word on tariffs. The tariff policy remains fluid, and we are continuing to monitor updates. Based on where the policy stands today and the actions we're taking, our updated guidance assumes we will be able to offset the impact of tariffs in 2025.

To conclude, we had a strong quarter and our business fundamentals remain solid. We are committed to our strategy to drive sustainable growth and margin expansion. I look forward to seeing you all at our Investor Day on November 13.

And now I'll turn the call back to Brent.

Thanks, Sam. Let's spend some time highlighting growth drivers in each business. There's not much I need to say here as these charts plotting TRx growth for Miebo and Xiidra speak volumes.

110% year-over-year prescription growth for Miebo is outstanding, especially considering there was a new entrant in dry eye disease treatment. Xiidra is doing what we said it would, steadily growing in volume while maintaining a sizable market share. We expect both medications will continue to benefit from ongoing category expansion as dry eye awareness and education increase. As a reminder, we're at the tip of the iceberg when it comes to treating the millions of Americans who suffer from dry eyes.

We often reference a thoughtful approach to expanding our daily SiHy portfolio as was the case in the third quarter when we launched a toric model in Japan. We're now in more than 50 countries and the portfolio still shows no sign of slowing down with 24% constant currency revenue growth in Q3. We're still in early innings, but remain excited for additional expansion and anticipated introduction of new SiHy offerings under development.

At a macro level, in consumer, we saw impressive consumption considering a work-down of inventory in the trade. That's a testament to brand building and confidence in our products among eye care professionals whose OTC recommendations carry significant weight. It's worth taking a moment to remember that we only acquired the Blink family of eye drops a few years ago in a deal that was largely overshadowed by our Xiidra acquisition. In that short period, we've completely revitalized the global brand and introduced new options, helping drive nearly 40% reported revenue growth in the third quarter.

Earlier, I referenced Artelac, which, as a reminder, continues to be our most global dry eye option with availability in more than 40 countries and plans to expand further. Double-digit reported revenue growth is common for the brand and Q3 was no different. Eye vitamins saw a nice uptick with 12% reported revenue growth. Our new formulation of PreserVision, which we expect will be on the shelves in the first half of 2026, could significantly increase the addressable market for age-related macular degeneration.

One caveat on LUMIFY performance. Our typical growth wasn't reflected in the third quarter due to the timing of a large promotional order shipped to Costco in June. Then that we saw the benefit in the second quarter with 27% reported revenue growth. LUMIFY's popularity and category dominance is clear with consumption seeing 14% growth in Q3.

2 call-outs for Surgical, both related to our momentum in the high-margin premium market. While not fully recovered, progress on our return to market for the enVista IOL platform and Envy in particular has been faster than expected, thanks to the tireless work from the team and our deep relationships with ophthalmic surgeons.

Total enVista sales in the third quarter reached 82% of Q1 or pre-recall levels, with Envy coming in at 91%. In September, Envy sales surpassed first quarter average monthly sales. While enVista Envy has a foothold in North America pending additional launches, our LuxSmart premium offering continues to expand in Europe with 6% constant currency revenue growth in the third quarter.

I've already said as much as I can on our pipeline. The rest we'll save for Investor Day, which will take place at the New York Stock Exchange on November 13.

What I can say is we put a premium on durability of growth through innovation and that these are exciting times for Bausch + Lomb.

Let's now move to Q and A. Operator?

[Operator Instructions] And the first question today is coming from Patrick Wood from Morgan Stanley.

I'll keep it to one just in the interest of time. But not to steal the thunder from the Investor Day, but you added obviously that financial excellence pillar. High level, any kind of commentary you could give us on like how we should interpret that? Are we thinking about is this a cash conversion thing? Is this like a margin structure thing? What was the impetus at least behind kind of adding that? Curious what you can add at least ahead of the Investor Day in November.

Yes, of course. And thanks, Patrick. Look, under our roadmap, which we've been talking about since I joined 3 years ago, we've made really strong progress across our 3 core pillars: selling excellence, operational excellence and innovation. This fourth pillar, financial excellence, is really about sharpening how we execute really on a day-to-day basis. In essence, really ensuring every dollar we spend drives growth and/or efficiency.

So look, we announced this Vision '27, which you'll see some greater detail in 2 weeks. But essentially, we're being very intentional about controlling operating expense, improving our mix and setting up for meaningful margin expansion over time. So it's not really about just cost cutting. It's really about disciplined execution and better outcome and resource allocation.

But I'll turn it over to Sam; maybe you want to add some more color.

Absolutely. And what Brent said here, Patrick, is very important because it outlines our strategy. So let me give you more insights on how we see this strategy drives both the top line growth, the margin expansion and the strong cash flow generation.

So when you think about the effects on the revenue, we've been driving gross all our businesses. And our team executed really well, and you see that throughout the last number of quarters, and you also see that in Q3 as we reported this morning. We expect to continue with this momentum with our guidance suggest above-market growth as we go forward. And as we look forward, again, we'll say more in a couple of weeks, but we see that momentum carrying forward with us.

On the margin expansion, it has been a focus for us. And this quarter, we're seeing a margin improving sequentially 400 basis points. We're seeing the benefit of the work that have been sort of going on with the Vision '27 that Brent announced earlier in the summer. And we're seeing these benefits this quarter with a lower SG&A percentage sequentially and year-over-year, which is very important. That sets the foundation for us as we think about margin expansion for this quarter and more importantly, for the future as well.

And then the last pillar of the financial metrics is the cash flow. On the cash flow, we've been working on optimizing our cash flow generation and we're seeing the results this quarter with a strong cash generation, adjusted cash flow from operation by $161 million. That's a 66% conversion to EBITDA, which is very strong. And what's important here is that sets also the foundation for us of what we were able to generate this quarter, but also as we go forward.

So the point that I can't emphasize enough is what we've been doing and executing on the work that we've been doing for the last number of quarters is setting us up well for what we delivered this quarter in Q3, but more importantly, setting us up well for the rest of this year and what we will be able to do beyond 2025, which we'll talk about more on November 13.

Yes. And I would just add a little bit more color. I think it's important to know that our Vision '27, which is the project that instigated our financial excellence pillar, is very broad. Almost all 13,000 colleagues are included. There are hundreds of projects. We have a dedicated PMO that we put our -- some very high potential people in full time to manage. And so this is a really comprehensive initiative. And there's no project that's too small. And obviously, every dollar counts. And so this is a full core press to really deliver financial excellence over the next few years.

The next question will be from Joanne Wuensch from Citibank.

My favorite question is always to ask about your contact lens business and you put up growth ahead of the market growth rate from what we can calculate. I'd love to get your impression of your share and the market. And there was an article in the Wall Street Journal that talked about changes in the contact lens market, and you were quoted in it. And I was interested if you had any additional color you could add.

Yes. Thanks, Joanne. So look, I think the lens market is growing still in the mid-single digit, probably at the lower end of the mid-single digit. We'll see when a few more of our competitors report, but that's probably where it's at. We have now, I think, for several quarters, grown the fastest in the industry and growing faster than -- significantly faster than the market. And I attribute that to new product innovations and good execution.

And I've said this before, but the thing that I've always been very proud about our team is that they continue to grow our new products, our Daily SiHy INFUSE or Ultra Daily while continuing to maintain growth in the older products and thereby really avoiding the leaky bucket syndrome, and that's a big contributor to our growth.

With respect to, I guess, the Wall Street Journal article and the Cooper situation, I want to be very clear about one point that the matter is that they're facing is strictly between Cooper and its shareholders. We have no intention of getting involved. That being said, what I did say, which I do believe, that a more scaled competitor certainly would strengthen competition and be beneficial to consumers and patients. And so look, we continue to evaluate it, but it really is a matter for Cooper and its shareholders.

The next question will be from Young Li from Jefferies.

I guess first one is just on Miebo dry eye and the launch of TRYPTYR. So I heard your comments about Miebo's performance even with the competitive launch, went to AAO and joined some of the sessions where docs were talking about using products and combo, either TRYPTYR or Xiidra to stimulate tear production and then Miebo to sort of lock that in. Can you maybe expand on that thought a little bit where you talk about just the use of combo drugs to help expand the dry eye market opportunity?

Yes, absolutely, and thank you for the question. And Yehia Hashad, our Head of R&D and Chief Medical Officer, is here. And so maybe he can weigh in here as well.

But look, when I look at the third quarter, and I've been through competitive launches. I remember when I was at Allergan when Xiidra launched, we're seeing the same pattern here when TRYPTYR is launching in the face of this market, which is the market tends to expand. And there's no better proof point than looking at TRx growth of 110% for Miebo and 8% for Xiidra in the face of a competitive launch from an established significant player in the industry. So that's a really good sign.

I think when you look at -- and always difficult to do, so I wouldn't read into this precisely, but I think it's helpful to think about it directionally. If you look at TRYPTYR on a launch-aligned basis with Miebo, it's running at a very small percentage of TRx compared to where Miebo was. I think in last week's number, it was around 20% on a launch-aligned basis of the MBO launch. So clearly a different type of launch with a different type of profile and curve.

That being said, we do think that there is a place for a drug that stimulates tear production. There are other drugs in the market. TRYPTYR is not the first to do it. Restasis has that in its label as well as a few of the other smaller products. And so that leads to the last point, which is this is a multifactorial disease. The 2 most prevalent conditions are evaporation and inflammation that probably makes up somewhere close to 80% of the patient population, and thereby creates a great opportunity for combination therapy to allow ECPs to really have the, what I call the easy button of not trying to -- and many of them don't even have the diagnostic capabilities to determine the etiology of the disease in the patient.

And so having a product where lifitegrast and Miebo or Xiidra and Miebo are combined really is, I think, an advancement for patients and certainly an advancement in treatment.

But Yehia Hashad, please jump in.

I think, Brent, you addressed really the critical points just to reemphasize that dry eye disease is a multifactorial disease. Naturally, it could actually be triggered by either aqueous deficiency or much more common by evaporation of the tear film. Miebo is the only product that's been approved for the evaporative component of the dry eye. Regardless it's an aqueous deficient or evaporative, if the osmolarity and with the chronicity of the disease if the osmolarities changed, this could trigger a visual circle of inflammation.

And actually it's a very good reason to start to think about combining 2 mechanism of actions in order to address the disease. It has the potential of more efficacy and also it has the potential of more compliance for the patients, and it has also the potential for maybe less adverse events due to much better innovative formulations. So I think this is where we are targeting our new programs as well with the combination between Miebo and Xiidra. And we still are actually very confident about our profile of products as the only evaporative -- the only treatment for evaporative dry eye, which is Miebo.

The next question will be from David Roman from Goldman Sachs.

I was hoping, Brent, you could spend a little bit more time on the surgical business. And I appreciate you sharing the metrics around the evolution of the franchise, both in third quarter and how you exited relative to where you had started pre-recall. But maybe you could just contextualize a little bit the enVista launch with where it's going, what feedback you're getting, how the recall may have impacted the overall trajectory and how to just think about the business as we head into Q4 and then just next year maybe directionally?

Sure. And David, welcome. So look, progress on the enVista platform, I think, has been impressive and certainly faster than we expected. This was an all-out effort on everyone in our Surgical team, but in particular to our frontline sales colleagues who worked so hard to work with surgeons and ASCs to make sure that they manage through the recall and came out with trust in us and our products.

I would say the other unintended super big benefit of this is the way we handled the recall. I think really even at this AAO, where the recall is something that was really not discussed at all, but the trust that we developed in how we handled it, I think, was on full display and many, many surgeons always commending us for doing the right thing and handling it with such transparency.

When you look at all the metrics though, you can really see that the recovery is strong, showing both a year-over-year basis and sequentially. And we are, as we had planned quickly approaching Q1 pre-recall revenue levels. In fact, Envy slightly surpassed that in the month of September. So third Q '25 revenue relative to Q1 '25 pre-recall, total enVista sales in Q3 reached 82% of Q1 pre-recall levels. Envy sales in Q3 reached 91% of Q1 pre-recall levels. And as I mentioned September, Envy sales surpassed Q1 on a monthly basis.

Revenue growth year-over-year in the total implantable portfolio was 2% sequentially and total premium IOLs was 27% sequentially. When you look at Q3 '25 versus Q2, so on a sequential basis, the implantable portfolio was up 14% sequentially and the premium IOL was up 67% sequentially.

I think to just answer the last point of your question, there is still some impact, right, which is many of our sales colleagues, particularly in North America, really spent the last several -- well, 3 or 4 months managing the recall, right? We had to go and get the inventory back. Our reps had to help establish new consignments and the like. And so that did probably shift some focus from some of their other responsibilities to focusing on managing this situation. I think that's nearly behind us now, and we're back out on our front foot and moving quickly.

I think with respect to consignment, we have most of our brands in full consignment with Envy getting there and probably before Investor Day, we should be back at full consignment in the market. So we're at the very tail end of hopefully having to talk about recalls anymore and just focusing on growth.

Super helpful perspective. And maybe just a follow-up on the P&L here. Clearly you're starting to see a lot of SG&A leverage as a reflection of the focus you've put on financial excellence. But maybe just can you help us think about the sustainability of that trend and how you balance reinvesting in the business for growth given the plethora of opportunities you have in front of you versus driving financial leverage? And I know you'll get into more of that at the analyst meeting, but just maybe help us think about Q3 in context here.

Yes. So maybe I'll start and then Sam could add some color. Look, our goal is that it is sustainable, and we've been saying this for some time. I think now we're trying to put some points on the board to show you that we can deliver. And really, the emphasis of the Investor Day is to walk you through our 3-year plan to show you what we believe we can deliver and how sustainable it really is.

And I would say that under Vision 27, some key factors here, not just about cost and OpEx discipline, but some of our launch products are moving more to growth mode, right? So where we overinvested, now we can come back to just growing some of these products that are no longer in launch mode, but just growth mode. So that's a piece of it. Product mix continues to be a large portion of how we can improve margins.

And then lastly, I would say some of our manufacturing efficiencies are probably towards the tail end or the back end of the 3-year cycle just because of the timelines, and regulatory burdens and whatnot of improving manufacturing capabilities. But all those things are in motion, and you'll get much more color when you see the 3-year plan in 2 weeks.

But Sam, anything you'd add?

Yes. Let me give you more insights here and put in context for you in terms of the numbers. And when you think about the Q3 P&L and you think about what we accomplished, again this is -- we're very pleased with what we have done from an execution because it really sets the foundation, like Brent said, of what we will be able to do going forward. And we'll speak about that more as we go into the Investor Day in a couple of weeks.

But just to focus on Q3 right now and the trajectory short term this year, SG&A hit its lowest point this year in Q3. We're running SG&A roughly about 40%, which is about less than what it was sequential, about 290 basis points on a sequential basis lower. When you look at it on a year-to-year basis, about 130 basis lower than compared to Q3 of last year. So we're seeing the sequential improvement, and that's really setting the new foundation for us of what we think about.

And it's all about not just the quantum of SG&A declining or going down, it is actually also the shift in the mix of what we're doing with the SG&A and repointing many of the dollars within SG&A to revenue generation. And you're seeing that in the top line growth here, David. So really, everything is pointing into the right direction for us in terms of what we've been doing and the execution that we've done is going pretty well. And that will be setting up the foundation for us as we wrap up 2025 and more importantly, as we go beyond 2025.

I would add one other thing because you asked the question, David, how do we prioritize investment? You see this nice improvement in the quarter despite a 13% increase in R&D expense. And that's because we are prioritizing this continuous stream of innovation, which Yehia and his team are going to be, I think, very proud to highlight in 2 weeks. So I think we can continue to invest in R&D and reallocate towards internal R&D development and still deliver the margin expansion we discussed. And so that's the balancing act, but I think we figured it out.

The next question is coming from Matt Miksic from Barclays.

I guess we lost Matt. We'll see if he gets back in the queue, but let's move on.

Certainly. The next question is coming from Robbie Marcus from JPMorgan.

This is Lily on for Robbie. I heard you said you expect to be able to offset tariffs in 2025. But how should we think about your ability to offset that in 2026? And with where things stand now, how big is the gross tariff impact for next year, if you're willing to share any color on how we should be thinking about the magnitude of that?

Yes. So Lily, I think we've been very transparent about tariffs and the impact and our ability to mitigate it. The problem is that the situation remains very fluid. One of the biggest impacts to us from tariffs is the reciprocal tariff from China. And as we know, the President is on a trip to Asia right now and is meeting with President Xi Friday to try to finalize trade negotiations. He did tweet or Truth Socialed yesterday that he expects a deal to be done and tariffs to be lowered. That would obviously be easier if that were to go the other way, then we'd have to continue to work hard to mitigate.

The point, I guess, I'm making is I know people were upset with us after the first quarter where we just didn't add it to our guidance because of the fluidity of the situation. I think we turned out to be correct, and we managed through it. I would hesitate to guess what the President is going to tweet tomorrow. But I think the long story is we can absorb it, we can manage it. Our team is -- we've got a dedicated team that tracks it and mitigates and we've got a lot of levers we can pull to do it. Now if something came out of left field, we'll have to deal with that. But I think we feel like we're on very solid ground now with tariffs.

Great. That's helpful. And just as a follow-up, I heard you said contact lens market growth at the low end of the mid-single-digit range, which sounds like it's a little bit softer than what you had been pointing to previously. So if you could just dig into that a little bit more, that would be helpful. What's driving what sounds like a slightly softer outlook? And how big of a contributor do you think price can continue to be?

Yes, absolutely. So I always think about this as a mid-single-digit market, but that could be 6% one year and 4% another. I think we're probably more between the 4% and 5% this year. There is some softness in different parts of the world. We see a little bit more softness in Southeast Asia. China is a watchout. We do see consumer softness in the data, in the global data. We grew 10% in China, but we do have it on our watchlist.

We have a very important event on November 11. Singles' Day is a very big event for us with our DTC approach in China. And so I'll know a lot more when we get to Investor Day after we see the results of Singles' Day for the Chinese market. That being said, big online players like Alibaba have seen big, big decreases. And so you just have to be thoughtful and watch. The data is mixed. There were some positive data Monday out of China on exports. So we watch it carefully.

I think when you look at the market, maybe there's a little bit of a bifurcation. I think some of the lower income consumer is, I think, feeling more stress than the higher income consumer. There's a nice bifurcation there. And so some of the private label or cheaper lenses seem to be growing the market a little bit slower than the more premium part of the market.

And even in the U.S., we're in this weird place where you see the stock market at all-time highs, yet consumer confidence on a relative basis quite low. And that's hard to reconcile. And so we just keep monitoring it very closely. But our outlook is positive. We'll grow faster than the market. We feel good about our business, but some of our competitors may have some different struggles.

[Operator Instructions] The next question is coming from Pito Chickering from Deutsche Bank.

Just sort of digging into sort of the gross profit margin that you saw this quarter, just looking at the strong constant currency growth coming from pharma and the mix tailwind that, that provided, and then can you sort of walk us through sort of the other moving parts sort of within this quarter, including tariffs and/or FX changes.

Yes. Sam, why don't you take that one?

Yes. So let me put in context for the gross margin. When you look at the gross margin this quarter, we had roughly about 130 basis point year-over-year decline. And that's really, as I said in my prepared remarks, there's the element of that we're still ramping up the reintroduction of the IOLs with enVista. That's a higher margin. So you're seeing the impact in the quarter from a mix perspective. And also you see product mix playing out in some of our businesses driving some of that remainder of the 130 basis points. So it's really more of a product mix story plus the enVista recall adjustment on a year-to-year basis.