Scotia Bank ReportCompany Profile Concordia Healthcare Corp. is a Canadian-based specialty pharmaceutical company focused on acquiring legacy pharmaceutical products and orphan drugs. CXRX operates three divisions: Legacy Pharmaceuticals, which acquires matures products with growth potential; Orphan Drugs, which acquires approved orphan drug products that are underutilized; and Specialty Healthcare Distribution (SHD), a mail-order pharmacy and medical supply business. The company owns the rights to 23 legacy products and the orphan drug Photofrin, and specializes in distributing diabetes-related products through SHD. Business Mix (Based on revenues unless otherwise noted) 93% Legacy Pharmaceuticals, 4% Orphan Drug, 3% Specialty Healthcare Distribution Comparable Companies (TSX unless otherwise noted) VRX, MSL, CPH, GUD, COM, TRL Recent Update Text as of 9FEB16 . We recently visited CXRX's AMCo operations in London and left with a better understanding of the company's opportunity outside the U.S. . On this side of the Atlantic, AMCo was a relatively unknown private UK specialty pharmaceutical company before CXRX acquired it in September 2015 for ~$3.5 billion. As a result, its operations, which now account for ~60% of CXRX's total business, have been somewhat of a black box for investors as: (i) the UK market is unique and likely underappreciated, (ii) AMCo focuses on leveraging nuances in the UK market to its advantage, (iii) there is limited historical financial data, and iv) third-party data to track the underlying growth are difficult to obtain. . After spending time with management discussing the market dynamics at work within the UK system, we believe AMCo is well positioned to continue to grow its business using a number of strategies available to it, including: developing new products, selectively promoting neglected brands, and optimizing price where appropriate. Furthermore, we left our meetings feeling that the management team in place at AMCo has a deep understanding of the market, the business, and the opportunities that are available going forward. . We believe Concordia's shares will likely trade higher as the market becomes more comfortable with the growth potential of AMCo, which should become apparent as the company reports results over the next 3-4 months. As a result, we maintain our $75 price target, Sector Outperform. Alan Ridgeway, PhD, MBA, CFA (Scotia Capital Inc. - Canada) alan.ridgeway@scotiabank.com / (416) 863-7009