Bausch Health Companies Inc. Q2 FY2025 earnings call

Key Points

• Bausch Health excluding Bausch + Lomb had ninth consecutive quarter of revenue and adjusted EBITDA growth.
• Unlocked value via $7.9 billion debt refinancing, evaluating capital structure.
• Growth in Salix (12% YOY revenue growth), Solta (25% reported revenue growth), EMEA (10 consecutive quarters of organic growth), Canada (promoted products +12% YOY).
• Innovation: Partnership with YUN NV, pipeline progress for RED-C, announced acquisition of DURECT Corporation.
• Legal matters: Settled 9 opt-out cases, Granite Trust matter concluded with no negative cash flow.

For Bausch Health excluding Bausch + Lomb:

• Salix: Revenues $627 million, +12% YOY. Organic growth driven by Xifaxan (10% growth), OHE and IBS-D segments, 67,000 new patient starts.
• International segments: Canada and EMEA grew double digits; LATAM softer. Canada promoted products +12%, EMEA achieved 10 consecutive quarters of organic growth.
• Solta Medical: Revenues $128 million, +25% reported, +26% organic. South Korea +115% organic, China +4% (tariff impact), U.S. and Canada double-digit growth.
• Diversified segment: Revenues $219 million, -13% YOY. Impacted by neurology and dermatology, but Wellbutrin and CABTREO strong.
• Bausch + Lomb: Revenues $1.3 billion, +5% reported, +3% organic.

Reaffirmed full year 2025 guidance for Bausch Health excluding Bausch + Lomb:

• Revenue expected between $4.95 billion and $5.1 billion.
• Adjusted EBITDA expected between $2.625 billion and $2.725 billion.
• Adjusted operating cash flow expected between $825 million and $875 million.

Risks

• Macro environment uncertainty.
• Impact of IRA negotiations on Xifaxan pricing.
• Potential headwinds from upcoming debt maturities.

Q: Any update on share buybacks and Xifaxan DTC efforts?

A: Capital allocation strategy includes delevering, reinvesting; share buyback under consideration but on back burner. Focus on OHE DTC with heavy investment.

Q: Details on DURECT acquisition?

A: Interesting opportunity, tender offer imminent; looking forward to sharing science post-close.

Q: IRA impact on Xifaxan?

A: Negotiations ongoing, team working to minimize impact on pricing.