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Bausch Health (BHC) Q2 Earnings In Line, Xifaxan Boosts Sales
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Bausch Health Companies Inc.'s (BHC - Free Report) reported second-quarter adjusted earnings per share of 89 cents, on par with the Zacks Consensus Estimate. The reported figure increased from 81 cents in the year-ago quarter due to higher revenues.
Total revenues of $2.4 billion were up 11% year over year. The top line also beat the Zacks Consensus Estimate of $2.3 billion.
Excluding the impact of foreign exchange of $25 million, acquisitions of $104 million, and divestitures and discontinuations of $14 million, revenues increased 8% organically.
BHC’s shares have lost 24% year to date against the industry’s growth of 14.8%.
Image Source: Zacks Investment Research
Quarter in Detail
The company reports revenues through five segments — Salix, International, Diversified Products, Solta Medical and Bausch + Lomb.
Salix revenues totaled $558 million, flat year over year. Within this segment, Xifaxan revenues were up 10%, led by strong growth in underlying demand. The growth in Xifaxan was offset by a decline in Relistor and Trulance revenues.
Xifaxan 550 mg tablets are indicated for the reduction in the risk of overt hepatic encephalopathy (HE) recurrence and the treatment of IBS-D in adults.
Salix revenues missed the Zacks Consensus Estimate of $560 million but matched our model estimate of $557.7 million.
International revenues totaled $276 million, up 7% year over year, led by double-digit organic growth in Canada and mid-single-digit growth in Latin America. The figure beat both the Zacks Consensus Estimate and our model estimate of $274 million. Revenues increased 6% organically.
Diversified Product revenues amounted to $251 million, up 10% from the year-ago quarter’s level due to an increase in neurology and dermatology sales. Dermatology revenues grew 21% as BHC focused on returning this business to consistent growth.
Cabtreo (the first and only FDA-approved fixed-dose, triple-combination topical treatment for acne vulgaris) was launched in January and has performed in line with the company’s expectations. Neurology posted an 11% year-over-year increase as the business benefited from competitor supply disruptions. Sales from the Dentistry business were flat year over year, and management expects this business to grow. Generics business was down due to competitive pressure.
Diversified Product revenues beat the Zacks Consensus Estimate of $250 million and our model estimate of $226 million.
Solta Medical reported revenues of $102 million, up 16% year over year. The figure beat the Zacks Consensus Estimate of $100 million but missed our model estimate of $103 million. Revenues were up 19% organically, primarily driven by strong results in Asia Pacific, especially China.
Revenues from Bausch + Lomb totaled $1.21 billion, up 17% year over year. The figure beat the Zacks Consensus Estimate of $1.17 billion and our model estimate of $1.15 billion. Bausch + Lomb’s revenues increased 10% organically on a year-over-year basis, driven by growth across all business units.
Pipeline Development
The phase II study on amiselimod, a new oral S1P receptor modulator that targets the treatment of mild to moderate ulcerative colitis (UC), completed enrollment. BHC also submitted a draft protocol to the FDA for a phase III study for moderate to severe UC patients and plans to meet the EMEA authorities in the second half of the year. BHC is also advancing plans for a phase II study on amiselimod for Crohn's disease.
The phase III studies in the RED-C program on rifaximin for the prevention and delay of the first episode of hepatic encephalopathy are in the treatment phase.
The submission for next-generation Fraxel, a fractionated laser device for skin resurfacing, has been completed in the United States, with an approval expected sometime in the second half of the year.
The company’s program for Clear and Brilliant Touch, a fractionated laser device for skin rejuvenation, is also advancing, with regulatory submissions planned for Europe, Canada and Asia Pacific markets in 2024.
Other Updates
In April 2024, the U.S. Court of Appeals for the Federal Circuit affirmed the decision of the U.S. District Court for the District of Delaware in the Norwich matter. In its ruling, the Federal Court denied Norwich Pharmaceuticals’ motion for modification of the court’s final order. As a result, the FDA cannot approve Norwich’s abbreviated new drug application (ANDA) for Xifaxan (rifaximin) 550 mg until October 2029.
In June 2024, BHC filed a second patent infringement lawsuit in the U.S. District Court for the District of New Jersey against Norwich. The lawsuit was filed in connection with a Notice of Paragraph IV Certification received from Norwich related to an amended ANDA requesting approval to market a generic version of Xifaxan 550 mg for the treatment of IBS-D.
During the second quarter, BHC also filed a lawsuit against Amneal Pharmaceuticals (AMRX - Free Report) and its subsidiaries. The lawsuit was filed on the heels of the Notice of Paragraph IV Certification, stating that Amneal submitted an ANDA to the FDA seeking approval to market a generic version of Xifaxan 550 mg tablets.
2024 Guidance Raised
BHC now expects revenues to be in the range of $9.4-$9.65 billion (previous estimate: $9.3-$9.55 billion). The rise was due to an increase in the guidance of Bausch + Lomb. Excluding Bausch + Lomb, revenues are anticipated to be in the band of $4.7-$4.850 billion (unchanged).
Bausch Health Cos Inc. Price, Consensus and EPS Surprise
Bausch's second-quarter results were encouraging as growth in revenues drove earnings. The Salix business maintained its momentum on the back of Xifaxan, which witnessed strong growth in underlying demand.
Last month, BHC’s shares tanked on rumors that the company is heading toward bankruptcy. These rumors were subsequently squashed by the company.
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have improved from 14 cents to 13 cents, and the same for 2025 have improved from $3.44 to $3.21. Year to date, shares of Entrada Therapeutics have risen 5.7%.
In the past 60 days, the Zacks Consensus Estimate for Halozyme Therapeutics’ earnings has risen from $3.69 per share to $3.90. For 2025, earnings estimates have increased from $4.50 to $4.81 in the past 60 days. Year to date, shares of HALO have surged 48.9%.
Earnings of Halozyme beat estimates in three of the trailing four quarters and matched the same in one, delivering an average surprise of 9.40%.
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Bausch Health (BHC) Q2 Earnings In Line, Xifaxan Boosts Sales
Bausch Health Companies Inc.'s (BHC - Free Report) reported second-quarter adjusted earnings per share of 89 cents, on par with the Zacks Consensus Estimate. The reported figure increased from 81 cents in the year-ago quarter due to higher revenues.
Total revenues of $2.4 billion were up 11% year over year. The top line also beat the Zacks Consensus Estimate of $2.3 billion.
Excluding the impact of foreign exchange of $25 million, acquisitions of $104 million, and divestitures and discontinuations of $14 million, revenues increased 8% organically.
BHC’s shares have lost 24% year to date against the industry’s growth of 14.8%.
Image Source: Zacks Investment Research
Quarter in Detail
The company reports revenues through five segments — Salix, International, Diversified Products, Solta Medical and Bausch + Lomb.
Salix revenues totaled $558 million, flat year over year. Within this segment, Xifaxan revenues were up 10%, led by strong growth in underlying demand. The growth in Xifaxan was offset by a decline in Relistor and Trulance revenues.
Xifaxan 550 mg tablets are indicated for the reduction in the risk of overt hepatic encephalopathy (HE) recurrence and the treatment of IBS-D in adults.
Salix revenues missed the Zacks Consensus Estimate of $560 million but matched our model estimate of $557.7 million.
International revenues totaled $276 million, up 7% year over year, led by double-digit organic growth in Canada and mid-single-digit growth in Latin America. The figure beat both the Zacks Consensus Estimate and our model estimate of $274 million. Revenues increased 6% organically.
Diversified Product revenues amounted to $251 million, up 10% from the year-ago quarter’s level due to an increase in neurology and dermatology sales. Dermatology revenues grew 21% as BHC focused on returning this business to consistent growth.
Cabtreo (the first and only FDA-approved fixed-dose, triple-combination topical treatment for acne vulgaris) was launched in January and has performed in line with the company’s expectations. Neurology posted an 11% year-over-year increase as the business benefited from competitor supply disruptions. Sales from the Dentistry business were flat year over year, and management expects this business to grow. Generics business was down due to competitive pressure.
Diversified Product revenues beat the Zacks Consensus Estimate of $250 million and our model estimate of $226 million.
Solta Medical reported revenues of $102 million, up 16% year over year. The figure beat the Zacks Consensus Estimate of $100 million but missed our model estimate of $103 million. Revenues were up 19% organically, primarily driven by strong results in Asia Pacific, especially China.
Revenues from Bausch + Lomb totaled $1.21 billion, up 17% year over year. The figure beat the Zacks Consensus Estimate of $1.17 billion and our model estimate of $1.15 billion. Bausch + Lomb’s revenues increased 10% organically on a year-over-year basis, driven by growth across all business units.
Pipeline Development
The phase II study on amiselimod, a new oral S1P receptor modulator that targets the treatment of mild to moderate ulcerative colitis (UC), completed enrollment. BHC also submitted a draft protocol to the FDA for a phase III study for moderate to severe UC patients and plans to meet the EMEA authorities in the second half of the year. BHC is also advancing plans for a phase II study on amiselimod for Crohn's disease.
The phase III studies in the RED-C program on rifaximin for the prevention and delay of the first episode of hepatic encephalopathy are in the treatment phase.
The submission for next-generation Fraxel, a fractionated laser device for skin resurfacing, has been completed in the United States, with an approval expected sometime in the second half of the year.
The company’s program for Clear and Brilliant Touch, a fractionated laser device for skin rejuvenation, is also advancing, with regulatory submissions planned for Europe, Canada and Asia Pacific markets in 2024.
Other Updates
In April 2024, the U.S. Court of Appeals for the Federal Circuit affirmed the decision of the U.S. District Court for the District of Delaware in the Norwich matter. In its ruling, the Federal Court denied Norwich Pharmaceuticals’ motion for modification of the court’s final order. As a result, the FDA cannot approve Norwich’s abbreviated new drug application (ANDA) for Xifaxan (rifaximin) 550 mg until October 2029.
In June 2024, BHC filed a second patent infringement lawsuit in the U.S. District Court for the District of New Jersey against Norwich. The lawsuit was filed in connection with a Notice of Paragraph IV Certification received from Norwich related to an amended ANDA requesting approval to market a generic version of Xifaxan 550 mg for the treatment of IBS-D.
During the second quarter, BHC also filed a lawsuit against Amneal Pharmaceuticals (AMRX - Free Report) and its subsidiaries. The lawsuit was filed on the heels of the Notice of Paragraph IV Certification, stating that Amneal submitted an ANDA to the FDA seeking approval to market a generic version of Xifaxan 550 mg tablets.
2024 Guidance Raised
BHC now expects revenues to be in the range of $9.4-$9.65 billion (previous estimate: $9.3-$9.55 billion). The rise was due to an increase in the guidance of Bausch + Lomb. Excluding Bausch + Lomb, revenues are anticipated to be in the band of $4.7-$4.850 billion (unchanged).
Bausch Health Cos Inc. Price, Consensus and EPS Surprise
Bausch Health Cos Inc. price-consensus-eps-surprise-chart | Bausch Health Cos Inc. Quote
Our Take
Bausch's second-quarter results were encouraging as growth in revenues drove earnings. The Salix business maintained its momentum on the back of Xifaxan, which witnessed strong growth in underlying demand.
Last month, BHC’s shares tanked on rumors that the company is heading toward bankruptcy. These rumors were subsequently squashed by the company.
Zacks Rank and Stocks to Consider
Bausch currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector are Entrada Therapeutics (TRDA - Free Report) and Halozyme Therapeutics (HALO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have improved from 14 cents to 13 cents, and the same for 2025 have improved from $3.44 to $3.21. Year to date, shares of Entrada Therapeutics have risen 5.7%.
In the past 60 days, the Zacks Consensus Estimate for Halozyme Therapeutics’ earnings has risen from $3.69 per share to $3.90. For 2025, earnings estimates have increased from $4.50 to $4.81 in the past 60 days. Year to date, shares of HALO have surged 48.9%.
Earnings of Halozyme beat estimates in three of the trailing four quarters and matched the same in one, delivering an average surprise of 9.40%.