Bausch (BHC) Q4 Earnings and Revenues Top Estimates
Bausch Health Companies Inc.'s BHC fourth-quarter results were better than expected. The company’s adjusted earnings per share of $1.15 beat the Zacks Consensus Estimate of $1.01. The reported figure also increased from $1.02 in the year-ago quarter.
Total revenues of $2.41 billion were up 10% year over year. The top line beat the Zacks Consensus Estimate of $2.25 billion.
Excluding the favorable impact of foreign exchange rates of $6 million and the impact of acquisitions worth $122 million, revenues increased 4% year over year on an organic basis.
BHC’s shares rose 7.3% on the quarterly results. The stock has risen 15.2% in the past six months compared with the industry’s growth of 14.8%.
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Quarter in Detail
The company reports revenues through five segments — Salix, International, Diversified Products, Solta Medical and Bausch + Lomb.
Salix revenues totaled $583 million, flat year over year. Xifaxan and Trulance sales came in flat year over year, while Relistor sales grew during the same time frame. Salix revenues missed the Zacks Consensus Estimate of $605 million and our model estimate of $593.6 million.
International revenues in the quarter totaled $290 million, up 11% year over year. The figure beat the Zacks Consensus Estimate of $264 million and our model estimate of $254 million. Revenues increased organically by 6%.
Diversified Product revenues amounted to $259 million, up 1% from the year-ago quarter’s level due to an increase in Neurology sales. While Dermatology and Generics sales went down, Dentistry sales were flat year over year. Volume increases for Jublia and Arazlo were offset by continued net pricing pressures. The top line beat the Zacks Consensus Estimate of $233 million and our model estimate of $242 million.
Solta Medical reported revenues of $103 million, up 4% year over year. The figure beat the Zacks Consensus Estimate of $95 million and our model estimate of $84.3 million. Revenues were up 5% organically, primarily driven by strong results in Asia Pacific, especially China.
Revenues from Bausch + Lomb totaled $1.2 billion, up 10% year over year. The figure beat the Zacks Consensus Estimate of $1 billion and our model estimate of $1.1 billion. Excluding the unfavorable impact of foreign exchange of $9 million and acquisitions worth $122 million, Bausch + Lomb segment revenues increased 7% organically on a year-over-year basis.
Bausch + Lomb launched its initial public offering and subsequently began trading under the ticker BLCO on May 6, 2022.
Pipeline Development
Bausch received FDA approval for IDP-126, under the brand name Cabtreo, the first and only FDA-approved fixed-dose, triple-combination topical treatment for acne vulgaris.
The phase II study on amiselimod, a new oral S1P receptor modulator that targets the treatment of mild to moderate ulcerative colitis, completed enrollment in July. BHC reported positive data from the study in December 2023. The company looks forward to an end of phase II meeting with the FDA and advance into the phase III study.
The submission for next-generation Fraxel, a fractionated laser device for skin resurfacing, is planned for the second quarter of 2024 in the United States, with 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.
Bausch Health Cos Inc. Price, Consensus and EPS Surprise
Bausch Health Cos Inc. price-consensus-eps-surprise-chart | Bausch Health Cos Inc. Quote
Updates
The FDA granted tentative approval to Norwich Pharmaceuticals Inc.’s abbreviated new drug application (ANDA) for Xifaxan (rifaximin) 550 mg in a letter dated Jun 2, 2023.
Xifaxan 550 mg tablets are indicated for reducing the risk of overt hepatic encephalopathy recurrence and treating irritable bowel syndrome with diarrhea in adults.
On Oct 6, 2023, the District Court held a hearing in Norwich’s lawsuit against the FDA, where Norwich was seeking immediate approval for its ANDA.
On Nov 1, the court denied Norwich’s motion and granted summary judgment in favor of the FDA and Salix. In December, Norwich appealed the District Court’s decision to the U.S. Court of Appeals for the DC Circuit. The DC Circuit has stayed the appeal until the federal circuit renders the decision in the Xifaxan litigation.
The consolidated appeals from the Delaware District Court are pending at the U.S. Court of Appeals for the Federal Circuit. On Jan 8, the Federal Circuit heard oral arguments. A decision is expected in the late first quarter or early second quarter of 2024.
2024 Guidance
Revenues are projected in the range of $9.3-$9.5 billion. The Zacks Consensus Estimate for 2024 revenues is pegged at $8.76 billion. Excluding Bausch + Lomb, revenues are projected to be in the range of $4.7-$4.850 billion.
BHC expects mid-single-digit revenue growth for the Salix business. For international business, BHC anticipates mid-single-digit organic revenue growth, led by the EMEA and Latin America regions. Strong double-digit organic revenue growth across all major geographies is expected for the Solta business.
BHC anticipates an overall mid-single-digit decline in organic revenues for the Diversified segment. Growth in dermatology is expected on the back of the introduction of Cabtreo. Dentistry is also expected to grow due to continued investment in sales force and its related tools. However, BHC expects continued pressure in neurology and generics businesses.
R&D expenses are also expected to increase.
Our Take
Bausch's fourth-quarter results were encouraging, as most of the business units reported growth. The Salix business maintains its momentum on the back of Xifaxan, which continued to represent approximately 80% of Salix segment revenues in 2023 and witnessed strong growth in underlying demand.
However, the neurology and generics businesses continue to face long-term challenges that will impact the Diversified segment.
Zacks Rank and Stocks to Consider
Bausch currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the healthcare sector are Puma Biotechnology, Inc. PBYI, Editas Medicine EDIT and ADMA Biologics ADMA. While PBYI currently sports a Zacks Rank #1 (Strong Buy), EDIT and ADMA carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Puma Biotech’s 2023 earnings per share (EPS) has remained constant at 73 cents. During the same time frame, the consensus estimate for 2024 EPS has increased by 2 cents to 71 cents. Over the past year, shares of PBYI have surged 48.9%.
PBYI’s earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 76.55%.
For 2024, loss per share estimate for Editas Medicine has narrowed to $2.48 from $2.53 in the past 60 days. EDIT’s earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 11.44%. In the previous reported quarter, its earnings beat estimates by 14.06%.
In the past 30 days, the Zacks Consensus Estimate for ADMA Biologics’ 2023 loss per share has remained constant at 2 cents. The consensus estimate for ADMA Biologics’ 2024 EPS is pegged at 22 cents. Over the past year, shares of ADMA have jumped 53.8%.
ADMA beat on earnings in three of the trailing four quarters and met in one, delivering an average surprise of 63.57%.
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