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Bausch's (BHC) Q4 Earnings Beat Estimates, Revenues Miss

·5 min read

Shares of Bausch Health Companies Inc. BHC were down 2.96% in response to fourth-quarter 2021 results as the outlook for 2022 was pretty ho-hum.

The stock has lost 26.2% in the past year compared with the industry’s decline of 39.3%.

The company’s adjusted earnings per share of $1.27 beat the Zacks Consensus Estimate of $1.08 but decreased from $1.33 reported in the year-ago quarter.

Total revenues of $2.1 billion missed the Zacks Consensus Estimate by 0.45% and fell 1% year over year.

Quarter in Detail

Revenues from the Bausch + Lomb segment were $1.0 billion, up 6% year over year. Excluding the unfavorable impact of $11 million from foreign exchange and the impact of divestitures and discontinuations of $2 million, revenues increased organically by 7%, primarily due to higher sales resulting from the positive impacts of recovery from the COVID-19 pandemic.

Bausch Pharma (comprising Salix, International, Ortho Dermatologics and Diversified Products) revenues were $1.19 billion, down 6% year over year.

Salix segment revenues came in at $559 million, up 6%. The growth in revenues was primarily driven by higher sales resulting from the positive impacts of the recovery from the COVID-19 pandemic, including sales of Xifaxan (rifaximin), Relistor (methylnaltrexone bromide) and Trulance (plecanatide), which grew 9%, 21% and 21%, respectively.

International Rx segment revenues in the quarter were $276 million, down 17%.
Ortho Dermatologics segment revenues were $146 million in the quarter, down 7% year over year due to a decrease in net realized pricing of medical dermatology products.

Diversified Products segment revenues were $214 million, down 14% from the year-ago quarter, primarily due to a decrease in volumes.

During 2021, the company repaid its debt by approximately $1.3 billion.

2021 Results

Revenues in 2021 came in at $8.4 billion, up 5% from 2020.  Excluding the favorable impact of foreign exchange of $95 million and the impact of divestitures and discontinuations of $132 million, primarily due to the divestiture of Amoun, revenues increased organically by 6% year over year.

2022 Guidance

Revenues are projected in the $8.40-$8.60 billion range.  The projected range falls short of the Zacks Consensus Estimate of $8.80 billion of revenues for 2022.

Initial Public Offering of Solta Medical

Bausch publicly filed a Registration Statement on Form S-1 with the SEC and a preliminary base PREP prospectus with each of the securities regulatory authorities in all of the provinces and territories of Canada relating to the proposed IPO of Bausch + Lomb and also has publicly filed a Registration Statement on Form S-1 with the SEC relating to the proposed IPO of Solta Medical Corporation.

Pipeline Progress

The company obtained FDA approval of the new drug application for Xipere (triamcinolone acetonide injectable suspension), which uses the suprachoroidal space to treat patients suffering from macular edema associated with uveitis, and launched in the United States during the ongoing quarter.

It also announced statistically significant top-line results from two phase III studies evaluating the investigational drug NOV03 (perfluorohexyloctane) as a first-in-class eye drop with a novel mechanism of action to treat the signs and symptoms of dry eye disease associated with meibomian gland dysfunction. Bausch expects to file an NDA with the FDA in the first half of 2022.

BHC announced statistically significant top-line results from the second pivotal phase III study evaluating the investigational IDP-126 gel in acne vulgaris.

The company also initiated phase III study of rifaximin soluble solid dispersion to study the use of rifaximin to prevent hepatic encephalopathy. The company initiated phase II study to evaluate amiselimod (S1P modulator) for the treatment of mild to moderate ulcerative colitis.

Our Take

Bausch beat on earnings in the fourth quarter but missed on sales. Nevertheless, management stated that several of the key products gained market share in 2021.

Zacks Rank & Stocks to Consider

Bausch currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the healthcare space are Axsome Therapeutics, Inc. AXSM, Dynavax Technologies Corporation DVAX and Vertex Pharmaceuticals VRTX, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Axsome Therapeutics’ loss per share estimates have narrowed to $3.64 from $3.66 for 2022 over the past 60 days.

Earnings of Axsome Therapeutics have surpassed estimates in three of the trailing four quarters and missed the same on the other occasion.

Dynavax’s earnings estimates have increased to $1.18 from $1.07 for 2022 over the past 60 days. The stock has rallied 24.8% in the past year.

Earnings of Dynavax have surpassed estimates in each of the trailing four quarters.

Vertex’ Pharmaceuticals earnings per share estimates have increased to $15.31 from $13.85 for 2022 over the past 60 days.

The consensus estimate for 2022 earnings for Vertex has increased $1.01 over the past 30 days to $14.33. Shares of VRTX gained 6.3% in the past year.



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