BHC's Late-Stage Liver Cirrhosis Studies Fail, Stock Down

Core Insights - Bausch Health (BHC) shares declined by 1.86% on January 26, marking the second consecutive day of losses, following a 10% drop on January 23 due to the failure of the late-stage RED-C clinical program [1][7]. Clinical Program Details - The RED-C program included two global, randomized, double-blind, placebo-controlled phase III studies with over 1,000 patients across 398 sites in 17 countries, aimed at evaluating rifaximin solid soluble dispersion (SSD) for delaying the first episode of hepatic encephalopathy (HE) in adults with liver cirrhosis [2]. - The trials did not meet their primary endpoint, despite the compound being deemed safe and well-tolerated [2]. Product Information - Rifaximin SSD is an oral formulation targeting the beta-subunit of bacterial DNA-dependent RNA polymerase, and it is already approved in the U.S. as Xifaxan, which is indicated for reducing the risk of overt HE recurrence and treating irritable bowel syndrome with diarrhea (IBS-D) in adults [3]. Financial Impact - Xifaxan is a significant growth driver for BHC, accounting for 85% of total Salix revenues in the first nine months of 2025 [5]. The failure of the RED-C program hampers the expansion of Xifaxan, which is crucial for BHC's growth plans [4][7]. - BHC's shares have decreased by 25.4% over the past year, contrasting with the industry's growth of 36.1% [6]. Debt and Acquisitions - BHC faces substantial financial pressure with long-term debt obligations of $21 billion and a cash balance of $1.3 billion as of September 30, 2025 [11]. - Recently, BHC acquired Wuhan Shibo Zhenmei Technology Co., Ltd. to enhance its aesthetics business, and it previously acquired DURECT Corporation to strengthen its R&D platform [9][10].