Bausch Health (BHC) Q2 2025 Earnings Call July 30, 2025 05:00 PM ET Company ParticipantsGaren Sarafian - VP - Head of IRThomas Appio - CEO & DirectorJean-Jacques Charhon - EVP & CFOUmer Raffat - Senior Managing DirectorMichael Nedelcovych - Director - Equity ResearchConference Call ParticipantsJason Gerberry - MD & Equity Research Analyst - Biotech & PharmaDouglas Miehm - AnalystOperatorWelcome to the Bosch Health First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen ...

Financial Data and Key Metrics Changes - Revenue for the second quarter was $2,530 million, up 5% on a reported basis and 4% on an organic basis compared to the same period a year ago [20] - Adjusted EBITDA was $871 million, an increase of $45 million or 5% year over year [21] - Adjusted operating cash flow was $442 million, reflecting strong operational cash flow generation [21] Business Line Data and Key Metrics Changes - Salix revenues were $627 million, an increase of 12% compared to the same period last year, driven by favorable net pricing and strong volume performance [23] - Solta revenues were $128 million, an increase of 25% on a reported basis and 26% on an organic basis compared to the same period last year, primarily fueled by South Korea [26] - Diversified segment revenues were $219 million, a decrease of 13% compared to the same period a year ago, impacted by one-time pricing adjustments in 2024 [28] Market Data and Key Metrics Changes - EMEA achieved 6% organic growth in the second quarter, marking the region's tenth consecutive quarter of organic growth [11] - Canada experienced 12% growth driven by the promoted products portfolio [24] - LATAM's performance was softer due to ongoing macroeconomic challenges and partial channel destocking [25] Company Strategy and Development Direction - The company is focused on unlocking value, growth, and optimizing capital structure, with a commitment to R&D and business development [6][31] - A strategic partnership was announced with YunnV to launch probiotic-based products for acne-prone skin in Poland [13] - The company is evaluating opportunities to reduce the net cost of capital of its debt over the next couple of months [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute strategic priorities and deliver value for stakeholders [20][68] - The company reaffirmed its full-year 2025 guidance for revenue and adjusted EBITDA, expecting revenue between $4,950 million and $5,100 million [30] - Management acknowledged the uncertain macro environment but highlighted strong operational performance and growth opportunities [5][19] Other Important Information - The company completed a $7,900 million debt refinancing, extending maturities and improving capital structure [7] - The acquisition of Direct Corporation is expected to advance the development of a treatment for alcohol hepatitis, pending certain conditions [17][18] Q&A Session Summary Question: Share buybacks and DTC efforts with XIFAXAN - Management indicated that share buybacks are still under evaluation but have taken a back seat to reinvestment in the business [39] - The focus for DTC investments is currently on the OHE indication, with significant growth in patient starts [41] Question: Rifaximin franchise and SSD trials - Management confirmed that lactulose background therapy is allowed in the SSD trials and emphasized the opportunity for expansion in the patient population [46][48] Question: XIFAXAN potential ROA headwinds in 2027 - Management acknowledged ongoing negotiations regarding XIFAXAN and the potential for significant price cuts, while emphasizing efforts to minimize impact [51][63] Question: Direct Corporation acquisition details - Management expressed confidence in the Direct acquisition, highlighting the potential for addressing unmet medical needs in hepatology [55] Question: Rifaximin SSD differentiation and off-label use - Management stated that the SSD formulation is different and does not plan to run head-to-head trials at this time [60]