Bausch Health(US:BHC)2022-01-12 20:20Summary of Bausch Health Companies, Inc. Conference Call Company Overview - Company: Bausch Health Companies, Inc. (NYSE: BHC) - Event: 40th Annual J.P. Morgan Healthcare Conference - Date: January 12, 2022 Key Points Company Separation and IPO Plans - Bausch Health is progressing towards separating into three public companies: Bausch + Lomb, Solta, and Bausch Pharma [4][6] - The company is substantially complete in planning for the IPOs of Bausch + Lomb and Solta, with readiness to launch when market conditions are favorable [4][5] - The next step involves announcing the public filing of the S-1 for Bausch + Lomb [5] Market Conditions and IPO Order - The order of the IPOs (Solta first or Bausch + Lomb) is flexible and will depend on market conditions [7] - Both businesses operate in different markets: medical aesthetics for Solta and eye health for Bausch + Lomb [7] Leverage Targets - Bausch Pharma aims for leverage targets of 6.5x to 6.75x, while Bausch + Lomb targets approximately 2.5x [9] - Proceeds from the IPOs will be used to pay down Bausch Pharma's debt [9] Divestments and Shareholder Value - Since 2016, Bausch Health has executed about $4 billion in divestments and reduced debt by approximately $10 billion [13] - The company remains open to divestitures that can enhance shareholder value [13][15] Guidance and Transparency - Guidance for 2022 will be reviewed at the end of February, with transparency provided for each of the three businesses [18] Bausch Pharma Business Insights - XIFAXAN is a key product for Bausch Pharma, showing a 6% prescription growth and approximately 12% revenue growth in Q3 [20] - The international business contributes nearly one-third of Bausch Pharma's revenue [20] - Bausch Pharma has a 57% profit margin and can deleverage approximately 0.75 turns per year [21] Intellectual Property and Legal Matters - Bausch Health is confident in the intellectual property surrounding XIFAXAN, with 26 patents and settlements with major generic companies [25] - Ongoing litigation with Alvogen is not expected to impact the IPO process [27] R&D Pipeline - Bausch Pharma is focusing on new formulations of rifaximin, with several clinical trials underway, including for sickle cell anemia and cirrhosis complications [29][30] - Amiselimod is another promising product in development for inflammatory bowel disease [32] Solta Business Performance - Solta reported a 27% organic revenue growth year-to-date, despite challenges in Q3 2020 [36] - The company is focused on expanding its product offerings, particularly with Thermage FLX and Clear + Brilliant Touch [40] Bausch + Lomb Business Insights - Bausch + Lomb is preparing for its IPO, with a strong product pipeline including INFUSE, which has seen significant growth [51][54] - The company is also launching XIPERE for treating macular edema, targeting a $600 million market opportunity [61] Future Investments and Growth - Each division will need to make capital allocation decisions to support growth, with a focus on new product launches [65][66] - The expectation is that new products will drive margin expansion over the long term [68] Timeline for Separation and Shareholder Distribution - The IPO for Bausch + Lomb is expected to involve 20% to 30% of the business, with a lockup period of three to six months post-IPO [70] - The remaining shares will be unlocked for distribution to shareholders after reducing Bausch Pharma's debt to the targeted leverage ratio [70] Additional Insights - The company is optimistic about recovering from COVID-19 impacts, with pent-up demand expected to drive future growth [58] - Bausch Health is committed to creating three strong companies, each with its own growth strategy and market focus [65]