Bausch Health(BHC) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Bausch Health, excluding Bausch + Lomb, increased by 4% on a reported basis and 7% on an organic basis compared to Q4 2023, with full-year revenues increasing by 5% on a reported basis and 6% on an organic basis [9][10] - Adjusted EBITDA for Q4 2024 increased by approximately 7% compared to the prior period, with full-year adjusted EBITDA growing by 8% [10][29] - Adjusted operating cash flow for the full year was approximately $1.3 billion, reflecting an 85% growth year-over-year [30][35] Business Line Data and Key Metrics Changes - Salix revenues in Q4 were$ 634 million, a 9% growth year-over-year, driven by Xifaxan, which grew by 16% [36] - Solta revenues increased by 34% in Q4, primarily driven by volume growth, particularly in South Korea and China [41][42] - International segment revenues were $279 million, a decrease of 4% on a reported basis but an increase of 1% on an organic basis [38] Market Data and Key Metrics Changes - Canada and EMEA were the strongest contributors to growth, with Canadian revenue growing 9% on a reported basis and 16% on an organic basis [39] - The Latin American market saw a 14% decrease in organic revenue year-over-year, primarily due to the timing of government tenders in Mexico [40] Company Strategy and Development Direction - The company is focused on three fundamental pillars for value creation: enhancing operational assets, unlocking the value of the Bausch + Lomb equity stake, and optimizing capital structure [12][23] - The strategic priorities include people, growth, innovation, efficiency, and unlocking value, with a strong emphasis on operational excellence and innovation [13][16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in carrying momentum into 2025, with expectations for continued revenue and adjusted EBITDA growth [12][27] - The company is actively exploring avenues to unlock the full value of its Bausch + Lomb equity stake, ensuring benefits for shareholders [12][52] Other Important Information - The company reduced its net debt by approximately$ 520 million in Q4 and nearly $1 billion for the full year [45] - The 2025 financial guidance expects revenues between$ 4.950 billion and $5.100 billion, with adjusted EBITDA projected between$ 2.625 billion and $2.725 billion [47][48] Q&A Session Summary Question: Update on the Norwich situation and FDA lawsuit - Management stated that Norwich gained tentative approval but the FDA denied final approval, and they believe the FDA's determination regarding Teva's first filer status is correct [61][62] Question: Reasoning behind the discontinuation of the Crohn's disease study - Management clarified that the study was not discontinued but deemed not worth the investment based on performance data [67] Question: Details on recent international deals in the cardiometabolic market - Management highlighted two deals in Latin America aimed at expanding their branded generic portfolio, which are expected to drive growth [70] Question: Contribution of Xifaxan to future growth - Management indicated that Salix with Xifaxan and Solta will be the two biggest contributors to growth in 2025, with continued strong dynamics expected [78] Question: Impact of potential government initiatives on Xifaxan - Management acknowledged Xifaxan's inclusion in the Medicare renegotiation list for 2027 and emphasized the importance of demonstrating its value during negotiations [90][92] Question: Plans for accessing capital markets and pledging Bausch + Lomb shares - Management confirmed that they are exploring various financing options, including potentially pledging Bausch + Lomb shares, but did not provide specific quantification [113][115]