Bausch Health(US:BHC)2025-10-29 22:00Financial Data and Key Metrics Changes - Bausch Health reported a year-over-year revenue growth of 7% on a reported basis and 5% on an organic basis, achieving $2.681 billion in revenue for the third quarter [4][8] - Adjusted EBITDA increased by 8% year-over-year to $986 million, with an adjusted gross margin of 72.7%, which is 40 basis points lower than the previous year [8][9] - The company reduced its debt by approximately $600 million, leading to an increase in full-year guidance for revenue, adjusted EBITDA, and adjusted operating cash flow [5][15] Business Line Data and Key Metrics Changes - The Solta Medical segment saw a remarkable 25% growth on a reported basis and 24% on an organic basis, while Salix delivered 12% growth on a reported basis and 11% on an organic basis [6][10] - Xifaxan revenue grew 16% in the third quarter, with volume up 9%, driven by strong performance in the hepatology segment [10][20] - The diversified segment experienced a revenue decrease of 4% on a reported basis and 6% on an organic basis, primarily due to challenges in the neurology business [13][14] Market Data and Key Metrics Changes - International segment revenues decreased by 2% on a reported basis and 4% on an organic basis, with mixed performance across geographies [11] - EMEA led the international segment with a 12% increase, while Canada and LATAM contracted by 8% and 17%, respectively [11] - The Asia-Pacific region contributed significantly to Solta Medical's growth, with South Korea achieving 96% growth year-over-year [12][22] Company Strategy and Development Direction - The company is focused on five strategic priorities: people, growth, efficiency, innovation, and unlocking value, which guide its vision for the future [18] - Bausch Health aims to enhance its operational assets and continue executing its innovation and profitable growth agenda [16][18] - The acquisition of DURECT Corporation is expected to complement the existing portfolio and enhance the R&D pipeline, particularly in hepatology [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic macro backdrop and highlighted strong operational performance [5][18] - The company anticipates continued growth in its key segments, particularly in Xifaxan and Solta Medical, while also preparing for the impact of CMS pricing negotiations [19][33] - Full-year guidance has been raised, reflecting positive trends across the portfolio, with revenue expected between $5 billion and $5.1 billion [15][16] Other Important Information - The company exited the 340B program and Medicaid drug rebate program to optimize sales channels and enhance patient assistance programs [61][62] - The focus remains on deleveraging the business and optimizing the capital structure, with plans to use free cash flow for debt servicing [66][68] Q&A Session Summary Question: Revenue growth for Xifaxan outpacing script growth - Management explained that the disconnect is due to a one-time benefit associated with gross-to-net accrual and strong new patient starts [30][32] Question: Dynamics of CMS pricing negotiations - Management confirmed ongoing fruitful negotiations with CMS and expects pricing to be published on November 30, 2025 [33][34] Question: Revised guidance and one-time factors - Management acknowledged one-time adjustments in Q3 but emphasized positive trends across the portfolio [40][41] Question: SG&A spending and future run rates - Management indicated that Q3 SG&A was unusually low due to non-recurring accrual changes, suggesting Q1 and Q2 as better indicators for future spending [42][43] Question: RED-C phase 3 results timeline - Management confirmed that both phase 3 studies will have a combined readout in early 2026, which will be the final readout for the program [45][46] Question: Impact of exiting the 340B program - Management highlighted the decision was made to optimize sales channels and enhance patient assistance programs [62][63] Question: Debt refinancing and deleveraging strategies - Management outlined plans to use free cash flow for debt servicing and mentioned potential asset sales as a means to support deleveraging [66][68]