Bausch Health Companies reported fourth-quarter profit growth on Tuesday. But the stock’s upside is likely to be limited until the legal battle over one of the company’s most popular drugs is resolved. LSEG said sales for the three months ended Dec. 30 rose 10% (4% organically) to $2.41 billion, beating TheStreet’s consensus estimate of $2.3 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $869 million, an increase of 5.6% year over year and above the consensus estimate of $863 billion. Conclusion As with Bausch’s previous report in November, numbers don’t matter. A key concern for investors is the continuing legal dispute over Xifaxan, the flagship drug that accounts for 81% of BHC’s Salix Pharmaceuticals division’s sales. Xifaxan is used to treat irritable bowel syndrome with diarrhea (IBS-D) and overt hepatic encephalopathy (HE). HE occurs when the liver is unable to filter out toxins that accumulate and reach the brain. The drug is at the center of a patent dispute with Norwich Pharmaceuticals dating back to 2020, with Norwich Pharmaceuticals aiming to bring a generic version to market. BHC stock rose 7% early Tuesday, but remains below $10 a share. In a post-earnings call with investors, management said the Federal Circuit Court of Appeals will hear oral arguments on January 8 and expect to issue a decision “in the late first quarter or early second quarter.” Ta. Many things influenced this decision, which is why we kept our rating on the stock at 4, with a slightly smaller position. Bausch needs to win. If the company loses the lawsuit, its stock price will likely fall significantly. As seen in the table below, excluding Bausch & Lomb, Salix accounted for over 47% of his revenue this quarter, and Xifaxan contributed approximately $472 million in sales. This leaves Xifaxan accounting for 38% of his Bausch Health sales excluding his B+L. Losing exclusivity would be a huge blow. On the other hand, a win (the outcome we expect) would eliminate the large increase in company valuations. It also paves the way for his second big move in the company, the monetization of his BLCO stock, which rose significantly this week after strong financial results and a positive outlook for the spin-off business. Guidance On a companywide basis, including B+L stock, management expects his full-year 2024 sales to exceed expectations of his $9 billion and range from $9.3 billion to $9.55 billion. I am. The breakdown is $4.7 billion to $4.85 billion attributable to Bauschk Health (suggesting organic growth of 2% to 5%) and $4.6 billion to $4.7 billion attributable to Bausch & Lomb. However, the EBITDA outlook was less favorable. Management expects companywide EBITDA to fall in the range of $3.2 billion to $3.35 billion, of which $2.36 billion to $2.46 billion will come from Bauschk Health and the remaining $840 million. The company expects to receive $890 from the Bausch & Lomb stock. The overall estimate is better than street expectations of $3.05 billion. (Jim Cramer’s Charitable Trust is Long BHC. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. I will receive it. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust’s portfolio. If Jim talks about a stock on his CNBC TV, he will wait 72 hours before executing the trade after issuing a trade alert. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
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Bausch Health Enterprises It reported a fourth-quarter profit beat on Tuesday.but, Any upside in the stock is likely to be limited until the legal battle over one of the company’s most popular drugs is resolved.
