Bausch Health Cos Q4 Earnings Call Highlights

Key Points

• Strong finish and 2026 outlook: Bausch Health reported Q4 consolidated revenue of $2.796 billion (up 9% YoY) and adjusted EBITDA of $1.052 billion, and provided 2026 guidance for Bausch Health excluding Bausch + Lomb of $5.25–$5.4 billion revenue and $2.0–$2.1 billion adjusted EBITDA.
• Pipeline mixed — RED-C setback, larsucosterol advancing: Management said two Phase III RED-C trials did not meet primary endpoints and are under review, while larsucosterol (from the DURECT deal) has begun enrollment in a U.S. Phase III alcohol-associated hepatitis study after promising Phase II results.
• Balance sheet progress and monetization plans, but near-term headwinds: The company cut net debt by several hundred million, completed a ~$1.7 billion debt exchange to extend maturities and repaid a $300 million facility, said it is likely to sell down its Bausch + Lomb stake rather than distribute shares, and warned Xifaxan may have peaked in 2025 with a projected dip in 2027 adjusted EBITDA to around $2.7 billion.

Bausch Health Cos NYSE: BHC executives said the company finished 2025 with its “eleventh consecutive quarter of growth” in revenue and adjusted EBITDA, as management highlighted broad-based commercial execution, improved balance sheet flexibility and a steady pipeline of business development activity. The discussion on the company’s fourth-quarter and full-year 2025 earnings call focused on Bausch Health excluding Bausch + Lomb, though management briefly referenced Bausch + Lomb’s results announced earlier in the day.

Fourth-quarter results and segment performance

Chief Financial Officer JJ Charhon reported consolidated fourth-quarter revenue of $2.796 billion, up 9% year-over-year on a reported basis. Adjusted EBITDA was $1.052 billion, up 13% year-over-year, while adjusted operating cash flow was $515 million.

For Bausch Health excluding Bausch + Lomb, fourth-quarter revenue was $1.391 billion, up 9% on a reported basis, with adjusted EBITDA of $773 million, a 9% increase from the prior-year quarter. Adjusted operating cash flow for the quarter was $362 million, down $205 million year-over-year, which Charhon attributed primarily to the timing of cash interest payments following a refinancing completed on April 8, 2025.

By segment, management cited the following fourth-quarter trends for Bausch Health excluding Bausch + Lomb:

• Salix: Revenue of $693 million, up 9% year-over-year and “ahead of expectations,” supported by script growth and residual volume from some state Medicaid customers. Charhon said the Medicaid benefit was not expected to be a “mature revenue driver” going forward and later quantified the residual Medicaid-related benefit as less than $50 million in revenue, mostly tied to Xifaxan and occurring mainly in October and November.
• International: Revenue of $306 million, up 10% reported and 2% organic. Charhon described mixed geographic results: EMEA and Latin America grew double digits on a reported basis while Canada declined 6%, driven by lower Wellbutrin volume amid increased generic competition, partially offset by double-digit growth in promoted products including CABTRIO and Ryaltris.
• Solta Medical: Revenue of $137 million, down 1% reported and flat organic. Management said results were impacted by a distributor transition in China, estimating revenue would have been up mid-single digits excluding the one-time effect. Charhon noted South Korea revenue was up 40% and became Solta’s largest geography in 2025.
• Diversified: Revenue of $255 million, up 12% on a reported basis, “mostly due to improved net pricing.”

On Bausch + Lomb, Charhon said fourth-quarter revenue was $1.405 billion, up 10% reported year-over-year, led by 16% reported growth in pharmaceuticals, with vision care and surgical each up 8%.

Full-year 2025 performance and 2026 guidance

Chief Executive Officer Thomas Appio said 2025 results exceeded guidance on “all key metrics.” For the full year, Bausch Health excluding Bausch + Lomb posted reported revenue growth of 7% and organic growth of 6%, while adjusted EBITDA increased at a double-digit rate, excluding Bausch + Lomb. Appio highlighted double-digit top-line growth at Salix (11%) and Solta (18%), and said Xifaxan revenue increased 11% for the year. He also cited Thermage revenue growth of 19% for the year, “anchored in Asia Pacific,” and said Ryaltris and CABTRIO also grew.

Looking to 2026, Charhon provided guidance for Bausch Health excluding Bausch + Lomb of:

• Revenue: $5.25 billion to $5.4 billion
• Adjusted EBITDA: $2.0 billion to $2.1 billion
• Adjusted operating cash flow: $1.2 billion to $1.275 billion

Charhon said the company expects stronger growth in the first half of 2026, citing the “temporary nature” of certain benefits recorded in the second half of 2025.

Pipeline updates and R&D: RED-C and larsucosterol

Appio addressed RED-C, saying management was “disappointed” that while the program was safe and well tolerated, neither Phase III trial met its primary endpoint. He said the company is reviewing the full data set “to determine potential new development opportunities.”

Management also discussed larsucosterol, acquired through the DURECT transaction. Chief Medical Officer and Head of R&D Jonathan Sadeh described larsucosterol as an epigenetic modulator and said the company views it as a “platform” beyond alcohol-associated hepatitis (AH). Appio said that following quarter end, the company began enrolling patients in the Phase III study for AH.

Sadeh provided details on the Phase III trial, stating it is a U.S.-only study enrolling about 350 patients randomized between drug and placebo, with a primary endpoint of 90-day transplant-free survival. He said the design is similar to DURECT’s Phase II trial with “some design improvements,” and referenced Phase II results showing “over 50% reduction in 90-day mortality,” which he said would be “an amazing result” if replicated.

Capital structure actions and Bausch + Lomb separation framework

Executives emphasized progress in the company’s capital structure. Appio said the company reduced net debt by “several hundred million dollars” during 2025 and improved its debt maturity profile by approximately $1.7 billion through a late-December 2025 debt exchange. Charhon added that in the quarter, Bausch Health repaid a $300 million accounts receivable facility, completed a $1.7 billion secured debt exchange that pushed maturities out four years and captured $80 million of debt discounts, and reduced net debt by roughly $320 million quarter-over-quarter.

On the separation of Bausch + Lomb, Appio said the company is focused on debt repayment and reinvesting in the business and stated there was “no change” in approach following the RED-C readout. Charhon said the improved maturity profile gives the company more ability to be patient and that, in his view, the “highest probability outcome” for separation would be selling down Bausch Health’s equity stake in Bausch + Lomb rather than distributing shares. He also said “all options are on the table” and that monetization decisions will be guided by shareholder value creation.

Xifaxan outlook, IRA-related dynamics, and 2027 EBITDA commentary

Management fielded multiple questions on Xifaxan and forthcoming pricing and exclusivity dynamics. Appio said the company intends to continue using its data and AI-driven approach to accelerate execution and identify new patient starts, arguing there remains unmet need in treated populations, particularly for OHE.

Charhon noted that, on a reported basis, 2025 “might be the peak year” for Xifaxan due to non-recurring factors, including gross-to-net adjustments tied to exiting Medicaid and residual Medicaid volume in the fourth quarter. He also said the company expects a gross-to-net accrual adjustment in the fourth quarter of 2026 reflecting that a new CMS rebate becomes effective Jan. 1, 2027.

On legal and generic timing, Appio reiterated the company expects a generic on Jan. 1, 2028, and referenced ongoing litigation involving Teva and separate patent matters with Amneal and Norwich, including discussion of a 30-month stay related to Norwich’s second ANDA, which the company believes applies.

Regarding EBITDA trajectory into 2027, Charhon reiterated prior commentary that the average of 2026 and 2027 adjusted EBITDA would be “fairly similar” to 2025 levels. Later, he also said that “there will be a dip in 2027,” and added that “the math” implies 2027 adjusted EBITDA would be around $2.7 billion.

Appio closed the call by saying the company ended 2025 with “meaningful growth,” supported by results across a broad portfolio, and said management believes that progress carries into 2026.

About Bausch Health Cos NYSE: BHC

Bausch Health Cos Inc, formerly known as Valeant Pharmaceuticals International, is a global specialty pharmaceutical company headquartered in Laval, Quebec, Canada. The company operates through two primary segments: Ophthalmology, led by its Bausch + Lomb franchise, and Diversified Brands, which encompasses prescription dermatology, gastrointestinal, neurology and branded pharmaceutical products. Bausch Health develops, manufactures and markets a range of therapeutic and over-the-counter offerings designed to address conditions such as cataracts, dry eye, glaucoma, acne, rosacea, migraine and gastrointestinal disorders.

The Ophthalmology segment under the Bausch + Lomb name provides products for eye health, including prescription drops, contact lens care solutions, intraocular lenses, surgical instruments and diagnostic devices.

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