Bausch Health Adds Two Icahn-Designated Directors to its Board, as Company Outperforms 2020 Revenue Guidance

LAVAL, Quebec—Bausch Health Companies Inc. (NYSE/TSX: BHC) will expand its board of directors with the addition of two designees from the Carl Icahn Group as part of an agreement with the investor's group, which said earlier this month that it has increased its ownership stake in the health care company to almost 8 percent. In a separate announcement Wednesday, Bausch reported that “despite unprecedented business challenges resulting from the COVID-19 pandemic … Bausch Health finished the year strong and outperformed the high end of [its] latest revenue guidance range.”

The announcements were part of a busy news day for Bausch Health, parent company of the Bausch + Lomb vision care business. It’s the B+L vision care business, which the parent company has previously said it would spin off as an independent company, that has drawn the attention of activist investors. On Tuesday, Bausch Health said it has “continued to make progress toward internal objectives necessary for the spin of Bausch + Lomb, and these internal objectives are anticipated to be achieved by the end of the third quarter of 2021.”

A Bausch Health spokeswoman told VMAIL that the company anticipates all internal objectives to be completed by the end of the third quarter of 2021. "This means the requirements and actions needed to be able to operationally separate into two companies—for example, our tax structures and internal operation structures will be finalized," she said. "In addition to those internal efforts, we are taking action and exploring all opportunities to improve our leverage ratio so that we can expedite the spinoff."

Bausch Health chairman and chief executive officer Joseph Papa said he was pleased to have reached an agreement with the Icahn Group. “Together, we are aligned and focused on unlocking unrecognized value in Bausch Health, and we look forward to building on the significant progress we have already made in capitalizing on areas of unmet medical need, gaining market share in key growth areas and positioning our businesses to deliver long-term, sustainable value for our shareholders.”

In its earnings announcement, Bausch Health said overall fourth-quarter revenue of $2.21 billion was roughly flat compared with the year-ago total of $2.22 billion. The Bausch + Lomb/international business segment also reported flat revenue in the quarter with sales of $1.242 billion in the recent period compared with $1.238 billion in the year-ago period.

For the full year, Bausch Health’s total revenue declined 6 percent to $8.027 billion from $8.601 billion in the prior year. The B+L/international segment also saw a revenue decline of 6 percent in 2020, with sales dropping to $4.408 billion from $4.739 billion in 2019.

Bausch Health reported a net loss of $153 million in 2020, with adjusted EBITDA (non-GAAP) of $911 million.

"During the pandemic-related downturn, we focused our efforts on growing market share for key promoted products, carefully managed our expenses and continued to invest in our pipeline for future growth opportunities,” Papa said in the earnings announcement. “We generated cash from operations of more than $1.1 billion, which helped us to repay approximately $900 million of our debt.”

He added, “We are continuing to execute on our business recovery from the pandemic, and we are well positioned to benefit from recovery-related tailwinds and capitalize on our key growth drivers and catalysts in 2021 as we remain focused on how best to unlock value in the company, including the planned spinoff of Bausch + Lomb.”

The highlights of the B+L segment included the launch of several products in 2020. Among them:

• Bausch + Lomb Infuse silicone hydrogel (SiHy) daily disposable contact lenses in the U.S.
• Bausch + Lomb Ultra One Day SiHy daily disposable contact lenses in Australia, Canada and Hong Kong.
• SimplifEYE intraocular lens (IOL) delivery system in the U.S.
• Expanded parameters for Biotrue ONEday for astigmatism daily disposable contact lenses.
• LuxSmart, the company's first extended depth of focus IOL, and LuxGood, a monofocal IOL, in Europe.