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Bausch (BHC) Suspends IPO Plans for Solta Medical

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Bausch Health Companies Inc.  (BHC - Free Report) recently announced that it is suspending its plans for the initial public offering (IPO) of its Solta Medical business, citing challenging market conditions and other factors.

Solta is Bausch’s medical aesthetics unit with innovative and effective skin rejuvenation and body contouring solutions, including the Thermage RF systems, Fraxel laser, Clear + Brilliant laser and VASER ultrasonic systems.

Bausch stated that the decision has been taken in the interests of the stakeholders and the company will drive Solta's revenues, profits and cash flow while also achieving key operational and regulatory milestones. Solta will remain as part of Bausch Health.  BHC will revisit alternative paths for Solta in the future.

The stock has plunged 73.6% in the year so far compared with the industry’s decline of 33.2%.

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Bausch is having a tough time. We remind investors that the company had launched the IPO for its eye health business, Bausch + Lomb, which subsequently began trading under the ticker "BLCO" on May 6, 2022.  However, the response to the IPO was lukewarm.

The company sold 35,000,000 common shares at a public offering price of $18.00 per share for aggregate gross proceeds of $630 million against the company’s expectation of $840 million.

Bausch's first-quarter results were dismal amid incremental macro pressures and a challenging supply chain environment.

The company’s adjusted earnings per share of 72 cents missed the Zacks Consensus Estimate of $1.03 and decreased from $1.04 reported in the year-ago quarter. Total revenues of $1.9 billion missed the Zacks Consensus Estimate of $2.1 billion and fell 5% year over year.

Solta Medical reported revenues of $72 million, flat year over year, as an increase in net realized pricing was offset by a decline in volumes primarily due to inventory shortfalls resulting from the impact of lockdowns in China due to the new COVID-19 variant and microchip supply chain constraints.

Bausch Health was looking to separate its eye health business and Solta Medical business to improve strategic focus, enhance financial transparency and manage its high levels of debt.  The company had a total debt obligations of $23.4 billion as of Mar 31, 2022.

Bausch currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks are Alkermes (ALKS - Free Report) , Bolt Therapeutics (BOLT - Free Report) and Geron Corporation (GERN - Free Report) . While Alkermes sports a Zacks Rank #1 (Strong Buy), Geron and Bolt have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Loss estimates for ALKS for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed estimates in all of the trailing four quarters, the average surprise being 350.48%.

Loss estimates for Bolt for 2022 have narrowed to $2.87 from $2.99 in the past 60 days.  Bolt surpassed estimates in two of the trailing four quarters and missed the mark in the remaining two, the average surprise being a negative 17.29%.

Loss estimates for GERN for 2022 have narrowed by 6 cents in the past 60 days. Geron surpassed estimates in three of the trailing four quarters and missed the mark in the remaining one, the average surprise being 1.07%.

 

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