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Bausch Health (BHC) Secures $600M Financing Facility, Stock Up
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Bausch Health Companies Inc. (BHC - Free Report) shares were up 8.45% after it announced a crucial development that will significantly enhance its liquidity.
Bausch Health, in collaboration with leading investment firm KKR, has established a non-recourse financing facility worth $600 million. This facility, provided by KKR and its credit funds and accounts, will be collateralized by specific accounts receivable generated by a wholly-owned subsidiary of BHC.
The primary objective of this financing facility is to strengthen Bausch Health's overall liquidity for general corporate purposes. By gaining access to this additional liquidity, the company will have greater flexibility to support its operations and pursue strategic initiatives. The facility's term is approximately five years, providing Bausch Health a long-term financial resource to effectively execute its plans.
This strategic move by Bausch Health underscores the company's proactive approach to managing its liquidity position. This collaboration will empower the company to navigate the evolving pharmaceutical landscape.
Bausch Health can utilize the funds for a range of corporate purposes, including research and development, acquisitions and debt repayment. This strengthened liquidity position is expected to have a positive impact on the company's overall financial health and support its long-term objectives.
Bausch ended the first quarter with a staggering debt of $20.6 billion.
The news of the additional liquidity cheered BHC investors as the company is currently sailing in rough storms with potential generic competition for one of its top drugs — Xifaxan.
Bausch’s stock has gained 32.8% in the year so far compared with the industry's growth of 13.1%.
Image Source: Zacks Investment Research
Last month, shares took a hit after the FDA granted tentative approval to Norwich Pharmaceuticals Inc.’s abbreviated new drug application for Xifaxan (rifaximin) 550 mg in a letter dated Jun 2, 2023.
However, the FDA confirmed in its letter that it cannot grant final approval until Oct 2, 2029, which is the date specified by the presiding judge in his final judgment in Salix Pharmaceuticals, LTD et al. v. Norwich Pharmaceuticals, Inc.
Bausch’s gastroenterology business is conducted through Salix Pharmaceuticals. Xifaxan 550 mg tablets are indicated for reducing the risk of overt hepatic encephalopathy recurrence in adults and for treating irritable bowel syndrome with diarrhea in adults. It is one of the top drugs in BHC’s portfolio.
Bausch Health intends to intervene in Norwich's lawsuit against the FDA.
Xifaxan accounted for approximately 81% of the Salix reporting unit’s revenues in 2022. Salix generated revenues of $2.09 billion in 2022. Hence, an earlier-than-expected generic entry will adversely impact revenues.
Over the past 30 days, earnings estimates for LGND have increased by $1.09 to $5.25. LGND topped earnings estimates in two of the last four quarters and missed in the remaining two, the average surprise being 21.50%.
Over the past 60 days, earnings estimates for ABBV have increased by 3 cents to $10.99 for 2023. ABBV surpassed estimates in all the trailing four quarters, the average surprise being 1.78%.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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Bausch Health (BHC) Secures $600M Financing Facility, Stock Up
Bausch Health Companies Inc. (BHC - Free Report) shares were up 8.45% after it announced a crucial development that will significantly enhance its liquidity.
Bausch Health, in collaboration with leading investment firm KKR, has established a non-recourse financing facility worth $600 million. This facility, provided by KKR and its credit funds and accounts, will be collateralized by specific accounts receivable generated by a wholly-owned subsidiary of BHC.
The primary objective of this financing facility is to strengthen Bausch Health's overall liquidity for general corporate purposes. By gaining access to this additional liquidity, the company will have greater flexibility to support its operations and pursue strategic initiatives. The facility's term is approximately five years, providing Bausch Health a long-term financial resource to effectively execute its plans.
This strategic move by Bausch Health underscores the company's proactive approach to managing its liquidity position. This collaboration will empower the company to navigate the evolving pharmaceutical landscape.
Bausch Health can utilize the funds for a range of corporate purposes, including research and development, acquisitions and debt repayment. This strengthened liquidity position is expected to have a positive impact on the company's overall financial health and support its long-term objectives.
Bausch ended the first quarter with a staggering debt of $20.6 billion.
The news of the additional liquidity cheered BHC investors as the company is currently sailing in rough storms with potential generic competition for one of its top drugs — Xifaxan.
Bausch’s stock has gained 32.8% in the year so far compared with the industry's growth of 13.1%.
Image Source: Zacks Investment Research
Last month, shares took a hit after the FDA granted tentative approval to Norwich Pharmaceuticals Inc.’s abbreviated new drug application for Xifaxan (rifaximin) 550 mg in a letter dated Jun 2, 2023.
However, the FDA confirmed in its letter that it cannot grant final approval until Oct 2, 2029, which is the date specified by the presiding judge in his final judgment in Salix Pharmaceuticals, LTD et al. v. Norwich Pharmaceuticals, Inc.
Bausch’s gastroenterology business is conducted through Salix Pharmaceuticals. Xifaxan 550 mg tablets are indicated for reducing the risk of overt hepatic encephalopathy recurrence in adults and for treating irritable bowel syndrome with diarrhea in adults. It is one of the top drugs in BHC’s portfolio.
Bausch Health intends to intervene in Norwich's lawsuit against the FDA.
Xifaxan accounted for approximately 81% of the Salix reporting unit’s revenues in 2022. Salix generated revenues of $2.09 billion in 2022. Hence, an earlier-than-expected generic entry will adversely impact revenues.
Zacks Rank and Stocks to Consider
Bausch currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the healthcare sector are Ligand Pharmaceuticals (LGND - Free Report) and AbbVie (ABBV - Free Report) . While Ligand currently sports a Zacks Rank #1 (Strong Buy), AbbVie carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 30 days, earnings estimates for LGND have increased by $1.09 to $5.25. LGND topped earnings estimates in two of the last four quarters and missed in the remaining two, the average surprise being 21.50%.
Over the past 60 days, earnings estimates for ABBV have increased by 3 cents to $10.99 for 2023. ABBV surpassed estimates in all the trailing four quarters, the average surprise being 1.78%.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.