BHC
Bausch Health Companies Inc
Healthcare, Event Driven/Special Sit
03/04/2016
Presented
| Date | 03/02/2016 |
| Price | $67.47 |
| Market Cap | $23.68B |
| Ent Value | $91.93B |
| P/E Ratio | 37.48x |
| Book Value | $18.49 |
| Div Yield | 0% |
| Shares O/S | 351.00M |
| Ave Daily Vol | 9,111,736 |
| Short Int | 4.83% |
Current
| Price | $8.39 |
| Market Cap | $3.08B |
| Bausch Health Companies Inc. is a multinational specialty pharmaceutical company that develops manufactures and markets a broad range of pharmaceutical products primarily in the areas of dermatology, eye health, neurology, and branded generics. The company operates through two operating and reportable segments: (i) Developed Markets and (ii) Emerging Markets. The Developed Markets segment consists of (i) sales in the U.S. of pharmaceutical products, OTC products, and medical device products, as well as alliance and contract service revenues, in the areas of eye health, dermatology and podiatry, aesthetics and dentistry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products it developed or acquired, and (iii) pharmaceutical products, OTC products, and medical device products sold in Canada, Australia, New Zealand, Western Europe and Japan. The Emerging Markets segment consists of branded generic pharmaceutical products and pharmaceuticals, OTC products, and medical device products. Products are sold primarily in Central and Eastern Europe (primarily Poland and Russia), Asia, Latin America (Mexico, Brazil, and Argentina and exports out of Mexico to other Latin American markets), Africa and the Middle East. Valeant Pharmaceuticals was founded on March 29, 1994 and is headquartered in Laval, Canada. |
Please note, on 7/16/18 Valeant Pharmaceuticals International Inc (VRX) changed it’s company name and ticker to Bausch Health Companies Inc. (BHC). The content of this idea will make reference to the original company name and ticker symbol.
Publicly traded companies mentioned herein: CVS Health Corp (CVS), Endo International PLC (ENDP), Molycorp Inc (MCPIQ), Valeant Pharmaceuticals International Inc (VRX)
Highlights
The presenter is short shares of Valeant Pharmaceuticals (VRX) based on his belief that the company “has been in total disarray since October 2015” and it is unlikely that management will be able to file the 2015 10-K within the foreseeable future. The R&O Pharmacy payment dispute started it all in early October, 2015; and while there may not be a “smoking gun,” the fact that management has not been able to sufficiently explain the impact the Philidor scandal and pricing have had on the business (and cash flow) is a problem, and, according to his work, cash flow does not support the $34 billion of net debt on the balance sheet. The value of Salix and Bausch & Lomb may offer some support to bondholders and/ or shareholders in the future, but questions around Pearson’s return from medical leave, the withdrawal of guidance, and the inability to file the 10-K should all weigh on the stock. If his asset value estimates prove to be accurate, the fair value of VRX stock may be closer to $30/share, or less.
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