Picture: 123RF/PIXEL SPACE
Picture: 123RF/PIXEL SPACE

Bengaluru — Canadian drugmaker Bausch Health said on Thursday that it will spin off its eye care unit, Bausch + Lomb, into a separate, publicly listed company, seven years after acquiring it for nearly $9bn.

Bausch’s US shares surged 28% before the opening bell.

Bausch Health, previously known as Valeant Pharmaceuticals, has sought to get past a flurry of investigations into its accounting and pricing practices under its previous management.

Last week, the company agreed to pay $45m, and three of its former top executives agreed to penalties, to settle charges of improper revenue recognition and misleading disclosures in US regulatory filings.

Since its purchase in 2013, Bausch + Lomb has been a stable source of revenue for the company, especially after the accounting issues led to a steep fall in the share price of the one-time Wall Street darling, compounded by concerns over Bausch’s large debt pile.

Bausch Health said the spin-off will create two companies, one of which will consist of Bausch Health’s global vision care, surgical, consumer and ophthalmic businesses that brought in revenue of about $3.7bn in 2019.

The other will comprise brands across the Salix, international, neurology and medical dermatology businesses that brought in revenue of about $4.9bn in 2019.

Bausch’s US shares, which touched a record high of $263 in 2015, were trading at $24.85.

“We have divested about $4bn of non-core assets, paid down over $8bn of debt, resolved numerous legacy legal issues and managed a loss of exclusivity on an about $1.4bn product portfolio,” CEO Joseph Papa said in a statement.

Papa, who took over from Michael Pearson in 2016, has tried to regain investor confidence by focusing on newer drugs, saying, “We believe that the time is right to begin the separation process.”

Reuters

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