Making Progress in Their Transition; Transferring Coverage; Hold with $5.50 PT

Research evidence excerpt

Making Progress in Their Transition; Transferring Coverage; Hold with $5.50 PT

Bausch Health Companies (BHC)

Equity Research

July 20, 2026

Near Term Business Updates: BHC has seen 12 consecutive quarters of growth. Near term macro

trends don’t seem to have material adverse impacts on BHC’s base business, with tariffs factored

into guidance. Same with the energy crisis. Solta Medical Chinese consumers also don’t seem to be

impacted much by the multiyear property slowdown given they are seeing very good growth there. The

diversified MNC with high margins can absorb a lot of these factors.

Business Development Opportunities: Through BHC’s acquisition of Durect last year, they are

advancing the larsucosterol P3 program for alcohol associated hepatitis. BHC believes larsucosterol

can become a platform asset with multiple indications. BHC has also narrowed their broader list

of potential indications based on those with the strongest scientific and clinical rationale. Beyond

larsucosterol, BHC continues to assess multiple BD oppties that leverage their commercial channels

and R&D pipeline, including GI, hepatology, neurosciences, dermatology, and aesthetics. BHC is

prioritizing assets that are late stage or commercial ready, where existing commercial capabilities

allow for execution from development to launch across markets.

Maximizing Xifaxan Cash Flow: BHC is focused on maximizing CF thru end of ’27 with strong

execution of Xifaxan. Setting up the portfolio for post Xifaxan LoE for success through the International

and Salta segments. Some potential inorganic oppties to supplement the pipeline. BHC had gone

through a series of refinances over the past year to give themselves some flexibility to get through ’28

by pushing out ~$11 B in maturities.