Q2 2024 Bausch Health Co Inc Earnings Call
Unknown Executive, Thomas Vadaketh, Unknown Executive, Thomas Appio
Speaker Change: Greetings. Welcome to the Bausch Health second quarter 2024 earnings call.
Operator: A question and answer session will follow the formal presentation. Please note this conference is being recorded. I would now like to turn the conference over to your host, Garen Serafian, Investor Relations at Bausch. You may begin.
Speaker Change: At this time, all participants are in a listen-only mode.
Speaker Change: A question and answer session will follow the formal presentation. Please note this conference is being recorded. I would now like to turn the conference over to your host, Garen Serafian, Investor Relations at Bausch. You may begin.
Speaker Change: Good morning and welcome to Bausch Health's second quarter 2024 earnings conference call.
Speaker Change: Participating in today's call are Thomas Appio, Chief Executive Officer of Bausch Health, and John Barresi, Interim Chief Financial Officer.
Speaker Change: Before we begin, I'd like to remind you that our presentation today contains forward-looking information.
Unknown Executive: We ask you to take a moment to read the forward-looking statements disclaimer at the beginning of this slide that accompanies this presentation, as it contains important information. Our actual results may vary materially from those expressed or implied in our forward-looking statements, and you should not place undue reliance on any forward-looking statements. We use non-GAAP financial measures to help investors understand our operating performance, which are available on Bausch Health's Investor Relations website. Finally, the financial guidance in this presentation is effective as of today only. Do not undertake any obligation to update guidance.
Speaker Change: We ask you to take a moment to read the forward-looking statements disclaimer at the beginning of the slide that accompanies this presentation, as it contains important information.
Speaker Change: Our actual results may vary materially from those expressed or implied in our forward-looking statements, and you should not place undue reliance on any forward-looking statements.
Speaker Change: Please refer to our SEC filings and filings with the Canadian Securities Administrators for a list of some of the risk factors that could cause our actual results to differ materially from our expectations.
Speaker Change: We use non-GAAP financial measures to help investors understand our operating performance.
Speaker Change: non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and should be considered along with, but not an alternative to, measures calculated in accordance with GAAP.
Speaker Change: You will find reconciliation to our non-GAAP measures in the appendix of the slides that accompany this presentation, which are available on Bausch Health's Investor Relations website.
Speaker Change: Finally, the financial guidance in this presentation is effective as of today only.
Thomas J. Appio: Our discussion today, Thursday, August 1st, will focus on Bausch Health, excluding Bausch & Lomb. However, we will briefly comment on Bausch & Lomb's results announced yesterday and refer to year-over-year comparisons with the same period last year, unless otherwise noted. With that, it is my pleasure to turn the call over to our CEO, Thomas Appio. I am pleased with the continued positive momentum we saw in the second quarter following our strong start to the year, positioning us well to continue to drive growth and execute against our strategic priorities in the back half of the year, all while focused on patient-centered outcomes.
Speaker Change: Do not undertake any obligation to update guidance.
Speaker Change: Our discussion today, Thursday, August 1st, will focus on Bausch Health excluding Bausch & Lomb. However, we will briefly comment on Bausch & Lomb's results announced yesterday.
Speaker Change: We will refer to year-over-year comparisons with the same period last year, unless otherwise noted. With that, it is my pleasure to turn the call over to our CEO , Thomas Appio. Tom?
Thomas Appio: Thank you, and welcome to those of you joining the call this morning.
Thomas Appio: I am pleased with the continued positive momentum we saw in the second quarter following our strong start to the year.
Thomas Appio: Positioning us well to continue to drive growth and execute against our strategic priorities in the back half of the year, all while focused on patient-centered outcomes.
Thomas Appio: The second quarter marked our fifth consecutive quarter of year-over-year growth in both revenue and adjusted EBITDA.
Thomas J. Appio: For the second quarter of 2024, revenues for Bausch Health, excluding B&L, were $1.19 billion, up $55 million, or 5% on a reported basis and 6% on an organic basis when compared to the second quarter of 2023. With organic growth in all of our segments, led by Zyfaxan, with 10% organic growth year over year, and Solta, with 19% organic growth, led by Asia Pacific, where our business approximately doubled in South Korea, with China and Taiwan each posting high teens organic growth. Adjusted EBITDA for Bausch Health, excluding BNL, was $614 million, an increase of approximately 8% compared to the prior year.
Thomas Appio: For the second quarter of 2024, revenues for Bausch Health, excluding B&L, were $1.19 billion, up $55 million, or 5% on a reported basis, and 6% on an organic basis,
Thomas Appio: When compared to the second quarter of 2023, with organic growth in all of our segments.
Thomas Appio: led by Zyfaxan, with 10% organic growth year over year, and Solta, with 19% organic growth, led by Asia Pacific, where our business approximately doubled in South Korea, with China and Taiwan each posting high teens organic growth.
Thomas Appio: Adjusted EBITDA for Bausch Health, excluding BNL, was $614 million, an increase of approximately 8% compared to the prior year.
Thomas Appio: John will provide additional commentary on the financial results later in the call. I want to touch on other key developments during the quarter.
Thomas J. Appio: As we previewed during last quarter's earnings call, in May, we presented data related to our Phase II trial for amicillomide for mild to moderate ulcerative colitis at Digestive Disease Week's annual conference. I came away from these discussions with a clear sense that our efforts are reinforcing our strong position in this area with health care providers. At the European Association for the Study of the Liver Conference in June, we presented data comparing Rifaximin monotherapy to Lactulose monotherapy in preventing overt hepatic encephalopathy recurrence in cirrhosis patients with a history of OHE, which suggests Rifaximin monotherapy has the potential to be a viable treatment option for OHE recurrent risk reduction in the appropriate patient population.
Speaker Change: As we previewed during last quarter's earnings call, in May, we presented data related to our Phase 2 trial for amicillomide for mild to moderate ulcerative colitis at Digestive Disease Week's annual conference.
Speaker Change: I attended this conference and I had the opportunity to meet with a number of key opinion leaders and other industry participants in the gastroenterology space.
Speaker Change: I came away from these discussions with a clear sense that our efforts are reinforcing our strong positioning in this area with healthcare providers.
Speaker Change: At the European Association for the Study of the Liver Conference in June , we presented data comparing Rifaximin monotherapy to Loptulose monotherapy in preventing overt hepatic encephalopathy recurrence in cirrhosis patients with a history of OHE.
Speaker Change: which suggests rifaximin monotherapy has potential to be a viable treatment option for OHE reoccurrence risk reduction in the appropriate patient population.
Thomas J. Appio: Also in June, I had the opportunity to meet with our Solta China team, including our newly appointed China Vice President and General Manager for this important and high-growth market in our new offices in Shanghai. While there, I had the opportunity to review the Thermage FLX launch. I left impressed by the commitment and enthusiasm of the team and excited about the opportunities for Solta in the Asia-Pacific market. I also want to take a moment to highlight important changes to our executive leadership. Amy brings more than 20 years of experience in the pharmaceutical industry, most recently with Galderma, as well as AbbVie and Allergan.
Speaker Change: Also in June , I had the opportunity to meet with our Solta China team, including our newly appointed China Vice President and General Manager for this important and high-growth market in our new offices in Shanghai.
Speaker Change: While there, I had the opportunity to review the Thermage FLX launch. I left impressed by the commitment and enthusiasm of the team and with the excitement about the opportunities for Solta in the Asia-Pacific markets.
Speaker Change: I also want to take a moment to highlight important changes to our executive leadership team.
Speaker Change: Amy Lennar has joined the company as Executive Vice President, U.S. Pharma, with the responsibility for the leadership of the Salix, Neurology, and Generics businesses, as well as market access and commercial operations.
Speaker Change: Amy brings more than 20 years of experience in the pharmaceutical industry, most recently with Galderma, as well as AbbVie and Allergan.
Speaker Change: We also recently announced that our search for Chief Financial Officer has concluded and that J.J. Charhon will join us in mid-August. J.J. has extensive experience leading financial organizations in the healthcare, technology and service industries.
Speaker Change: I also want to thank John Barresi for all his hard work and dedication as interim CFO in addition to his other responsibilities.
Speaker Change: He will resume his role as Senior Vice President and Chief Accounting Officer and remain a valued member of the financial leadership team.
Speaker Change: The additions of Amy and JJ will bring valuable perspective and expertise to the company, and I am looking forward to closely partnering with them and with our teams to drive our transformation into a globally integrated and innovative healthcare company, trusted and valued by patients, employees, and the public.
Speaker Change: Healthcare Providers, Employees, and Investors.
Speaker Change: Speaking of innovation, I will now turn to our R&D pipeline. We continue to make progress on our key R&D initiatives during the quarter and are tracking in line with our previously established timing goals.
Thomas J. Appio: Starting with our GI pipeline for amicillomide, in June, we submitted our draft protocol for our planned phase 3 clinical trial for patients with moderate to severe UC to the FDA, and we plan to meet with authorities in EMEA in the second half of the year. Top-line results for these studies, which together include over 1,000 patients across North America, Europe, and Asia Pacific, are expected by early 2026. Turning now to our aesthetics pipeline.
Speaker Change: Starting with our GI pipeline for amicillomide, in June we submitted our draft protocol for our planned phase 3 clinical trial for patients with moderate to severe UC to the FDA and plan to meet with authorities in EMEA in the second half of the year.
Speaker Change: We also continue to move forward with evaluating Phase II programs for Crohn's disease.
Speaker Change: Our two global phase three studies for our RED-C program with rifaximin for reduction of early decompensation and cirrhosis are in the treatment phase.
Speaker Change: These studies are focused on assessing the efficacy of our refaxment SSD formulation versus placebo to delay the occurrence of hempatic encephalopathy-related hospitalization.
Speaker Change: Top-line results for these studies, which together include over 1,000 patients across North America, Europe , and Asia-Pacific, are expected by early 2026.
Speaker Change: In our dermatology business, we are pleased with the initial response to our U.S. launch of CABTREO, with further marketing efforts planned for this product in the back half of the year. We also anticipate that CABTREO will be approved in Canada in the second half of the year.
Thomas J. Appio: As we have discussed, Thermage FLX and the TR4 return pad have been launched in China as a medical device. Early results are consistent with our expectations, and the product has been well received in the market. In Q2, we also filed an FDA submission for our next generation Fraxel, a fractionated laser device for skin resurfacing, and continue to expect approval could be received in the second half of this year. Finally, our program for Clear and Brilliant Touch, a fractionated laser device for skin rejuvenation, continues to advance.
Speaker Change: Turning now to our Aesthetics Pipeline.
Speaker Change: As we have discussed, Thermage FLX and the TR4 return pad have launched in China as a medical device. For more information, please visit www.thermage.com.
Speaker Change: Early results are consistent with our expectation and the product has been well received in the market.
Speaker Change: In Q2, we also filed an FDA submission for a next generation Fraxel, a fractionated laser device for skin resurfacing and continue to expect approval could be received in the second half of this year.
Speaker Change: Finally, our program for clear and brilliant touch, a fractionated laser device for skin rejuvenation continues to advance.
Thomas J. Appio: We have received approvals in Australia, New Zealand, and the Philippines this year, representing our first approvals outside of the United States, and our plan for regulatory submission in 2024 for Europe, Asia Pacific, and Canadian markets remains on track. Overall, we feel good about the initiatives the team is driving forward related to new market authorizations and next generation products as we continue to grow this global, durable portfolio of aesthetic products. Regarding Norwich's first UNDA for Xifax and 550, as you will recall, on April 11, 2024, the U.S. Court of Appeals for the Federal Circuit affirmed the decision of the U.S. District Court for the District of Delaware. Subsequently, both we and Norwich petitioned the court for a rehearing or en banc, and both petitions were denied by the court.
Speaker Change: We have received approvals in Australia, New Zealand, and the Philippines this year, representing our first approvals outside of the United States, and our plan for regulatory submission in 2024 for Europe , Asia-Pacific, and Canadian markets remained on track.
Speaker Change: Overall, we feel good about the initiatives the team is driving forward related to new market authorizations and next generation products as we continue to grow this global, durable portfolio of aesthetics products.
Speaker Change: Moving to developments with respect to Xifax and litigation.
Speaker Change: Regarding Norwich's first ANDA for Zyfaxan 550, as you will recall, on April 11, 2024, the U.S. Court of Appeals for the Federal Circuit affirmed the decision of the U.S. District Court for the District of Delaware.
Speaker Change: Subsequently, both we and Norwich petitioned the court for a rehearing or a hearing en banc, and both petitions were denied by the court. This UNDA remained barred from approval by the FDA until October 2029.
Thomas J. Appio: This UNDA remains barred from approval by the FDA until October 2029. We remain focused on our balance sheet and liquidity, ending the second quarter with approximately $1.5 billion of liquidity. In Q2, we repaid over $360 million of debt, including repurchasing approximately $305 million of bonds with a 2025 maturity. Now, turning now to the potential full separation of Bausch & Lomb. The full separation of Bausch & Lomb continues to be a strategic priority. We continue to evaluate strategies regarding the potential full separation with the objective of ensuring that any transaction results in two appropriately capitalized companies.
Speaker Change: During the second quarter, we initiated lawsuits in the U.S. District Court for the District of New Jersey regarding Norwich's amended ANDA and amnial's ANDA directed to Zyfaxan 550 milligram for IBSD.
Speaker Change: As a leader in gastroenterology health, we continue to vigorously defend our intellectual property and are committed to advocating for the safety of patients who have benefited from continued access to Zyfaxan.
Speaker Change: We look forward to continuing to serve our patients as every patient deserves better health outcomes and the chance to make the most of life.
Speaker Change: We also continue to prepare for the first trial in the remaining shareholder opt-out cases, which is currently scheduled to commence on September 3rd.
Speaker Change: On the granted trust matter, we continue to expect the settlement with the IRS to be finalized in the coming months. As we have previously indicated, the currently anticipated outcome of these settlements does not have a material impact on the company's results or cash flows.
Speaker Change: We remain focused on our balance sheet and liquidity, ending the second quarter with approximately $1.5 billion of liquidity.
Speaker Change: In Q2, we repaid over $360 million of debt.
Speaker Change: including repurchasing approximately 305 million of bonds with 2025 maturities.
Speaker Change: Turning now to the potential full separation of Bausch and Long.
Speaker Change: The full separation of Bausch & Lomb continues to be a strategic priority. We continue to evaluate strategies regarding the potential full separation with the objective of ensuring that any transaction results in two appropriately capitalized companies.
Thomas J. Appio: Any decision regarding if and when a separation occurs or its structure will be based on and, As a leadership team, we are committed to driving growth by leveraging our existing assets, making targeted investments, and executing with commercial excellence, while continuing to progress our pipeline all with a patient-centered mentality. With that, I will turn the call over to John Barresi, who will provide further details on our second quarter performance.
Speaker Change: Any decision regarding if and when a separation occurs or its structure will be based on and subject to an assessment of all relevant factors and circumstance. Any potential separation will also be subject to shareholder and other applicable approvals.
Speaker Change: As a leadership team, we are committed to driving growth by leveraging our existing assets, making targeted investments, and executing with commercial excellence.
John Barresi: While continuing to progress our pipeline, all with a patient-centered mentality. With that, I will turn the call over to John Barresi, who will provide further details on our second quarter performance. John ?
John S. Barresi: Thanks, Tom. Hello, everyone, and thanks for joining us. Second quarter revenues for Bausch Health, excluding B&L, were $1.19 billion, up 5% on a reported basis and 6% on an organic basis over the same quarter last year, led by Sulta and, as Tom noted, Zyfaxan Performance within Salix. Speaking of Salix, let's now turn to segment revenue performance starting on slide 12. Second quarter Salix revenues increased $1 million on a reported basis to $558 million, driven by 10% growth year-over-year in Xifaxin revenues.
John Barresi: Thanks, Tom. Hello, everyone, and thanks for joining us. We ended the second quarter with consolidated revenues for Bausch Health of $2.4 billion, up 11% on a reported basis and 8% on an organic basis over the second quarter last year.
John S. Barresi: Revenues grew $6 million, or 1% on an organic basis, which reflects the impact of divestitures and discontinuations of certain non-promoted products. Wellestore declined 9% over the prior year period due to lower net pricing relative to Q2 of the prior year and softer demand, with TRXs declining by 3%.
John Barresi: Second quarter revenues for Bausch Health, excluding B&L, were $1.19 billion, up 5% on a reported basis and 6% on an organic basis over the same quarter last year, led by Sulta and, as Tom noted, Zyfaxan performance within Salix.
Speaker Change: Speaking of Salix, let's now turn to segment revenue performance starting on slide 12.
Speaker Change: Second quarter Salix revenues increased $1 million on a reported basis to $558 million, driven by 10% growth year-over-year in Xifaxin revenue.
Speaker Change: Relastore, Trulance, and the non-promoted portfolio within this segment experience declines in the quarter.
Speaker Change: Revenues grew $6 million, or 1% on an organic basis, which reflects the impact of divestitures and discontinuations of certain non-promoted products.
Speaker Change: The Faxon continued to represent the majority of Salix segment revenues during the quarter and saw strong growth in underlying demand.
Speaker Change: Bifaxian revenues in Q2 increased 10% compared to the prior year period. While retail prescription growth was 1% in Q2 versus the prior year, extended units grew 4%, a continuation of the trend we have seen of strong growth in non-retail units, including hospitals and outpatient clinics.
Speaker Change: Wellestore declined 9% over the prior year period due to lower net pricing relative to Q2 of the prior year and softer demand, with TRX's declining by 3%.
John S. Barresi: Trulance TRX growth was 5%, but revenues declined approximately 50% year-over-year due in large part to net pricing pressure. It's important to note that Q2 this year for Trulance is also compared to a very strong second quarter in 2023, which saw revenues increase 73% on script growth of 14%. International revenues were $276 million during the quarter, an increase of 7% on a reported basis and 6% on an organic basis compared to the prior year period.
Speaker Change: Trulance TRX growth was 5%. However, revenues declined approximately 50% year-over-year due in large part to net pricing pressure.
Speaker Change: It's important to note that Q2 this year for Trulance is also compared to a very strong second quarter in 2023, which saw revenues increase 73% on script growth of 14%.
Speaker Change: We also continue to experience meaningful pressure on both pricing and volumes in our non-promoted portfolio in this segment.
Speaker Change: International revenues were $276 million during the quarter.
Speaker Change: An increase of 7% on a reported basis and 6% on an organic basis compared to the prior year period.
John S. Barresi: All three regions posted both reported and organic growth, led by double-digit organic growth in Canada and mid-single-digit growth in Latin America. In Canada, growth was led by our promoted portfolio, including Rialtris, Contrave, and Jublia. Total medical revenues were $102 million during the second quarter, an increase of 16% on a reported basis and 19% on an organic basis over the prior year period. Thermage FLX was launched in the second quarter.
Speaker Change: All three regions posted both reported and organic growth, led by double-digit organic growth in Canada and mid-single-digit growth in Latin America. In Canada, growth was led by our promoted portfolio, including Rialtris, Contrave, and Jublia.
Speaker Change: Total medical revenues were $102 million during the second quarter, an increase of 16% on a reported basis and 19% on an organic basis over the prior year period.
Speaker Change: Delta's growth was led by APAC, most notably South Korea, followed by China.
John S. Barresi: As Tom noted, early results are in line with our expectations, and we continue to be encouraged about the potential for this product line. However, we did see a softening of performance in the U.S. While revenue grew sequentially relative to Q1 of 2024, it declined by 4% year over year. We continue to build and transform the leadership team as well as invest in the sales team and tools to enable this market to deliver sustained growth going forward. Revenue for the generics business declined 11% on a reported basis and 4% on an organic basis.
Speaker Change: Thermage FLX launched in the second quarter. As Tom noted, early results are in line with our expectations, and we continue to be encouraged about the potential for this product line.
Speaker Change: We did see a softening of performance in the U.S. While revenue grew sequentially relative to Q1 of 2024, it declined by 4% year over year.
Speaker Change: We continue to build and transform the leadership team as well as invest in the sales team and tools to enable this market to deliver sustained growth going forward.
Speaker Change: Diversified revenues were $251 million during the second quarter, an increase of 10% on a reported basis and 12% on an organic basis compared to the prior year period, reflecting the impact of divestitures and discontinuations of certain non-promoted products.
Speaker Change: In dermatology, revenue grew by 21% on a reported basis and 25% on an organic basis in the quarter compared to the prior year period as we continue to focus on returning this business to consistent growth.
Speaker Change: Growth in the quarter benefited from favorable net pricing comparisons year over year, which we do not expect will be sustained over the remainder of the year, while volumes for our non-promoted products continue to be pressured.
Speaker Change: Captrio launched in January and has performed in line with our expectations. We are continuing to invest in marketing for this key product in the second half of the year, which we will expect will enable it to become a more meaningful driver of growth in our dermatology business as the year progresses.
Speaker Change: Neurology saw low double-digit revenue growth, posting an 11% increase year-over-year as we continued to benefit from competitor supply disruptions.
Speaker Change: This segment also benefited from favorable net pricing comparisons year over year. While Buterin and Applension revenues grew despite lower volumes, as we continue to execute our strategy to manage scripts for overall profitability.
Speaker Change: Revenue for the generics business declined 11% on a reported and 4% on an organic basis.
John S. Barresi: This business continues to operate in a highly competitive space, and while we have seen some areas of growth, including products such as Euceris AG, the net pricing pressures in this business are meaningful, and we continue to evaluate this portfolio to optimize our margins and profitability. Dentistry revenues were flat year over year; however, we continue to expect this business to grow for the full year. Turning to the second quarter P&L on slides 17 and 18, the second quarter consolidated adjusted gross margin was 70.9%, 80 basis points higher compared with the prior year. Consolidated adjusted operating expenses for the second quarter were $955 million, an increase of $123 million.
Speaker Change: This business continues to operate in a highly competitive space, and while we have seen some areas of growth, including products such as Euceris AG, the net pricing pressures in this business are meaningful, and we continue to evaluate this portfolio to optimize our margins and profitability.
Speaker Change: Dentistry revenues were flat year over year, however we continue to expect this business to grow for the full year.
Speaker Change: As shown on slide 16, Bausch and Lohm revenues were $1.2 billion during the second quarter, up 17% on a reported basis and 10% on an organic basis compared to the prior year period, with growth across all Bausch and Lohm businesses, key product franchises, and geographies.
Speaker Change: Turning to the second quarter P&L on slides 17 and 18, second quarter consolidated adjusted gross margin was 70.9 percent, 80 basis points higher compared with the prior year.
Speaker Change: For Bausch Health, excluding B&L, adjusted gross margin for the second quarter was 79.9%, approximately 40 basis points higher than last year's second quarter.
Speaker Change: At B&L, adjusted gross margin was 62.1% of Q2 of 2024 compared to 59.7% for Q2'23 driven primarily by product mix including the impact of Zydra.
Speaker Change: Consolidated Adjusted Operating Expenses for the second quarter were $955 million, an increase of $123 million.
Speaker Change: For Bausch Health excluding B&L, adjusted operating expenses increased by approximately $6 million compared to the second quarter of 2023.
Speaker Change: Hire A&P, you're run by investments in Sulta and Dermatology for the launch of CABTRIO, offset by lower G&A expenses as we continue to focus on cost management.
John S. Barresi: We expect A&P increases to continue to moderate over the course of the year as we continue to annualize our investments in selling and marketing for Zyfax. B&L reported an increase of $117 million in adjusted operating expenses due primarily to increased selling in A&P driven by investments behind Zydra and Maibo. Consolidated Adjusted R&D Expense for the quarter was $156 million, LAC compared to the prior year, and represented 6.6% of product sales compared to 7.3% for the prior year period.
Speaker Change: We expect A&P increases to continue to moderate over the course of the year as we continue to annualize our investments in selling and marketing for Zyfaxan.
Speaker Change: B&L reported an increase of $117 million in adjusted operating expenses due primarily to increased selling in A&P driven by investment behind Zydra and Maibo.
Speaker Change: Consolidated adjusted R&D expense for the quarter was $156 million, LAC compared to the prior year, and represented 6.6% of product sales compared to 7.3% for the prior year period.
John S. Barresi: For Bausch Health, excluding B&L, R&D expenses of $72 million were largely in line with the same quarter last year as we begin to annualize the step-up in investment from 2023. Turning to cash flow, on a consolidated basis, Bausch Health generated $380 million of operating cash flow and $287 million of adjusted operating cash flow in the second quarter. For Bausch Health, excluding B&L, adjusted operating cash flow was $264 million for the second quarter, compared to adjusted operating cash flow of $140 million for the second quarter of 2023, with the changes primarily reflecting improved business performance, timing of cash flows related to income taxes, and more favorable working capital movements in 2024 relative to 2023.
Speaker Change: For Bausch Health, excluding B&L, R&D expenses of $72 million were largely in line with the same quarter last year as we begin to annualize the step-up in investment from 2023.
Speaker Change: Second quarter consolidated adjusted EBITDA attributable to Bausch Health was $798 million, an increase of $71 million or 10% as compared to the same quarter last year.
Speaker Change: Adjusted EBITDA for Bausch Health excluding BNL was $614 million, an increase of 8% from $568 million in the second quarter of 2023.
Speaker Change: Turning to cash flow. On a consolidated basis, Bausch Health generated $380 million of operating cash flow and $287 million of adjusted operating cash flow in the second quarter.
Speaker Change: For Bausch Health, excluding B&L, adjusted operating cash flow was $264 million for the second quarter, compared to adjusted operating cash flow of $140 million for the second quarter of 2023, with the changes primarily reflecting improved business performance.
Speaker Change: Timing of cash flows related to income taxes and more favorable working capital movements in 2024 relative to 2023.
John S. Barresi: As we've discussed in prior quarters, as a result of the accounting treatment for the senior notes issued as part of our 2022 debt exchange, a portion of our cash interest payments is classified as financing cash flows. Adjusted cash flow includes payments of the full contractual interest as well as adjustments for the payment of separation costs, business transformation costs, and litigation and other matters net of insurance proceeds.
Speaker Change: As we've discussed in prior quarters, as a result of the accounting treatment for the senior notes issued as part of our 2022 debt exchange, a portion of our cash interest payments are classified as financing cash flows.
Speaker Change: Adjusted cash flow includes payments of the full contractual interest as well as adjustments for the payment of separation costs, business transformation costs, and litigation and other matters net of insurance proceeds.
John S. Barresi: Now let's turn to our balance sheet on slide 19. We continue to evaluate alternatives to reduce our overall leverage while also focusing on our maturity profile. In the second quarter, we repurchased an additional $305 million in principal value of our 9% unsecured bonds maturing in 2025, in addition to the $250 million in principal value of 2025 and 2026 maturities repurchased in Q1. Excluding B&L debt, approximately 85% of our debt is fixed, and approximately 70% of the company's debt on a consolidated basis is fixed.
Speaker Change: Now let's turn to our balance sheet on slide 19.
Speaker Change: We continue to prioritize liquidity management and the delevering of our balance sheet. In the second quarter, we reduced our debt for Bausch Health excluding B&L by approximately $360 million, while debt net of cash decreased by approximately $250 million.
Speaker Change: We continue to evaluate alternatives to reduce our overall leverage while also focusing on our maturity profile.
Speaker Change: In the second quarter, we repurchased an additional $305 million in principal value of our 9% unsecured bonds maturing in 2025 in addition to the $250 million in principal value of 2025 and 2026 maturities repurchased in Q1.
Speaker Change: Year-to-date, we've retired approximately $555 million in principal value of 2025 and 2026 maturities, capturing approximately $25 million of discount in the process.
Speaker Change: We also repaid $57 million of additional debt this quarter consisting of mandatory term loan amortization and repaying a portion of the amount outstanding under our AR facility.
Speaker Change: At the end of the second quarter, Bausch Health, excluding B&L, had $300 million outstanding under our AR facility and had no outstanding borrowings and approximately $950 million of availability under our revolving credit facility.
Speaker Change: As shown on slides 20 and 21, total debt for Bausch Health, excluding Bausch and Lohm, at the end of the quarter was $15.7 billion.
Speaker Change: which consisted of approximately $14.4 billion of restricted debt issued by Bausch Health excluding B&L and approximately $1.3 billion of unrestricted debt, which includes the $1 billion of senior secured notes issued by the unrestricted subsidiary created in the third quarter of 2022.
Speaker Change: and the $300 million drawn under our AR facility.
Speaker Change: Excluding B&L debt, approximately 85% of our debt is fixed and approximately 70% of the company's debt on a consolidated basis is fixed.
Speaker Change: We ended the quarter with approximately $1.5 billion of liquidity, which includes approximately $320 million of cash and $950 million of availability under our revolving credit facility, as well as the underwrought availability under our AR facility.
John S. Barresi: We are focused on strengthening our balance sheet, including evaluating and utilizing, as appropriate, various tools and strategies along with our existing liquidity to manage both our maturity profile and our overall leverage. Turning to guidance, we are maintaining our guidance for Bausch Health, excluding B&L. For the full year 2024, we continue to expect revenue of $4.7 billion to $4.85 billion and adjusted EBITDA of $2.36 billion to $2.46 billion, as well as adjusted operating cash flow in a range of approximately $775 million to $825 million.
Speaker Change: We are focused on strengthening our balance sheet, including evaluating and utilizing, as appropriate, various tools and strategies, along with our existing liquidity, to manage both our maturity profile and our overall leverage.
Speaker Change: Turning to guidance, we are maintaining our guidance for Bausch Health excluding B&L.
Speaker Change: For the full year 2024, we continue to expect revenue of $4.7 billion to $4.85 billion and adjusted EBITDA of $2.36 billion to $2.46 billion, as well as adjusted operating cash flow in a range of approximately $775 to $825 million.
Speaker Change: I'll now hand the call back to Tom.
Tom: Thank you, John .
Tom: I am proud of the progress we have made this quarter, driving consistent growth.
Tom: Maintaining disciplined capital allocation, continuing to progress our pipeline and growing our footprint in our existing business areas, all while improving our operational effectiveness and remaining focused on cost management.
Tom: Our performance thus far in 2024 provides us with momentum for the second half of the year as we continue to focus on delivering against our 2024 priorities.
John S. Barresi: Driving a results-oriented culture of accountability, delivering on our revenue-adjusted EBITDA and adjusted operating cash flow commitments. These priorities help support our ambition of being a globally integrated healthcare company trusted and valued by patients, healthcare providers, employees, and investors as we relentlessly drive to deliver better health outcomes, ultimately driving better health outcomes for patients globally. I look forward to working with the entire team, including our new executive leadership team members, to drive our transformation into a globally integrated and innovative health care company.
Tom: Driving a results-oriented culture of accountability, delivering on our revenue-adjusted EBITDA and adjusted operating cash flow commitments.
Tom: Executing with operational excellence and a cost-focused mindset across the enterprise. Intensifying our focus and operating rigor behind R&D and business development.
Tom: And, continuing to evaluate strategic alternatives, as we have said, achieving the full separation of BNL remains a priority.
Tom: These priorities help support our ambition of being a globally integrated healthcare company trusted and valued by patients, healthcare providers, employees, and investors as we relentlessly drive to deliver better health outcomes.
Tom: I want to thank the entire global Bausch Health team for their hard work and dedication to growing our company and delivering on our commitments.
Tom: Ultimately driving better health outcomes for patients globally. I look forward to working with the entire team, including our new executive leadership team members, to drive our transformation into a globally integrated and innovative health care company.
John S. Barresi: Thank you for your interest in and support of our company. With that, we will now take questions. Operator, please open the line for Q&A. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Tom: Thank you for your interest in and support of our company. With that, we will now take questions. Operator, please open the line for Q&A.
Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions.
Thomas J. Appio: One moment, please, while we poll for questions. Yeah, so Glen, as you know, you see in our strategic priorities, the separation continues to be a strategic priority, and we're diligently working towards that. You know, clearly, as we look at it, you look at the performance of our company, Bausch & Lomb. Again, both companies are performing well, and it makes strategic sense to separate them. What I would say is, you know, a broad framework, you know, overall, on the separation, there's a lot, it's, you know, multifactorial of what we need to work on.
Speaker Change: And the first question today is coming from Glen Santangelo from Jefferies.
Speaker Change: Glenn, you're live. Oh, yes.
Glenn Sant'Angelo: Good morning. Thanks for taking my question. Hey, Tom, obviously a lot of focus on the balance sheet and leverage here. And as you're obviously aware, about a week ago, there was a media report suggesting that the company was having some negotiations with the co-op.
Speaker Change: And the company, obviously, subsequently put out a press release suggesting that some of those media reports were not true. Can you comment on whether you're having any dialogue with the co-op at this point? Because it's not exactly clear to us what rights they have.
Speaker Change: And what would force a negotiation at this point? And then I just had a quick follow-up.
Speaker Change: Thanks, Glen. Thanks for the question. I appreciate it.
Speaker Change: Let's just take it like two answers to your question. Firstly, it's our general policy not to comment on discussions with particular stakeholders. However, given the circumstances last week, I think it's important.
Speaker Change: Again, I can't control what rumors are out there in the marketplace, but I want to reiterate that in our press release last week...
Speaker Change: that we issued that said, you know, Bausch Health is not considering bankruptcy or insolvency proceedings of any kind. So we are not.
Speaker Change: And that's a full stop there. So unfortunately, these things get published, but, you know, again, it's rumor. And, you know, as I've said many times, we just continue to...
Speaker Change: work to grow this company and to generate results and as you saw in the quarter, we had really great performance with Faxon growing by 10, Salta growing by 19, International growing by 6 and diversified.
Speaker Change: growing by 12. So it was a really great quarter for us on performance and really that's where the team's focused.
Speaker Change: Awesome. Maybe if I could just ask one quick follow-up. I mean, you also commented...
Speaker Change: A full separation of Bausch and Lomb remains a strategic priority, and I think in your prepared remarks you said, you know, the focus is on having two appropriately capitalized companies, and that's kind of, you know, a generalized
Speaker Change: And so, I think what people are really trying to understand is, you know, what do you think is an appropriate amount of leverage?
Speaker Change: for Bausch Health or Remainco, and you said that any separation would require a shareholder and other applicable approvals. What exactly are those other applicable approvals? Thanks, and I'll stop there.
Speaker Change: Yeah, so, Glen, you know, clearly as you, you know, you see in our strategic priorities, you know, the separation continues to be a strategic priority and we're diligently working towards that.
Speaker Change: Unknown Speaker 07.01.2010
Speaker Change: As we look at it, you look at the performance of our company, of Bausch & Lomb, again, both companies are performing well.
Speaker Change: and it makes strategic sense on the separation.
Thomas J. Appio: We need strong operational excellence, and we need, you know, effective debt management. And, you know, working through some of those and looking forward to updating you and others as we move forward on this.
Speaker Change: What I would say is a broad framework overall on the separation,
Speaker Change: Unknown Executive, Thomas Vadaketh, Unknown Executive, Thomas Appio
John Barresi: And Glen, it's John . Maybe I'll just address your question on appropriately capitalized. And this is consistent with what we said, I think, for the past
John Barresi: Unknown Executive, Thomas Vadaketh, Unknown Executive, Thomas Appio
Operator: Thank you. The next question is coming from Mike Nedelcovych from TD Count. Mike, your line is live.
John Barresi: Okay, thanks for the comments.
Speaker Change: Thank you. The next question is coming from Mike Nedelcovych from TD Cowen. Mike, your line is live.
Mike Nadelkovich: Thank you for the questions. I have two. My first relates to the separation from Bausch and Loewen. Please tell me if this is a bad assumption, but it seems that every day that passes,
Mike Nadelkovich: Full separation becomes less and less likely. So my question is, what is plan B? Can you articulate an alternative vision for the consolidated company should you arrive at the decision that separation is not feasible?
Speaker Change: And my second question relates to InnoCellomod. It seems as though you're pursuing a Phase III IBD program. That, of course, would be expensive, and InnoCellomod would be third to market in its class. So at a high level, can you tell us what commercial assumptions you're making to justify the cost of the Phase III program?
Speaker Change: Thank you.
Speaker Change: Thanks, Mike. I appreciate the question. As I've said before, the separation continues to be a strategic priority and we're diligently working towards that goal.
Speaker Change: That's all I'm going to say at this time. We continue to work on things that will get us to a full separation of being out.
Speaker Change: Regarding your question on Amicillamide...
Speaker Change: Thank you. The next question is coming from Jason Gerberry from Bank of America. Jason, your line is live.
Thomas J. Appio: Oh, hey, guys. Sorry to beat a dead horse, but I just wanted to come back to the topic on the capitalization target. And then secondly, just the facts and scripts for this quarter flat on a year-on-year basis. Wondering how you think about cash flow versus step-up investment to drive growth. Just on the Zyfaxin dynamics, good NBRX but flat TRX. How do you reconcile that?
Jason Gerberry: Oh, hey guys. Sorry to beat a dead horse, but just wanted to come back to the topic on the capitalization target. Is it a fair, high-level, like, synopsis, just to say?
Speaker Change: Given negotiations with the co-op that leverage left for Romainco is a moving target and sort of critical is pushing out the 2027-2028.
Speaker Change: Maturities, if something's going to get done there. And then secondly, just as I fax some scripts this quarter flat on a year-on-year basis, wondering how you think about whether it's the appropriate stage of the life cycle to optimize this business for cash flow versus step-up investment to drive growth. Thanks.
Speaker Change: [inaudible]
Speaker Change: If you take a look at where we are with Zyfax and you mentioned the script growth, one of the things that I'm focusing on here is the NBRX growth, and if I take a look at the NBRX growth.
Speaker Change: and the data there. When you really look at it...
Speaker Change: There is a lot of untreated patients out there today.
Speaker Change: From the data that we see, you know, we see that we're treating probably half the patient population in OHE at the present time.
Speaker Change: So, I think there's, you know, a lot of runway here.
Speaker Change: to continue to grow Zyfaxan. So, you know, a couple of things that we've done.
Speaker Change: Last year since I became CEO was number one to launch our AI engine. And that engine has been launched now for 12 months and it consistently, continually refines the panel of where we're going to making sure that the HCPs.
Speaker Change: Who are going to the right HCPs and also delivering the right message.
Speaker Change: There's a lot of opportunity here to continue to grow it. If you take a look also, one of the things that we've put in place is our DTC campaign. Historically, in the past, we haven't done DTC in the HE segment, and now we have Bellamy Young, who's...
Speaker Change: And then lastly is really looking at the treatment and really the disease state of IBSD and OHE. And in this case, we have put a medical affairs team in place.
Speaker Change: Yeah, Jason, and just to the first part of your question, I think Tom said it a few minutes ago, but
Speaker Change: We don't comment on any discussions and haven't said that we are negotiating with anyone at this point in time. So I just want to reiterate that point from Tom's earlier comment.
Speaker Change: But to your question of, you know, leverage for RemainCo.
Speaker Change: As we've talked about consistently, right, we are looking to balance leverage and maturity profile. If you look at slide 21 in the earnings deck that we published this morning,
Tom: You'll see we do have a meaningful amount of 27 and 28 maturities, and so, yes, that is part of what we look at when we think about how to manage the balance sheet. Got it. Tom, can I ask a quick follow-up? Sure. Thank you.
Thomas J. Appio: We look at, like half the business historically has been IBS. That's maybe more of an acute use indication. Yeah, I think that when you look at it, if you look at the MBRX, eventually, down the road, they will turn into TRXs. What we are seeing, the dynamic in the market is this shift to non-retail, and then also where those scripts are going from an MBRX perspective, we're trying to see where they are, but they will eventually become TRXs.
Tom: We look at like half the business historically has been IBS, that's maybe more of an acute use indication. Is there just a replacement dynamic with these NBRXs that are just having a hard time keeping up?
Thomas J. Appio: But if you look at the non-retail, it's really up, and then if you look at the extended units, when we look at this business, it's up 4%. So when you look at just TRXs, it's sometimes difficult to see where they're going.
Operator: But based on the data that we have and how we're tracking it, we are confident that we're going to see growth, and clearly, MBRX is the first stage. Thank you. Operator, next question. The next question will come from Umer Raffat from Evercore ISI. Umer, your line is live.
Speaker Change: Thanks. Transcribed by https://otter.ai
Speaker Change: Thank you. The next question will come from Umer Raffat from Evercore ISI. Umer, your line is live.
Umair Rafat: Hi guys, thanks for taking my question. I'll focus on two as well. First, on your Red Sea trial for the new formulation, my understanding is it's to prevent a first encephalopathy episode rather than recurrence.
Speaker Change: Isn't that an indication that would be used off-label with the generic ZEF-FACS in any way? Can you speak to that?
Speaker Change: Cash flow guidance for the company is $800 million midpoint for the year.
Speaker Change: Salix segment will do operating profit about $1.5 billion, based on your disclosures. Avoid Xifaxin is by far the most important. So said differently, Xifaxin exceeds the total cash flows of the company.
Speaker Change: So, in that backdrop, and considering that FACTS and GENERIC is definitely happening, either in a year or in three years, what aggressive action are you considering? I know you mentioned…
Thomas J. Appio: Yeah, Umer, thanks for the question. I'll take the RED-C question first, and then I'll hand the – speaking about the debt to John. When we take a look at RED-C, yes, you're correct. It is for OHE prevention.
Speaker Change: Yeah, Umer, thanks for the question. I'll take the Red Sea question first, and then I'll hand the speaking about the debt to John .
Speaker Change: When we take a look at RED-C, yes, you're correct. It is for OAT prevention. So if we take a look at
Thomas J. Appio: So if we take a look at what we – and you talked about generic Rifaximin, but of course, this is a new formulation. This is Rifaximin solid with 40-milligram tablets being studied in the delay of emphatic encephalopathy. So when we look at it, clearly, this is two times – three times the size of the market that we have today with the current Rifaximin. So with our different formulation and what we've studied, we do not think that the generic is going to be used for prevention.
Speaker Change: What we and you talked about the generic rifaximin, but of course, this is a new formulation. This is rifaximin solid
John S. Barresi: We think there's a long runway here to really move into the prevention space rather than the treatment space. What I would also say is that when you look at this new formulation, it will have better water solubility, so that should be able to penetrate the small intestine lumen, so that will really help us. And also, lastly, remember, RED-C is a global program where our current 550 program is just a U.S. product. So we believe that, of course, when we get the data, this could be a really great opportunity to transform our company and grow.
Speaker Change: What I would say is also when you look at this new formulation, you know, it will have
Speaker Change: better water solubility. So, you know, that should be able to penetrate the small intestine lumen. So that, you know, will really help us. And also, lastly, remember, REDD-C is a global program where our current...
Speaker Change: Of course, when we get the data, that this could be a really great opportunity to transform our company and grow. What I'll do now is turn it over to John to just highlight, to talk about some of the questions you had in the second part.
John S. Barresi: What I'll do now is turn it over to John to just highlight, to talk about some of the questions you had in the second part. Yeah, thanks for the question, Umer. Without getting into a full walk-through of the answer here, I'll call out a couple of things to your point, I think. The cash flow metric this year, of course, is after interest.
John Barresi: Yeah, thanks for the question, Umer. Without getting into a full walk in the answer here, I'll call out a couple of things to your point, I think.
John Barresi: And we're focused on growing those, and we're focused on advancing the pipeline, as we just talked about with Red Sea. And so as we think about the longer term, those three elements are critical to how we move forward for the long term.
Speaker Change: Operator, next question.
Speaker Change: Thank you. The next question will be from Leszek Sulewski from Truist Securities. Leszek, your line is live.
John S. Barresi: So, it's levered free cash flow or levered and proper in cash flow, and which is why it's important to continue to manage the balance sheet and continue to focus on reducing our debt. At the same time, we remain focused on growing the business. There is a meaningful part of our business that is not Zyfaxan, including businesses like Sulta, and we're focused on growing those, and we're focused on advancing the pipeline, as we just talked about with Red Sea. And so, as we think about the longer term, those three elements are critical to how we move forward for the long term. Good morning.
Thomas J. Appio: Thank you for taking my questions. First, can you comment on any timelines on the rulings we should be aware of ahead of the amended and lawsuit versus Norwich and the latest and the filing from Amneal? Second, on Ballistor, what's driving some of the weakness?
Thomas J. Appio: Is there any pressure on the alter-age script trends that impact this product ultimately? And then third, it does not sound like you've been in discussions with the group, but can you comment if there have been any indications that some of the lenders will be putting the pressure on the separation to be put on hold? Thank you. Yeah, thanks, Michael, for the question. Clearly, as I've said on many calls, you know, I love this business.
Speaker Change: Since the original Norwich decision, I just would like to make sure we emphasize that there are new IBSD patents. And so as we move on and look between the Norwiches and Amnil, there are different patents.
Speaker Change: Dispute here. So and also just would like to say, you know, Teva, you know, as we are aware, Teva continues to be and, you know, remain the first filer on the USA Facts in 550.
Speaker Change: On the second part of your question on driving the Relestor weakness and the TRX pressure, you know, it really comes down to, you know, some of the payer looking at, you know, what the payers were and, you know, what coverage we had.
Speaker Change: You know an opportunity with this product, but as we as we look at it
Speaker Change: That's where their pressure came in the second quarter. Lastly, on the co-op, as John already said, our general policy is not to comment on discussions with particular stakeholders at this time.
Speaker Change: So, anything else, John , you want to add? No. I think that covers it. Okay.
Speaker Change: I'm just going to keep coming back to the question on solvency and what is the path forward or the priority, as Umer put it. So you have, I believe...
Speaker Change: 9 billion worth of maturities coming up around the same time frame that Zyfaxan
Speaker Change: So I guess I'll just ask that.
Speaker Change: That's number one. And then related to that, you're talking about the R&D pipeline. I get that.
Speaker Change: Regarding Amicelamod, Red Sea, etc. etc. Is there anything else you can do in terms of bringing in assets?
Speaker Change: Particularly in the context of your financial constraints, maybe give us some sense of what you can do there to bolster the R&D. Thanks.
Speaker Change: Sure. Thanks for the question. So let me take the last part first. I mean, I highlight the R&D programs that are ongoing. And, you know, of course, we talk about Red Sea.
Speaker Change: I think that this is our first opportunity, clearly really wanting to make sure we get those studies completed and get the drug launched.
Speaker Change: Certainly, to the future.
Speaker Change: The second thing is, is that there's many ongoing business.
Speaker Change: to continuing to grow, invest behind that business. I did talk about some of the R&D capabilities there as well. We're excited about what we have. Plus, there's also some BD that's going on to see, you know, what other options out there to bring into the portfolio. So, I would think from an R&D perspective, a BD perspective, you know, where we're really
Speaker Change: Transcripts provided by Transcription Outsourcing, LLC. The opinions rendered herein are those of the guests, and not necessarily those of Douglas Goldstein, Profile Investment Services, Ltd., or Israel National News. Readers should consult with a professional financial advisor before making any financial decisions. Please see the complete disclaimer at https://sites.google.com.au If you have any questions or other problems, please post them in the comments. I am happy to answer any and all questions you may have. Please see the complete disclaimer at https://sites.google.com.au
Speaker Change: I just would like to just, before I hand it over to John to take you through specifically,
John Barresi: The performance of this company over the last five quarters, growing revenue.
John Barresi: growing EBITDA, you know, if you take a look, Zyfaxan.
Speaker Change: 10%, Solta 19%, International 6%, Diversified 12%. The team is working hard to grow this business.
Speaker Change: I'll just hand it over to John to talk specifically about some of the points you raised on solvency and the debt maturities.
John Barresi: And if you look beyond those near-term tools, we have, as Tom said, a diverse product and a diverse geographic footprint. We have the active R&D pipeline. We've demonstrated, you know, a track record of growth over the past five quarters. And those are all tools that we can use.
John Barresi: to do things like continue to repurchase and retire debt, which then, you know...
Speaker Change: It allows us to save on interest, et cetera, and becomes a bit of a nice circle there. Look at asset sales and other types of transactions we've been able to do in the past. We look at all those tools when we think about the leverage profile beyond the near-term debt.
Speaker Change: Hey, good morning, Tom, John , Jaron. Maybe hopping on to the last question on relating to Solta. I wonder if you could maybe get a bit more granular on the reception of Thermage Epilex in China since its January approval. And, you know, given the growth we're seeing in Solta and like solid prospects globally, would it,
Speaker Change: How are you thinking about a reconsideration potentially of an IPO as we've let time pass over the last couple of years?
Speaker Change: Yeah, thanks, Michael, for the question.
Thomas J. Appio: It is a durable business. And really, the focus since I've become CEO is to really make sure we are growing this business in all geography. If you look at it today, China is still a very large opportunity for us as we got FLX approved in China along with the return path. That's why we hired a new vice president to run this business. She has extensive experience in the beauty space, and we are really excited about what we can do in China. I was there a couple of weeks ago.
Speaker Change: Clearly, as I've said on many calls, I love this business. It is a durable business.
Speaker Change: And really the focus since I've become CEO is to really make sure we are growing this business in all geographies.
Thomas J. Appio: And some of the things, you know, the team that we're going to build. We're continuing to add resources. We just opened our flagship office in China. The team is highly motivated to really grow this business. What I would say is, you know, if you look, the opportunities in China are great. I have a lot of experience, of course, having lived in China for 13 years.
Thomas J. Appio: So I'm excited about what we can accomplish there and power growth. When I look at the rest of the world, if you look at Asia Pacific, our career business will double this year. The growth in the quarter was 111%.
Speaker Change: When I look at the rest of the world, if you look at Asia-Pacific, our Korea business will double this year. The growth in the quarter was 111%. If you look at what the teams in Taiwan are doing, growing at 18%.
Thomas J. Appio: If you look at what the teams in Taiwan are doing, growing at 18%, we are also focusing on executing with excellence in Europe. Some of the European countries are really starting to grow. And some of the work that's been done there over the last year to get them on track. You know, Zolta was under-invested in Europe. I see that as an opportunity. Dock grew 17% in the quarter. France grew nine and Italy grew 12.
Speaker Change: We are focusing also on executing with excellence in Europe , some of the European countries.
Speaker Change: are really starting to grow, and some of the work that's been done there over the last year to get those on track. You know, Solta was under-invested in Europe. I see that as an opportunity. Dock grew 17% in the quarter. France grew 9%. Italy grew 12%.
Thomas J. Appio: Let's pivot to the U.S. There is a lot of work still to be done there, but we believe that what we've done there, we've brought in a new leader for our U.S. business. I'm seeing some really good things that he's putting in place and the team that we're building. Clearly, the investments behind expanding our sales team and really making sure that we're growing both our capital and our consumable business. Overall, when I look at this business, it's durable, and it really is outside the payer landscape. This is why I love it.
Speaker Change: Let's pivot to the U.S.
Speaker Change: A lot of work still to be done there. We believe that
Thomas J. Appio: If you take a look, our organic growth or Thermage in the quarter was 24, and Fraxel was three. Clear and Brilliant was seven. And if you then take a look between capital and consumables, it's about 75, 25 on consumable versus capital. So again, durable. And to your last question, the last part of your question, I think this is a valuable asset to Bausch Health, and my plan is to continue to invest in and grow this business globally.
Speaker Change: on Consumable vs. Capital, so again, durable.
Speaker Change: And to your last question, the last part of your question, I think this is a valuable asset to Bausch Health and, you know, my plan is to continue to invest and grow this business globally.
Speaker Change: Operator, next question.
Speaker Change: Thank you. There were no other questions in queue at this time. I would now like to hand the call back to Tom Appio for closing remarks.
Thomas J. Appio: Thank you. What I'd say is I really appreciate everyone joining the call today and for your questions. We tried to, you know, in the prepared remarks really cover what we've accomplished in this quarter and what we're working on. Clearly, the business, the growth in the quarter is really good, and, you know, the fifth consecutive quarter of growth in both revenue and EBITDA. What I would say is I really want to thank the global Bausch Health team for their hard work and dedication in driving this company forward and delivering results. I would say I look forward to keeping everyone updated, and thank you for your interest in and support of our company. Have a good day!
Tom Appio: Thank you. What I'd say is really appreciate everyone joining the call today and for your questions. We tried to, you know, in the prepared remarks really cover what we've accomplished in this quarter and what we're working on.
Speaker Change: www.globalonenessproject.org www.globalonenessproject.org