Q2 2025 Bausch + Lomb Corp Earnings Call
George Gadkowski: Good morning and welcome to Bausch + Lomb's second quarter 2025 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to George Gadkowski, Vice President of Investor Relations and Business Insights. Please go ahead.
Good morning and welcome to bosion lom's. Second quarter, 2025 earnings call. All participants will be in listen-only mode. Should you need assistance? Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions.
To ask a question. You may press star then 1 on your touchtone phone to withdraw your question. Please press star then 2
Please note this event is being recorded. I would now like to turn the conference over to George Gadkowski, Vice President of Investor Relations and Business Insights. Please go ahead.
Sam Eldessouky: Thank you. Good morning, everyone, and welcome to our second quarter 2025 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer, Mr. Brent Saunders, and Chief Financial Officer, Mr. Sam Eldessouky. In addition to this live webcast, a copy of today's live presentation and a replay of this conference call will be available on our website under the Investor Relations section. Before we begin, I would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation as it contains important information. This presentation contains non-GAAP financial measures and ratios. For more information about these measures and ratios, please refer to slide one of the presentation. Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website.
Thank you. Good morning everyone and Welcome to our second quarter 2025 Financial results conference call participating on today's call are chairman and chief executive officer. Mr. Brent, Saunders and Chief Financial Officer Mr. Sam eldessouky.
In addition to this live webcast, a copy of today's slide presentation and a replay of this conference call will be available on our website under the Investor Relations section.
Before we begin, I would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the Forward-Looking Legend at the beginning of our presentation, as it contains important information.
This presentation contains non-gaap Financial measures and ratios. For more information about these measures and ratios. Please refer to slide 1 of the presentation.
Sam Eldessouky: The financial guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter unless required by law and not to update or affirm guidance other than through broadly disseminated public disclosure. With that, it's my pleasure to turn the call over to Brent.
Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website.
The financial guidance in this presentation is effective as of today only it is our policy to generally not update guidance until the following quarter unless required by law and not to update or affirm guidance other than through broadly disseminated public disclosure.
With that, it's my pleasure to turn the call over to Brent.
Brent Saunders: Thank you, George, and thanks to everyone for joining us this morning. I will start the call with an overview of our second quarter performance and how it aligns to the strategic roadmap we announced when I rejoined the company. Sam will unpack the financials and provide an update on 2025 guidance, and I will close by highlighting standout products and services driving growth and future offerings with the potential to significantly improve the standard of care in eye health. Maintaining focus in the current environment is easy to talk about, but hard to do. I continue to be immensely proud of the way my colleagues have executed on our strategy despite facing unexpected challenges. Our constant currency revenue growth speaks to the breadth and depth of our portfolio and is driven by a mix of hero products and a steady stream of new introductions around the world.
Thank you, George, and thanks to everyone for joining us this morning.
I'll start the call with an overview of our second quarter performance and how it aligns to the strategic roadmap. We announced, when I rejoined the company,
Sam will unpack the financials and provide an update on 2025 guidance, and I'll close by highlighting standout products and services driving growth and future offerings with the potential to significantly improve the standard of care and eye health.
Maintaining focus in the current environment is easy to talk about but hard to do.
I continue to be immensely proud of the way my colleagues have executed on our strategy, despite facing unexpected challenges.
Brent Saunders: Our contact lens performance is worth highlighting as we have continued to outpace industry growth averages thanks to strong execution from the entire team. There is no better example of selling excellence than the exponential growth in our comprehensive dry eye portfolio, which offers something for everyone. One billion is an important revenue milestone and a nice round number, but it will soon be in our rearview mirror as we continue to gain OTC and prescription market share. When it comes to operational excellence, look no further than our return to full production of our enVista intraocular lenses, which I will speak to later.
Our constant currency Revenue, growth speaks to the breadth and depth of our portfolio and is driven by a mix of hero products and a steady stream of new introductions around the world.
Beverages. Thanks to strong execution from the entire team.
There's no better example of selling Excellence than the exponential growth and our comprehensive dry eye portfolio, which offers something for everyone.
1 billion is an important Revenue Milestone and a nice round number, but it will soon be in our rearview mirror as we continue to gain OTC and prescription market share.
When it comes to operational, excellence look no further than our return, to full production of our investa intraocular lenses, which I'll speak to later.
Brent Saunders: We continue to have an intense focus on innovation, and our robust pipeline represents the future of the company. We are excited to showcase potential game changers at our November 13 Investor Day, where we will cover our most promising candidates in each business from concept to commercialization. The look and feel of our roadmap slide has evolved since first being introduced more than two years ago. What has not changed is our commitment to methodically moving through each phase, as indicated by incremental advances in our progress with each update. Parts of the first two phases are admittedly boring, but absolutely necessary as we stand on the precipice of phase three, accelerate growth. We have adopted the theme of our upcoming Investor Day for this update because the growth will largely be driven by what is next.
We continue to have an intense, focus on Innovation and our robust pipeline represents the future of the company.
We're excited to showcase potential game changers at our November 13th Investor Day, where we'll cover our most promising candidates in each business from concept to commercialization.
The look and feel of our road map slide has evolved since first being introduced more than 2 years ago.
What hasn't changed is our commitment to methodically move through each phase as indicated. By making incremental advances in our progress with each update,
Parts of the first two phases are minimally boring but absolutely necessary, as we stand on the precipice of phase three to accelerate growth.
we've adopted the theme of our upcoming investor day for this update because the growth will largely be driven by what's next
Brent Saunders: Our commitment to staying the course for the first two phases has helped fortify our base business and develop the processes, platforms, and talent required to write the next chapter in Bausch + Lomb's storied history. enVista implants continue to increase as we rapidly resupply the market. Surgeons who loved these lenses before the voluntary recall have jumped right back in, and adoption rates among others, including new users, are very encouraging as we make a significant push to recapture our momentum. We recently hired a new Head of North American Surgical with more than 30 years of industry experience to help turbocharge that effort. Earlier this month, he attended the American-European Congress of Ophthalmic Surgery's summer session, and he was met with excitement for our return and appreciation for our ongoing focus on patient safety and customer trust.
Our commitment to stay in the course. For the first 2, phases has helped fortify our base business, and develop the processes platforms and talent required to write the next chapter and Bash alarm story history.
In Vista implants continue to increase as we rapidly resupply the market
Surgeons who loved these lenses before the voluntary recall have jumped right back in, and the adoption rates, including new users, are very encouraging as we make a significant push to recapture our momentum.
We recently hired a new head of North American Surgical with more than 30 years of industry experience to help turbocharge that effort.
Earlier this month, he attended the American European Congress of AIC surgery, summer session and he was met with excitement for our return and appreciation for our ongoing. Focus on patient. Safety and customer Trust
Brent Saunders: Earlier, I mentioned operational excellence, which has been a core component of our strategic roadmap. If faced with this recall two years ago, our return to market would have taken much, much longer. That speaks to how far we've come and the importance of resilient, talented operators who are obsessed with getting the small things right. I'd like to draw your attention to the fine print for some of these figures. Big picture, our 3% constant currency revenue growth in the quarter would be doubled if you excluded the enVista recall. The difference becomes even more pronounced in our surgical segment. The fact that there was constant currency growth in the quarter is impressive on its own, but it would have been 15% absent the recall. Our pharmaceutical segment performance also has an asterisk, as underperformance in our U.S.
Earlier, I mentioned operational excellence, which has been a core component of our strategic roadmap.
it based with this Recall, 2 years ago, our return to Market would have taken much much longer
That speaks to how far we've come and the importance of resilient talented operators, who are obsessed with getting this small things, right?
I'd like to draw your attention to the fine print for some of these figures.
Big picture are 3%, constant currency Revenue growth in the quarter? Would be doubled if you excluded the investor recall, the difference becomes even more pronounced and are surgical segment. The fact that there was constant currency growth in the quarter is impressive on its own.
But it would have been 15% absent, the recall.
Brent Saunders: generic business brought constant currency revenue growth in the quarter from a would-be 6% to minus 1%. While we're obviously disappointed with the generic results, we're confident there will be a steady improvement in the second half of the year for U.S. generics, which has a new leader as of June. When it comes to our top-performing products in the second quarter, it's once again a story of launches and reinventions driving growth, which means our strategy is working. Nearly all the high-growth products shown here, which are spread out among our businesses, make the top 10 revenue list. That's staying power. I'll now turn it over to Sam, but before I do, it's important to recognize his team's work in revamping our capital structure and securing improved credit agreement. The favorable terms allow for more flexibility going forward, and it is important to take advantage of these opportunities, Sam.
Our pharmaceutical segment performance also has an asterisk as underperformance in our us, generic business for a constant currency Revenue growth in the quarter. From a would-be 6% to minus 1%.
While we're obviously disappointed with the generic results, we're confident there will be a steady Improvement in the second half of the year for us generics, which has a new leader as of June.
When it comes to our top performing products in the second quarter, it's once again, a story of launches and reinventions drive and growth, which means our strategy is working nearly all the high growth products shown here which are spread out among our businesses, make the top 10 Revenue list that's staying power.
I'll now turn it over to Sam, but before I do, it's important to recognize his team's work in revamping our capital structure and securing improved credit agreements. The favorable terms allow for more flexibility going forward and it's important to take advantage of these opportunities Sam.
Sam Eldessouky: Thank you, Brent, and good morning, everyone. Before we begin, please note that all of my comments today will be focused on growth expressed on a constant currency basis unless specifically indicated otherwise. Turning now to our financial results on slide eight. Total company revenue for the quarter was $1.278 billion, which reflects year-over-year growth of 3%. We delivered a solid quarter led by the performance in consumer, contact lenses, and promoted pharma brands. Our surgical segment grew by 1%, absorbing a $29 million impact from the enVista recall in Q2. Excluding the impact of the enVista recall, total company revenue grew by 6% in the quarter. As Brent noted, enVista implants continue to increase as we resupply the market, and we are making a significant push to recapture our momentum. For the second quarter, currency was a tailwind of approximately $21 million to revenue.
Thank you, Brent, and good morning, everyone.
Before we begin, please note that all of my comments today will be focused on growth expressed on a constant currency basis unless specifically indicated otherwise.
Turning now to our financial results on Slide 8.
Both companies' revenue for the quarter was $1.278 billion, which reflects year-over-year growth of 3%.
Our surgical segment grew by 1%, absorbing a $29 million impact from the investor recall in Q2.
Excluding the impact of the investor recall, total company revenue grew by 6% in the quarter.
as brand noted in Vista implants continue to increase as we resupply the market
and we are making a significant push to recapture our momentum.
For the second quarter.
Currency was a Tailwind of approximately 21 million to revenue.
Sam Eldessouky: As a reminder, in Q1, we experienced currency headwinds. On a year-to-date basis, currency has had a nominal impact on both revenue and adjusted EBITDA. Now, let's discuss the results of each of our segments in more detail. Vision Care's second quarter revenue of $753 million increased by 6%, driven by growth in both consumer and contact lenses. The consumer business grew by 6% in Q2 as our key brands continued to perform well, and consumption trends remained steady. Let me go over a few highlights. In the quarter, Lumify grew by 27% and generated $61 million of revenue. We continued our strong execution in the dry eye portfolio, which delivered $115 million of revenue in Q2, representing 19% growth. Our two key franchises, Artelac and Blink, once again contributed to the strong performance. Artelac grew by 34%, and Blink grew by 13% in the quarter.
As a reminder in q1, we experienced currency headwinds.
On a year to date basis.
Currency has had a nominal impact on both revenue and adjusted EBITDA.
Now, let's discuss the results of each of our segments in more detail.
Vision Care. Second quarter revenue of 753 million increased by 6%.
Driven by growth in both consumer and contact lenses.
The consumer business grew by 6% in Q2 as our key brands continue to perform well and consumption trends remain steady.
Let me go over a few highlights.
In the quarter, lumify grew by 27% and generated 61 million of Revenue.
We continued our strong execution in the dry eye portfolio.
Which delivered 115 million of Revenue. In Q2 representing, 19% growth.
Our 2 key franchises, artelac, and blank. Once again, contributed to the strong performance,
Article by 304% and blank grew by 13% in the quarter.
Sam Eldessouky: As we mentioned in Q1, we anticipated retail destocking of inventory to take place in Q2. The destocking impact may affect our eye vitamins, which declined by 8% in the quarter. It is important to note that consumption trends continue to remain steady and demand remains solid. Contact lenses' revenue growth was 7%. Our contact lens business outpaced the market in 2024, and we continue to see strong performance in the first half of this year. In the quarter, we saw solid performance across our key brands. The Daily SiHy franchise was up 36% in Q2 and continues to be our fastest growing brand. Our Bausch + Lomb ULTRA Monthly franchise grew by 8%, and Biotrue ONEday was up 2% in the quarter. In Q2, our contact lens business saw broad-based growth and strong performance across our key markets. The U.S.
As we mentioned in q1, we anticipated retail at the stocking of inventory to take place in Q2.
The ding impact media affected our I vitamins, which declined by 8% in the quarter.
It is important to note that consumption, Trends, continues to remain steady and demand remains solid.
Contact lenses: Revenue growth was 7%.
our contact lens business outpaced, the market in 2024,
And we continue to see strong performance in the first half of this year.
In the quarter, we saw solid performance across our key brands.
The dates, I have franchise was up 36% in Q2.
And continues to be our fastest growing brand.
Our Ultra monthly franchise, grew by 8%.
And buy through was up 2% in the quarter.
In Q2.
Our contact lens business saw broad-based growth and strong performance across our key markets.
Sam Eldessouky: was up 11%, EMEA was up 11%, Latin America grew by 25%, Japan grew 3%, and China was up 7%. Moving now to the surgical segment, second quarter revenue was $216 million, an increase of 1%. As I mentioned, this absorbs the impact of the enVista recall. Excluding the recall, surgical segment growth in Q2 was 15%. Consumables, which represents approximately 56% of surgical revenue, grew by 10%. The enVista recall impacted our implantables business and parts of the equipment portfolio. Implantables declined by 16% in the quarter, and equipment declined by 2%. In the quarter, we made solid progress with the enVista return to market. As we progress through the year, we expect to continue to build on the performance. From a phasing perspective, we expect to continue to make progress in Q3 and further ramp up in Q4.
The US was up 11% and was up 11% last time grew by 25%.
Japan, grew 3% and China was up 7%.
moving now to the surgical segment,
Second, quarter Revenue was 216 million, an increase of 1%.
As I mentioned, this absorbs the impact of the investor recall.
Excluding the recall, surgical segment growth in Q2 was 15%.
Consumables, which represents approximately 56% of surgical Revenue?
Rubik 10%.
The investor recall impacted our implantable business and parts of the equipment portfolio.
Implantable declined by 16% in the quarter and Equipment declined by 2%.
In the quarter.
We made Solid progress with the investor return to Market.
As we progress through the year, we expect to continue to build on the performance.
From a phasing perspective, we expect to continue to make progress in Q3 and further ramp up in Q4.
Sam Eldessouky: Lastly, revenue in the pharma segment was $309 million in Q2, which represents a decline of 1%. Our U.S.-branded RX business was up 8% in the quarter, mainly driven by the continued growth of Miebo. Miebo delivered $63 million of revenue in Q2. This represents sequential growth of 11% and a year-over-year growth of 50%. Xiidra delivered $82 million of revenue in the quarter. We continue to see strong growth in Xiidra volume, with average weekly TRX up 12% on a year-over-year basis and 5% sequentially. Miebo, Xiidra, and our consumer brands have established us as a clear leader in dry eye. We have built a robust dry eye platform to address all patient needs throughout their care journey, which gives us the confidence that we'll continue to drive growth and leverage the portfolio to drive innovation.
Lastly.
Revenue in the pharmacy segment was $3,009 million in Q2, which represents a decline of 1%.
Our us branded RX business was up 8% in the quarter.
Mainly driven by the continued growth of mayo.
Mayo delivered $63 million of revenue in Q2.
This represents sequential growth of 11% and a year-over-year growth of 50%.
Zero delivered $82 million in revenue in the quarter.
We continue to see strong growth in Zyra volume with average weekly TRX of 12% on a year-over-year basis and 5% sequentially.
My boo Zyra. And our consumer brands have established us as a clear leader in dry eye.
To address all patient needs through other care journeys.
Which gives us the confidence that we will continue to drive growth.
And leverage the portfolio to drive innovation.
Sam Eldessouky: Our international pharma business was up 2%, with strong performance across our markets in Europe. Our U.S. generics business declined 29% in the quarter. As we have previously stated, we have taken a number of actions which we expect will improve performance in the generics business in the second half of the year. Now, let me walk through some of the key non-GAAP line items on slide nine. Adjusted gross margin for the second quarter was 60.6%, which represents a 130 basis points decrease year over year. This was driven by the one-time impact of the enVista recall, product mix, and currency. In Q2, we invested $96 million in adjusted R&D, which represents an increase of approximately 12% over Q2 of 2024. Second quarter adjusted EBITDA, excluding acquired IPR&D, was $192 million.
Our international Pharma business was up 2% with strong performance across our markets in Europe.
Our us genetics, business declined, 29% in the quarter.
As we have previously stated, we have taken a number of actions which we expect will improve performance and the generic business in the second half of the year.
Now, let me walk through some of the key non-gaap line items on slide 9.
Adjusted gross margin for the second quarter was 60.6%.
Which represents a 130 basis points decrease year-over-year.
By the 1-time impact of the investor recall.
Product mix and currency.
In Q2 we invested 96 million in adjusted R&D.
Which represents an increase of approximately 12% over Q2 of 2024.
Second quarter, adjusted ibida, excluding acquired IP R&D was 192 million.
Sam Eldessouky: This absorbs a one-time impact of $19 million from the enVista recall and $18 million impact from the decline in the U.S. generics business. Adjusted cash flow from operations was $86 million in the quarter. Adjusted net interest expense for the quarter was $94 million, and adjusted EPS, excluding IPR&D, was $0.07 for the quarter. Finally, as part of our efforts to continue to optimize our capital structure, in June, we successfully executed a refinancing of $3.1 billion of our debt. The refinancing extended the majority of our maturities to 2031 and is expected to have a minimal impact on our interest expense. Turning to our 2025 guidance on slide 12, we are raising our full-year revenue guidance from a range of $5 billion to $5.1 billion to a range of $5.05 billion to $5.15 billion.
This absorbs, a 1-time impact of 19 million from the investor recall and 18 million impact from the decline. In the US, generic business.
Adjusted cash flow from operations was $86 million in the quarter.
Adjusted net interest expense for the quarter was $94 million.
And adjusted EPS, excluding IPR and D was 7 cents for the quarter.
Finally, as part of our efforts to continue to optimize our capital structure,
In June, we successfully executed a refinancing of $3.1 billion of our debt.
The refinancing extended the majority of our maturities to 2031.
And is expected to have a minimal impact on our interest expense.
Now, turning to our 2025 guidance on slide 12.
We are raising our full-year revenue guidance from a range of $5.0 billion to $5.1 billion to a range of $5.05 billion to $5.15 billion.
Sam Eldessouky: The updated revenue guidance represents constant currency growth of approximately 5% to 7%, up from 4.5% to 6.5%. This new guidance range continues to absorb approximately 100 basis points from the one-time impact of the enVista recall. Shifting to adjusted EBITDA, we are raising our adjusted EBITDA guidance from a range of $850 million to $900 million to a range of $860 million to $910 million. In terms of the other key assumptions underlying our guidance, we continue to expect adjusted gross margin to be approximately 61.5%. As a reminder, the adjusted gross margin absorbs an estimated one-time 50 basis points headwind from the enVista recall. For the full year, we continue to expect investments in R&D to be about 7.5% of revenue, and interest expense to be approximately $375 million. We will continue to monitor the Fed's actions for the rest of the year.
The updated Revenue guidance represents constant currency growth of approximately 5 to 7%.
Up from 4.5 to 6.5%.
This new guidance range continues to absorb approximately 100 basis points from the 1-time impact of the invested recall.
Shifting to adjusted ibida.
We are raising our adjusted Eva guidance from a range of 850 to 900 million to arrange of 860 to 910 million.
In terms of the other key assumptions underlying our guidance.
We continue to expect adjusted gross margin to be approximately 61.5%.
as a reminder, the adjusted gross margin, absorbs, an estimated 1 time, 50 basis points, head went from the investor recall,
For the full year, we continue to expect investments in R&D to be about 7 and a half percent of Revenue.
And interest expense to be approximately 375 million.
We will continue to monitor the Fed's actions for the rest of the year.
Sam Eldessouky: We continue to expect our adjusted tax rate to be approximately 15% and full-year CapEx to be approximately $280 million. In terms of phasing for the remainder of the year, we expect the fourth quarter to be the highest. This is driven by the natural seasonality of our business, the ramp-up of enVista, and the actions we are taking to improve performance in our U.S. generics business as we progress through the remainder of the year. Consistent with our previous guidance, our current guidance excludes any potential one-time IPR&D charges that we may incur in 2025. Finally, let me briefly address tariffs. The tariff policy remains fluid, and we are continuing to monitor updates. Based on where the policy stands today and the actions we're taking, our updated guidance assumes we will be able to offset the impact of tariffs in 2025.
we continue to expand our adjusted tax rate to be approximately 15%,
And full year capex to be approximately $280 million.
In terms of phasing for the remainder of the year.
We expect a fourth quarter to be the highest.
This is driven by the natural seasonality of our business.
The ramp up of investor and the actions we're taking to improve performance and our us genetics business as we progress through the remainder of the year.
In system with our previous guidance.
Our current guidance excludes any potential one-time, IP, and charges that we may incur in 2025.
Finally.
Let me bring briefly address tariffs.
The Tariff policy remains fluid and we're continuing to monitor updates.
Based on where the policy tends today and the actions we're taking our updated guidance assumes. We will be able to offset the impact of tariffs in 2025.
Sam Eldessouky: Moving to slide 13, now let me provide some additional color on how to think about the updated revenue and adjusted EBITDA guidance in 2025. Our updated revenue guidance range of $5.05 to $5.15 billion reflects a $25 million raise driven by strong business performance and $25 million from currency tailwinds. The updated 2025 adjusted EBITDA guidance range of $860 to $910 million includes approximately $10 million driven by business performance and our continued focus on disciplined cost management. To sum up, we had a solid quarter. The markets are healthy, and our business fundamentals remain strong. We are committed to our strategy to drive sustainable growth and margin expansion. Now, I will turn the call back to Brent.
Moving to slide 13. Now, let me provide some additional color on how to think about the updated revenue and adjust the EBA guidance in 2025.
Of 5.05 to 5.15 billion reflects a 25 million, raise driven by strong business performance, and 25 million from currency, Tailwind.
The updated 2025 adjusted EBA guidance range of 860 to 910 million.
Includes approximately $10 million, driven by business performance and our continued focus on disciplined cost management.
To sum up. We had a solid quarter.
The markets are healthy, and our business fundamentals remain strong.
We are committed to our strategy to drive sustainable growth and margin expansion.
And now, I will turn the call back to Brent.
Brent Saunders: Thanks, Sam. Let's focus on some of the more impressive Q2 performances and reasons to be so optimistic about the future of Bausch + Lomb. At the bottom of this slide, there's a simplified view of the dry eye journey for consumers and patients. No matter where they stop, whether it's an Amazon order or a visit to the pharmacy counter, we're there to meet them with solutions that have become among the favorite of eye care professionals. There are a few consumer options worth highlighting based on Q2 performance. Momentum for Blink eye drops continues with 13% reported revenue growth. Artelac performance was even more impressive at 39% reported revenue growth, and it continues to be our most global dry eye option with availability in more than 40 countries and plans to expand further.
Thanks Sam. Let's focus on some of the more impressive second quarter performances and reasons to be so optimistic about the future of Bashan law.
At the bottom of this slide, there's a simplified view of the dry eye Journey for consumers and patients.
No matter where they stop, whether it's an Amazon order or a visit to the pharmacy counter, we are there to meet them with solutions that have become among the favorites of Eye Care Professionals.
There are a few consumer options worth highlighting based on second quarter performance.
Momentum for Blink. Eye drops continues with 13%, reported Revenue growth.
Artelac performance was even more impressive at 39% reported Revenue growth.
And it continues to be our most Global dry eye option with availability in more than 40 countries and plans to expand further.
Brent Saunders: Those products and others shown here drove a 16% constant currency revenue growth for the dry eye portfolio. Expansion of the dry eye market shows no sign of slowing down, but there remains a gap in education and awareness. In fact, according to our updated State of the Dry Eye survey, 78% of sufferers wish they had more dry eye resources. We're doing our part to help fill that gap with our latest Dry Eye Awareness Month campaign, which encourages visits to knowyourdryeye.com and reinforces that there are a range of potential relief options available that may be appropriate depending on the cause, severity, and frequency of symptoms. The theme of this slide is staying the course. When we acquired Xiidra in 2023, we made clear our intentions to nurse the brand back to health and remind eye care professionals of its benefits.
Those products and other shown here, drove a 16% constant currency Revenue growth for the dry eye portfolio.
Expansion of the dry eye Market shows. No sign of slowing down but there remains a gap in education and awareness. In fact according to our updated state of the dry eye survey, 78% of sufferers wish they had more dry eye resources.
We're doing our part to help fill that Gap with our latest dry eye Awareness Month Campaign which occurs visits to know your dry eye.com.
And reinforces that there are a range of potential relief, options available, that may be appropriate, depending on the cause severity and frequency of symptoms.
The theme of this slide is staying the course.
Brent Saunders: Sticking to this playbook has resulted in 12% year-over-year prescription growth and renewed excitement for a medication that produces hundreds of millions of dollars in annual revenue. Our work to improve profitability is far from done, but we're starting to see the benefits. Miebo continues to be a juggernaut with 111% year-over-year prescription growth. The playbook hasn't changed there either. Through extensive education and best-in-class field force, we've established Miebo as the prescription solution for evaporative dry eye. Patient feedback continues to be overwhelmingly positive, as made clear in the Phase 4 data published earlier this year. Study participants reported rapid relief of symptoms and most commonly chose "silky, smooth, and soothing" to describe how the drop felt on administration. Effective direct-to-consumer campaigns continue to raise awareness of our flagship branded dry eye medications, rounding out a thoughtful, all-encompassing approach that accounts for every possible touchpoint.
When we acquired Zyra in 2023, we made clear our intentions to nurse the brand back to health and remind Eye Care Professionals of its benefits.
Sticking to this Playbook has resulted in 12%, year-over-year, prescription growth, and renewed, excitement for a medication that produces hundreds of millions of dollars in annual revenue.
Our work to improve profitability is far from done, but we're starting to see the benefits.
My book continues to be a juggernaut with 111% year-over-year prescription growth.
The Playbook hasn't changed there either, through extensive education and best-in-class field support for us. We've established Mybo as the prescription solution for evaporative dry eye.
Patient feedback continues to be overwhelmingly positive, as made clear in the Phase 4 data published earlier this year.
Study participants reported rapid relief of symptoms and most commonly chose silky smooth and soothing to describe how the drop belt on Administration.
Effective direct to Consumer campaigns, continue to raise awareness of our Flagship branded dry. Eye medications, rounding out a thoughtful, all-encompassing approach that accounts for every possible touch point.
Brent Saunders: The recent launches of preservative-free OTC options are a prime example of continuous brand reinvention and being responsive to evolving customer needs. Lumify preservative-free launched in May and brings the same fast-acting redness relief to those with sensitive eyes. While exponential growth has been a constant theme for Lumify, we are thinking well beyond the next few years. In fact, we recently settled patent disputes related to Lumify, enabling continued investment ahead of a date certain for generic launch. Introducing preservative-free options for Blink now means there are six dry eye drops to choose from, in addition to multiple contact lens lubricating drops and a once-a-day nutraceutical that is quickly becoming the most trusted among eye care professionals. Optionality matters for consumers looking for OTC relief, and the growing Blink family, a global brand, checks every box.
The recent launches of preservative-free OTC options are a prime example of continuous brand reinvention and being responsive to evolving customer needs.
Lumabi preservative-free launched in May and brings the same fast-acting redness relief to those with sensitive eyes.
While exponential growth has been a constant theme for lumifi. We're thinking well beyond the next few years. In fact, we recently settled patent disputes related to lumifi and enabling continued investment ahead of a date certain for generic launch.
Introducing preservative-free options for Blink. Now, there are 6 dry eye drops to choose from, in addition to multiple contact lens lubricating drops and a once-a-day neutral that's quickly becoming the most trusted among eye care professionals.
optionality matters for consumers, looking for OTC relief and the growing blink family, a global brand checks, every box
Brent Saunders: While Daily SiHy was once again the clear standout with 36% constant currency revenue growth in the second quarter, it is important to note that all our key contact lens brands are growing. That includes ULTRA Monthly contacts with 8% constant currency revenue growth, an impressive figure for a legacy brand bucking the trend of a gradual shift towards daily lenses. Our thoughtful approach to expanding our Daily SiHy portfolio has not changed, with plans to introduce multifocal and toric options in several markets next year and realize the expected benefits of offering a full suite of lenses. Those benefits are clear in the U.S. with 40% constant currency revenue growth in the second quarter. In May, we received European approval for LuxLife, full range of vision IOL, the latest example of our push into the high-margin premium market.
Quarter. It's important to note that all are key contact. Lines brands are growing that includes Ultra monthly contacts, with 8% constant, currency Revenue, growth and impressive, figure for a legacy brand, bucking the trend of a gradual shift towards daily lenses.
Our thoughtful approach to expanding our daily SI Hai portfolio. Hasn't changed with plans to introduce multi, focal and torque options in several markets next year.
And realize the expected benefits of offering a full Suite of lenses.
Those benefits are clear in the U.S. with 40% constant currency revenue growth in the second quarter.
In may, we received European approval for Luxe life. Full range of vision iol
Brent Saunders: The lens has an impressive clinical profile, and early feedback from surgeons mirrors our excitement about the latest addition to the Lux portfolio. Our stage rollout of premium offerings continues with the anticipated soft launch of enVista in Europe later this year and expected early 2027 U.S. launch for enVista Beyond. Our pipeline slides should be familiar to you by now, but I will not go too deep to avoid spoiling Investor Day. I'll remind you that we have multiple shots on goal in each of our businesses, and the focus is category disruption as opposed to modest improvement. Importantly, this isn't aspirational. We've initiated clinical studies for several of these products with others to follow soon. I look forward to seeing many of you in November, where members of the R&D team and our commercial leaders will bring these products to life. Let's move to Q&A now. Operator.
The latest example of our push into the high-margin premium market.
The Lance has an impressive clinical profile and early feedback from surgeon mirrors. Our excitement about the latest addition to the Luxe portfolio.
Our stage role at premium offerings continues with the anticipated soft launch of Vista Envy in Europe later this year and expected early 2027 U.S. launch from Vista Beyond.
Our pipeline slide should be familiar to you by now, but I won't go too deep to avoid spoiling Investor Day. I'll remind you that we have multiple shots on goal in each of our businesses, and the focus is category disruption as opposed to modest improvement.
Importantly, this isn't aspirational. We've initiated clinical studies for several of these products with others to follow soon.
I look forward to seeing many of you in November, where members of the R&D team and our commercial leaders will bring these products to life.
Let's move to Q&A now, operator.
George Gadkowski: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question today is coming from Matt Miksic from Barclays. Matt, your line is live.
Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touchtone phone.
if you were using a speaker-phone please pick up your handset before pressing the keys to withdraw your question. Please press star. Then to at this time we will pause momentarily to assemble or roster.
And the first question today is coming from, Matt mixx from Barclays at your line of life.
Matt Miksic: Thanks so much, and thanks for taking the question. Congratulations on the strong quarter here, particularly on an underlying basis, taking out some of the puts and takes as you talked about. Brent, I wanted to ask first about, you have made a recommitment to the company here based on your original contract, and you talk often about the bright future that you see for a lot of the product lines and product launches that you have run through. Maybe just talk about, in the midst of the recent uncertainty, what are some of the key highlights that inform that decision to recommit for a longer period of time and would follow up on guidance if I could.
Thanks so much and thanks for taking the question. Um,
So uh congrats on the on the strong quarter here, um, particularly kind of an underlying basis, you know, to taking out some of the some of the puts and takes as you talked about. Um, but I wanted to ask first about, um,
you know, you've made sort of a recommitment to the company here, based on your original contract. And you talked often about
Uh, the bright future that you see for a lot of the, the product lines and product, launches that you that you've run through. Maybe you just talked about um, you know, in the midst of the recent uncertainty, uh,
what are some of the, the key highlights that, that sort of, you know, inform that, uh, that decision to sort of recommit for a long period of time and I want to follow up on, on guidance, if I could
Brent Saunders: Yeah, absolutely, Matt. Let me take the first part, and thank you. Look, I am really excited that I extended my contract to stay at Bausch + Lomb, and I will tell you, I did it entirely because of my deep confidence in our team, our products, and the strength of our R&D pipeline. I think we have an amazing opportunity as we work through our roadmap here to truly transform our company in the next couple of years and really focus on accelerating sales growth, importantly expanding margins, and then, of course, advancing our innovations to help us fulfill our mission to help people see better, to live better.
Yeah, absolutely Matt. So, let me, let me take the first part and, and thank you. Um, look, I, I'm really, uh, excited that I extended my contract to to stay at Balaam and I'll tell you, I, I did it.
entirely because of my deep confidence in, in our team, our products and and the strength of our R&D pipeline,
Brent Saunders: If you look at just the challenges we had in the first quarter, whether it be the recall or tariffs and the resiliency and our ability of our teams to execute and overcome those challenges that were very unexpected and quite impactful and get back on track here in the second quarter, it just underscores what I was saying about the confidence in the team and our ability to really transform our company. I guess net-net, if you really step back and think about it, the way I really think about it, I really see the opportunity in front of this team right now is really too important and too exciting not to be a part of it. I am just incredibly excited for what we can do in the future here.
I think we have an amazing opportunity as we've worked through our our roadmap here to, uh, truly transformed our company in the next couple years, and really focus on on accelerating sales, growth importantly, expanding margins. And, and then, of course, advancing our our Innovations to help us, uh, fulfill our mission to help people see better to live better. If you, if you look at just the challenges we had in in the first quarter.
Um, whether it be the recall or tariffs and the resiliency and or an ability of our, our teams to to execute and overcome, those challenges that were were very unexpected and and quite impactful and get back on track here in the second quarter, it just underscores. What I was saying about the confidence in the team, and our ability to to, to Really transform our company and I guess net net. If you really step back and think about it, the way, I I really think about it. I I I really see the opportunity in front of this team right now is really 2, 2 important and and 2, exciting not to be a part of it and and I'm just incredibly excited for what we can do in the future here.
Matt Miksic: Oh, that is great. Great to hear. Following that line of some of the challenges and initiatives that factor into guidance, there is a couple I think that folks have some familiarity with or understanding, maybe more so around the recall and the impact that that had and around tariffs to some degree. If you could talk a little maybe about quantifying the tariff impact, and also just walk us through the strategy in pharma, because there is clearly strong growth in Xiidra scripts, but strong growth sequentially, but down a little bit year over year. Maybe walk us through what is the plan behind that and how do you expect that to play out the rest of the year, plus anything you have to mention you would be able to share on tariff impact would be helpful to folks if they do the puts and takes.
Oh, that's great. Great to hear. So, and following that line of, of sort of, you know, some of the challenges and initiatives, uh, that factory like the guidance, um, you know, I I there's a couple I think that folks have some familiarity with, or understanding, maybe more so, around the recall, um, and the
Impact that that had, uh, and uh, you know, around tariffs to some degree. But if you could talk a little maybe about um, uh, quantifying the Tariff impacts, and then also just walk us through the strategy in Pharma because there's clearly, you know, strong growth as Hydra,
Scripts, but you know, and strong growth sequentially. But, um,
You know, but down a little bit year-over-year, maybe walk us through the, the, what's the plan behind that and and how do you expect that to play out the rest of the year? You know, plus anything? Yes, I mentioned you'd be able to share on on tariff and back would be helpful to folks, as they do, the flips and takes
Brent Saunders: Yeah, so if you do not mind, Matt Miksic, let me take them in reverse order because then Sam Eldessouky can help me with the tariff impact. Look, in pharma, let us start with Miebo, Xiidra, and PreserVision. Throughout last year, I think we told you guys, and, you know, at the beginning of this year as well, that we had some headwinds going into 2025 that would kind of reset the base on particularly Xiidra, and that those headwinds were one-time managed care payment and then the IRA, which we quantified. So, you know, our focus this year was to drive prescription and demand, right? You see it obviously in Xiidra, you see, you know, 12% TRX year over year, 5% sequentially. In Miebo, you know, you see 50% year over year and 11% sequentially.
Yeah, so if you don't mind, Matt, let me take them in reverse order because then Sam can can help me, um, with the, uh, the Tariff impact. Um,
look, I I in Pharma, um,
Let's start with my boo Zyra and gross to net.
Brent Saunders: So you see the expansion of the market, and clearly now as a franchise we are the market leaders in the prescription space. The goal now after 2025 and beyond is to now see that pull through the P&L, and I think you will start to see that in 2026, 2027, and beyond as we focus on driving not just growth but profitability through the P&L. So we are exactly where we thought we would be. I get why it can look like a step backwards given the PreserVision headwinds, but I think it is very important for a long-term franchise, and we have these drugs for several years, to make sure that we secured reimbursement and availability for patients and then drive through an education to ECPs the importance of treating both evaporative and inflammatory dry eye. So I think we are, you know, 2025 is an interesting year.
Throughout last year. I think we we we we told you guys and and you know, at the beginning of this year, as well, that we had some headwinds going into, um, 2025 that would kind of reset the base on on particularly Zyra. And that those headwinds were um uh 1 time, managed care payment and and then the IRA um, which we Quantified. And and so, you know, our Focus this year was to drive prescription and demand, right? And so you see it, uh, obviously inside where you see, you know, 12%, TRX year-over-year, 5% sequentially in maybo, you know, you see 50% year-over-year and 11% sequentially and so you see the the expansion of the market. And and clearly now as a franchise, where the market leaders in in the prescription um space the the goal now after 25 and and Beyond
Is to now see that pull through the p&l and I think you'll start to see that in in 26 27 and Beyond as as we focused on driving, not just growth, but profitability through the p&l. And so we're exactly where we thought we would be. Um, I get why it it, it can look like a step backwards given the the growth in net headwinds, but I think it's, it's very
Brent Saunders: I think the team is executing well. That being said, you know, I think we are exactly where we want to be, and if we could just have a little patience to see it pull through starting in 2026, I think you will understand the power of what we can do with these franchises. I would also note, you know, the generics obviously was a disappointment and something that we are working hard to reconcile. As I mentioned in the prepared remarks, we have a new leader of generics. We saw, you know, modest improvements sequentially from first to second quarter of about 2% improvement.
Very important for a long-term franchise and we have these drugs for several years, um, to make sure that we we secured reimbursement, um, and availability for patients. Um, and then drive through an education to, to to, to ecps, the importance of treating, both evaporative and inflammatory dry eye. And so, I think we're, you know, 25 is an interesting year, I think the team is executing. Well that being said, you know, I I, I think we're exactly where we want to be, um, and, and if we could just have a little patience to see it, pull through starting in 26. Um, I think you'll, you'll understand the power of, of what we can do with these these franchises. I would also note, you know, the generics, um, obviously was a disappointment, um, and, and something that we're working hard to reconcile. As I mentioned, in the prepared remarks. We we have a new leader generics. We saw, you know, modest improvements sequentially from first to second quarter of about 2% Improvement.
Brent Saunders: You know, I would say green shoots at best, not where I would want to be, but we are working with the team and we are starting to see more improvements in early Q3, but we have a lot of work to do there, and we expect it to resolve in the back half of the year. So that will no longer be a drag, you know, going into 2026 as well. Net-net, Matt, I think we are well positioned. I am excited about where we are in the execution that we have seen on our prescription brands, but we have some work to do and we are focused on getting it done.
Uh, you know, I would say green shoots at best not not where I would want to be, um, but but we're working with the team and, and we're starting to see more improvements in early Q3, but we have a lot of work to do there and we expect it to resolve in in the back half of the year so that will no longer be a drag, you know, going into 26 as well. And so, you know, net, net, man. I I think we're well positioned. I'm excited about where we are in the execution that we've seen on the on on our prescription Brands. Uh, but we have some work.
To do and, and we're focused on getting it done.
Brent Saunders: I think with respect to guidance, I will turn it over to Sam, but look, I am proud of our ability to get through what we saw, some unexpected challenges in the first quarter and deliver a solid second quarter and be positioned to grow with momentum into the back half of the year. I really do think we have momentum. I think you see it because the market for eye health is vibrant. You see great execution on our team, as I have said several times. Then, of course, there is seasonality where the back half of the year, particularly the fourth quarter, is our strongest. I will turn it over to Sam for some more color on tariffs.
Matt Miksic: Yeah, Matt, when you think about tariffs, the policy continues to be fluid. You remember saying August 1st is Friday, right? When you think about what we shared in our last earnings call, we estimated roughly about the impact of 120 basis points, but at that point, that was based on the environment that we were reporting then back in April. A lot has changed since then. One, the policy has changed in different directions and helped us in a meaningful way in terms of having favorability in terms of what we think the potential impact for 2025. Also, our team, we have done a really great job in terms of navigating around the tariffs and taking steps and mitigating the impact where we see it.
Our strongest, but I'll turn it over to Sam for some more color on tariffs. Yeah, and, uh, Matt, when you think about tariffs, the policy continues to be fluid and...
Matt Miksic: That gives us the confidence to be able to, one, reflect on our guidance and also be able to fully offset it within our guidance.
Brent Saunders: If I could say, I would also say it's easy for us to say the team helped mitigate, but it was an immense amount of work, and I would just want to acknowledge the hard work that our team and our supply chain and commercial colleagues had to do to really be nimble and reinvent ourselves a little bit to deal with these tariffs.
You say August 1st is Friday, right? Yeah, yeah. So when you think about what we shared, uh, in our last earnings call, we estimated roughly about the impact of 120 basis point. Uh, but at that point, that was based on the environment that we were uh, reporting, then back in April. So Allah have changed since then, uh, 1 the possibility of change, um, in different directions and that helped us in a meaningful way in terms of having preferability, uh, in terms of what we think, the potential impact for 25, but also, uh, the team our team, we've done a really great job in terms of navigating, uh, around the tariffs and taking steps and mitigating the impact, uh, where we see and that gives us the confidence to be able to 1 reflect in our guidance and also, uh, be able to fully offset it within our guidance. If I could say, I'm, you know, I would also say
Matt Miksic: Where we stand here today, we expect we estimated roughly about 40 basis points as an impact for us in 2025. Obviously, we will continue to monitor what happens on the end of this week and any other further developments from our policy, but that is one of those things where we are not going to sit back. We are going to continue to work around what comes our way from tariffs, and we will continue to work through mitigating that through 2025.
It's easy for us to say the team helped mitigate, but but it was an immense amount of work and and I would just want to acknowledge the hard work that our team and our supply chain, and Commercial colleagues had had to do to, to really be nimble. And and, and and reinvent ourselves a little bit to to deal with these tariffs. Yeah.
Brent Saunders: But to be clear, just so there is no confusion, those 40 bps are absorbed in the guidance.
Matt Miksic: That's correct.
Brent Saunders: It is not going to get carved out of guidance. That is absorbed in the guidance Sam just provided.
So, where we stand here today? Uh, we expect we estimate roughly about 40 basis points, uh, as an impact for us, in 2025, obviously, we'll continue to monitor what happens on end of this week and any other further developments from a policy, but that's 1 of the things. We're uh, we're not going to sit back, we're going to continue to work around. What comes our way from tariffs and we'll continue to work through uh mitigating that through 2025, but to be clear. Just so there's no confusion, those 40 basis points are absorbed in the guidance.
So, it's not, that's not going to get carved out of guy. And so that, that's absorbed in the guidance, Sam just provided
Matt Miksic: Very, very, very helpful. Thanks so much and congrats again.
Brent Saunders: Yep, thanks, Matt.
Very, very, very helpful. Thanks so much, and congrats again.
Yep, thanks Matt.
George Gadkowski: Thank you. The next question is coming from Young Li from Jefferies. Young, your line is live.
Thank you. The next question is coming from Young Lee. From Jeffrey's young, your line is live.
Matt Miksic: Very great. Thanks for taking our questions. To start on the pharma side, I think, previously you talked about investing heavily in Miebo for the first couple of years, basically to prime the market. Then that investment will taper off and profitability will increase. I guess, with a pretty big competitor coming into the market soon, I am wondering if that impacts your plans on investment and profitability timing.
All right, great. Thanks for taking on questions. Um, I guess to start on the pharma side. Um, so I think, um, you know, previously, you talked about, um, investing heavily in my role for the first couple of years; uh, it's basically to prime the market and then, you know, if that investment will taper off and profitability will increase. Um, but I guess,
Uh, you know, with, um, a pretty big, um, competitor coming into the market. So, um, wondering if, um, that impacts your plans on, um, Investments and, uh, profitability, uh, timing.
Brent Saunders: Yeah, so great question. While we are on the topic of Artelac and Alcon, I will ask Yehia, our Chief Medical Officer and Head of R&D, to come in as well. Look, I do not think our strategy has changed. To be fair, we knew this product was in development all along, so it is no surprise to us. I think it is important to understand the dry eye market when you think about competitive environments, and I think two things are really important. Remember, I was running Allergan when Xiidra launched and obviously was deeply involved in the defense of the market. I remember analysts on calls like this thinking it was going to be a fight to the death between Restasis and Xiidra, and one was going to win and one was going to lose.
Yeah, so so great question and and um, you know, while we're on the, the topic of trip to your and and Alcon, I'll ask that you here, our chief medical officer and head of R&D to to, to come in as well. Um, look it, I don't think our strategy is changed, um, to be fair. We knew this product was in development all along, so it's no surprise to us. Um, and, you know, I think,
Brent Saunders: The reality is the market expanded to accommodate both, and Restasis and Xiidra grew through the launch. That is because it is a very low penetration prescription market and a very large untreated market, as I mentioned in the prepared remarks. This market has plenty of room to bring more patients in for prescription treatment. That is a really important dynamic in this particular market. Alcon, which is a great company and a strong company in eye care with deep relationships, you never want to underestimate them. I think the second point I would make is we have a beachhead, and when you have a beachhead in dry eye, it is really hard for competitors to work around us. I think of even when I was running Allergan and Restasis, we thought we had a beachhead.
I think it's important to understand the dry eye Market, when you think about competitive environments, and I, I think 2 things are really important. Um, remember I, I was running allergen when when zyber launched and obviously was was deeply involved in the in, in the defense of of the market. And I remember analysts on calls like this, you know, thinking it was going to be a fight to the death between Restasis and Zyra. And 1 was going to win and 1 was going to lose. And the reality is the market expanded to accommodate both and Restasis and Zyra grew through the launch. And that's because it, it's a very low penetration prescription market, and a very large untreated Market. As I mentioned, in the prepared remarks. And so, this, this Market has plenty of room to to to
To bring more patients in for prescription treatment. And so that's really important Dynamic, uh, in this particular market. And, and so,
Brent Saunders: Our beachhead here is even more comprehensive and deep, given that we have the only evaporative dry eye drug and a best-in-class anti-inflammatory drug, which are the two main parts of the etiology of the disease. Of course, all the OTC options as well. Our ability to work with ECPs and work with consumers and patients is unprecedented versus any of our competitors. I think we just have a terrific portfolio and a lot of momentum. Maybe Yehia, talk a little bit about how you see it more clinically.
The only evaporative a dry eye drug and a best in class anti inflammatory drug, which which are the two main main parts of the of the etiology of the disease and so you know I don't and then of course, all the OTC options as well and so.
Um, outcome, which is a great company and a stored company. And I care with deep relationships, you never want to underestimate them, but I think the second point I'd make is we have a beach head and when you have a beach head and dry eye, um, it's really hard for for competitors to work around us and I think of even when I was running out and Restasis you know we thought we had a beach head, our beach head here is is even more comprehensive and deep um given that we have.
Our ability to to to work with ECP and work with consumers and patients is unprecedented versus any of our competitors and I think we just have a terrific portfolio at a lot of momentum, but maybe talk a talk a little bit about how you see it more clinically.
Yehia Hashad: Yeah, I think from a clinical perspective, we still believe Miebo is unique. It is the only approved treatment for evaporative dry eye. Let me just get a little bit back and just describe from a dry eye perspective. When we look to the etiology of dry eye, there are two main categories. One is either the eye is tear deficient. This means that it doesn't secrete much tears. For that category, you need an increased tear production, which we have multiple options on the market. Xiidra is not the first one. Restasis increases the tear production. Tervia increases the tear production. So this is really now coming as a third to the market for increased tear production. But the bigger category of dry eye is really evaporative dry eye.
I think I think from a clinical perspective, we still believe Michael is unique and it's the only approved treatment for a separate of dry eye and let me just get a little bit back just described from a dry eye perspective, when we look to the etiology of dry eye. There are two main categories one.
One is either the I S. T. A deficient this means that doesn't succeed much tiers.
And for that category, you'll need an increase to your production, which we have multiple options on the market <unk> is not the first one restasis increases the tear production sort of via increased production. So this is really now coming as a third to the market for increased production.
But the biggest category of dry eye is really evaporate of dry eye and those are the patients who really are.
Yehia Hashad: Those are the patients who really have like Mibovian gland dysfunction that no matter how you increase the tear production and you still have one of those causes, it will be like a leaking bucket syndrome. So basically, you increase the tear, but it evaporates immediately. This is where really the only treatment for these types of patients would be Miebo. So we still believe that it is unique from an etiological perspective. Apart from that, whether it's evaporative or decreased tear production, if the eye remains for a long period of time with dry eye, it will get inflammatory dry eye. Again, unless you have a specific treatment for the inflammation like Xiidra to address the inflammatory cytokines, you will not be able to treat the inflammatory component of the dry eye.
Have like my <unk> gland dysfunction that no matter, how you increase the production and do you still have one of those causes it would be like a leaking bucket syndrome.
So basically you increased the tier, but it evaporates immediately and this is where really the only treatment for these type of patients would be Michael. So we still believe that it is unique from any geological perspective, apart from that whether it's evaporative or decreased production.
It remains for a long period of time was dry eye it will get inflammatory dry eye and again unless you have a specific treatment for the inflammation like zebra to address the inflammatory cytokines, you will not be able to treat the inflammatory component of the dry eye.
But the most important piece I would like to mention related to the clinical data.
Yehia Hashad: But the most important piece I would like to mention related to the clinical data is what matters for the patients are the symptoms of the dry eye. This is really where we differentiate clearly versus Xiidra. According to the Phase 3 data from Xiidra, actually, while 50% have an increased tear production, it's still on the symptom scale. They do not show improvement except at day 14. In fact, one of the pivotal studies failed the statistical significance and the other one met, and they had to pool the data to amplify the effect of the product. So I think this is a clear indication where the symptom and the patient outcome play an important role of the use of the treatment because Miebo still in each individual pivotal study has significantly and clinically meaningful effect on the symptoms reduction.
Is what matters for the patients are the symptoms of dry eye.
And this is really where we differentiate clearly versus thrift here. So.
According to the phase III data from a trip here actually while 50% have an increased steel production.
It's still on the symptom skills, they do not show improvement.
Except at day 14, and in fact, one of the people with the study's fields, the statistical significance and the other one met and they had to pull the data to amplify the effect of the product.
So I think this is a clear indication of where the symptom and the patient outcome plays an important tool of the use of the treatment because Michael still in each individual pivotal study have significantly and clinically meaningful.
On the symptoms of reduction in fact, the lift study that we conducted as a phase four study show that the improvement in the symptoms happens within a few minutes of the installation at day, one phase III data <unk> and so long.
Yehia Hashad: In fact, the latest study that we conducted as a phase four study shows that the improvement in the symptoms happens within a few minutes of the instillation at day one, day three, day 14, and so on. We do believe that Miebo and Xiidra are totally differentiated. Again, needless to say, obviously, tolerability plays an important role in this market. With a product that could have 50% of burning and stinging after instillation, I think from a patient outcome perspective, it could be challenging to use it for a long period of time. That is why I still have a lot of confidence in our dry eye portfolio and I still believe that we have a very differentiated product existing on the market.
So we do believe that Michael and zebra are totally differentiate it.
And again I Needless to say, obviously put liability plays an important role in this market and with a product that could have 50% of burning and stinging offer installation I think from a patient outcome perspective.
Could be challenging to use the product.
Long period of time, so that's why I still have a lot of confidence in our dry eye portfolio and I still believe that we have a very differentiated products existing on the market.
Yeah.
Alright, great that's very comprehensive and helpful answer I appreciate it.
Matt Miksic: I agree. That is a very comprehensive and helpful answer. Appreciate it. I guess switching gears a little bit to the contact lenses market. More than or almost half of the market has reported so far. It is coming in better than expected in the second half. We definitely heard something last quarter around consumers buying less and channel inventory drawdowns. Can you maybe level set us a little bit on what you are seeing in the contact lens market from a macro and a consumer and channel perspective?
Switching gears, a little bit too.
When this market.
More than or almost half of the market has reported so far it's coming in better than expected in the second half.
We definitely hurts.
Last quarter around.
Consumers buying less.
Channel inventory draw downs.
Maybe level set us a little bit on what youre seeing in the contact lens market from a macro and consumer and channel perspective.
Yeah, we still see it as healthy.
Brent Saunders: Yeah, we still see it as healthy. We have not seen, obviously, we hear what some of our competitors are saying, and frankly, we just don't see it. Perhaps part of the reason why is the investments we've made over.
We have not seen.
Obviously, we hear what some of our competitors are saying and frankly, we just don't see it.
And perhaps part of the reason why is the investments we've made over the last year.
George Gadkowski: year in not just innovation, but also the direct-to-consumer channel, whether it be in China, where we stood up a fully integrated direct-to-consumer, or in the U.S., where we launched LuxLife, which is actually exceeding our expectations in terms of adoption and use and pull-through. I think that's a large part of it. When I look at our performance, I think it tells the story. We kind of expected our Daily SiHy and Bausch + Lomb ULTRA ONEday outside the U.S. to do well, and you see that 36% growth performance in that daily segment. But what makes me really proud of the team is the fact that ULTRA monthly grew 8%, and Biotrue ONEday even grew 2%. We are really trying to focus on that, sealing the leaky bucket. You tend to launch the new products, and the old products decline.
And.
And not just innovation, but also the direct to consumer channel whether it be in China, where we stood up a fully integrated direct to consumer <unk> in the U S, where we launched <unk>, which is actually exceeding our expectations in terms of adoption and use and pull through and so I think I think that's.
A large part of it.
When I look at our performance I think it tells the story when we did we kind of expected our daily Si Hy infused our ultra one day outside the U S to do well and you see that 36%.
Growth performance in that daily segment, but what makes me really proud of the team is the fact that ultra monthly grew 8% in bio true even grew 2% and so we're we're really tried to focus on that.
Sealing the leaky bucket right you tend to launch the new products in the old products decline and I think you'll see a really nice performance and execution from our contact lens team.
George Gadkowski: I think you see a really nice performance and execution from our contact lens team to drive growth. When you get growth from your older products and stellar growth from your new products, it puts you in a very strong position. I am very optimistic about the contact lens market, and I think it is going to remain healthy throughout the year and for years to come.
To drive growth and so when you get growth from your older products and stellar growth from your new products that puts you in a very strong position. So.
Very I'm very optimistic about the contact lens market and and I think it's going to remain healthy throughout the year and for years to come.
Alright, Thank you very much.
Speaker 2: Thank you very much.
Thank you. The next question will be from Larry <unk> from Wells Fargo. Your line is live.
Operator: Thank you. The next question will be from Larry Biegelsen from Wells Fargo. Larry, your line is live.
Hi, Good morning. This is Lee calling in for Larry Thanks for taking my question and congrats great quarter.
Rachel Smith: Hi, good morning. This is Leigh calling in for Larry. Thanks for taking the question, and congrats, nice quarter. Just starting off, Sam, I know you're not giving guidance for 2026 yet, but you did give a lot of color around some of the issues in 2025, the investor recall, the relaunch, U.S. generic, et cetera, and all the investment that's going behind the key portfolios. Can you just talk about, for next year, as we think about it, is there any reason the business can't grow, let's say, the 6% to 8% you would be growing in 2025 ex the recall, especially against the easy comps this year? Related, in terms of the EBITDA, do you think you can return to kind of the pre-recall margins next year, just given the ramp that we're likely to see? I have a follow-up.
I guess, starting off Sam I know youre, not giving guidance for 'twenty, yes.
But you did give a lot of color around some of the issue and that 25.
Recall that relaunch U S snacks et cetera, and all the investment that's coming behind that.
Key portfolio can you just talk about for next year I can think about it is there any reason Rebecca.
Let's say the 6% to 8% you would be growing in 25 X 10 recall, especially can say easy comps this year.
And related to EBITDA.
Do you think you can return to kind of pre recall margin next year, just given the ramp that we're likely to see and I have a follow up.
Yes.
George Gadkowski: Yeah, so Leigh, I'll let obviously Sam answer. I think one piece of color I would say is I am very optimistic about 2026 and beyond. As I mentioned in the first question from Matt, why I stayed is I think we have a massive opportunity at this company over the next couple of years. As I said, the key opportunities are really accelerating growth, strong improvement in margins, and then, of course, our pull-through of our innovation and R&D pipeline. In that context, let me turn it over to Sam to provide a more specific answer.
I'll, let obviously Sam answer, but I think one piece of color I would say is I am very optimistic about 26 and beyond.
And as I mentioned in the first question.
From that why why I stayed as I think we have a massive opportunity at this company over the next couple of years and as I said the key opportunities are really accelerating growth.
Strong improvement in margins.
And then of course, our pull through of our innovation and R&D pipeline and so in that context, let me turn it over to Sam to provide more.
More specific answer.
Sam Eldessouky: Yeah, I share the exact same thoughts as Brent Saunders. Maybe just going through a little bit more, taking a step back, and you think about how 2025 plays for us, first half versus second half. With the raise of our guidance, that really represents our confidence in the core business and what we are seeing in both the consumer business, the lens business performance that Brent just went through, and also seeing the surgical outside the investor recall, as well as the work around the pharma and even generic, seeing a sequential improvement in generic, which is encouraging. More work there to be done, but encouraging in terms of how we think about it for the full year 2025. When you think about that momentum and what we are doing here from 2025, it gives us the confidence as we think forward.
Really the exact same thoughts as brands and maybe just going through a little bit more stepping ticket step back and you think about what sort of how twenty-five plays for us.
First half versus second half.
With the raise of our guidance that's really represents all confidence all the core business and what we're seeing in both the consumer business the lens business performance.
Brian just went through and also seeing the surgical outside sort of the investor recall as well as the work around sort of the pharma and even generic proceeding on sequential improvement in generics, which is encouraging.
More work there to be done, but it is encouraging in terms of how we think about it is for the full year of 25%. So when you think about that momentum and what we're doing here from 25. It gives us the confidence as we think forward and I'm not going to give you exact guidance for the 26 right now we'll spend more time talking through.
Sam Eldessouky: I am not going to give exact guidance for 2026 right now. We will spend more time talking through guidance, as well as long-term guidance when we see each other on November 13 on the Investor Day. It is really going to be important to how you build on this momentum going into 2026 and really push forward both on the top line growth, as well as on the margin expansion. Just also maybe double-clicking a little bit here as you think about the margins and how we think about the buildup of the growth and the margins. Our second half tends to be stronger than the first half because of seasonality in general.
Guidance as well as long term guidance when we see each other in November 13th on the Investor day, but it's G you're going to be important to how you build on this momentum go into 2020 six and really.
The push forward both on the topline growth.
As well as on the margin expansion.
Also maybe double clicking a little bit.
Element here, just thinking about the margins and how we think about the build up of the growth and the margins are second half tends to be stronger than the first half because of seasonality in general, but this year is even more pronounced because of just how the ramp up for investor recall is playing out.
Sam Eldessouky: This year is even more pronounced because of just how the ramp-up for investor recall is playing out, as well as how the generics actions are taking place and how we are building up with the generics. So I do expect, as we think about the phasing for Q3 and Q4, I would expect Q3 probably a very similar phasing as we saw last year in 2024. That puts really a much bigger emphasis on Q4 for us, which is our exit point as we go into 2026, which we will build on from that point.
As well as how the generics actions are taking place and how we're building up with the generics. So I do expect as we think about the phasing for Q3 and Q4 I would expect Q3, probably very similar phasing as we saw last June 20 for bad debt.
It's really a much bigger emphasis on Q4 for us, which our exit point as we go into 'twenty, six which will build on from that point.
George Gadkowski: Yeah, I think, Leigh, it's important to recognize, I know we tend to think about quarters, we talk about quarters. When I joined, I laid out the roadmap. We spent the last two years really stabilizing and fortifying this company, making it more resilient, upgrading talent, building processes and customer focus. You are starting to see that pay off in some of the resiliency we saw in the first quarter and first half of the year. I think you are going to see the strategy is working in the second half of the year. I think you are going to see the fruits of all the hard work we have done over the last few years really start to pick up in 2026 and 2027 and beyond. That is what we are excited to talk to you about in November and really hope you and the team and Larry attend.
I think it's important to.
I recognize you know I know, we tend to think about quarters, and we talk about quarters, but you know when I joined I laid out the roadmap and we spent the last two years really stabilizing and fortifying This company, making it more resilient upgrading talent and.
In building processes and end.
Customer focus and you know you're starting to see that pay off in some of the resiliency. We saw in the first quarter and first half of the year.
But but I think youre going to see the strategy is working in the second half of the year, but youre really.
I think youre going to see the fruits of all the hard work we've done over the last few years really start to pick up in 'twenty six 'twenty seven.
And beyond and so that's what we're excited to talk to you about in November.
And really help you on the team.
Korea attend.
Okay.
That's super helpful. Thank you and then just for my follow up question.
Rachel Smith: is super helpful. Thank you. For my follow-up question, just a couple of things on the pipeline. Earlier, it looks like you are still looking, the filing is pending. Would you still expect approval by the year-end? Any thoughts on adoption once we launch? Beyond, it looks like it may have been pushed out to 2027. Just see if you have any color on that. Thank you so much.
Just a couple of things on that pipeline.
It looks like you still have the filing is pending would you still expect approval by the year end.
Any thoughts on adoption once you launch and then beyond it looks like it may have been pushed out to 2007 just to give you any color on that thank you so much.
Yeah, I'll, let you he answer I'll, just say too.
George Gadkowski: I will let Yehia answer. I will just say, on Elios, obviously, we are super excited about the technology. I think the point we should just underscore here is having it approved in Europe and seeing the results clinically in Europe is quite encouraging for us. Obviously, a very different reimbursement environment than what the U.S. will be. Adoption will look entirely different. But clinically, you are seeing really great outcomes and great adoption in Europe. So that gives us a lot of confidence. But Yehia, you want to talk about approval and the file and then, of course, enVista beyond as well.
On <unk>, obviously, we're super excited about the technology and I think the point.
Good.
We should just underscore here is.
Having an approved in Europe and seeing the results clinically in Europe is quite encouraging for us.
Obviously, a very different reimbursement are.
Environment than what the U S will be and so adoption will look entirely different but clinically you're seeing really great outcomes and great adoption in Europe. So that gives us a lot of confidence, but you want to talk about approval in the file and then of course, our ambition beyond as well yeah sure. So so for.
Brent Saunders: Yeah, sure. So for Elios, I think, as Brent mentioned, we are very confident in the technology. The results we have seen and we are seeing from Europe are really very encouraging. With regard to the file, the strategy we took that we wanted to mitigate the risks once we submit the file, we get a lot of questions about certain areas from the FDA. We are trying to do upfront work that can save us the number of questions and cycles that could come. That is why we have actually put a little bit of time more in order to submit the file in the best shape. The other piece that we also decided to do it upfront is that we are actually introducing another probe, which actually, just from a capacity perspective, can work with the probe that we have in Europe.
Failures I think as Brent mentioned, we are very confident in the technology. The results. We have seen and we are seeing from Europe is really very encouraging with regard to define the strategy. We took that we wanted to mitigate the risks once we submit the file we get lots of questions about certain areas from the FDA. So.
We're trying to do upfront where could that can save us the number of questions in cycles that could come and that's why we have actually put a little bit of time more in order to submit the file in the best shape. The other piece that we also decided to do it upfront is that we are actually.
Introducing another.
<unk>, which actually just from a capacity perspective can work with the probe that we have in Europe. So as when we also launched the product we don't have issues with regard to the supply. So that's why we have additional supplier that led also that we have to validate and verify that so we're doing a huge progress we do expected that.
Brent Saunders: So when we also launch the product, we do not have issues with regard to the supply. So that is why we have an additional supplier that led also that we have to validate and verify that. We are doing huge progress. We do expect that we will submit this year. We do expect the approval could come early second half next year.
We will submit this year, we do expect the approval could come early second half next year, Yes, and look I think.
George Gadkowski: Yeah, and look, I think it was a tough decision to rush it in or create a more robust file. Given the promise of this technology, I think we made the right choice of creating a more robust file and approving a second supplier because we think demand will be high. The last thing you want to do is launch a great product like this and not be able to supply. We have been in that position in the past. I think a few months here will pay off handsomely for us in the future. You want to talk about enVista beyond? Timeline.
It was a tough decision to.
Rush it in or create a more robust file.
And given the promise of this technology, we I think we made the right choice of creating a more robust file and Ed and approving a second supplier because we think demand will be high and the last thing you want to do is launch a great product like this and not be able to to supply and so we've been in that position in the past.
I think a few months here will pay off.
Had some lay for us in the future.
You want to talk about them just to be honest.
Timeline.
And this step beyond yes, so investor beyond obviously, we were doing very good in terms of recruitment. However, with the recall we were affected also because some of the IOM measurements with part of the recalls batches. So we had to hold the recruitment for two months, but actually we.
Brent Saunders: enVista beyond, yes. enVista beyond, obviously, we were doing very good in terms of recruitment. However, with the recall, we were affected also because some of the IOL measurements were part of the recalled batches. We had to hold the recruitment for two months. But actually, after we came back to the market, we also backed the recruitment. We have recruited approximately 32 patients since we are back. We do expect still that we are trying to catch on the timelines. But we do expect maybe a couple of months of delay launch based on the delay that we had from the recall.
We decided after that we came back to the market. We also back to that equipment. We have recruited approximately 32 patients. Since we are back and we do expect that still that we are trying to catch on the timelines, but we do expect maybe a couple of months of delay launch based on the delay that we had from that.
Recall.
Yeah.
That answer the question.
George Gadkowski: that answer the question? Hello?
Hello, Yes, perfect. Thank you so much.
Rachel Smith: Yes, perfect. Thank you so much.
Alright, thank you.
George Gadkowski: Great. Thank you.
Brent Saunders: Thanks.
Operator: Thank you. The next question will be from Joanne Wuensch from Citibank. Joanne, your line is live.
Thank you. The next question will be from Joanne Wuensch from Citibank, John Your line is live.
Good morning, and thank you for taking the question I appreciate the comments on the contact lens market held that I'm curious if you can give us an update on how you're thinking about the product pipeline.
Rachel Smith: Good morning, and thank you for taking the question. I appreciate the comments on the contact lens market health. I am curious if you can give us an update on how you are thinking about the product pipeline and what we may be able to look forward to in the coming years. Thank you.
And what we may be able to look forward to you in the coming years. Thank you.
Yeah, Great question and I'll ask you here again to talk a little bit about it. Obviously this will be a key topic of the November Ah that Joanne and so we don't want to we don't want to front run our own investor day here too much but.
George Gadkowski: Yeah, great question. I will ask Yehia again to talk a little bit about it. Obviously, this will be a key topic of the November event, Joanne. We do not want to front-run our own Investor Day here too much. I think the bottom line, and Yehia can provide a little more details, is I think our contact lens portfolio of R&D projects is probably the best it has ever been in the history of the company. The last 30 years, our R&D has been playing catch-up to the market. As part of our strategy, it was to now try to get into a lead the market. I think Yehia and the R&D team in contact lenses has cracked the code. I am immensely proud of the challenge we gave them a couple of years ago and where they are today.
I think the bottom line and maybe you can provide a little more details as is.
I think our contact lens.
Portfolio of.
R&D projects is probably the best it's ever been in the history of the company.
The last 30 years, our R&D has been playing catch up to the market and as part of our strategy. It was to now try to get into a lead the market and and I think he and the R&D team in contact lenses has has cracked the code and I'm immensely proud of the challenge we gave them a couple of years ago.
And where they are today, but you want to talk a little bit more about that so.
George Gadkowski: Do you want to talk a little bit more about what we are doing?
Brent Saunders: Yeah, so definitely, the contact lens, we saw the opportunity in the material innovation. It has been for us always, Brent Saunders said, "There's no innovation happened on the material side for so many years." This for us was really one of the areas that we wanted to tackle. However, the bigger challenge for us is that we still wanted to produce it on our internal manufacturing capabilities without additional new lines of manufacturing and also to be considered one of the new segments if we can create a new segment for the contact lens area. This is when we started the biomimetic about two years. We are doing great progress on this project. In fact, our strategy, as I mentioned, is that we are trying as much as possible to do a lot of upfront work to save time on the back end.
So definitely.
The contact lens actually we sold the opportunity in the material innovation and it has been for as always been said just like there is no innovation happened on the material side for so many years and this for US was really one of the areas that we wanted to tackle however, the bigger challenge for us that we still wanted to produce it on.
Our internal manufacturing capabilities without additional.
New lines of manufacturing and also to be considered one of the new segments. If we can create a new segment for the contact lens area and this is when we started the biomimetic about two years, we are doing a great progress on this project in fact, our strategy again as I mentioned that we are trying as much as possible.
To do a lot of upfront work to save time on the back end. So Luckily we have done approximately 10 internal studies on the biomimetic lens and the results are showing us great progress, giving us confidence every day.
Brent Saunders: Luckily, we have done approximately 10 internal studies on the biomimetic lens. The results are showing us great progress, giving us confidence every day. We expect still that we will go for an external clinical study, a large one, that will be starting around October time frame. This actually will be the first study. You will hear more about the program and also the expected launch dates at the Investor Day.
And we expect still that we will go forward in external clinical study our largest one.
That would be starting around October timeframe and this is actually will be the first the study and you will hear more about the program and also the expected launches dates at the Investor Day, we're going to do a deep dive of this in November.
George Gadkowski: We are going to do a deep dive at this in November, Joanne. Anything else, Joanne, or? OK, operator, should we?
Anything else Joanna.
Okay operator.
Yes, we will be the last question will be from Doug <unk> from RBC capital markets Tokyo line is live.
Operator: Yes, we'll do. Next question will be from Douglas Miehm from RBC Capital Markets. Doug, your line is live.
Sam Eldessouky: Yeah, thank you. Good morning. I think we've touched on this to a fairly significant degree. You mentioned about the growth to net on Xiidra, and I think that's well understood. Is there anything that you're doing with respect to Miebo as well in terms of pricing to really firmly place this product in the market, especially in anticipation of the competition that you've already highlighted?
Thank you.
Good morning.
Okay.
I think we've touched on this too shall we should mention green, but you mentioned about the gross to net on are designed to run them and I think that's well understood but.
Is there anything that you're doing with respect to my role as well in terms of pricing.
To really firmly placed this market this product in the market, especially in anticipation of the competition that you've already highlighted.
Yeah, I mean, so we have invested in it.
George Gadkowski: Yeah, I mean, we have invested immensely in Miebo. Coverage rates on Miebo are incredibly strong. In fact, I would say we are essentially at what would be considered full coverage. As you compare to last year when it was uncovered, obviously, to full coverage today, you are looking at a hit to growth to net to secure that coverage. That is where it will be. When you think about 74% commercial coverage and 71% Medicare coverage, that is a great place. We did that regardless of the launch of a competitive product because that is how you win in this market. It also, in some ways, creates an uphill battle for any competitor because you know how this disease state works. The patient comes in, gets a prescription, goes to fill it at the pharmacy. If they do not have insurance coverage, they tend to abandon.
Immensely in my Boeing and coverage rates are on my bow or are incredibly strong and in fact I would say we're at we're essentially at what would be considered full coverage.
And so as you compare to last year when it was uncovered obviously to full coverage today.
Youre looking at.
Hit to gross to net to secure that coverage, but that is that is where it will it.
It will be and so.
When you think about 74% commercial coverage and 71% Medicare coverage right that that's that's a great place we did that regardless of the launch of a competitive product because that's how you win in this market, but it also you know in some ways creates an uphill battle for any competitor because.
You know you know how this disease state works that the patient comes in and gets a prescription goes to filled at the pharmacy and if they if they are if they don't have insurance coverage they tend to abandon.
And so you know.
George Gadkowski: Making sure when you have a chronic medicine that they do not abandon and they stay on therapy because it is effective and tolerable and covered are really the key dynamics. We are where we need to be. There is really no further work to be done there. Now it is about driving more adoption and bringing more patients into the marketplace.
Making sure when you have a chronic medicine that they don't abandon and they stay on therapy, because it's effective and tolerable.
And covered.
Really the key dynamics and we are where we need to be so theres really no further work to be done there now it's about driving more adoption.
And bringing more patients into the marketplace.
Okay, Perfect and then just as a follow up with respect to the generics business I know you're working on fixing this but I mentioned it does have any impact on the margins within the division.
Sam Eldessouky: OK, perfect. Just as a follow-up, with respect to the generics business, I know you're working on fixing this. I mentioned it does have an impact on the margins within the division. Can we think about the generics business as flat going forward, or do you actually expect that you can gain share in that business? That would be unusual, but it would be great if you could do it.
Can we think about the generics business is flat going forward or do you actually expect that you can gain share in that business that would be unusual but it'd be great. If you could do it.
George Gadkowski: You know, I am quite experienced in the generics world, having run Actavis for a few years, right, and selling it to Teva. Look, I mean, there are a couple of things in the generics business that, you know, you have to be quite nimble to be able to handle, right? What we saw over the last couple of years was a big competitor in the space, in the generics space, go out, Acorn. Then, of course, return. When they are out, it is a sort of a commodity-like business. So when supply is out, you have more robustness in the marketplace. When supply is broad, you have less robustness, you know, in the marketplace. That is how this business works. There is also just fundamental execution and other things. I think we are solving those.
[laughter] I'm quite experienced.
<unk> in the generics, we're all having run actavis for for a few years right it and selling it to Teva, but but look I mean.
There are a couple of things in the generics business that that.
You have to be quite nimble.
To be able to handle right and what we saw over the last couple of years was a big competitor in the space in the generic space go out.
And then of course return and when when they are out.
It's a sort of a commodity like business. So when supply is out you have more robustness in the marketplace and when supply is.
<unk> is broad you have less robustness in the marketplace and so that's how this business works, but theres also just fundamental execution and other things and I think we're solving those.
Our secret weapon in the generics business as we make the generics in the United States for the United States in our our state of the art facility in Tampa, where we make most of our pharmaceutical products or will make most of our pharmaceutical products. So.
George Gadkowski: Our secret weapon in the generics business is we make the generics in the United States for the United States in our state-of-the-art facility in Tampa, where we make most of our pharmaceutical products or will make most of our pharmaceutical products. So, you know, we will see what happens with tariffs from India. We will see what happens in other places. We are a high-quality, reliable supplier of generics. That is an important part of the dimension there. So it is a long way of saying it. It is an unpredictable market. We can do better than we have done in the first half of the year. We need to focus on what we can control, which is execution, high quality, reliable supply. That is exactly what we are going to do to see improvement in the second half and thereon. Sam, any other color you want to add?
We'll see what happens with tariffs from India, we'll see what happens in other words other places, but we are a high quality reliable supplier of generics and that's an important part of the dimension there. So.
It's a long way of saying it it's a it's an unpredictable market, we can do better than we've done in the first half of the year.
And so we need to focus on what we can control, which is execution high quality reliable supply and thats exactly what were going to do to see improvement in the second half and Theyre on the Sam any other color you want to I think you covered it well Brendan.
Sam Eldessouky: I think you covered it well, Brent. Douglas, when you think about the generics business, it exactly does go through those cycles. For example, we do not talk much about it, but last year, we ended generics was up about 10%. It was going to benefit from the cycle of the secret weapon that Brent talked about in terms of our manufacturing in Tampa, but also having the competitor being out of the market. One of the things we will look for in this business, in addition to the steps we are taking for execution, is we will continue to be standing ready for capitalizing on those opportunities when they present themselves and grab that market share and turn it into the growth rate that we saw last year.
Doug when you think about the generics business.
Exactly does go through cycles. So for example, we don't talk much about but last year. We ended <unk> was up about 10%.
And it was going to benefit from the cycle of the secret weapons, Brent talked about it in terms of our manufacturing in Tampa, but also having the competitor being out of the market. So one of the things. We will look forward. In this business is in addition to the steps we're taking for execution. It will continue to be standing ready for capitalizing on those opportunities.
When they present themselves.
That market share and turning it into the growth rate that we saw last year.
That's great. Thank you.
George Gadkowski: is great. Thank you.
Thank you and the final question today will be from Gary Nachman from Raymond James Gary Your line is live.
Operator: Thank you. The final question today will be from Gary Nachman from Raymond James. Gary, your line is live.
Great Thanks, and good morning.
Sam Eldessouky: Great, thanks, and good morning. First, regarding the investor recovery after the recall, Brent, just provide some more detail on position adoption and confidence in the product offering at this point. How quickly you were able to recapture that with the ECPs. As far as the investor recall impact on any of your other products or franchises, you specifically mentioned equipment. Just clarify that and how you were able to resolve that and if you are anticipating any other impacts from the recall over the course of the year. Then have a follow-up.
First regarding the investor recovery after the recall, Brian just provide some more detail on physician adoption and confidence in the product offering at this point.
How quickly you were able to recapture that with Ecp's Ed.
I guess as far as the Investor recall impact on any of your other products or franchises you specifically mentioned equipment. So just clarify that and how you were able to resolve that and if you're anticipating any other impacts from the recall over the course of the year and then I have a follow up.
Yeah sure happy to so look when we when we voluntarily recalled the invest a product line. We did it because it was the right thing to do and we always put patient safety first.
George Gadkowski: Yeah, sure, happy to. Look, when we voluntarily recalled the enVista product line, we did it because it was the right thing to do. We always put patient safety first. The benefit from an unfortunate situation is also an opportunity. That is about trust, right? Trust can be earned in every interaction with customers. It takes a long time to build a foundation of trust. It can be destroyed very quickly. I think the way we handled it with the transparency and patient safety first mentality really gave us an opportunity to earn more trust in a marketplace like IOLs where surgeon relationships are paramount. When customers trust you, they give you their business. When they really trust you, they give you their loyalty. We hope that our actions here will have a longer-term benefit. As surgeons know, we will always prioritize patient safety.
Benefit from from a unfortunate situation is also an opportunity and Thats about trust right.
And trust can be earned in in every interaction with customers. It takes a long time to build a foundation of trust and it can be destroyed very quickly and so I think.
The way we handled it with the transparency.
Patient safety first mentality really gave us an opportunity to earn more trust.
In a marketplace like Io elsewhere surgeon relationships.
Our Paramount and so.
When customers Trust you they give you their business, but when they really trust you. They give you their loyalty and so we hope we hope that that our actions here.
We will have a longer term benefit.
As surgeons know, we will always prioritize patient safety.
George Gadkowski: I think when you look at where we stand in the context of the recall, I think we are in very good shape. It will take some time, right? We have shipped about 200,000 lenses, as we said in the prepared remarks. We still do not have full consignment ability in the marketplace. That will happen over the next few weeks as we continue to ramp up production. When you look at adoption, as I mentioned, the loyalist KOLs came right back in. Even though we do not always have every diopter or every lens, they are working with us to really drive implantation and see strong results. There are a group of surgeons that are starting to implant but have not fully adopted because we cannot provide a full consignment yet.
When you look at where we stand in the in the context of the recall.
I think we're we're we're in very good shape. It will take some time right. We have shipped about 200000 lenses as we said in the prepared remarks.
Don't have four consignment.
Our ability.
In the marketplace.
And that will happen over the next few weeks as we continue to ramp up production.
And then when you look at adoption as I mentioned, the loyalists Kols, who came right back in and even though we don't always have every diopter or everyone's they're working with us to to really drive implantation and see strong results.
There are a group of surgeons that are starting to implant, but haven't fully adopt because we can't provide a full consignment yet.
George Gadkowski: Of course, when we get to full consignment, it will be about bringing new implanters and new surgeons into the business. My sense of where we are today is that we will be fully back on track and recaptured our momentum by the first quarter of next year. So a work in progress throughout the year, but it will build sequentially and week over week, month over month. We are seeing exactly what we want to see. I think this was as well handled as can be. We still have a lot of work to do in the second half of the year to get to where we want to be. We are absolutely on track. Does that answer your question?
And then of course, when we get to four consignment it will be about bringing new new and planters and new surgeons into the business and some night might my sense of where we are today is that we will be fully back on track and recaptured our momentum by the first quarter of next year. So a work in progress throughout the year, but it will build sequentially.
Chile and week over week month over month.
And so we're seeing exactly what we want to see an and.
I think this was as well handled as can be but we still have a lot of work to do in the second half of the year to get to where we want to be but but we're absolutely on track.
Does that answer yes.
Yes, yes, that's perfect and then just shifting to pharma.
Sam Eldessouky: Yeah, yeah, yeah. No, that was perfect. Then, just shifting to pharma, within dry eye, where we have been seeing a lot of market growth, where are you seeing most of the incremental growth in Miebo prescriptions? Is it mostly new patients or switches from other dry eye products, just given the unique evaporative nature of the product? Lastly, how comfortable are you with the pharma pipeline? I know you will talk more about this at the R&D Day in November. Do you think you need to add to that meaningfully with BD to help with the long-term growth in that business? You talk a little bit about generics, but I am curious more on the innovative side of things. Thanks.
Within dry eye.
We've been seeing a lot of market growth, but where are you seeing most of the incremental growth in <unk> prescriptions.
It mostly new patients or switches from other dry eye products, just given the unique evaporative nature of the product.
And then just.
Lastly, just.
How comfortable I know you'll talk more about this at the R&D day in November, but how comfortable are you with the pharma pipeline.
Do you think you need to add to that meaningfully with BG to help with the long term growth in that business you talk a little bit about generics, but I'm curious more on the innovative side of things.
Yeah, So I think what youre seeing in dry eye, which is benefiting <unk>.
George Gadkowski: Yeah, so, you know, I think what you're seeing in dry eye, which is benefiting Miebo extensively, is an expansion of new patients into the market. That's in part, it's obviously multifactorial, but it's in part based on our DTC and other efforts to expand the market, which are absolutely working. I've always said this. I know this market well. It's a very promotionally sensitive marketplace. But I think what's making it better is when you look at a medicine like Miebo and you look at the risk-benefit of it, it tremendously tilts towards the benefit. You have a drug that works almost instantly, as Yehia mentioned from our phase four study we just produced, works consistently and has essentially, you know, no AEs, right? It's a highly tolerable drug. So patients, as I said, describe it as silky and smooth in the eye.
Extensively as an expansion of new patients into the market.
That's in part, it's obviously multifactorial, but it's in part based on our DTC and other efforts to expand the market, which which are absolutely working this as I've always said this I know this market well its a very promotional sensitive marketplace.
But I think what's what's making it it.
Better is when you look at a medicine like like Mimo.
And you look at the risk benefit of it it's tremendously tilts towards the benefit you have a drug that that that works almost instantly as you have mentioned from our phase four study we just produced.
<unk> consistently.
It has essentially no aes right, it's a highly tolerable drug and so patients as I said subscribe it as silky smooth in the eye and so when patients are getting that kind of relief when there.
George Gadkowski: So when patients are getting that kind of relief, when you have the type of managed care coverage that we had to invest to get, that makes for kind of the winning formula for success in dry eye, right? A great product, instant relief, great long-term tolerability, and affordability because of the coverage is really where you want to be. So Miebo is absolutely growing the market. I think the other, I don't have the data in front of me. We can follow up with you. But the refill rate on Miebo is higher than the rest of the category too, which is another sign that patients really do appreciate this therapy. So, you know, I think Miebo has a lot of growth in front of it. And obviously, we'll talk more about it in the November meeting.
When you have the type of managed care coverage that we had to invest to get that makes for a kind of the winning formula for success in dry eye right a great product.
Instant relief, great long term, tolerability, and and and affordability because of the coverage is really where you want to be and so my bow is absolutely growing the market I think the other I don't have the data in front of me, we can follow up with you, but but the refill rate on LIBOR is higher.
<unk> been the rest of the category too which is another sign that the patients patients really do appreciate this therapy.
And so you know.
<unk> has.
A lot of growth in front of it.
And obviously, we'll talk more about it in the November meeting, but very optimistic on where we can drive my Boe despite noise around competition and the likewise I don't really think thats going to be an issue for <unk> growth.
George Gadkowski: But very optimistic on where we can drive Miebo despite, you know, noise around competition and the likewise. I don't really think that's going to be an issue for Miebo growth. The pipeline, you know, Yehia can weigh in here. I'm super excited about our pharma pipeline from the combination for dry eye therapy that will enter clinicals this year, our novel neuroprotective glaucoma product that will enter clinicals this year, and then, of course, our pain product I think has already started.
The pipeline yeah. He can weigh in here I'm Super excited about our pharma pipeline from the the combination.
For dry eye therapy.
And our clinical as this year.
R R.
<unk> Neuroprotective.
Glaucoma product that will enter clinical as this year and then of course our pain.
Product.
I think as already start.
Actually it will be starting recruiting next week, we'll start next week. So these programs are going to be in clinical and we will be able to talk about that in November but you know earlier in the pipeline we have a lot of other really important.
Brent Saunders: Actually, we'll be starting recruiting next week.
George Gadkowski: will start next week. So, these programs are going to be in clinical, and we will be able to talk about that in November. But, earlier in the pipeline, we have a lot of other really important programs, whether it be through our collaborations with Citibank or Artelac and the like. So, Yehia, anything you want to chime in there?
Programs, whether it be through our collaborations with city or character and alike. So you hear anything you want to chime in there I think you addressed almost all points Brent, but just would like just mentioned the philosophy on the pharma pipeline in particular, because I think it is.
Brent Saunders: I think you addressed almost all points, Brent. I would like to mention the philosophy on the pharma pipeline in particular because I think it is one of the areas that witnessed a lot of transformation in Bausch + Lomb. To give you an overall perspective on the strategy, what we are looking for is areas of high unmet medical need currently either not addressed by any treatment or addressed by treatment that could have the potential we get a better version of these treatments or best-in-class treatments. You mentioned the innovation part. I would like to comment on the innovation part because for ocular pain, it is a new chemical entity. It is the first time that we use this indication; it is not existing before.
One of the areas that witnessed a lot of transformation and <unk> and just to give you an overall perspective on the strategy. So what we are looking for is areas of high unmet medical need currently either not addressed by any treatments or addressed by treatment that could have the potential we get a better.
Version of these treatment of best in class treatments and.
You mentioned the innovation part and I, just would like to comment on the innovation part because for ocular pain, it's a new chemical entity. It's the first time that we use this indication is not existing before so.
And if you look at the dry eye area.
Brent Saunders: If you look at the dry eye area, we are developing the first combination therapy in the prescription dry eye market to address inflammation and evaporative dry eye. Glaucoma, we really want to change the standard of care. Glaucoma is a neuropathy disease. We have been addressing glaucoma as an IOP lowering only, but neglecting the neuropathy part that leads to vision loss. That is why we are very much interested in these new segments. As Brent mentioned, this is the wave going into the clinical trials this year. We also are having a second wave coming up next year from Character BioCollaboration and Citi Therapeutic that address bigger areas in the retina, like geographic atrophy, precision medicine. You will hear a lot more about this at the Investor Day. It is one of the most innovative pipelines if we look holistically in the pharma now existing in eye care.
Again, we are developing the first combination therapy in the prescription dry eye market address inflammation and elaborate a dry eye.
Glaucoma, we really want to change the standard of care glaucoma, either neuropathy disease, we have been addressing glaucoma is an IOP lowering only but neglecting the neuropathy part that leads to vision loss and Thats why we are very much interested in these new segments and as Brent mentioned.
This is that we have going into the clinical trials. This year, but we also are.
Having a second wave coming up next year from character bio collaboration and city therapeutics that address bigger areas in the retina like geographic atrophy precision medicine. So you will hear a lot more about this at the Investor day, but it's one of the most innovative pipelines if we look holistic.
Really in the pharma now existing in eyecare.
Yeah.
Hey, Oscar.
George Gadkowski: Anything else, Gary?
Yeah that color was really helpful. Thanks, guys.
Sam Eldessouky: That color was really helpful. Thanks, guys.
Great.
George Gadkowski: Well, let me just conclude by thanking everyone for joining. As I opened the call, I think the opportunity in front of us is extraordinary. I think you will better understand why I have so much optimism for our future after you hear our more detailed thoughts around our strategy, our guidance, and our pipeline in November, which I encourage you all to participate in. Of course, we are always available to you if you have any questions. George, Sam, and I are happy to follow up as we always do with you. Thank you for joining us today, and we look forward to keeping you updated.
Well.
Let me just conclude by thanking everyone for joining as I opened the call.
I think the opportunity in front of us is extraordinary.
I think you will better understand why I have so much optimism for our future. After you hear our more detailed thoughts around our strategy our guidance and in our pipeline in November.
Which I encourage you all to participate in.
And of course, we're always available to you. If you have any questions George Sam and I are happy to follow up as we always do with you.
But thank you for joining us today, and we look forward to keeping you updated.
Thank you. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.