Valeant to Change its Name to Bausch Health Companies, Reports Loss in First Quarter
In what is likely a move to shake off unwanted baggage from pricing controversies and accounting scandals, Valeant Pharmaceuticals will change its name to Bausch Health Companies Inc. in July of this year.
The company will rebrand itself with the highly recognizable name of its subsidiary eye-care company Bausch & Lomb. The Quebec-based Valeant announced the rebranding effort this morning. Joseph C. Papa, chairman and chief executive officer of Valeant, said the Bausch name “embodies the rich history of innovation, fortitude and dedication to patient health.” Referring to the innovation that made Bausch + Lomb such a strong brand, Papa said the qualities of that brand and its founder, J.J. Bausch, “form the foundation of who we are today as we continue to build an innovative company striving to improve the health of patients globally."
In announcing the name change Papa pointed to some of the changes that have taken place at the embattled company that was once the poster-child for excessive M&A activity. Since taking over the reins of the company Valeant said Papa has guided more than a dozen divestitures to strategically streamline operations, has reduced debt by more than 20 percent and has resolved numerous “legacy issues.”
"Now is the right time in our turnaround to unite our Company's core businesses, subsidiaries and brands under the Bausch Health name," Papa said in a statement. "We believe Bausch Health Companies more accurately represents the full scope of the Company today – a leader in the development and manufacture of a wide range of pharmaceutical, medical device and over-the-counter products, primarily in the therapeutic areas of eye health, gastroenterology and dermatology."
When Papa took over embattled Valeant in May 2016 the company had a massive debt of more than $30 billion due to its M&A activity. To cut that debt the company committed to divesting itself of non-core business units. Last year Valeant sold off equity interests in Dendreon Pharmaceuticals, Inc., the manufacturer of prostate cancer drug Provenge, to China’s Sanpower Group Co., Ltd. for about $820 million. The company also sold three skincare brands to L'Oréal and divested itself of a manufacturing facility in Brazil. At one time the Bausch + Lomb brand itself was reportedly considered up for sale to Carl Zeiss Meditec for $2 billion as the company examined its finances. That deal never happened though.
When the name change happens in July Valeant will unveil a new corporate brand identity, which will include new imagery and web site. The company’s will continue to trade on the New York Stock Exchange and the Toronto Stock Exchange under its current ticker symbol VRX until July. Then the company will trade under the ticker symbol BHC.
Although Valeant will change its corporate branding, the company said some of its subsidiaries “have strong brand equity,” so those entities will continue to operate under the corporate umbrella using their existing names.
In addition to the name change, Valeant also announced it raised its revenue forecast for 2018. For the first quarter of 2018 the company reported revenues of $1.995 billion, although those numbers are down 5 percent from the previous year’s first quarter. For the first time since 2015 the company said it delivered “overall organic revenue growth,” which was driven by its branded drugs and the Bausch + Lomb lines.
The company also said it was able to resolve some of the legal issues it has faced, including a California Department of Insurance matter relating to fraudulent claims allegedly submitted by its former specialty pharmacy company Philidor. That resulted with no finding of admission or liability by Valeant, the company said. As part of the deal Valeant agreed to pay $1.875 million to cover claims for reimbursement for Valeant products submitted by Philidor to California insurers.
Over the past three years Valeant has lost more than 90 percent of its market value when the company was trading at $257.53 in the summer of 2015. This morning though Valeant Investors seem to be happy with Papa’s latest moves. Shares of the company are up nearly 9 percent in premarket trading to $19.79.