Shares of Bausch Health Companies Inc. dropped 6.2 per cent Wednesday after the pharmaceutical company reported a loss of nearly US$1.52 billion in its latest quarter after settling a lawsuit over a stock plunge that hit investors in 2015.
The Quebec-based company’s stock closed down $2.30 to $34.93 on the Toronto Stock Exchange after dropping by as much as 10.4 per cent in earlier trading.
The company, which keeps its books in U.S. dollars, said its net loss amounted to US$4.30 per diluted share for the quarter compared with a net loss of US$344 million, or 98 cents per diluted share, in the same quarter a year earlier.
On an adjusted basis, Bausch Health reported a profit of $404 million or $1.12 per share for the final quarter of 2019, up from adjusted net income of $368 million or $1.03 per share in the fourth quarter of 2018.
Revenue totalled $2.22 billion for the quarter, up from $2.12 billion in the same quarter a year earlier.
The company was expected to post adjusted profits of $1.15 per share on $2.19 billion of revenues, according to financial markets data firm Refinitiv.
“We have now delivered eight consecutive quarters of organic growth, and 2019 was our first full year of reported revenue growth since 2015,” CEO Joseph Papa said in a conference call.
For the full-year, it lost $1.79 billion, down from $4.15 billion a year earlier on improved operating results and lower interest expenses and debt charges.
Adjusted profits increased 11 per cent to $1.56 billion or $4.36 per share as revenues increased three per cent to $8.6 billion.
In December, Bausch Health said it would pay US$1.21 billion to resolve all claims against it in the so-called Valeant stock drop case, which was filed in a U.S. district court in October 2015. The company admitted no wrongdoing as part of the settlement.
The settlement allows the firm, previously known as Valeant Pharmaceuticals, to further emerge from the tide of litigation that has seen more than 160 cases settled or resolved since 2017.
Douglas Miehm of RBC Dominion Securities Inc. said the results demonstrate that there “will continue to be a gap between management and the Street as it pertains to the company’s medium to longer-term growth trajectory,” he wrote in a report.
The company’s revenue guidance includes a $50-million revenue impact from the coronavirus.
Bausch told analysts that given its leverage, it is difficult to pursue the sale of one or more of its business units even though investors prefer “pure plays.”
“But as we look down the road, some day down the road, there may be opportunities to pursue more pure plays with respect to one or more of our businesses, but that’s just something that’s down the road,” chief financial officer Paul Herendeen told analysts.
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