Bausch & Lomb International: A major division
Bausch & Lomb International is Valeant’s (VRX) primary Durable Growth segment. The business comprises its Global Vision Care, Global Surgical, Global Consumer, Global Ophthalmology Rx, and International business units.
The top ten products in these five units include SofLens Total, Occuvite + Preservision, ReNu Total, Lotemax Total, PureVision Total, Biotrue MultiPurpose Solution, and Cerave Total.
The segment’s revenues jumped 4% on a year-over-year basis to ~$1.2 billion in 3Q16. However, after making certain adjustments for acquisitions, divestitures, and discontinuations, there was a 1% decline in the segment’s same-store sales on annual basis. With a fall in net price, the volume increase wasn’t sufficient to offset the impact.
However, its Consumer business was a win and increased 6% on a same-store basis during the period. Despite a 4% price decline, the 10% volume gain did more than offset the negative impact.
Operating margin and expenses for Bausch & Lomb
Over the past five quarters, the Bausch & Lomb business had shown a variation in the margins, where its gross margin fell to 61% in 3Q16 from 67% in 3Q15. With the lowest of the three segments’ gross margins, Bausch & Lomb’s contribution to Valeant’s overall EBITA[1. earnings before interest, tax, and amortization] remained at 32%.
The adjusted operating income of the segment stood at $348 million during 3Q16.
If you want diversified exposure to Valeant, you can invest in the VanEck Vectors Pharmaceutical ETF (PPH). The fund holds ~2.0% of its assets in Valeant. Along with Valeant, PPH also holds ~6.2% in Sanofi (SNY), ~6.0% in Merck (MRK), and ~5.8% in Johnson & Johnson (JNJ) in its portfolio.
In the next article, we’ll discuss the Branded Rx segment in detail.