10-K: Bausch + Lomb Reports Fiscal Year 2024 Results; Separation from Bausch Health Still Under Consideration

Bausch + Lomb's 2024 annual report reveals a 16% revenue increase, driven by volume growth and strategic acquisitions, while the company continues to evaluate options for separating from Bausch Health.

Summary

• Bausch + Lomb's 2024 revenues increased by 16% to $4.791 billion, compared to $4.146 billion in 2023.
• The revenue increase was driven by volume growth, strategic acquisitions, and increased net realized pricing.
• The Vision Care segment's revenue increased by 8% to $2.739 billion, driven by consumer eye care and contact lens businesses.
• The Pharmaceuticals segment's revenue increased by 45% to $1.209 billion, primarily due to the XIIDRA acquisition and the launch of MIEBO.
• The Surgical segment's revenue increased by 10% to $843 million, driven by increased demand for consumables, equipment, and implantables.
• Net loss attributable to Bausch + Lomb Corporation was $317 million, compared to a net loss of $260 million in the previous year.
• The company is actively managing its supply chain and inflationary challenges.
• Bausch Health Companies Inc. still holds approximately 88.1% of Bausch + Lomb's common shares as of February 12, 2025.
• Bausch + Lomb is still considering options for separating from Bausch Health Companies Inc., including a distribution, sale transaction, or a combination thereof.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While revenue growth is positive, the net loss and ongoing challenges related to the separation from BHC temper the overall outlook.

Positives

• The company's comprehensive product portfolio allows it to engage with patients and consumers throughout the entire continuum of their eye health needs.
• Bausch + Lomb is focused on patient, consumer, and eye care professional education to increase product adoption.
• The company is continuously implementing and searching for new ways to drive operational efficiencies and margin expansion.
• The company has a robust, global succession planning process to strengthen the pipeline for critical leadership positions.
• The Bausch Foundation supports initiatives aimed at disease prevention, improving patient outcomes and lives, education and community support.
• The ONE by ONE Recycling program has collected more than 94 million used contact lenses, blister packs and top foils since its launch.

Negatives

• The company reported a net loss attributable to Bausch + Lomb Corporation of $317 million in 2024.
• The company faces risks associated with the potential imposition of and adverse changes to duties, tariffs and other trade protection measures.
• The company is subject to ongoing and potential legal and governmental proceedings, including with respect to intellectual property.
• The company is subject to compliance by its third party partners and service providers of their contractual, legal and regulatory obligations.
• The company is subject to product liability matters, including potential product recalls or voluntary market withdrawals.
• The company is subject to compliance with various laws and regulations, including with respect to marketing, promotional and business practices and fraud and abuse, anti-bribery, environmental and privacy and security matters.

Risks

• Adverse economic conditions and macroeconomic factors, including heightened inflation and interest rates, slower growth or a potential recession, could adversely impact the company's revenues, expenses and resulting margins.
• The company may not realize the anticipated benefits from the Separation, and the Separation could harm the company's business.
• The company has limited history of operating as an independent company, and its historical financial information prior to the B+L IPO is not necessarily representative of the results that it would have achieved as an independent or standalone company and may not be a reliable indicator of its future results.
• The company's ability to successfully develop its pipeline of products is highly uncertain and requires significant expenditures and time, including risks relating to obtaining necessary government approvals.
• Interruptions to the company's manufacturing operations and those of its third-party manufacturers, including as a result of failure to comply with applicable regulations, could adversely affect the company's business.
• Certain of the company's products or components thereof are available from a single source or a limited number of sources.
• The company may experience changes in market acceptance of its products due to inadequate reimbursement for such products or otherwise.
• The company may face pricing decisions, including as a result of price changes and/or new programs to enhance patient access to its products.
• The company's indebtedness could adversely affect its business and its ability to meet its obligations.
• The company's international operations are subject to risks associated with conducting a significant portion of its business outside the United States, including with respect to foreign currency risk and the ongoing Ukraine-Russia conflict and Middle East conflict involving Israel, Hamas and other countries and militant groups in the region.
• The company may face the loss of patent protection or exclusivity rights and, even where it retains patent protection or exclusivity rights, competition from similar products in the markets in which it participates.
• The company may face a breakdown, interruption or breach of its information technology systems.
• The company may face competition for its pharmaceutical, OTC products or medical devices.
• The company's effective tax rates may increase, including as a result of changes in applicable tax laws.
• The company may face the impact of potential imposition of and adverse changes to duties, tariffs and other trade protection measures (including any retaliations to such measures).
• The company may face the impact of ongoing and potential legal and governmental proceedings, including with respect to intellectual property.
• The company may face product liability matters, including potential product recalls or voluntary market withdrawals.
• The company may face compliance with various laws and regulations, including with respect to marketing, promotional and business practices and fraud and abuse, anti-bribery, environmental and privacy and security matters.
• The company may face enactment of new regulations or changes in existing regulations related to the health care system.

Future Outlook

Bausch + Lomb plans to continue developing and commercializing its global pipeline of approximately 60 projects and is developing an integrated ESG program to comply with evolving sustainability regulations.

Industry Context

The eye health market is competitive, with Bausch + Lomb competing against specialty and large pharmaceutical companies, medical device companies, biotechnology companies, OTC companies, and generic manufacturers.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or benchmarks.
• The document does not list specific comparible companies, projects, and results.

Legal Proceedings

• Bausch + Lomb is involved in various legal and administrative proceedings, including product liability, intellectual property, commercial, tax, antitrust, governmental and regulatory investigations, and employment-related issues.
• The company is a defendant in multidistrict antitrust litigation related to generic pharmaceuticals pricing.
• The company is involved in product liability lawsuits related to Shower to Shower body powder, with Johnson & Johnson having indemnification obligations.
• The company is involved in a declaratory judgment action in New Jersey related to alleged transfers of assets from BHC to Bausch + Lomb.
• The company is involved in a lawsuit with Doctors Allergy Formula, LLC, asserting breach of contract and related claims.
• The company is involved in patent infringement proceedings related to PreserVision AREDS and Lumify products.

Related Party Transactions

• Bausch + Lomb has entered into a Master Separation Agreement and other agreements with BHC that govern the relationship between the parties following the B+L IPO.
• BHC continues to provide some transitional services to Bausch + Lomb under a Transition Services Agreement.
• Bausch + Lomb has agreed to indemnify BHC for certain liabilities, and BHC has agreed to indemnify Bausch + Lomb for certain liabilities.

Stakeholder Impact

• The company's performance and strategic decisions may impact shareholders, employees, customers, suppliers, and creditors.
• The company's ability to develop and commercialize new products may impact patients and healthcare providers.
• The company's compliance with environmental, social, and governance (ESG) matters may impact communities and the environment.

Next Steps

• Continue global roll out of SiHy Daily contact lenses.
• Continue launch of Lumify Preservative Free.
• Continue launch of enVista Envy TM in the U.S.
• Anticipate launching enVista Envy TM in Europe in 2025.
• Anticipate launching enVista Beyond TM in the U.S. in 2026.

Key Dates