Bausch Health Companies Inc.
Loading chart...
PART I
Item 1. Business
Introduction
Bausch Health Companies Inc. (“we”, “us”, “our”, the “Company” or “Bausch Health”) is a global, diversified specialty pharmaceutical and medical device company that develops, manufactures and markets, primarily in the therapeutic areas of gastroenterology (“GI”), hepatology, neurology and dermatology, a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products and aesthetic medical devices and, through our approximately 88% ownership of Bausch + Lomb Corporation (“Bausch + Lomb” or “B+L”), branded, and branded generic pharmaceuticals, OTC products and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment) in the therapeutic areas of eye health. The Company’s products are marketed directly or indirectly in approximately 90 countries.
Our portfolio of products falls into five reportable segments: (i) Salix, (ii) International, (iii) Solta Medical, (iv) Diversified and (v) Bausch + Lomb. The following is a brief description of the Company’s segments:
•The Salix segment consists of sales in the U.S. of GI products. Sales of the Xifaxan® product line currently represent approximately 85% of the Salix segment revenues.
•The International segment consists of sales, with the exception of sales of Bausch + Lomb products and Solta Medical aesthetic medical devices, outside the U.S. of branded pharmaceutical products, branded generic pharmaceutical products and OTC products.
•The Solta Medical segment consists of global sales of Solta Medical aesthetic medical devices.
•The Diversified segment consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) dermatology products, (iii) generic pharmaceutical products and (iv) dentistry products.
•The Bausch + Lomb segment consists of global sales of Bausch + Lomb Vision Care, Surgical and Pharmaceuticals products.
For additional discussion of our reportable segments, see the discussion in Item 1. “Business — Segment Information” and Note 23, “SEGMENT INFORMATION” to our audited Consolidated Financial Statements.
Separation of the Bausch + Lomb Eye Health Business
On August 6, 2020, we announced our plan to separate our eye health business consisting of our Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses into an independent publicly traded entity, Bausch + Lomb, from the remainder of Bausch Health Companies Inc. (the “B+L Separation”). On May 5, 2022, the registration statement related to the initial public offering of Bausch + Lomb (the “B+L IPO”) was declared effective, and Bausch + Lomb’s common stock began trading on the New York Stock Exchange and the Toronto Stock Exchange, in each case under the ticker symbol “BLCO” on May 6, 2022. Prior to the effectiveness of the registration statement, Bausch + Lomb was an indirect wholly-owned subsidiary of Bausch Health. On May 10, 2022, a wholly owned subsidiary of Bausch Health sold 35,000,000 common shares of Bausch + Lomb pursuant to the B+L IPO. Upon the closing of the B+L IPO and after giving effect to the subsequent partial exercise of the over-allotment option by the underwriters, Bausch Health indirectly holds 310,449,643 common shares of Bausch + Lomb, which represents approximately 88% of B+L’s outstanding common shares as of February 11, 2026.
We continue to believe that the B+L Separation, which may include the monetization of all or a portion of our ownership interest in Bausch + Lomb, the transfer of all or a portion of our remaining direct or indirect equity interest in Bausch + Lomb to our shareholders, or a combination thereof, makes strategic sense. The completion of the B+L Separation is subject to the achievement of targeted debt leverage ratios and the receipt of any applicable shareholder and other necessary approvals. We continue to evaluate all relevant factors and considerations related to the B+L Separation, including the Xifaxan® Generics Litigation (see “Xifaxan® Paragraph IV Proceedings” of Note 21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements).
The B+L Separation, if consummated, will result in two separate, independent companies:
•Bausch Health excluding Bausch + Lomb - a diversified pharmaceutical company with leading positions in gastroenterology, hepatology, dermatology, neurology and international pharmaceuticals, and aesthetic medical devices. The remaining pharmaceutical entity will comprise a diversified portfolio of our brands across the Salix, International, dentistry, neurology, medical dermatology and generics, and aesthetic medical devices businesses; and
1
•Bausch + Lomb - a fully integrated eye health company built on the iconic Bausch + Lomb brand and its long history of innovation.
As independent entities, management believes that each company will be better positioned to individually focus on its core businesses to drive additional growth, more effectively allocate capital and better manage its respective capital needs. Although management believes the B+L Separation will unlock value, there can be no assurance that it will be successful in doing so.
For additional details on the B+L Separation, see “Separation of the Bausch + Lomb Eye Health Business” in Note 2, “SIGNIFICANT ACCOUNTING POLICIES” to our audited Consolidated Financial Statements and Item 1A. “Risk Factors — Risks Relating to the B+L Separation” of this Form 10-K.
Business Strategy
Our strategy is to focus our business on core therapeutic classes and geographies that offer attractive growth opportunities. Within our chosen therapeutic classes, we prioritize durable products which we believe have the potential for strong operating margins and evidence of growth opportunities. We have found and continue to believe there is significant opportunity in each of our businesses and we believe our existing portfolio, commercial footprint and pipeline of product development projects position us to successfully compete in these markets and provide us with the greatest opportunity to build value for our shareholders.
We believe we have a well-established diversified product portfolio across all our businesses that provides a sustainable revenue stream to fund our operations. Our continued success is dependent upon our ability to refresh our pipeline on an ongoing basis and bring new product solutions to the market that meet changing demands and replace other products that have lost momentum. We have a pipeline that we believe not only provides for the next generation of our existing products but is also poised to bring new and innovative solutions to market.
We have focused our research and development (“R&D”) to advance development programs that we believe will drive growth in our core businesses, while creating efficiencies in our R&D efforts and expenses. Although we primarily rely on our R&D organization to build-out and refresh our product portfolio, to supplement those efforts, we continually seek out opportunities, such as co-promotions, licensing agreements and strategic acquisitions, to leverage our commercial footprint, particularly our sales force, by strategically aligning ourselves with other innovative product solutions that, when coupled with our existing product portfolio, address specific needs in the market. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Focus on Value and Core Businesses” of this Form 10-K.
Segment Information
Our revenues for 2025, 2024 and 2023 were $10,266 million, $9,625 million and $8,757 million, respectively. Currently, we have approximately 1,000 products in our portfolio of products, which fall into five reportable segments:
Salix
Our Salix segment consists of sales in the U.S. of GI products and includes our Xifaxan® product. We have implemented initiatives, including increasing our marketing investment in Xifaxan®, to seek to further capitalize on the value of the infrastructure we have built around these products to extend our market share. Our principal products include:
•Xifaxan® which includes: (i) tablets indicated for the treatment of irritable bowel syndrome with diarrhea (“IBS-D”) in adults and for the reduction in risk of overt hepatic encephalopathy (“OHE”) recurrence in adults and (ii) tablets indicated for the treatment of travelers’ diarrhea caused by noninvasive strains of Escherichia coli in patients 12 years of age and older. Our Xifaxan® product accounted for revenues of $2,212 million, $1,993 million and $1,810 million for 2025, 2024 and 2023, respectively.
•Relistor® (methylnaltrexone) is given to adults who use narcotic medicine to treat severe chronic pain that is not caused by cancer to prevent constipation without reducing the pain-relieving effects of the narcotic.
•Trulance® (plecanatide) is a once-daily tablet for adults with chronic idiopathic constipation, or CIC, and irritable bowel syndrome with constipation.
We have continued our investment in Xifaxan® direct-to-consumer (“DTC”) advertising and new sales force capabilities.
Our ongoing commitment to pipeline investment was exemplified in September 2025, when we completed the acquisition of DURECT Corporation (“DURECT”) a biopharmaceutical firm specializing in the development of epigenetic therapies that address abnormal deoxyribonucleic acid methylation, aiming to revolutionize the management of severe and life-threatening illnesses such as acute organ injury. DURECT’s primary drug candidate, Larsucosterol, is a unique therapeutic agent that has
2
shown encouraging outcomes in Phase 2 clinical studies for alcohol-associated hepatitis (“AH”). Notably, Larsucosterol has received Breakthrough Therapy designation from the U.S. Food and Drug Administration (“FDA”).
The Company has filed lawsuits against third-party generic manufacturers that have sent the Company Notices of Paragraph IV Certification for Trulance® and Xifaxan®. See “Intellectual Property Litigation” of Note 21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements for details of these litigation matters.
International
Our International business includes, with the exception of our Bausch + Lomb and Solta Medical products, sales in Canada, Europe, Asia, Latin America, Africa and the Middle East of branded pharmaceutical products, branded generic pharmaceutical products and OTC products. Our principal products include:
•Bedoyecta® is a multivitamin line with Complex B vitamin that is used to obtain sufficient energy and have optimal performance during the day, by avoiding deficiencies of the nutrients that the body requires to function properly, indicated as adjuvant for diabetic patients.
•Jublia® (efinaconazole 10% topical solution) is a topical azole approved for the treatment of onychomycosis of the toenails (toenail fungus) and is commercialized in Canada.
•Bisocard® (bisoprolol fumarate) is an orally administered tablet dosed once daily for patients with hypertension, angina pectoris or heart failure and is a leading brand in Poland.
•Diclofenac is a nonsteroidal anti-inflammatory drug used to treat mild-to-moderate pain and helps to relieve symptoms of arthritis. This product is sold in Central and Eastern European countries.
•Contrave® / Mysimba®
Loading financial statements...
Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
| Line item |
|---|
| Period ending |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
INTRODUCTION
Unless the context otherwise indicates, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “our,” “the Company,” “Bausch Health,” and similar terms refer to Bausch Health Companies Inc. and its subsidiaries, taken together. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and the related notes (the “Financial Statements”) included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026 (this “Form 10-Q”). The matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain certain forward-looking statements within the meaning of Section 27A of The Securities Act of 1933, as amended, and Section 21E of The Securities Exchange Act of 1934, as amended, and that may be forward-looking information within the meaning of applicable Canadian securities laws (collectively “forward-looking statements”). Forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “should”, “target”, “potential”, “opportunity”, “designed”, “create”, “predict”, “project”, “forecast”, “seek”, “strive”, “ongoing”, “likely”, “evolve”, “decrease” or “increase” and variations or other similar expressions. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances are forward-looking statements.
These statements are based upon the current expectations and beliefs of management. Readers are cautioned that actual results may vary from those in the forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making such forward-looking statements, including, but not limited to, factors and assumptions relating to: (i) our ability to execute our business strategy, business plans and operational efficiency initiatives; (ii) demand for, competitive positioning of and pricing for our current and anticipated products and our ability to achieve expected revenues, margins and expense levels; (iii) the successful development, regulatory approval, manufacture and timing of launches and commercialization of pipeline and other products; (iv) the completion, timing, integration and expected benefits of completed and pending acquisitions and other strategic transactions and the potential separation of our eye health business consisting of our Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses on anticipated terms, timing and costs; (v) the scope, duration and financial and operational impact of product quality matters and manufacturing facility compliance and certification matters; (vi) the continued availability and performance of key third‑party distribution, fulfillment and other arrangements and the stability of global supply chains; (vii) the continuation of patent protection and regulatory exclusivity for key products; (viii) the expected impacts of the Inflation Reduction Act (“IRA”), and the impact of the negotiated prices for Xifaxan®, expected to become effective in 2027, under certain programs of the Centers for Medicare & Medicaid Services (“CMS”) and other healthcare reform measures and our ability to mitigate the impact thereof; (ix) our ability to generate cash flows and access liquidity to meet working capital needs, satisfy debt maturities as they become due, reduce debt levels and comply with financial and other covenants under our financing arrangements; (x) the expected scope and impact of tariffs, counter‑tariffs and other trade restrictions and the effectiveness of mitigation actions and the Company’s ability to recover any tariffs that are eligible for refund claims; (xi) macroeconomic and geopolitical conditions (including inflation, recessionary pressures, foreign currency exchange rates and interest rates), changes in tax laws and related guidance (including legislation referred to as the One Big Beautiful Bill Act (the “OBBBA”) and Organisation for Economic Co-operation and Development (“OECD”) related measures); (xii) the expected outcomes of litigation, subpoenas, investigations, reviews, audits, regulatory proceedings and other contingencies; (xiii) the recent changes to the composition of the Bausch + Lomb board of directors and executive leadership team including the appointment of Bausch Health’s Chief Executive Officer as Chairman of the board of directors and interim Chief Executive Officer of Bausch + Lomb while concurrently serving as Bausch Health’s Chief Executive Officer; and (xiv) the factors described under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
We caution that, as it is not possible to predict or identify all relevant factors that may impact forward-looking statements, the factors referred to in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are not exhaustive and should not be considered a complete statement of all potential risks and uncertainties. When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the aforementioned factors and other uncertainties and potential events. These forward-looking statements speak only as of the date made. We undertake no obligation to update or revise any of these forward-looking statements to reflect events or circumstances after the date of this Management’s Discussion and Analysis of Financial Condition and Results of Operations or to reflect actual outcomes, except as required by law.
Our accompanying unaudited interim Condensed Consolidated Financial Statements as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025 have been prepared in accordance with accounting principles
43
generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for interim financial statements, and should be read in conjunction with our Consolidated Financial Statements for the year ended December 31, 2025, which were included in our Annual Report on Form 10-K. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of the financial condition, results of operations and cash flows for the periods indicated. Additional company information is available on SEDAR+ at www.sedarplus.ca and on the SEC website at www.sec.gov. All currency amounts are expressed in U.S. dollars, unless otherwise noted. Certain defined terms used herein have the meaning ascribed to them in the Financial Statements.
OVERVIEW
We are a global, diversified specialty pharmaceutical and medical device company that develops, manufactures and markets, primarily in the therapeutic areas of gastroenterology (“GI”), hepatology, neuroscience and dermatology, a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products and aesthetic medical devices, and, through our approximately 87% ownership of Bausch + Lomb Corporation (“Bausch + Lomb” or “B+L”), branded and branded generic pharmaceuticals, OTC products and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment) in the therapeutic areas of eye health. Our products are marketed directly or indirectly in approximately 90 countries.
Our portfolio of products falls into five reportable segments: (i) Salix, (ii) International, (iii) Solta Medical, (iv) Diversified and (v) Bausch + Lomb. The following is a brief description of the Company’s segments:
•The Salix segment consists of sales in the U.S. of GI products. Sales of the Xifaxan® product line currently represent approximately 85% of the Salix segment revenues.
•The International segment consists of sales, with the exception of sales of Bausch + Lomb products and Solta Medical aesthetic medical devices, outside the U.S. of branded pharmaceutical products, branded generic pharmaceutical products and OTC products.
•The Solta Medical segment consists of global sales of Solta Medical aesthetic medical devices.
•The Diversified segment consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neuroscience and certain other therapeutic classes, (ii) dermatology products, (iii) generic pharmaceutical products and (iv) dentistry products.
•The Bausch + Lomb segment consists of global sales of Bausch + Lomb Vision Care, Surgical and Pharmaceuticals products.
For additional discussion of our reportable segments, see Note 18, “SEGMENT INFORMATION” to our unaudited interim Condensed Consolidated Financial Statements.
Separation of the Bausch + Lomb Eye Health Business
On August 6, 2020, we announced our plan to separate our eye health business consisting of our Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses into an independent publicly traded entity, Bausch + Lomb (the “B+L Separation”). On May 10, 2022, a wholly owned subsidiary of Bausch Health sold 35,000,000 common shares of Bausch + Lomb in the initial public offering of Bausch + Lomb. Bausch Health currently indirectly holds 310,449,643 common shares of Bausch + Lomb, which represents approximately 87% of B+L’s outstanding common shares as of October 21, 2026.
We continue the evaluation of all relevant factors and considerations relating to our investment in Bausch + Lomb, including the Xifaxan® Generics Litigation (see “Xifaxan® Paragraph IV Proceedings” of Note 17, “LEGAL PROCEEDINGS” to our unaudited interim Condensed Consolidated Financial Statements).
See Item 1A. “Risk Factors — Risks Relating to the B+L Separation” of our Annual Report on Form 10-K for the year ended December 31, 2025 for risks relating to the B+L Separation.
For additional details on the B+L Separation, see “Separation of the Bausch + Lomb Eye Health Business” in Note 2, “SIGNIFICANT ACCOUNTING POLICIES” to our unaudited interim Condensed Consolidated Financial Statements.
44
Focus on Value and Core Businesses
We continue to execute on actions intended to bring out value in our Company. In line with this focus on our core businesses, we have: (i) made measurable progress in effectively managing our capital structure, including taking actions to reduce the principal balances or extend maturities of our long-term debt, (ii) directed capital allocation to drive growth within our core businesses, (iii) increased our efforts to improve patient access and (iv) continued to invest in sustainable growth drivers to position us for long-term growth.
We believe that these measures, along with our continued commitment to improving people’s lives through our health products, help position us to unlock potential value across our portfolio of assets, including by separating our eye health and pharmaceutical businesses. Although management believes the B+L Separation could unlock additional value, there can be no assurance that it will be successful in doing so.
Effectively Managing Our Capital Structure
At the time of our announcement of the B+L Separation, we emphasized that it is important that the post-separation entities be appropriately capitalized, with appropriate leverage and with access to additional capital, if and when needed, to provide each entity with the ability to independently allocate capital to areas that will strengthen their own competitive positions in their respective lines of business and position each entity for sustainable growth.
April 2025 Refinancing Transactions
In April 2025, the Company and its indirect wholly-owned subsidiary, 1261229 B.C. Ltd., a company incorporated under the laws of British Columbia, Canada (“126NumberCo”), closed a series of transactions (the “April 2025 Refinancing Transactions”) whereby it: (i) entered into a credit agreement which provides for new senior secured credit facilities (the “2025 Credit Agreement”) consisting of a five-year senior secured revolving credit facility in an amount of $500 million due April 8, 2030 (the “2030 Revolving Credit Facility”) and a $3,000 million 5.5-year senior secured term loan B facility due October 8, 2030 (the “2030 Term Loan B Facility”, and together with the 2030 Revolving Credit Facility, the “2025 Senior Secured Credit Facilities”) and (ii) issued $4,400 million aggregate principal amount of 10.00% senior secured notes due April 15, 2032 (the “2032 Senior Secured Notes”).
The proceeds from the April 2025 Refinancing Transactions were used: (i) to repay in full and terminate the Company’s term loan facility (the “February 2027 Term Loan B Facility”), (ii) to redeem certain senior secured notes, certain unsecured notes and the 9.00% Senior Secured Notes due 2028 (the “9.00% Intermediate Holdco Secured Notes”), (iii) to pay related fees, premiums and expenses and (iv) for general corporate purposes.
The April 2025 Refinancing Transactions reduced our short-term cash requirements for debt service by extending approximately $6,870 million in aggregate debt maturities from the years 2025 through 2028 to the years 2030 through 2032.
August 2025 Repurchase Activity
In August 2025, we repurchased and retired our outstanding 9.25% Senior Unsecured Notes (the “August 2025 Repurchase Activity”) with an aggregate par value of approximately $602 million using cash on hand, for an aggregate cost of approximately $601 million.
December 2025 Exchange
In December 2025, the Company and 126NumberCo, completed offers to exchange (the “December 2025 Exchange”) $797 million aggregate principal amount of 4.875% Senior Secured Notes due in 2028 (the “June 2028 Senior Secured Notes”) and $886 million aggregate principal amount of 11.00% First Lien Secured Notes due in 2028 (the “11.00% First Lien Secured Notes”), for $1,600 million in aggregate principal amount of new 10.00% Senior Secured Notes due April 2032, which form a single series with the 2032 Senior Secured Notes issued in April 2025 which reduced the outstanding principal value of our debt by $83 million. In connection with the December 2025 Exchange, 26,495,472 common shares of
45
Bausch + Lomb were transferred to 126NumberCo, which owns, in the aggregate, 211,963,893 common shares of Bausch + Lomb following such transfer.
The December 2025 Exchange reduced our short-term cash requirements for debt service by extending approximately $1,600 million in aggregate debt maturities from the year 2028 to the year 2032.
Defined terms used above and in the following section but not defined in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are defined and discussed in Note 10, “FINANCING ARRANGEMENTS” to our unaudited interim Condensed Consolidated Financial Statements.
Bausch + Lomb June 2025 Refinancing Activity
On June 26, 2025, Bausch + Lomb entered into an incremental amendment to its credit agreement (the “B+L June 2025 Credit Facility Amendment”), which consisted of a new $800 million revolving credit facility maturing June 26, 2030 (the “B+L 2030 Revolving Credit Facility”) and a new $2,325 million term B loan facility maturing January 15, 2031 (the “B+L January 2031 Term Loan B Facility”). In addition, Bausch + Lomb’s subsidiaries, Bausch + Lomb Netherlands B.V. and Bausch & Lomb Incorporated, issued €675 million aggregate principal amount of Senior Secured Floating Rate Notes due January 2031 (the “B+L January 2031 Secured Notes” and, together with the B+L October 2028 Senior Secured Notes, the “B+L Senior Secured Notes”). The B+L January 2031 Secured Notes accrue interest at a rate per annum of: (i) three-month EURIBOR (subject to a 0% floor) plus (ii) 3.875%, reset quarterly, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, commencing on January 15, 2026.
The proceeds from the B+L January 2031 Secured Notes along with the proceeds of the B+L January 2031 Term Loan B Facility were used by Bausch + Lomb to: (i) repay in full borrowings under the B+L May 2027 Revolving Credit Facility, (ii) refinance, in full, its outstanding term loans due 2027 and (iii) pay related fees and expenses (these transactions together, the “B+L June 2025 Refinancing Activity”).
In January 2026, Bausch + Lomb entered into a refinancing transaction amendment (the “B+L January 2026 Credit Facility Amendment”; the B+L Original Credit Agreement, as amended by the B+L September 2023 Credit Facility Amendment, the B+L November 2024 Credit Facility Amendment, the B+L June 2025 Credit Facility Amendment and the B+L January 2026 Credit Facility Amendment, the “B+L Amended Credit Agreement”) providing for a new $2,802 million term loan facility maturing on January 15, 2031 (the “B+L January 2031 Refinancing Term Facility” or the “B+L Term Facilities”; the B+L Term Facilities, together with the B+L 2030 Revolving Credit Facility, the “B+L Senior Secured Credit Facilities”). The proceeds from the B+L January 2031 Refinancing Term Facility were used to refinance, in full, the B+L September 2028 Term Loan B Facility and the B+L January 2031 Term Loan B Facility.
The April 2025 Refinancing Transactions, August 2025 Repurchase Activity, December 2025 Exchange, B+L June 2025 Refinancing Activity and B+L January 2031 Refinancing Term Facility provide us more flexibility to operate and allow us to more effectively allocate capital to initiatives that will strengthen our products and brands.
As of September 30, 2026, we had aggregate maturities and mandatory payments of our principal balances of debt obligations as follows:
| (in millions) | Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | Thereafter | Total | ||||||||||||||||||||||||||||||||||||
| Total debt obligations | $ | 15 | $ | 701 | $ | 3,766 | $ | 1,667 | $ | 4,123 | $ | 3,896 | $ | 6,000 | $ | 20,168 | ||||||||||||||||||||||||||||
Continue to Manage our Capital Structure
We continue to monitor our capital structure and to evaluate other opportunities to simplify our business and improve our capital structure, giving us the ability to better focus on our core businesses. The Company regularly evaluates market conditions, its liquidity profile and various financing alternatives for opportunities to enhance its capital structure. If the Company determines that conditions are favorable, the Company may refinance or repurchase existing debt or issue additional debt, equity or equity-linked securities.
See Note 10, “FINANCING ARRANGEMENTS” to our unaudited interim Condensed Consolidated Financial Statements and “— Liquidity and Capital Resources — Liquidity and Debt — Long-term Debt” below for additional discussion of these matters. Cash requirements for future debt repayments including interest can be found in “— Liquidity and Capital Resources — Off-Balance Sheet Arrangements and Contractual Obligations.”
Direct Capital Allocation to Drive Growth Within Our Core Businesses
Our capital allocation is also driven by our long-term growth strategies. We allocate resources to promote our core businesses globally through: (i) strategic acquisitions, (ii) research and development (“R&D”) investment, (iii) strategic
46
licensing agreements and (iv) strategic investments in our infrastructure. We believe that the outcome of this process allows us to better drive value in our product portfolio and generate operational efficiencies.
R&D Investment
We search for new product opportunities through internal development and strategic licensing agreements, that, if successful, will allow us to leverage our commercial footprint, particularly our sales force, and supplement our existing product portfolio and address specific unmet needs in the market.
Our internal R&D organization focuses on the development of products through clinical trials. As of December 31, 2025, approximately 1,400 dedicated R&D and quality assurance employees in 25 R&D facilities were involved in our R&D efforts internally.
Certain core internal R&D projects that have received a significant portion of our R&D investment in current and prior periods are listed below.
Gastrointestinal
•Larsucosterol - In September 2025, we completed the acquisition of DURECT Corporation (“DURECT”). Larsucosterol, DURECT’s lead drug candidate, has the potential to be the first U.S. Food and Drug Administration (“FDA”) approved therapeutic option for alcohol-associated hepatitis (“AH”) patients. The FDA has granted a Breakthrough Therapy designation for this drug. A registrational Phase 3 program to evaluate the safety and efficacy of Larsucosterol for the treatment of patients with severe AH began in January 2026.
•Amiselimod (S1P modulator) - A Phase 2 study to evaluate Amiselimod (S1P modulator) for the treatment of mild to moderate ulcerative colitis was completed in 2024. In 2024, we met with the FDA for an end of Phase 2 meeting. We also met with the European Medicines Agency of the European Union (“EU”) and Japan’s Pharmaceuticals and Medical Devices Agency. All regulatory feedback is currently under review.
Solta Medical
•Clear + Brilliant® Touch - The latest generation Clear + Brilliant® laser is designed to deliver a customized and more comprehensive skin resurfacing treatment protocol by providing patients of all ages and skin types the benefits of two wavelengths in one treatment. To support its ongoing global expansion, the device has been submitted for regulatory approval in multiple markets globally. Clear + Brilliant® Touch was launched in Canada in February 2026 and subsequently received EU Medical Device Regulation (“MDR”) approval in September 2026, enabling the device to be marketed in the EU.
•Fraxel FTX® - The next generation Fraxel® is a fractionated laser device for skin resurfacing that has been submitted for approval in multiple markets globally. Fraxel FTX® was launched in Australia in September 2026.
Dermatology
•CABTREO® Topical Gel - The first and only FDA approved fixed-dose, triple-combination topical treatment for acne was submitted for approval to the European Medicines Agency of the EU.
Bausch + Lomb
•Lumify® Franchise – An OTC redness reliever eye drop that significantly reduces redness to help eyes look whiter and brighter. To date, Bausch + Lomb has launched and acquired the right to launch Lumify® in various countries. A new line extension formulation, Lumify® Preservative Free was launched in the first quarter of 2025. In addition, Bausch + Lomb has completed a Lumify® next generation development program, for which a Phase 3 study met all primary and secondary endpoints and for which the New Drug Application has been submitted and approval is anticipated during the first half of 2027.
•Blink® Franchise – During June 2024, Bausch + Lomb expanded its OTC dry eye portfolio with the launch of Blink® NutriTears®, a clinically proven OTC nutritional supplement that targets the key root causes of dry eyes, promotes healthy tear production and provides noticeable relief of eye dryness symptoms. In June 2025, Bausch + Lomb launched Blink® Boost preservative-free lubricating eye drops in the U.S. and in March 2026, launched a preservative-free lipid-based formulation of the Blink Triple Care® product.
•LuxLife® – Bausch + Lomb is expanding its portfolio of premium intraocular lenses (“IOLs”) built on the “Lux” platform with the LuxLife® Trifocal IOL with two options, non-Toric and Toric for astigmatic patients. The European launch of this product is in process.
47
•Bausch + Lomb is expanding its portfolio of premium IOLs built on the enVista® platform with: enVista Aspire® monofocal and toric IOLs with Intermediate Optimized optics launched in the U.S. in October 2023, in Europe and Canada in 2025, enVista Envy® trifocal IOLs launched in Canada, the U.S., Europe and Hong Kong, and rollouts into additional geographies are expected and enVista BeyondTM extended depth of focus IOL is anticipated to launch in the U.S. in 2027. Bausch + Lomb recently received topline results and is conducting a comprehensive review of the data.
Strategic Licensing Agreements
To supplement our internal R&D initiatives and to build-out and refresh our product portfolio, we also search for opportunities to augment our pipeline through arrangements that allow us to gain access to unique products and investigational treatments, by strategically aligning ourselves with other innovative product solutions.
In the normal course of business, the Company may enter into select licensing and collaborative agreements for the commercialization and/or development of unique products primarily in the U.S. and Canada. These products are sometimes investigational treatments in early stage development that target unique conditions. The ultimate outcome, including whether the product will be: (i) fully developed, (ii) approved by the FDA or other regulators, (iii) covered by third-party payors or (iv) profitable for distribution, is highly uncertain. Under certain agreements, the Company may be required to make payments contingent upon the achievement of specific developmental, regulatory, or commercial milestones.
Strategic Acquisitions
We remain very selective when considering any acquisition and pursue only those opportunities that we believe align well with our current organization and strategic plan. In being selective, we seek to enter into only those acquisitions that provide us with significant synergies with our existing business, thereby minimizing risks to our core businesses and providing long-term growth opportunities.
On October 8, 2026, Bausch + Lomb entered into an agreement to acquire certain ophthalmic surgical manufacturing businesses. The acquisition is expected to close during the fourth quarter of 2026 for an upfront cash payment of approximately $85 million, due at closing.
In December 2025, we completed the acquisition of Wuhan Shibo Zhenmei Technology Co., Ltd. (“Shibo Zhenmei”), consisting of the aesthetics distribution business of our full‑service distributor in China, the Shibo Group. Through this transaction, we assumed full responsibility for the distribution of Solta Medical’s entire product portfolio, including Thermage® FLX as well as other aesthetic devices, within the Chinese market.
In September 2025, we acquired DURECT, a biopharmaceutical company engaged in the development of epigenetic therapies that target dysregulated deoxyribonucleic acid methylation to transform the treatment of serious and life-threatening conditions, including acute organ injury. DURECT’s lead drug candidate, Larsucosterol, is a novel therapeutic molecule that has demonstrated promising results in Phase 2 trials for the treatment of AH and has been granted Breakthrough Therapy designation by the FDA.
In December 2025, Bausch + Lomb acquired certain manufacturing equipment, other assets and the assumption of a manufacturing facility lease in Mexico. The acquisition is expected to unlock manufacturing capacity and expand Bausch + Lomb’s margins.
In January 2025, Bausch + Lomb acquired Whitecap Biosciences, LLC which was developing two innovative therapies for potential use in glaucoma and geographic atrophy. However, during July 2026, Bausch + Lomb announced that the Phase 2 study regarding the glaucoma neuroprotective candidate did not meet its primary endpoint, and as such will no longer advance this program, and will now focus on developing an innovative therapy for potential use in geographic atrophy.
See Note 4, “LICENSING AGREEMENTS AND ACQUISITIONS” to our unaudited interim Condensed Consolidated Financial Statements for additional information.
Divest Assets to Simplify Our Business
In order to better focus on our core businesses, we continue to evaluate opportunities to simplify our operations and improve our capital structure, including divesting non-core assets in order to narrow the Company’s activities to our core businesses where we believe we have an existing and sustainable competitive edge and the ability to generate operational efficiencies. We will also consider dispositions or divestitures in core areas that we believe represent attractive opportunities for the Company.
48
Improve Patient Access
Improving patient access to our products, as well as making them more affordable, is a key element of our business strategy.
Patient Access and Pricing Team - Our Patient Access and Pricing Team is committed to maintaining patients’ ability to access our branded prescription pharmaceutical products. All pricing actions are subject to review by the Patient Access and Pricing Team. Future pricing changes and programs could affect the average realized pricing for our products and may have a significant impact on our revenues and profits.
Bausch Health Patient Assistance Program - We are committed to supporting patients through our Patient Assistance Program which offers free medication for patients who meet income and other eligibility criteria. If approved, patients receive their Bausch Health prescription product(s) at no cost to them. Eligible patients must reapply yearly to remain in the program and must meet all current requirements.
Cash-pay Prescription Program - The cash-pay or Point of Sale program was adopted to address the affordability and availability of certain branded dermatology products when insurers and pharmacy benefit managers are no longer offering those branded prescription pharmaceutical products under their designated pharmacy benefit offerings. This program is currently limited to a select group of our brands and offered through different fulfillment platforms which allows for patients to choose telemedicine, direct delivery to their home or to use a pharmacy of their choice. This program is designed to connect patients with dermatologists and provide patients both a predictable customer experience and a predictable cost for their dermatology health care needs.
Walgreens Fulfillment Arrangements - Under our brand fulfillment arrangement with Walgreen Co. (“Walgreens”), we make certain dermatology products available to eligible patients through patient access and co-pay assistance programs at Walgreens U.S. retail pharmacy locations, as well as participating independent retail pharmacies.
Invest in Sustainable Growth Drivers to Position us for Long-Term Growth
We are constantly challenged by the changing dynamics of our industry to innovate and bring new products to market. We have divested certain businesses where we saw limited growth opportunities, so that we can be more aggressive in redirecting our R&D spend and other corporate investments to innovate within our core businesses where we believe we can be most profitable and where we aim to be an industry leader.
We believe that we have a well-established product portfolio that is diversified within our core businesses and provides a sustainable revenue stream to fund our operations. However, our future success is also dependent upon our ability to continually refresh our pipeline, to provide a rotation of product launches that meet new and changing demands and replace other products that have lost momentum. We believe we have a pipeline that not only provides for the next generation of our existing products but is also poised to bring new products to market.
Salix - We believe in our GI product portfolio and we have implemented initiatives, including increasing our marketing investment in Xifaxan®, to further capitalize on the value of the infrastructure we have built around these products to extend our market share. We have invested in Xifaxan® direct-to-consumer advertising and new sales force capabilities. We also continue to invest in the development of Larsucosterol, a novel therapeutic molecule that has demonstrated promising results in Phase 2 trials for the treatment of AH and has been granted Breakthrough Therapy designation by the FDA. In addition, we have invested in developing our investigational oral drug Amiselimod (S1P modulator) for the treatment of moderate to severe ulcerative colitis. This program remains under evaluation.
International - Our product portfolio in Canada includes our CABTREO® Topical Gel, a triple-combination topical treatment for acne. Our current focus in Canada is on expanding towards general practitioners (“GPs”) and strengthening awareness and education for both GPs and patients. In EMEA and Latin America, our portfolio remains primarily focused on branded generic products.
Solta Medical - More than 75% of our Solta Medical business revenue has historically come from consumables, which we believe results in a durable business model. We continue to invest in key markets, including through the acquisition of Shibo Zhenmei in China. Our Thermage® FLX, Fraxel FTX® and Clear + Brilliant® Touch platforms continue to expand, reaching more customers. Clear + Brilliant® Touch launched in Canada in February 2026 and subsequently received EU MDR approval in September 2026, enabling the device to be marketed in the EU.
Diversified - We continue to seek ways to bring out value in our promoted and nonpromoted products within our Diversified portfolio. In the first quarter of 2024, we launched CABTREO® Topical Gel in the U.S. adding to our established acne product portfolio.
49
Business Trends
In addition to the actions previously outlined, the events described below have affected and may affect our business trends. The matters discussed in this section contain forward-looking statements. Please see “INTRODUCTION” above for additional information.
Macroeconomic Matters
The Company is monitoring ongoing policy changes being made by the Trump administration and the responses to these policy changes by foreign governments, including those related to existing trade agreements, the actual or threatened imposition of new tariffs and non-tariff barriers, and amendments to existing tariffs, and the counter-duties, counter-tariffs and/or other counter-measures threatened or implemented in response by other countries, as well as the recent United States Supreme Court ruling that invalidated certain tariffs and the possible eligibility for refunds of previously paid tariffs following such ruling, and the tensions between the U.S. and other members of North Atlantic Treaty Organization. Some of these policies have targeted countries and sectors in which we do business, including pharmaceuticals. Given the international scope of our operations, any sanctions, export controls, tariffs, trade wars and other governmental actions, could have an adverse effect on our business, financial condition, cash flows and results of operations. Similarly, adverse economic conditions impacting our customers in these countries or uncertainty about global economic conditions could cause purchases of our products to decline, which would adversely affect our revenues and operating results.
Additionally, on February 20, 2026 the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). In response to the U.S. Supreme Court’s decision, new Executive Orders were announced aimed at restructuring U.S. tariff policy and exploring alternative statutory authorities under which to impose or maintain tariffs. On March 4, 2026, the U.S. Court of International Trade (“CIT”) ordered the U.S. Customs and Border Protection (“CBP”) to liquidate (meaning calculate and finalize) and, where applicable, reliquidate, or correct, certain import entries without regard to duties imposed under the IEEPA. The CIT order provides relief for entries affected by IEEPA tariffs. On April 20, 2026, the CBP opened the Consolidated Administration and Processing of Entries (“CAPE”) portal to facilitate the submission and processing of IEEPA duty refund claims. We are evaluating the impact of these developments on our business, financial condition, cash flows and results of operations, however, as of the date of this filing, amounts related to tariff recoveries have not been material.
On April 2, 2026, the White House posted a Presidential proclamation imposing, effective September 29, 2026, a one hundred percent (100%) tariff on patented pharmaceutical products and ingredients imported into the United States following an investigation into the effects of imports of pharmaceuticals and pharmaceutical ingredients on the national security of the United States under section 232 of the Trade Expansion Act of 1962, as amended. The tariff rate is reduced to fifteen percent (15%) for products originating from the European Union, Japan, Korea or Switzerland and Liechtenstein. A zero percent (0%) tariff applies through January 20, 2029 for companies that enter Most Favored Nation pricing agreements with the Department of Health and Human Services and onshoring agreements with the Department of Commerce. We do not expect these tariffs to have a material impact on our business and consolidated results of operations.
See Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on the risks associated with tariffs.
Russia-Ukraine War
In February 2022, Russia invaded Ukraine. As military activity and sanctions against Russia and specific areas of Ukraine have continued, the war has continued to affect economic and global financial markets and placed further pressure on ongoing economic challenges, including issues such as inflation and global supply-chain disruption. The U.S., Canada, the EU and other jurisdictions have imposed sanctions and export controls against Russia in response to the ongoing war. To date, the challenges associated with the Russia-Ukraine war and related sanctions from the U.S., EU and elsewhere have not had a material impact on our operations; although, we continue to review recent and proposed sanctions imposed by the EU, U.S. and others to assess their impact on our operations.
Our revenues attributable to Russia, Ukraine and Belarus for each of the nine months ended September 30, 2026 and 2025 were approximately 2% of our total revenues. In addition, we do not have any research or manufacturing facilities in Russia, Ukraine or Belarus. While we have been monitoring this conflict and will continue to do so as this conflict continues to evolve, we are unable to predict the impact of this conflict on our business.
For a further discussion of these and other risks relating to our international business, see Item 1A. “Risk Factors — Risks Relating to the International Scope of our Business” in our Annual Report on Form 10-K for the year ended December 31, 2025.
50
Middle East Conflict
The conflict between Israel and Hamas began in October 2023 and has since expanded to include other regional actors, including Iran, as well as military involvement by the U.S. and Israel. While certain ceasefire or de-escalation efforts have been announced, the situation remains uncertain and continues to evolve. Our revenues attributable to the impacted regions are not material and to date, the conflict has not had a measurable impact on our supply chain and business. While we have been monitoring this conflict (including the potential macroeconomic impact) and will continue to do so as this conflict continues to evolve, we are unable to predict the impact of this conflict on our business.
Global Minimum Corporate Tax
On October 8, 2021, the Organisation for Economic Co-operation and Development (“OECD”)/G20 inclusive framework on Base Erosion and Profit Shifting (the “Inclusive Framework”) published a statement updating and finalizing the key components of a two-pillar plan on global tax reform. The Inclusive Framework plan has now been agreed to by more than 140 OECD members, including several countries which did not agree to the initial plan. Under Pillar One, a portion of the residual profits of multinational businesses with global turnover above €20 billion and a profit margin above 10% will be allocated to market countries where such allocated profits would be taxed. Under Pillar Two, the Inclusive Framework has agreed on a global minimum corporate tax rate of 15% for companies with revenue above €750 million, calculated on a country-by-country basis. While many countries have adopted some or all aspects of these rules, some countries have not adopted any or all of them, and many interpretive questions remain that are expected to be addressed in future guidance. On June 20, 2024, Canada enacted the Global Minimum Tax Act (“GMTA”) that adopted certain components of Pillar Two. The GMTA is generally aligned with the model rules proposed by the OECD.
The United States did not announce plans to enact the tax measures under the two-pillar plan. On January 20, 2025, the Trump administration issued an executive order declaring the Inclusive Framework has no force or effect in the U.S. absent congressional action, and directing the U.S. Department of Treasury to: (i) investigate whether any non-U.S. countries are not in compliance with any U.S. tax treaty or have implemented or are likely to implement tax rules that are extraterritorial or disproportionately affect U.S. companies, which may include actions or taxes imposed under Pillar One or Pillar Two, and (ii) develop options for “protective measures” in response to any such noncompliance or tax rules. On June 28, 2025, the United States and the rest of the G7 countries announced an agreement that would, in principle, exclude U.S. parented groups from certain taxes under Pillar Two and address certain risks of base erosion and profit shifting. In January 2026, the OECD published the “side by side” arrangement package to implement this exclusion. In September 2026, the Inclusive Framework released further guidance and an updated GloBE Information Return to incorporate the simplifications included in the “side by side” arrangement package. However, we cannot predict whether the United States will adopt any other protective measures including with respect to any taxes imposed under Pillar One, or whether or how any non-U.S. countries may change their tax laws, including with respect to taxes imposed under Pillar One or Pillar Two, in response to the executive order, the “side by side” arrangement described above, or otherwise. It is possible that any changes in United States or non-U.S. tax law could have a material adverse effect on our future tax liabilities and our effective tax rate.
While many jurisdictions in which the Company operates have adopted the global minimum tax provision of Pillar Two effective for tax years beginning in January 2024, the Company has concluded that there is minimal impact to its 2026 tax rate due to the accounting for the tax effects of intercompany transactions. The Company expects that there is risk that the impact of the global minimum tax and other changes in tax law in jurisdictions in which it operates may eventually result in an increase to its overall effective tax rate.
One Big Beautiful Bill Act
On July 4, 2025, President Trump signed into law the OBBBA. The effects of this legislation for the Company include extending and modifying certain key provisions of the Tax Cuts and Jobs Act enacted in December 2017 (both domestic and international). The corporate tax rate remains unchanged but bonus, depreciation and an adjustment to the interest limitation were retroactive to January 1, 2025. The OBBBA makes additional changes to international tax provisions, including substantive changes to net controlled foreign corporation tested income, foreign-derived intangible income, and base erosion and anti-abuse tax provisions. These changes are effective for taxable years after 2025. We believe the impact of this legislation will be favorable to our future tax positions.
Health Care Reform
The U.S. federal and state governments continue to propose and pass legislation designed to regulate the health care industry. Many of these changes focused on health care cost containment, which resulted in pricing pressures relating to the sales and reimbursements of health care products.
In August 2022, the Inflation Reduction Act (“IRA”) was signed into law, which among other matters made significant changes to how drugs are covered and paid for under the Medicare program, including imposing financial penalties if drug
51
prices are increased at a rate faster than inflation, redesigning Medicare Part D benefits to shift a greater portion of the costs to manufacturers and allowing the U.S. government to set prices for certain drugs in Medicare. The IRA provides for (i) the U.S. government to set or “negotiate” prices for select high-cost Medicare Part D (beginning in 2026) and Medicare Part B drugs (beginning in 2028) that are more than nine years (for small-molecule drugs) or 13 years (for biological products) from their initial FDA approval, (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation beginning in 2022 for Medicare Part D and 2023 for Medicare Part B drugs and (iii) Medicare Part D redesign which replaced the current Part D Coverage Gap Discount Program and established a $2,000 cap for out-of-pocket limits costs for Medicare beneficiaries beginning in 2025, which has increased to $2,100 for 2026, with manufacturers being responsible for 10% of costs up to the $2,100 cap and 20% after that cap is reached. Although we have taken certain actions which we believe may mitigate any negative pricing impact, the reduction of prices or reimbursement levels for certain of our products could materially affect our business and consolidated results of operations and may accelerate revenue erosion prior to the expiration of intellectual property protections.
In January 2025, the CMS selected Xifaxan® for participation in the Medicare Drug Price Negotiation Program established under the IRA. Other products in our portfolio may be selected for negotiation in future years. Following the completion of negotiations, CMS publicly announced the finalized maximum fair price for Xifaxan® on November 25, 2025. The negotiated price will become effective on January 1, 2027 and is expected to reduce revenue, operating results and cash flows associated with Xifaxan®. Since generic versions of Xifaxan® are currently expected to enter the market in 2028, the Company believes the impact of the negotiated price will be most significant during 2027.
Although management continues to evaluate the potential impact of the IRA, the anticipated short-term impact is not expected to affect the recoverability or useful lives of our Xifaxan®-related intangible assets based on our most recent assessment.
In addition, certain U.S. states have passed legislation intended to impact pricing or requiring manufacturers to report price increases to states, including certain states also allowing for drug affordability (i.e. price control) review boards. It is expected that state legislatures will continue to focus on drug pricing in 2026 and beyond and that similar bills will be passed in more states. These proposals create new authorities for state regulatory bodies to limit reimbursement for certain drugs and such efforts may expand to additional states.
Over the past several years, numerous legislative changes have caused the Company and other pharmaceutical manufacturers to re-evaluate participation in optional Federal programs.
In 2025, Bausch Health US, LLC (“BHUS”) ceased participation in two optional Federal drug pricing programs – the Medicaid Drug Rebate Program (“MDRP”) and the 340B Drug Pricing Program (“340B”). BHUS provided notice to the CMS and the Health Resources and Services Administration of the end of its participation in these programs effective September 30, 2025. Other Federal programs such as Medicare and the Federal Supply Schedule (supporting agencies such as the Department of Veterans Affairs and the Department of Defense) are not affected by this decision. We continue to evaluate the Company’s participation in government channels. Bausch + Lomb continues to participate in state government-managed Medicaid programs, as well as certain other qualifying federal and state government programs whereby rebates are provided to participating government entities.
The Company remains fully committed to the patients who are prescribed our products and understands the importance of its therapies to patients supported through Federal government programs. To prioritize the needs of patients first, effective October 1, 2025, the Company expanded support of Medicaid-eligible patients for most single-source pharmaceuticals through an enhanced Patient Assistance Program, where eligible patients will receive the pharmaceutical free of charge. Our goal is to maintain a straightforward process to ensure continuity of care for patients, physicians and caregivers during this transition.
The ultimate long-term outcome, including any impact on our business and consolidated results of operations of discontinuing our participation in the MDRP and 340B is still being assessed.
Generic Competition and Loss of Exclusivity
Certain of our products face the expiration of their patent or regulatory exclusivity in 2026 or in later years, following which we anticipate generic competition of these products. In addition, in certain cases, as a result of negotiated settlements of some of our patent infringement proceedings against generic competitors, we have granted licenses to such generic companies, which will permit them to enter the market with their generic products prior to the expiration of our applicable patent or regulatory exclusivity. Finally, for certain of our products that lost patent or regulatory exclusivity in prior years, we anticipate that generic competitors may launch in 2026 or in later years. Following a loss of exclusivity (“LOE”) of and/or generic competition for a product, we would anticipate that product sales for such product would decrease significantly shortly following the LOE or entry of a generic competitor. Where we have the rights, we may elect to launch an authorized generic (“AG”) of such product (either ourselves or through a third-party) prior to, upon or following generic entry, which
52
may mitigate the anticipated decrease in product sales; however, even with launch of an AG, the decline in product sales of such product would still be expected to be significant, and the effect on our future revenues could be material.
2026 through 2030 LOE Branded Products - Based on current patent expiration dates, settlement agreements and/or competitive information, we have identified branded products that we believe could begin facing potential LOE and/or generic competition in the U.S. during the years 2026 through 2030. These products and year of expected LOE include, but are not limited to, Aplenzin® (2026), Bryhali® (2026), Relistor® Subcutaneous (2028), Xifaxan® (2028) and Duobrii® (2030) in the U.S. and Jublia® (2028) in Canada. These dates may change based on, among other things, challenges to our patents, settlement of existing or future patent litigation and at-risk generic launches. We believe the entry into the market of generic competition generally would have an adverse impact on the volume and/or pricing of the affected products, however we are unable to predict the magnitude or timing of this impact.
In addition, for a number of our products (including Xifaxan® 550 mg, Cabtreo® and Relistor® Oral tablets in the U.S.), we have commenced (or anticipate commencing) and have (or may have) ongoing infringement proceedings against potential generic competitors in the U.S. If we are not successful in these proceedings, we may face increased generic competition for these products.
See Note 17, “LEGAL PROCEEDINGS” to our unaudited interim Condensed Consolidated Financial Statements elsewhere in this Form 10-Q, as well as Note 21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2025 for further details regarding certain infringement proceedings.
The risks of generic competition are a fact of the health care industry and are not specific to our operations or product portfolio. These risks are not avoidable, but we believe they are manageable. To manage these risks, our leadership team continually evaluates the impact that generic competition may have on future profitability and operations. In addition to aggressively defending the Company’s patents and other intellectual property, our leadership team makes operational and investment decisions regarding these products and businesses at risk, not the least of which are decisions regarding our pipeline. Our leadership team actively manages the Company’s pipeline in order to identify innovative and realizable projects aligned with our core businesses that are expected to provide incremental and sustainable revenues and growth into the future. We believe that our current pipeline is strong enough to meet these objectives and provide future sources of revenues, in our core businesses, sufficient enough to sustain our growth and corporate health as other products in our established portfolio face generic competition and lose momentum.
We believe that we have a well-established product portfolio that is diversified within our core businesses. We also believe that we have a pipeline that not only provides for the next generation of our existing products, but also brings new solutions into the market.
See Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on our competition risks.
Regulatory Matters
In the normal course of business, our products, devices and facilities are the subject of ongoing oversight and review by regulatory and governmental agencies, including general, for cause and pre-approval inspections by the relevant competent authorities where we have business operations.
In June 2026, following a routine FDA inspection of Bausch + Lomb’s Tampa, Florida facility, as part of its findings, the FDA issued an Official Action Indicated (“OAI”) of this facility. Bausch + Lomb submitted to the FDA a response to the initial inspection and a subsequent response to the OAI, in connection with which it fully completed all comprehensive corrective and preventive actions raised. Subsequently, in September 2026, Bausch + Lomb received a warning letter from the FDA in connection with this matter. Bausch + Lomb has submitted its response to the FDA in connection with the warning letter, and is in the process of completing the corrective and preventive actions raised. Bausch + Lomb has also requested a meeting with the FDA and is awaiting a response from the FDA. The warning letter does not require the Tampa facility to cease manufacturing operations and does not require a product recall, withdrawal or other market action. The Tampa facility continues to manufacture, release and distribute products and Bausch + Lomb does not anticipate any interruption to product supply and remains confident in the quality and safety of products manufactured at the Tampa facility.
As of September 30, 2026, our remaining global operations and facilities have the relevant operational good manufacturing practices certificates and all Company products and our operating sites are in compliance in all material respects with the requirements of all relevant notified bodies and global health authorities, subject to ordinary course inspections, observations and remediations. See Item 1A “Risk Factors – Manufacturing and Supply Risks” of our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on certain risks relating to manufacturing activities.
53
FINANCIAL PERFORMANCE HIGHLIGHTS
The following table provides selected unaudited financial information for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
| (in millions, except per share data) | 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||
| Revenues | $ | 2,941 | $ | 2,681 | $ | 260 | $ | 8,317 | $ | 7,470 | $ | 847 | ||||||||||||||||||||||
| Operating income | $ | 983 | $ | 619 | $ | 364 | $ | 773 | $ | 1,339 | $ | (566) | ||||||||||||||||||||||
| Income (loss) before income taxes | $ | 597 | $ | 218 | $ | 379 | $ | (409) | $ | 311 | $ | (720) | ||||||||||||||||||||||
| Net income (loss) attributable to Bausch Health Companies Inc. | $ | 436 | $ | 179 | $ | 257 | $ | (729) | $ | 269 | $ | (998) | ||||||||||||||||||||||
| Earnings (loss) per share attributable to Bausch Health Companies Inc. | ||||||||||||||||||||||||||||||||||
| Basic | $ | 1.16 | $ | 0.48 | $ | 0.68 | $ | (1.95) | $ | 0.73 | $ | (2.68) | ||||||||||||||||||||||
| Diluted | $ | 1.15 | $ | 0.48 | $ | 0.67 | $ | (1.95) | $ | 0.72 | $ | (2.67) | ||||||||||||||||||||||
Financial Performance
Summary of the Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
Revenues for the three months ended September 30, 2026 and 2025 were $2,941 million and $2,681 million, respectively, an increase of $260 million, or 10%. The increase reflects broad-based growth across all reportable segments and was primarily driven by: (i) improved net realized pricing and (ii) incremental sales attributable to acquisitions, partially offset by lower volumes. These changes in net realized pricing and volumes were partially the result of our decision to exit certain channels, as discussed below.
Operating income for the three months ended September 30, 2026 and 2025 was $983 million and $619 million, respectively, and included non-cash charges for Depreciation and amortization of intangible assets of $284 million and $306 million, acquired in-process research and development (“IPR&D”) costs of $0 and $81 million and Share-based compensation of $52 million and $43 million, respectively. The increase in our operating income of $364 million reflects, among other factors:
•an increase in contribution (Product sales revenue less Cost of goods sold, excluding amortization and impairments of intangible assets) of $269 million, primarily due to the increase in revenues, as previously discussed;
•an increase in selling, general and administrative (“SG&A”) expenses of $39 million, primarily attributable to higher compensation costs and selling expenses, partially offset by lower general and administrative expenses; and
•a decrease in Other expense, net of $70 million, primarily attributable to lower acquired IPR&D costs related to the 2025 acquisition of DURECT.
Income before income taxes for the three months ended September 30, 2026 and 2025 was $597 million and $218 million, respectively, a favorable change of $379 million. The change is primarily attributable to the increase in our operating income of $364 million, as previously discussed, and a decrease in Interest expenses of $14 million.
Net income attributable to Bausch Health for the three months ended September 30, 2026 and 2025 was $436 million and $179 million, respectively, a favorable change of $257 million, which is primarily attributable to a favorable change in Income before income taxes of $379 million, as previously discussed, offset by an unfavorable change in Provision for income taxes of $114 million.
Summary of the Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
Revenues for the nine months ended September 30, 2026 and 2025 were $8,317 million and $7,470 million, respectively, an increase of $847 million, or 11%. The increase is attributable to growth in our Salix, Bausch + Lomb, Solta Medical and International segments driven by: (i) improved net realized pricing, (ii) incremental sales attributable to acquisitions and (iii) the favorable impact of foreign currencies, partially offset by lower volumes. These changes in net realized pricing and volumes were partially the result of our decision to exit certain channels, as discussed below.
Operating income for the nine months ended September 30, 2026 and 2025 was $773 million and $1,339 million, respectively, and included non-cash charges for Depreciation and amortization of intangible assets of $860 million and $918
54
million, Acquired IPR&D costs of $16 million and $110 million, Goodwill impairments of $1,426 million and $0 and Share-based compensation of $158 million and $132 million, respectively. The decrease in our operating income of $566 million reflects, among other factors:
•an increase in contribution (Product sales revenue less Cost of goods sold, excluding amortization and impairments of intangible assets) of $820 million, primarily due to the increase in revenues, as previously discussed;
•an increase in SG&A expenses of $46 million, primarily attributable to higher compensation costs and selling expenses, partially offset by lower general and administrative expenses;
•an increase in Goodwill impairments of $1,426 million related to our Salix reporting unit; and
•a decrease in Other expense, net of $9 million, primarily attributable to lower: (i) acquired IPR&D costs related to the 2025 acquisition of DURECT and (ii) provisions for certain legal matters, partially offset by higher Acquisition-related contingent consideration during 2026.
Loss before income taxes for the nine months ended September 30, 2026 was $409 million as compared to Income before income taxes of $311 million for the nine months ended September 30, 2025, a decrease in our results of $720 million. The change is primarily attributable to: (i) a decrease in our operating income of $566 million, as previously discussed, and (ii) a decrease in Gain on extinguishment of debt of $182 million.
Net loss attributable to Bausch Health for the nine months ended September 30, 2026 was $729 million as compared to Net income attributable to Bausch Health of $269 million for the nine months ended September 30, 2025, a decrease of $998 million, primarily due to a decrease in our results of $720 million, as previously discussed, and an unfavorable change in Provision for income taxes of $228 million.
RESULTS OF OPERATIONS
Our unaudited operating results for the three and nine months ended September 30, 2026 and 2025 were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||
| Product sales | $ | 2,912 | $ | 2,657 | $ | 255 | $ | 8,237 | $ | 7,388 | $ | 849 | ||||||||||||||||||||||
| Other revenues | 29 | 24 | 5 | 80 | 82 | (2) | ||||||||||||||||||||||||||||
| 2,941 | 2,681 | 260 | 8,317 | 7,470 | 847 | |||||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||
| Cost of goods sold (excluding amortization and impairments of intangible assets) | 721 | 735 | (14) | 2,195 | 2,166 | 29 | ||||||||||||||||||||||||||||
| Cost of other revenues | 14 | 15 | (1) | 50 | 49 | 1 | ||||||||||||||||||||||||||||
| Selling, general and administrative | 834 | 795 | 39 | 2,602 | 2,556 | 46 | ||||||||||||||||||||||||||||
| Research and development | 141 | 166 | (25) | 477 | 468 | 9 | ||||||||||||||||||||||||||||
| Amortization of intangible assets | 227 | 253 | (26) | 693 | 765 | (72) | ||||||||||||||||||||||||||||
| Goodwill impairments | — | — | — | 1,426 | — | 1,426 | ||||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-08-19 | Lenar Aimee J. | President, US Pharma | Sell | -36,827 | $7.03 | -$258,894 |
Source: SEC Form 4 filings.
Next expected filings
- ~2027-04-29 10-Q expected by 2027-05-08 (in 182 days)
- ~2027-07-29 10-Q expected by 2027-08-07 (in 273 days)
- ~2027-10-28 10-Q expected by 2027-11-06 (in 364 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-29 10-Q Quarterly Report
- 2026-10-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-30 10-Q Quarterly Report
- 2026-07-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-01 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-04-30 10-Q Quarterly Report
- 2026-04-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-08 DEF 14A Proxy Statement
- 2026-03-02 8-K Officer/Director Change
- 2026-02-19 10-K Annual Report
- 2026-02-18 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-13 8-K Earnings Release; Regulation FD Disclosure
- 2026-01-02 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2025-12-29 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-12-23 8-K Other Events; Financial Statements and Exhibits