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Equity Report Our Picks

Bausch Health

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Bausch Health (formerly known as Valeant) is a Canadian based company headquartered in Laval Quebec. The company we know today was a direct result of a series of acquisitions, cutting R&D, and raising prices to grow the top and bottom line impressively. This came to an end in 2015, when the stock and company came crashing down amid short sellers over their price gouging, debt burden and potential of fraud with one of their units, Philidor. After this, out went CEO Mike Pearson and in came Joseph Papa and the company began to run like a typical pharma company, spending more on R&D and attempting to correct the balance sheet. Although just a shell of what it once was, the company possesses a diversified business with Salix (GI Tract), Bausch and Lomb (Prescription and OTC eye care products/equipment), ortho/dermatology, and a slew of other diversified products including Neuro, that provides the company with steady, strong cash flows.

The company continues to execute upon their plan, yet the market refuses to reward the company with a multiple anywhere close to peers. In the long term, we believe that for a multitude of reasons such as rightsizing the balance sheet, pipeline breadth, and strong cash flows, the company should start to be rewarded with a closer valuation to peers.

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