LAVAL, QC - Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) and its subsidiary Salix Pharmaceuticals announced today the filing of a patent infringement lawsuit against Norwich Pharmaceuticals, Inc. The legal action, initiated in the U.S. District Court for the District of New Jersey, arises from a Paragraph IV Certification notice that Norwich submitted to the U.S. Food and Drug Administration (FDA). In the notice, dated May 10, 2024, Norwich indicated its intention to market a generic version of XIFAXAN® (rifaximin) 550 mg tablets, which are prescribed for irritable bowel syndrome with diarrhea (IBS-D).
The lawsuit represents Bausch Health's ongoing efforts to protect its intellectual property rights surrounding XIFAXAN®. Previously, in August 2022, the U.S. District Court for the District of Delaware ruled against Norwich's first Abbreviated New Drug Application (ANDA) for a XIFAXAN® generic, extending market exclusivity for Bausch Health's product until October 2029. This ruling was upheld on appeal.
Bausch Health, which has secured additional patents for XIFAXAN® since the 2022 court decision, asserts these patents further safeguard the treatment's unique approach to managing IBS-D. The company has been transparent about its dispute with Norwich, referencing the previous court decision in its patent applications to the U.S. Patent and Trademark Office.
XIFAXAN® is also approved for reducing the risk of overt hepatic encephalopathy (HE) recurrence in adults. Salix Pharmaceuticals, a Bausch Health business focused on gastrointestinal health, has been marketing XIFAXAN® among other products to healthcare providers in the United States.
Bausch Health, with its diverse portfolio in various medical fields including gastroenterology and hepatology, emphasizes its commitment to defending its intellectual property and ensuring patient access to XIFAXAN®.
The company has not provided assurances regarding the FDA's approval timeline for Norwich's ANDA or the outcome of the current patent litigation. These forward-looking statements are subject to risks and uncertainties that could affect actual results.
In other recent news, Bausch Health Companies Inc. has reported strong growth in its first quarter of 2024, with revenues increasing to $1.05 billion, marking a 4% increase on a reported basis and a 5% rise organically from the previous year. The company's adjusted EBITDA also saw a 9% increase to $504 million. Bausch Health is actively progressing its R&D initiatives and is working towards the full separation of its Bausch+Lomb segment.
In addition, Bausch Health is currently involved in a legal battle with Norwich Pharmaceuticals, Inc., defending its intellectual property rights concerning XIFAXAN®, a medication prescribed for the treatment of irritable bowel syndrome with diarrhea in adults. The company has expressed its intention to vigorously enforce its intellectual property rights concerning this medication.
Furthermore, an RBC Capital analyst recently reduced Bausch Health's price target to $10.00, down from the previous $11.00, after the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) fell short of expectations. However, the company's rating remained at Sector Perform. These are some of the latest developments in the ongoing story of Bausch Health Companies Inc.
InvestingPro Insights
As Bausch Health Companies Inc. (NYSE:BHC) continues to navigate the complexities of patent litigation to protect its XIFAXAN® product, the financial landscape of the company presents a mixed picture. According to the latest metrics from InvestingPro, Bausch Health has a market capitalization of approximately $2.48 billion. While the company's P/E Ratio stands at a challenging -5.46, indicating that it has been unprofitable over the last twelve months, analysts predict a turnaround with profitability expected this year. This anticipation is further supported by a strong gross profit margin of 70.81% in the last twelve months as of Q1 2024.
Despite the recent legal challenges, Bausch Health's revenue growth remains robust, with a 10.01% increase in the last twelve months as of Q1 2024 and a quarterly revenue growth of 10.75% in Q1 2024. This suggests that the company's core business operations are expanding, even as it faces off against generic competitors in the pharmaceutical market.
Among the InvestingPro Tips, it's noteworthy that while four analysts have revised their earnings estimates downwards for the upcoming period, the valuation implies a strong free cash flow yield. This could be an indication of the company's potential to generate positive cash flows relative to its share price. For readers interested in deeper analysis, there are additional InvestingPro Tips available that could provide further insights into Bausch Health's financial health and projections. To access these tips, visit: https://www.investing.com/pro/BHC and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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