Shares of Bausch Health Companies (BHC -8.06%) fell more than 9.5% after the announcement of the departure of Chief Financial Officer Tom Vadaketh and the company’s CFO transition plan. Despite the decline, the healthcare company’s stock is still up more than 20% for the year.
Bausch Health specializes in pharmaceutical therapies for various medical conditions. Vadaketh, who joined the company in October 2021, is leaving to assume the CFO role at Enviri, an environmental solutions provider. His new position begins on October 16. If a replacement is not found by that time, John S. Barresi, the company’s senior vice president, controller, and chief accounting officer, will serve as interim CFO.
Investors were concerned about Vadaketh’s departure because he played a role in the recent financial improvement of the company. In the second quarter, Bausch reported a 10% increase in revenue and a net income of $26 million compared to a loss of $145 million in the same period last year. The company operates in five segments, with four of them experiencing double-digit revenue gains. The only segment that saw a decline was diversified, which fell by 3% year over year.
Although the CFO concerns may be a short-term issue, the company is currently involved in a patent dispute with Norwich Pharma Services over Xifaxan, a drug used to treat irritable bowel syndrome and antidiarrheal. On July 28, a district court ruled certain Bausch patents for the therapy invalid. The ongoing litigation could potentially impact the company’s stock, especially if the third-quarter financials are not as strong as the second-quarter report.
In conclusion, Bausch Health Companies is facing a CFO transition and a patent dispute, which has caused concern among investors. However, the long-term implications are uncertain and will depend on the resolution of these issues and the company’s future financial performance.