Last updated: February 15, 2023 at 3:02 pm ET
Initial publication: February 15, 2023 at 2:03 p.m. ET
Bausch + Lomb Corp.’s decision to bring back Brent Saunders as CEO signals the company’s broader ambitions in the global eye care market.
Bausch + Lomb’s BLCO stock rose about 9% in trading on Thursday after the company announced that Saunders would return to the company and officially take over as CEO and chair on March 6. He previously ran what was then Bausch & Lomb from 2010 to 2013, and he will continue to serve as chairman of Beauty Health Co. SKIN, which markets the HydraFacial system.
Sauder, …
Bausch + Lomb Corp.’s decision to bring back Brent Saunders as CEO signals the company’s broader ambitions in the global eye care market.
Bausch + Lombs
BLCO
Shares rose about 9% in trading on Thursday after the company announced that Saunders would be returning to the company and will officially take over as CEO and chairman on March 6. He previously ran what was then Bausch & Lomb from 2010 to 2013, and he will continue to chair Beauty Health Co.
SKIN
,
which sells the HydraFacial system.
Saunders, a longtime pharmaceutical executive, is known for leading Allergan to a much-hyped but failed $160 billion merger with Pfizer Inc.
PFE
in 2015 and then into an acquisition by AbbVie Inc.
ABBV
for $63 billion in cash and stock in 2020. In an industry known for stuffy CEOs, Saunders was seen as a different breed of executive in the 2010s, bringing Botox to the forefront at corporate events and a “growth pharma.” ‘ strategy tried to inflate the pipelines of the companies he runs. He was a favorite of investors.
Bausch + Lomb, which has long focused on products ranging from contact lens solutions to canine eye care products to ophthalmic surgical equipment, is recovering from a difficult few years.
The company was acquired by Valeant Pharmaceuticals Inc. in 2013 for $4.5 billion. Back then, Valeant had a unique approach to growth: It bought many companies and then slashed research and development spending to 3% each of total sales when the industry average was about 20%, according to Phrma, a lobby group. The company then hiked prices on therapies being developed by the acquired companies — a strategy that was great for shareholders but eventually put the company in the regulatory crosshairs, led to CEO Michael Pearson’s ouster and pushed Valeant to move into Bausch Health rebranded company in 2018.
After years of stability under CEO Joseph Papa, who is now stepping down, this is an interesting moment for the eye care company. It went public in May, despite its full divestment from Bausch Health Cos.
BHC
is not yet completed. (Bausch Health stock was also up about 13% on Thursday.)
Bausch + Lomb, which Papa described as a “pure eye health company” at the JP Morgan Healthcare Conference in January, plans to launch 15 new products this year. It also makes investors realize that eye health will become a bigger concern given an aging population, increasing myopia (which is associated with screen time), and potentially rising rates of diabetes-related eye diseases. An experimental dry eye drug it developed with Novaliq, a privately held German company, is currently under review by the US Food and Drug Administration, with a decision expected in June.
More details on Saunders’ appointment are expected next Wednesday when Bausch + Lomb reports its fourth-quarter results.
Bausch + Lomb stock is up 22.2% over the past three months, while the broader S&P 500
SPX
has increased about 5%.
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