What happened
Shares of Bausch Health Companies (BHC 1.04%) were jumping 8.7% higher as of 11:02 a.m. ET on Wednesday after rising as much as 13% earlier in the day. The solid gain reflected a rebound after the pharmaceutical company's shares fell on Tuesday on Bausch's update that Tom Vadaketh had resigned as CFO to "pursue another opportunity." Environmental services company Enviri announced on Tuesday that Vadaketh would be coming on board as its CFO.
So what
It's not unusual for a stock to decline on the news of a shuffling among its executive ranks. When a CFO unexpectedly leaves, investors inevitably begin to wonder if there could be an accounting scandal or some other issue behind the move. In the case of Vadaketh's exit, investors were also probably concerned that a leader of Bausch Health's financial turnaround would no longer be at the helm.
Tuesday's sell-off of the pharma stock reflected this uncertainty. However, it didn't take some investors very long to view the dip as a buying opportunity.
There's no reason at this point to think that Vadaketh's departure was anything but a personal decision to seek another position. Bausch Health should also be in good hands with the company's plan to appoint John Barresi as interim CFO if a permanent replacement hasn't been found by Oct. 13, when Vadaketh plans to step down. Barresi currently serves as Bausch Health's senior vice president, controller, and chief accounting officer.
Now what
The main things to watch with Bausch Health over the near term are its ongoing litigation with Norwich Pharmaceuticals over irritable bowel syndrome with diarrhea drug Xifaxan and its pending acquisition of dry eye treatment Xiidra. Norwich, which seeks to market a generic version of Xifaxan, appealed a U.S. District Court's ruling in favor of Bausch Health. A decision on this appeal is expected by early 2024.
