Why Shares of Bausch Health Jumped on Friday

What happened

Shares of pharmaceutical company Bausch Health Companies (BHC 1.04%) were up more than 10% as of 2:30 p.m. ET on Friday after it announced that its Bausch Receivables Funding subsidiary had entered into a $600 million financing facility with global investment firm KKR (KKR 0.71%). The agreement provides access to additional liquidity for roughly five years. Bausch stock is up more than 34% so far this year.

So what

Bausch Health specializes in therapies to treat disorders in gastroenterology, hepatology, neurology, and dermatology. The deal with KKR will give it a lot more flexibility in its operations.

In the first quarter, the company reported revenue of $1.94 billion, up 1%, year over year, but also a net loss of $201 million ($0.55 per share), compared with a net loss of $69 million ($0.19 per share) in the first quarter of 2022. The company also reported that it had cash and equivalents of $531 million on the books at the end of Q1.

Bausch's guidance for the year is for revenues of between $8.35 billion and $8.55 billion, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of between $3 billion and $3.15 billion.

Now what

A key for Bausch will be how long it is able to keep generic versions of one of its top-selling medications -- irritable bowel syndrome diarrhea (IBS-D) drug Xifaxan -- off the market. In June, the Food and Drug Administration approved Norwich Pharmaceuticals' Abbreviated New Drug Application (ANDA) for its generic version of Xifaxan, but also said it cannot grant final approval until Oct. 2, 2029, per a court decision. However, Norwich is suing the FDA to direct it to immediately grant final approval for the ANDA.

Bausch is also awaiting an FDA decision on its New Drug Application for IDP-126 -- a combination of benzoyl peroxide, clindamycin phosphate, and adapalene -- as a treatment for acne. The Prescription Drug User Fee Act (PDUFA) date for that application (i.e., the deadline for a decision) is Oct. 20. An approval has the potential to further boost the stock.