A Member of Pat McKeough’s Inner Circle recently asked for his advice on Bausch + Lomb, a leading global eye health company founded in 1853 that finally went public in 2022.
Pat likes the firm’s strong brand recognition, diversified product lineup, and consistent revenue growth with robust performance in core segments like vision care and surgical devices. However, Pat notes the company holds significant debt while facing heightened competition.
BAUSCH + LOMB CORP. (Toronto symbol BLCO; www.bausch.com) s a leading maker of contact lenses, lens care products, eye care products, ophthalmic pharmaceuticals, over-the-counter products and ophthalmic surgical devices and instruments.
Bausch + Lomb was the eye care unit of Bausch Health Companies (symbol BHC on Toronto) before it was split off from its former parent and shares in the newly independent company sold to the public through an initial public offering.
Bausch + Lomb launched its IPO and began trading on the Toronto and New York exchanges at $18.00 U.S. on May 6, 2022. Bausch Health Companies still owns about 88.2% of Bausch + Lomb.
Bausch + Lomb has a comprehensive portfolio of over 400 products. These include contact lenses, lens care products, eye care products, ophthalmic pharmaceuticals, over-the-counter products and ophthalmic surgical devices and instruments.
The business was founded in 1853. Today, it has over 13,500 employees and a presence in nearly 100 countries. Bausch + Lomb is headquartered in Vaughan, Ontario, with corporate offices in Bridgewater, New Jersey.
Bausch + Lomb operates through three business segments: Vision Care, Pharmaceuticals and Surgical.
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The Vision Care segment (62% of sales) includes the company’s contact lenses and consumer eye care businesses. Among its leading products are Biotrue ONEday daily disposables, and Biotrue multi-purpose. Its lens products span a wide spectrum of uses.
The Pharmaceuticals segment (20%) makes exclusive and generic pharmaceutical products for the treatment of many eye conditions. These include glaucoma, eye inflammation, ocular hypertension, dry eyes, and retinal diseases. Its key pharmaceutical brands include MIEBO (dry eyes) and Vyzulta (glaucoma and ocular hypertension).
The Surgical segment (18%) makes medical device equipment and develops technologies for the treatment of cataracts, corneal, and other eye conditions. These include intraocular lenses and delivery systems, and surgical instruments for cataract surgery. Key surgical brands include Akreos (cataracts) and AMVISC (used in a variety of surgeries).
In September 2023, Bausch + Lomb completed a major acquisition when it bought Xiidra; it’s the non-steroid eye drops developed by Swiss pharmaceutical firm Novartis (symbol NVS on New York) to treat the symptoms of dry eye disease. Bausch + Lomb paid $1.75 billion U.S. in upfront cash and agreed to future payments of as much as $750 million U.S. if certain performance milestones are met.
Sales of Xiidra, mainly in the U.S., are about $500 million U.S. annually.
Xiidra is a good fit for Bausch + Lomb: the acquisition complements its existing dry eye business, which includes eye and contact lens drops. Xiidra also works differently than the company’s existing Miebo eye drops.
Bausch + Lomb’s high debt is a significant risk factor
In the three months ended March 31, 2025, Bausch + Lomb’s revenue rose 3.5%, from $1.14 billion from $1.10 billion a year earlier. Excluding one-time items, the company lost $54 million, or $0.15 a share, in the latest quarter, compared to a profit of $24 million, or $0.07. The loss was driven by increases in selling and promotion costs, primarily attributable to new drug Miebo.
The company’s long-term debt of $4.8 billion is a high 1.2 times its market cap. That adds a lot of risk.
Bausch + Lomb generally spends an average of 8% of its sales on research, which lets it introduce and improve its own innovative new products.
Bausch + Lomb also operates in a competitive market, with big rivals that include Johnson & Johnson Vision Care, Novartis, Alcon and AbbVie’s Allergan business. Still, it taps into long-term trends, like an aging population, greater wealth globally, and technological changes. That makes it hard for new entrants to gain significant market share.
Recommendation in Pat’s Inner Circle: Bausch + Lomb Corp. is okay to hold.
