Bausch Health (BHC) Deal for Synergy Assets 'Makes Strategic Sense' - Mizuho

Mizuho Securities analyst Irina Koffler reiterated a Buy rating and $38 price target on Bausch Health Companies (NYSE: BHC) after the company entered into a “stalking horse” agreement to acquire the assets of Synergy Pharmaceuticals for ~$200M in total consideration plus any assumed liabilities.

"We had previously contemplated Synergy as a strategic fit for Bausch," Koffler commented. "Its gastrointestinal segment, Salix, could provide increased support behind Trulance in IBS-C and Chronic Constipation, while using the revenue accretion to expand its own sales organization to grow Xifaxan and its line extensions. Linzess, Trulance's closest competitor, is projected to attain blockbuster status within a few years, so Trulance has the potential to become a significant contributor to Bausch, if it can continue to grow in this market. We also note that Synergy has rights to commercialize Trulance in all territories except Canada, mainland China, Hong Kong, and Macau, which may create additional value for Bausch in its international markets. This deal gives us more conviction around a 2019 growth story. We reiterate our Buy rating on BHC, and will review assumptions to incorporate Trulance into our model."

For an analyst ratings summary and ratings history on Bausch Health Companies click here. For more ratings news on Bausch Health Companies click here.

Shares of Bausch Health Companies closed at $23.15 yesterday.

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