This week on QAV America, Cameron delivers a doozy of a pulled pork on Bausch Health Companies (BHC), the scandal-riddled pharma beast formerly known as Valeant. From jacking drug prices to a multi-billion dollar loss for Bill Ackman, this company has a backstory filthier than a New Jersey motel carpet. But does all that stink mean it’s a value investor’s dream? We break down the history, the cashflow, the debt, and whether BHC’s rebrand is enough to justify a second look — or if it’s just lipstick on a particularly greasy pig.

Tony weighs in on cultural overhang, conglomerate discounts, and why even psychopaths can run a good balance sheet. Oh, and we talk Trump, Maxwell, and the goddamn Godfather.

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## **⏱️ Timestamps + Stocks**

– **00:00 ** – Welcome to QAV America 15: NYSE focus and value investing lens

– **02:00 ** – This week’s pulled pork: Bausch Health Companies (BHC)

– **04:00 ** – Dirty history: Valeant, price gouging, and the big rebrand

– **07:00 ** – 10,000% price hikes and congressional heat

– **09:00 ** – Philidor scandal, shady pharmacy networks, and fake aliases

– **10:30 ** – Bill Ackman’s $2.8B loss and catastrophic exit

– **12:00 ** – The Sprout female Viagra saga: billion-dollar boomerang

– **13:30 ** – Current financials: $1.6B OCF, $20B debt, and F-score of 7

– **16:00 ** – Xifaxan, IBS, and hepatic snuffleupagus

– **18:00 ** – Bausch + Lomb confusion: spin-off but 90% still owned

– **20:00 ** – Conglomerate discount, legal overhang, and valuation mess

– **24:00 ** – Why value investors should care: deep discount and high cashflow

– **26:00 ** – Quality and QAV metrics: QAV score ~0.45

– **28:00 ** – Trump, Ozempic, and pharma pricing politics

– **30:00 ** – Portfolio update: US portfolio YTD and all-time performance

– **33:00 ** – After hours: The Open Championship, Godfather rewatch, John Wick realism, and Robert Maxwell conspiracies

 [00:00:00 ]

Cameron: Welcome back to QAV America, Tony, episode 15. We are recording this July 22nd Australian time, 2025. Just did our Australian show. Now talking about America. For new listeners, welcome. We’re two Australian value investors that have been doing a podcast in Australia for about six years on value investing, and now we’re doing one on the American market as well, where each week I take a company.

On the New York Stock Exchange or NASDAQ in theory, but they always tend to be New York Stock Exchange. ’cause our system of value investing doesn’t tend to score very many NASDAQ companies very highly. But, uh, there’s a lot to choose from. On the New York Stock Exchange, so I, I pick one every week. That scores highly in our system of looking for [00:01:00 ] quality companies.

And by quality companies we mean a lot of different things, but essentially generating a lot of cash is the big one that we’re looking for. And then we look at the, the valuation. What can we, can we buy them at a discount? We’re looking for companies that generate a lot of cash. Particularly interested in the ones that we can buy to discount to what we think their intrinsic valuation is.

Then I’ll do a little bit of a deep dive or a pulled pork as we call them. And this week, oh, this is a terribly dirty, dirty company story. Yeah. I think last, I can’t, I think last week we were talking about dirty oil or dirty something. This week it’s dirty, dirty drugs

Tony Kynaston: about coal tile last week.

Cameron: Ah, that’s right. Well, this time it’s dirty drugs and dirty contact lenses.

You don’t want your contact lenses to be dirty, but uh, turns out the business of contact lenses is dirtier than I realized. So the company is called. [00:02:00 ] Bausch Health, you’re probably familiar with Bausch and lom. The, uh, eyewear brand. Well, this is the parent company now, confusingly Bausch Health. BHC is the company that I’ll be talking about.

Bausch Lo is a separately listed company on the New York Stock Exchange. They spun it out. I think it’s B-L-B-L-C-O is Bausch and Lam. Not talking about Bausch and Lobo. I’m talking about Bausch Health. They still own 90% I think of Bausch and lom. They floated off a small amount of it, and they might float off the rest of it too, which I’ll get to, but this is BHC.

Now, I do want to preface this by saying. From a sentiment chart perspective, they are currently what we call a Schrodinger. They are above their byline, but slightly below their sell [00:03:00 ] line. So they’re simultaneously a buy and a sell. So we wouldn’t buy them, they just tipped down they were a buy. So I ran my checklist, my, my buy list, like, uh, two weeks ago.

They were a buy at the time. They’ve just dipped a few cents below. Well, it’s a bit more than a few cents. Their sell price is $6 49. They’re currently about $6 31, so they’ve dropped 18 cents or so below their, uh, buyline. So we wouldn’t buy them at this stage, but I’m gonna talk about ’em anyway ’cause they could pop back up above that at any given moment.

They’re a global diversified. American Canadian. Really? Canadian American. ’cause they come outta Canada. Pharmaceutical company. Primarily global corporate headquarters are in Quebec at a place called Laval in, uh, Quebec. Its US headquarters are in New Jersey, which is [00:04:00 ] fitting because I think for a long time they sound like they were run by like the mob.

Tony Kynaston: Allegedly.

Cameron: Oh, it sounds like they were run like the mob, not by the mob, like the. Dirty. Very, very dirty. Uh, they develop, manufacture a market range of pharmaceutical products, from diarrhea to constipation, from female horniness to itchy skin conditions and better contact lenses. They’ve got it all covered, although they sold off their female Viagra product.

But it’s a really good story because I’m, I’m gonna get to that later on. They’ve had a bunch of scandals over the last decade in particular, uh, actually had other scandals going back to the nineties, but thi this is a company that has a stank on it. They’ve had lots of very, very expensive headline grabbing corporate scandals over the last 20, 30 years, [00:05:00 ] and that’s one of the reasons I think why they’re cheap at the moment.

It’s just one of the reasons so bad they had to do a rebrand to try and get away from the stink on their brand. So they used to be known as Valiant, V-A-L-E-A-N-T. But then about seven or eight years ago, they changed their name to Bausch. So, um, people, as I said before, if you, if you, if you wear glasses or you have ever walked past a glasses shop, you’ve probably heard of Bausch and lom.

They’re a pretty big global brand. This is the parent company. They bought that business quite some years ago. But they really are post-scan rebrand of this company, Valiant Pharmaceuticals. They have one of the filthiest backstories on the market. Um, about 10 years ago, they were in a heap of trouble in the US for all sorts of things.

Jacked up, drug prices, lied about sales cooking. The [00:06:00 ] books blew up one of the most famous hedge funds on Wall Street. Your old friend Bill Ackman, then they changed their name in 2018. To, you know, I guess to in hope that the market would forget, and it hasn’t really, but this is how it all went down. I mean, the company goes way back many, many years started by a, I think it was a Canadian pharmacologist, but it went through decades of development.

In 2003, it was called ICN Pharmaceuticals changed their name to Valiant. And decided they didn’t. The guy who was the CEO at the time decided they didn’t want to develop drugs. They just wanted to buy existing brands. So he started doing this massive rollup. A debt fueled rollup of other smaller drug companies, stopped really spending on r and d and just started borrowing like crazy, gobbling up small drug [00:07:00 ] companies.

And then once they bought it, jacking the prices up. Through the roof, they would. Buy an old medicine, cut costs, raise the price and then milk the hell out of it. Got some examples. In 2015, they bought two old cardiovascular hospital drugs, Isoprel and Nitropress, and then raised the prices overnight by 525% and 212% respectively.

No new research. No better version, just. A new sticker price, and that wasn’t a one off. They did that on 62 different drugs, raising the prices in some cases by more than 500%, and one antifungal called flu toine. It’s being sold in the US for 10000% more than it was costing in Europe, [00:08:00 ] 10000%. So they got themselves the, uh, in all sorts of trouble with Congress, the me there was a media storm around it.

Then in 2015, the activist firm, Citron Research called Seller, Andrew left, who I think we’ve talked about before. He’s one of these guys that like in the big short, uncovers companies