The reputation and value of Valeant plummeted in 2015 and 2016 as the one-time Wall Street darling became embroiled in a series of scandals, starting with accusations of an Enron-type fraud. That led to Congressional investigations, lawsuits, arrests and growing concerns Valeant would be crushed by its mountain of debt.
Since then, the leadership team Valeant hired to arrest the tailspin has paid down debt and sought to get the business back on track. Having made some progress on those fronts, Valeant now wants to lose one of the most significant ties to its troubled past: its name.
Valeant’s search for a new name led it to Bausch + Lomb, one of the businesses it bought during the debt-fueled acquisition spree that preceded its downfall. The Bausch brand dates back 165 years and was somewhat insulated from the scandals that engulfed Valeant.
Those strengths of the brand, plus Bausch’s history of innovation, attracted Valeant. However, rather than adopt the name wholesale, Valeant has settled on Bausch Health Companies as its new identity.
Leadership at Valeant thinks the name better reflects the breadth of the company’s activities, which encompass drugs, medical devices and over-the-counter products. Valeant is also painting the adoption of the new brand as a key milestone in its recovery.
“I'm excited about this development because it signals we've reached an important point in the turnaround process. The steps we have taken are yielding concrete results and we're beginning to turn the page away from legacy issues that have been headwinds over the past few years,” said Joseph Papa, chairman and CEO of Valeant, on a quarterly results conference call with investors.
Valeant will rebrand in July, changing its stock ticker, website and corporate identity in the process.
Valeant hired Papa to turn the business around in 2016. Since then, Valeant has repaid almost $7bn of debt by selling off some of the companies it acquired on its way up.
The actions bought Valeant some breathing room but it is still carrying $25bn of debt. Papa is looking to growth in the company’s remaining businesses to help it manage the burden.
Valeant’s first quarter results raised expectations that Papa can execute the strategy. Valeant posted better than expected numbers, its first organic sales growth since 2015 and increased its 2018 revenue forecast.
Shares in Valeant rose 9% following the release of the quarterly results. The stock jump moved the value of Valeant shares up toward $20, double the low they hit last year but well short of the $250-plus peak of 2015.