Bausch Health Names Hedge Fund Billionaire Paulson Chairman

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(Bloomberg) — Bausch Health Cos. has named hedge fund billionaire John Paulson as its new chairman, replacing Joseph Papa, who resigned on Thursday.

The pharmaceutical and device company, which focuses on eye care, gastroenterology and dermatology products, said Papa’s resignation wasn’t the result of “any dispute or disagreement.” Paulson, who is also the company’s second-largest shareholder, starts immediately.

Shares of Bausch jumped in late trading, gaining about 3% to $7.49 a share at 6:30 p.m. in New York. The Canadian company was once known as Valeant Pharmaceuticals. It rebranded in 2018 in the wake of public outcry over drug price hikes and the conviction of a former executive for accepting a bribe. 

Its shares have been falling this year, declining more than 70% by Thursday’s close, partly driven by the suspension of a planned spinoff of its skin-care business. That’s much steeper than the 16% drop in the Dow Jones Industrial Average over the same period. The company spun off its eye-care unit, Bausch + Lomb Corp., earlier this year. 

“We have made progress towards the separation of Bausch + Lomb,” Paulson said in a statement provided by Bausch Health. “We will intensify our focus on driving future growth and profitability as we capitalize on our expertise and commercial scale to expand market share globally. We are committed to taking decisive actions to harness Bausch Health’s full potential and unlock significant shareholder value.”

Paulson, 66, is worth $4.6 billion, according to the Bloomberg Billionaires Index. He’s famous for pulling off one of the most successful trades in history, when he bet against the US housing market before the 2008 financial crisis.

The hedge-fund manager made $20 billion for himself and investors when subprime mortgage bonds collapsed. His investment firm, Paulson & Co. Inc., later ventured into different areas, but ultimately stumbled. In 2020, he said that he would turn his firm into a family office, in which he manages his own money.

Paulson’s stake in Bausch was worth about $188 million at the end of trading Thursday. He owns nearly 26 million shares, or 7.2% of the total shares outstanding, according to Bloomberg data.

He was previously on the board of directors at Bausch from June 2017 to May 2022, according to the company. Bausch didn’t give further details about Papa’s split with the company.

(Updates with Paulson comment in fifth paragraph)

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