What happened

Shares of Bausch Health (BHC 0.53%), a healthcare company that sells generic and branded drugs, medical devices, and over-the-counter products, rose as much as 30.3% this week, according to data from S&P Global Intelligence. The stock closed last Friday at $5.18 and then opened on Monday at $5.06. By Thursday, it had hit $6.69, and on Friday, it rose to $6.75 per share, before falling a bit at the close. The stock's 52-week low is $4.00, and it has a 52-week high of $29.59. The stock is down more than 76% this year.

So what

Investors reacted positively to the announcement of a $4 billion debt swap by the company. Bausch pushed some of its current debt out to 2028 through 2030, trading higher interest rates for more capital now. The hope is that Bausch can invest more now in the company to grow revenue, allowing it to become profitable enough to easily handle the debt load. The last year that Bausch closed with positive net income was 2017.

In the second quarter, Bausch reported revenue of $1.967 billion, down 6% year over year. The company reported a loss of $145 million, an improvement over its $595 million loss in the same period a year ago, due in part to the company paying off $481 million in long-term debt in the quarter.

The company said that it is still planning on spinning off its Bausch + Lomb segment into a separate eye-care company. That's interesting because that was the only segment that saw a rise in revenue in the quarter, reporting $941 million, representing a 1% improvement year over year.

Bausch also said it plans to appeal a July 28 U.S. District Court decision that invalidated some of Bausch's patent claims for therapy Xifaxan (rifaximin). The ruling, as it stands, would allow Norwich Pharmaceuticals to market a generic version of the drug to treat irritable bowel syndrome.

Now what

The pharmaceutical company is in the midst of a turnaround effort by new CEO Thomas J. Appio, who was appointed in May. It's too early to tell yet if the moves the company is making now will lead it back to profitability. The debt swap could also end up being a risky move if the company isn't able to increase revenue. Once there are signs that the company is again profitable, though, its shares would likely bounce back to where they were last year.