After a break with Philidor, outlook from Valeant is more guarded

Embattled Valeant Pharmaceuticals is slashing its expectations for the current quarter and 2015 as a whole and issuing a guarded outlook for next year as well.

See Full Article

Valeant is lowering its per-share profit expectations for the year, reported in U.S. currency, from between $11.67 and $11.87, to between $10.23 and $10.33. That's well short of the analyst estimates.

The drugmaker's outlook for the fourth quarter ending Dec. 31 has been lowered to between $2.55 and $2.65 a share. Analysts expected $3.47 per share and the company's previous estimate was between $4.00 and $4.20 per share.

Valeant's press release didn't specify the reason for the reduced expectations -- which come as the Quebec-based company faces investor dissatisfaction over its handling of a controversy over its pricing and distribution practices, which are being investigated by U.S. authorities.

Chief executive Michael Pearson and other Valeant executives will face questions from analysts at a company briefing this morning.

In October, the Quebec-based company severed ties with a U.S. mail-order pharmacy that distributed specialty drugs for Valeant. It also announced on Tuesday that it will deliver up to US$600 million in annual savings to the U.S. health-care system starting next year after agreeing to cut prices as part of distribution agreements with the large Walgreens retail chain.

Valeant says it will drop wholesale prices for branded prescription-based skin and eye-care products by 10 per cent. Walgreens will also distribute more than 30 of Valeant's branded products at comparable generic prices, starting in the second half of 2016. The average price decrease is expected to be more than 50 per cent, and range between five and 95 per cent.

The company's shares are already down more than 20 per cent for the year, closing Tuesday at C$149.75 on the Toronto Stock Exchange.

Valeant's price cuts don't apply in Canada where the Laval-based company doesn't have similar distribution agreements with pharmacy retailers such as Shopper's Drug Mart, Jean Coutu or the Rexall Group.

The new distribution agreement with Walgreens -- a chain with more than 8,000 retail outlets -- follows Valeant's decision in October to sever ties with mail-order pharmacy Philidor Rx Services. That relationship came to light as a result of a court battle between Valeant and another mail-order pharmacy.

Valeant has been accused of using Philidor to create a network of "phantom pharmacies" to steer pharmacy benefit managers toward Valeant's more expensive drugs, rather than cheaper alternatives.

With files from The Associated Press and the Canadian Press.



Advertisements

Latest Economic News

  • DavidsTea swings to loss on charges but says e-commerce improving

    Economic CTV News
    MONTREAL - DavidsTea Inc. says it swung to a loss in its last quarter as onerous contract charges and impairments weighed on its balance sheet. The specialty tea retailer says it had a loss of $16.1 million for the fourth quarter ending Feb. Source
  • Rogers profit rises by more than a third to $425M

    Economic CBC News
    Rogers Communications Inc. reported a $425 million net profit in its first quarter, up 37 per cent from $310 million in the comparable period last year. The wireless, cable, internet and media company's adjusted earnings grew even more, rising by 45 per cent to $477 million under new accounting rules that Rogers began using in the quarter ended March 31. Source
  • Ottawa's new privacy rules give businesses flexibility on reporting data breaches

    Economic CTV News
    OTTAWA -- Federal data breach regulations set to take effect Nov. 1 will require mandatory reporting of security breaches that pose a "real risk of significant harm," but give businesses flexibility about how that's done. Source
  • Spat breaks out between Tim Hortons franchisee factions over public complaints

    Economic CBC News
    The Tim Hortons franchisee advisory board is slamming a group representing at least half of the brand's restaurant owners for publicly making complaints about their parent company Restaurant Brands International Inc. In a letter to franchisees obtained by The Canadian Press, the board argues that the comments by the Great White North Franchisee Association criticizing the company in the media and to the federal government is corrosive and damaging to the Tim Hortons brand. Source
  • Acacia Mining production drops 45 per cent as Tanzania troubles persist

    Economic CTV News
    TORONTO -- A subsidiary of Toronto-based Barrick Gold Corp. says gold production at its Tanzanian operations plunged 45 per cent last quarter as it grappled with export restrictions from the country. London-based miner Acacia Mining, owned 64 per cent by Barrick, says the drop in production resulted from reduced operations at its Bulyanhulu mine and producing mostly from lower-grade stockpiles at its Buzwagi mine. Source
  • Supreme Court beer ruling could apply to Alberta-B.C. pipeline war, experts say

    Economic CTV News
    CALGARY -- A Supreme Court of Canada ruling on bringing beer from Quebec into New Brunswick has implications for the trade war between Alberta and B.C. over the Trans Mountain pipeline expansion. Experts say the court seems to be addressing the issue in its decision when it notes that while some trade barriers can be allowed in some circumstances, those designed to punish another province or to protect a local industry would not be permissible. Source
  • High cost of dental services prompting some patients to seek alternative options

    Economic CBC News
    An unaffordable price tag kept Melanie Laxson out of the dentist's chair until the pain became unbearable. With no access to insurance, the 38-year-old says there's no way she could afford the full cost of a dentist. Source
  • Canadian airline profits will fall in 2018 on higher costs: Conference Board

    Economic CTV News
    MONTREAL - The Conference Board of Canada says the growth of the country's airline industry will slow in 2018 as profits are forecast to decrease from last year's peak primarily because of higher fuel and labour prices. Source
  • Commodities volatile on $100 US oil talk

    Economic CBC News
    Talk that Saudi Arabia has its sights on $80-$100 US a barrel oil again and of more U.S. sanctions on Russia ignited a rally in commodities and resource stocks on Thursday, though the potential boost to inflation hit fixed-income assets. Source
  • Commodities rollercoaster on $100 US oil talk, sanctions stress

    Economic CBC News
    Talk that Saudi Arabia has its sights on $80-$100 US a barrel oil again and of more U.S. sanctions on Russia ignited a rally in commodities and resource stocks on Thursday, though the potential boost to inflation hit fixed-income assets. Source