Valeant says it's on road to recovery despite cutting forecasts for 2015

Valeant Pharmaceuticals says it's on the road to recovery after taking big financial and PR hits from its association with a controversial U.S.

See Full Article

mail-order pharmacy.

The Quebec-based company expects its revenues and adjusted earnings will increase by double digits in 2016 and its battered share price will once again reflect the fundamentals of its business.

"We have been through a lot," CEO Michael Pearson told investors during a four-hour webcast.

Pearson said he was "pissed" at the "false" allegations about the company from a short seller that drove its share price collapse and prompted some calls for him to be replaced.

"If the board wants to fire me they are welcome to fire me but until they do we're going to get through this thing."

Valeant said the October split from specialty pharmaceutical partner Philidor Rx Services caused a big short-term disruption to its business that will reduce its expectations for the fourth quarter and 2015 as a whole.

However, Pearson said a new distribution deal with a prominent U.S. drugstore chain, Walgreens, is a better arrangement than the one with Philidor, a low-profile company that distributed specialty drugs for Valeant.

Despite cutting prices, Valeant expects it will make more money by gaining access to the 8,000-store network of the largest American pharmacy retailer.

"The opportunity for volume growth is huge," he told analysts.

Pearson said Walgreens was "courageous" for partnering with Valeant given the negative attention heaped on the company in the last few months.

"(But) we both fundamentally believe that this is going to change the industry, it's going to create enormous value for both our shareholders."

Valeant conceded the company, which has been accused of price-gouging for some of its products, has altered its strategy to pursue volume growth by lowering prices and reducing costs.

The deal with Walgreens is forecast to deliver up to US$600 million in annual savings to the U.S. health-care system starting next year after Valeant agreed to cut the prices of several of its drugs as part of the distribution agreement.

Alex Arfaei of BMO Capital Markets said the 2016 revenue guidance of US$12.5 billion to US$12.7 billion is in line with forecasts, but targeted earnings are weaker than predicted.

That "indicates to us that the increase in expected volume from the Walgreens agreement is not enough to offset the loss of more profitable products from the specialty pharmacy business at higher prices, at least in the near term," he wrote in a report.

The Montreal-area company's previously obscure relationship with Philidor and its pricing policies, which are under investigation by U.S. authorities, have contributed to a major decline in the company's stock.

Shares were up nearly eight per cent to $161.26 in Wednesday afternoon trading on the Toronto Stock Exchange.

That's compared to the 52-week low of $92.65 and the $347.84 high in August before its troubles began.

The company faces several U.S. investigations, including at a committee of the U.S. House of Representatives that will be holding a hearing in the new year on increasing prices for medication.

A high-ranking U.S. politician released a letter sent to Valeant that accuses the firm of failing to disclose information as requested and obstructing the congressional investigation.

"Your refusal to provide any documents or witnesses is obstructing this congressional investigation and preventing a full understanding of your company's suspect actions," wrote Elijah Cummings, the committee's ranking Democrat.



Advertisements

Latest Economic News

  • Alberta Energy Regulator names companies falling behind on pipeline safety

    Economic CTV News
    CALGARY - The Alberta Energy Regulator is making it easier for the public to see which oil and gas companies are falling behind on pipeline safety. The regulator launched a new pipeline reporting website Tuesday that lays out several pipeline safety ratings for all operators in the province over the past two years. Source
  • Wal-Mart keeps working to make inroads against Amazon

    Economic CTV News
    NEW YORK -- The nation's largest retailer keeps working to make headway against the largest online seller. Wal-Mart drew more shoppers to its namesake stores in the United States and its online sales soared 29 per cent in the fourth quarter, which covers the critical holiday shopping season. Source
  • Verizon forces Yahoo to cut sale price over hacking scandal

    Economic Toronto Sun
    SAN FRANCISCO — Yahoo is taking a $350 million hit on its previously announced $4.8 billion sale to Verizon in a concession for security lapses that exposed personal information stored in more than 1 billion Yahoo user accounts. Source
  • Seven-year-old girl's job application to Google catches CEO's eye

    Economic CTV News
    For seven-year-old Chloe Bridgewater, it’s never too early to get started on building your career. The girl from Hereford, U.K. penned a job application to Google CEO Sundar Pichai after seeing images of Google offices outfitted with bean bag chairs, go karts and slides. Source
  • French leftist lawmakers take EU-Canada free trade deal to court

    Economic CBC News
    More than 100 French left-wing lawmakers decided on Tuesday to appeal to the country's Constitutional Council to block a contentious free trade deal between the European Union and Canada. Supporters of the Comprehensive Economic and Trade Agreement (CETA) say it will boost economic growth and jobs on both sides of the Atlantic. Source
  • Feds may face 'rough' NAFTA renegotiation: former PM Mulroney

    Economic CTV News
    TORONTO - Former prime minister Brian Mulroney says the federal government may face a "rough negotiation" when it comes to NAFTA, but he believes Canada will nonetheless emerge with strong ties to the U.S. and Mexico. Source
  • Efforts to revise NAFTA will include all three member countries: Freeland

    Economic CTV News
    TORONTO -- All three NAFTA members will be at the table whenever talks to revise the trade deal get underway, Foreign Affairs Minister Chrystia Freeland said Tuesday amid concerns that Mexico could be given short shrift. Source
  • Wells Fargo fires 4 senior managers in sales scandal inquiry

    Economic CTV News
    NEW YORK -- Wells Fargo's board of directors said it is firing four senior managers as part of its investigation into the bank's sales practices scandal. The board said Tuesday the four are Claudia Anderson, the former community bank chief risk officer, Pamela Conboy, the lead regional president in Arizona, Shelly Freeman, the former regional president in Los Angeles, and Matthew Raphaelson, head of the community bank's strategy and initiatives. Source
  • Yahoo salvages Verizon deal with $350M US discount

    Economic CBC News
    ?Yahoo is taking a $350 million US hit on its previously announced $4.8 billion US sale to Verizon in a concession for security lapses that exposed personal information stored in more than 1 billion Yahoo user accounts. Source
  • Fast food facts: Popeyes and Restaurant Brands International

    Economic CTV News
    OAKVILLE, Ont. -- Restaurant Brands International is set to acquire the Popeyes fried chicken chain under a deal announced Tuesday worth US$1.8 billion. Here's a quick look at the two fast-food companies: Popeyes: Founded: New Orleans, 1972 Source