August 9, 2016
By Alex Keown, BioSpace.com Breaking News Staff
LAVAL, Quebec – After a year of struggles that has seen a tremendous loss of revenue and the tapping of a new chief executive officer, embattled Valeant Pharmaceuticals is tacking a new course with a strategic reorganization, CEO Joseph Papa said in a statement this morning.
In a statement, Papa said the heart of the company’s new strategic course is the mission to improve the lives of patients. He said Valeant employees have been tirelessly working to rebuild the fractured relationship the company has with prescribers, patients and payors, as well as regaining the trust of debt holders and shareholders.
“Although it will take time to implement and execute our turnaround plan, I am confident that we will show progress in the coming quarters,” Papa said.
In its statement, Valeant did not elaborate on what the new strategic vision will be, but the company plans to hold a conference call later this morning where details are likely to be laid out. Following the announcement, shares of Valeant were up nearly 7 percent in premarket trading to $24.10.
Part of the reorganization began earlier this year with the hiring of Papa to replace former CEO J. Michael Pearson, who helmed the company during its dramatic slide in stock value as well as when the company came under scrutiny for its steep drug prices and some questionable accounting practices, particularly with its specialty pharmacy subsidiary, Philidor RX Services. Papa took over Valeant in the spring and was immediately challenged by a possible acquisition from Takeda Pharmaceuticals —something the company ultimately held off from in order to give Papa time to work.
Part of that work is attempting to appease the company’s creditors for failing to meet several financial reporting deadlines, which triggered default notices. Valeant has an estimated debt of $30 billion, largely due to its aggressive M&A practices.
In the second quarter of this year, Valeant saw total revenues decline 11 percent to $2.42 billion compared to the second quarter of 2015, where the company posted revenues of $2.73 billion. The company said the revenue decline was passed on drops in sales as well as negative foreign currency exchange. Analysts at Thompson Reuters predicted revenue of $2.46 billion in the second quarter.
Although revenue was down for the second quarter, Valeant reconfirmed revenue projections of $9.9 - $10.1 billion for the year.
As part of its new strategic focus, Valeant said it has begun to streamline its portfolio with sales of the brodalumab EU rights, Synergetics USA OEM business and Ruconest for a total combined upfront payment of $181 million and additional consideration up to $329 million for achieving specific approval and sales milestones, the company said. Additionally, Valeant said all North American rights to Ruconest will be sold to Pharming Group N.V. for up to $125 million.
