Walgreens will also distribute more than 30 of Valeant’s branded products at comparable generic prices, starting in the second half of 2016.
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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 US authorities.
Cummings’ letter, which was also sent to each Valeant board member, states that the congressmen believes the “majority of Valeant’s Board of Directors had direct knowledge of the Philidor relationship before it was disclosed to shareholders – including personally touring Philidor’s facilities”.
“We have listened to what the marketplace is saying and we’ve taken positive steps to respond”, said Valeant chief executive J. Michael Pearson. For example, Valeant bought the life-saving heart drugs Nitropress and Isuprel in February, then tripled the price of one and raised the other sixfold. Analysts expect the company to report an EPS of $2.89 for the current fiscal year.
The shares of Valeant have dropped as much as 64% since its August high, as company has been under pressures because of the pricing scandal.
On Wednesday embattled drug maker Valeant will present its guidance for 2016 in a four-hour Investor Day conference call that starts at 8:00 am EST.
“Valeant and Walgreens hope to expand the relationship to include other therapeutic areas over time”, the two companies said in a joint statement.
Valeant expects the price decreases across both programs, when fully implemented, will provide up to $600 million in annual savings to the healthcare system.
U.S.-traded shares of the drugmaker jumped nearly 15 percent, or $13.75, to $107.98 in morning trading Tuesday. The Firm is engaged in developing, manufacturing, and marketing a range of branded, generic and branded generic pharmaceuticals, over-the-counter products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices), which are marketed directly or indirectly in over 100 countries. Prices on affected drugs are expected to fall from five to 95 percent, the companies said.
He said he expected the Walgreens deal to grow business through volume. Its stocks scaled sixteen percent or more on Tuesday.
This pact essentially lets Walgreens replace Philidor Rx at least for the ophthalmological and dermatologic products.
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Currently, the analyst consensus on Valeant Pharma is Moderate Buy and the average price target is $150.33, representing a 61.5% upside.
