Joe Papa, Valeant’s chief executive officer, said on a conference call Tuesday that the company would seek to modify the interest financial maintenance coverage covenant on its bank debt.
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As soaring drug prices became a hot political issue, Valeant has been hit with three ongoing federal probes into its accounting and business practices and criticism from presidential candidates, forcing it to renounce its price-hiking strategy and push out Michael Pearson, the CEO behind that strategy.
Analysts on the call, some sounding skeptical the Canadian company’s behavior has changed much, peppered Valeant executives with questions about their plan, assumptions underlying rosy performance projections, and progress repairing tattered relations with insurers, doctors and patients.
Valeant Pharmaceuticals (TSX:VRX) is reporting a US$302 million net loss for its second quarter – almost six times bigger than during the same period a year ago – but the company is sending a message that things will get better. Earnings, adjusted for many one-time gains and costs, came to $488 million, or $1.40 per share.
Revenue tumbled to $2.42 billion in the period.
Many Wall Street Analysts have commented on Valeant Pharmaceuticals Intl Inc.
The company, which reported earnings Tuesday, said it repaid $1.29 billion of debt in 2016, according to an earnings presentation.
However, Valeant – which reports in USA currency – had lower adjusted earnings, which fell to $488 million or $1.40 per share from $751 million or $2.14 per share in the second quarter of 2015.
The company previously obtained an amendment earlier this year to help stave off default, allowing it additional time to file its financial statements with securities regulators. The shares’ second-biggest percentage gain so far was the 23.59% jump on September 9, 2005.
As a result, Valeant posted a loss almost six times higher than a year ago, amid an 11 percent plunge in total revenue, legal and restructuring costs and a almost $900 million writedown in the value of assets.
Papa said he’s “confident” that Valeant’s “future is bright”, given its new strategy, numerous appointments and promotions to top management announced Monday, and the replacement of 10 of its 12 board members.
No details about that direction were released, but anything that brings Valeant closer to a more typical pharmaceutical concern would be a relief to embattled investors.
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“Nonetheless, we believe that new CEO Joseph Papa must continue to build credibility during the early stages of his tenure, and investor confidence can only be fostered through execution and delivery of targets”, he wrote in a report.
