In a move that boosted investor confidence, Valeant said on Tuesday it had signed a distribution deal with leading pharmacy chain Walgreens Boots Alliance, offering discounts on its products. Analysts say Walgreens benefits from Valeant’s many skin-drug patients going to the chain’s pharmacies, which can then try to cross-sell high-end shampoos and cosmetics to the often young, affluent patients as they wait for prescriptions.
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Valeant reduced its 2015 adjusted earnings forecast to a range between $10.23 per share and $10.33 per share, compared to the $11.67 per share to $11.87 per share previously forecast. It has held a series of investor calls as it struggles to dispel the bad publicity it has suffered, following a damning report from short seller Citron Research, which had accused it of using Philidor to falsify revenue. The specialty pharmaceutical company reported $2.74 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $2.68 by $0.06.
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.
Valeant shares rose 4.5 percent to $114.50 in premarket trading in NY, but remain far from an August high of $263.70.
Federal prosecutors have subpoenaed documents tied to Valeant’s drug pricing and other practices ahead of a presidential election in which the soaring price of prescription medicines has become a top political issue and the chief health concern of many Americans.
The company said it would rebuild lost business through a distribution agreement with Walgreens pharmacies announced on Tuesday, and said the new arrangement would also help sales of products like Xifaxin for irritable bowel syndrome and Addyi, a new sexual dysfunction treatment.
The company is spending as much as $500 million on research and development next year and expects to have three drugs approved by the U.S. Food and Drug Administration, Pearson said on CNBC.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) increased the price of Isuprel and Nitropress by 212% and 525%, respectively after acquiring the drugs in February.
Cummings also questioned an assertion by Valeant that Philidor operates “independently” from Pearson’s company.
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. Cummings asked Pearson to respond by January 8. The stock’s slide worsened in the fall, when the Philidor allegations emerged, and shares fell to a low of barely $69.
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In September, the Democratic members of the Committee asked Chaffetz to issue a subpoena compelling Valeant to turn over documents related to its huge drug price increases.
