US federal agencies are also investigating the company for potentially cornering a part of the specialty contact lens market through its acquisition of Paragon Vision Sciences.
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In other news, Director Ronald Harold Farmer acquired 1,500 shares of Valeant Pharmaceuticals Intl stock in a transaction on Wednesday, October 21st. Valeant, which has its legal address in Laval, Quebec, and is run from Bridgewater, New Jersey, has previously promised to use the “lion’s share” of its cash flow to reduce debt, the result of a three-year, $23 billion borrowing binge, as it slows its dealmaking.
The specialty pharmaceutical and medical device company now expects 2015 revenue to range between $10.4 billion and $10.5 billion, down from its previous forecast between $11 billion and $11.2 billion. The forecast fell well short of the $3.47 per share expected by Wall Street analysts. Analysts were expecting earnings to be $14.27 per share on sales of $12.55 billion.
The company also plans pay down $2.25 billion in debt next year, including mandatory payments and maturities. 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.
Valeant said 2016 sales would be driven by volume, a change for Valeant, which has been criticized for a business model that depends on growth through purchasing companies and making large price increases on their older drugs.
Then, during a second investor call on October 26, Valeant offered another reason for withholding information about its relationship with Philidor, claiming that it was not “material” because, for example, sales to Philidor were below Valeant’s “10% threshold” for sales revenue.
“You’ll not see abnormally high price increases at all, this year or next”, Pearson said. Jefferies Group dropped their price objective on Valeant Pharmaceuticals Intl from $224.00 to $172.00 and set a buy rating for the company in a research note on Monday, November 2nd. “It’s our obligation to prove what they said is false”.
CVS Health CEO Larry Merlo told investors at its own investor meeting on Wednesday that the agreement between Valeant and Walgreens appeared to be an attempt to circumvent its policies meant to drive down costs for insurers and employers. “This claim is highly dubious”, Cummings wrote, “given Valeant’s own admissions that it ‘has the right to appoint employees to Philidor including a head compliance officer and an in-house lawyer, ‘ has ‘rights to access Philidor’s books, records and facilities, ‘ and has a ‘joint steering committee, composed of members from Valeant and Philidor'”. Company officials declined to comment on the progress of that review.
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Cummings is the top Democrat on a House committee that will be holding a hearing in the new year on increasing prices for medication. Even though, the company slashed its guidance for the fourth quarter, many analysts believe the transparency being provided by the company is a huge positive.
