Shares in Valeant, down 53% over the past three months through Tuesday’s close, fell 4.2% in premarket trading. Previously, Valeant expected to earn $11.67 to $11.87 in earnings a share on $11 billion to $11.2 billion in revenue. (VRX.TO) is cutting its revenue and profit forecasts.
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The company also forecasts earnings before interest and taxes of $6.9 billion to $7.1 billion in 2016 compared to previous estimates of $7.5 billion, but significantly higher revenues compared to 2015.
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For 2016, Valeant said it expects adjusted earnings will come in between $13.25 to $13.75 per share on revenue of $12.5 billion to $12.7 billion. Analysts were expecting earnings to be $14.27 per share on sales of $12.55 billion. “Walgreens is about as reputable as you can get”, Pearson said. Instead, the drugmaker will retain ownership over the therapies and ship the products to the pharmacy, which will enjoy distribution and dispensing fees for its efforts. The deal, which the drugmaker said it would offer to some other pharmacies, includes plans to cut wholesale prices of Valeant’s branded prescription therapies in dermatology and ophthalmology by 10% starting in the first quarter of 2016.
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That “indicates to us that the increase in expected volume from the Walgreens agreement is not enough to offset the loss of more profitable products from the specialty pharmacy business at higher prices, at least in the near term”, he wrote in a report.
“We have listened to what the marketplace is saying, and we’ve taken positive steps to respond”, J. Michael Pearson, Valeant Chairman and CEO said in a statement.
“Why people challenge what we’re doing is we do things unconventionally”, he said. More recently, he’s requested interviews with Valeant executives about the company not disclosing its relationship with specialty mail-order pharmacy Philidor. Guggenheim dropped their price objective on Valeant Pharmaceuticals Intl from $300.00 to $195.00 and set a “buy” rating for the company in a report on Friday, November 6th. “It’s our obligation to prove what they said is false”.
On Wednesday, Pearson told investors that Philidor was behind them.
A special Valeant board committee is examining specifics of the Philidor arrangement. The move is being seen as an attempt by Valeant to restore its reputation and provide the much-needed boost for its stock price.
The ranking Democrat on the House Oversight and Government Reform Committee is turning up the heat on beleaguered Valeant Pharmaceuticals, as the committee continues investigating soaring drug prices.
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Pearson sought to project a more upbeat future on Wednesday. “We believe that we are entering a new era of growth and opportunity as we continue to build and grow our businesses around the world and deliver medicines and products at affordable prices that improve the lives of patients”.
