Valeant Pharmaceuticals International Inc cuts earnings forecast and its stock rallied – FINANCIAL NEWS-ecozik.com
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Valeant Pharmaceuticals International Inc cuts earnings forecast and its stock rallied

Bill Ackman, CEO and founder of Pershing Square Capital and Valeant Pharmaceuticals' second largest shareholder, visits the company's trading post on the floor of the New York Stock Exchange.

MONTREAL – The CEO of Valeant Pharmaceuticals International Inc. on Wednesday presented investors with a company that’s cutting earnings and purchasers forecasts, abandoning price increases, focusing on reducing debt and promoting its research and development spending. The end result: The marketplace wants it.

Over the course of the Laval, Que.-based drug maker’s investor day presentation, the stock climbed 9.23 per cent to close at $163.57 around the TSX, providing some respite to some company that lost 60 percent of its share price in just 3 months from the record high hit in early August.

“We’ve been via a lot,” Valeant chief executive officer Michael Pearson said throughout a speech at the company’s offices in Bridgewater, N.J.

“The real objective is not to make money, it’s to help patients. It’s to help consumers, take health care costs out of the system and provide it back to those who are paying. Should you choose this in an intelligent way, you can make more money.”

Valeant said the fallout from the relationship having a controversial mail-order pharmacy, Philidor Rx Services, will slash hundreds of millions of dollars from the company’s earnings this quarter and next year.

The drug maker said in October that it was ending its relationship with Philidor, that has been charged with using aggressive business practices to push Valeant’s more costly products. Valeant maintains the specialty pharmacy was working in the interests of everybody involved to bring the proper medication to people who needed it.

“The doctors loved it, the patients loved it. This is exactly why we did it,” said Pearson.

The cost of the Philidor separation alone is estimated to cost around US$250 million and represented about 7 percent of the company’s business.

Valeant says it’s also cancelled almost all of its planned price increases in the fourth quarter.

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