Valeant in new distribution deal with Walgreens

Valeant said its “fulfillment agreement” will cut prices by 10 percent on all skin and eye medicines, and by more than 50 percent on some other branded drugs that that have generics available.

Valeant said it will offer the discounted drugs over the next six-nine months under the 20-year deal, which will take effect in the first quarter of 2016.

Valeant’s pricing practices have been under investigation by the U.S. Congress since the company dramatically increased prices for some specialty products this year.

Valeant Pharmaceuticals has a new distribution deal with Walgreens, sending shares of the beleaguered Canadian drug company up sharply in morning trading.

In addition, federal prosecutors and securities regulators are also probing Shkreli’s relationship with pharmaceutical company Retrophin (RTRX.O), which he used to head, and hedge funds he managed, according to Retrophin’s corporate filings.

In a letter to Valeant CEO Michael Pearson released early Wednesday, Representative Elijah Cummings says he wants previously requested interviews with company executives, as well as documents, by January 8, 2016.

However, since the summer, Valeant has faced questions about its drug pricing, business practices, and accounting and disclosures. Analysts expected $3.47 per share and the company’s previous estimate was between $4.00 and $4.20 per share. Goldman Sachs lowered Valeant Pharmaceuticals Intl from a buy rating to a neutral rating in a report on Monday, November 2nd.

Those drugs were not mentioned in Tuesday’s announcement regarding price reductions, but the companies said they hope to expand their agreement “over time” to include other therapeutic areas.

Valeant’s U.S.-listed shares rose 6 percent to $99.96 before the bell on Tuesday. Because Valeant owns a highly diversified, divisible, and desirable portfolio of products that can be soldproduct-by- product and/or division-by-division in an industry with many well-capitalizedbuyers, it could deleverage at an even more rapid rate if it chose to do so.

As part of the partnership, Valeant will slash dermatological and opthalmological products distributed via Walgreens by 10%.

Separately, Walgreens has agreed it will distribute over 30 branded products of Valeant, where generics are available and at generic prices.

Valeant said that the two programs will “provide up to $600 million in annual savings to the healthcare system”. Valeant shares have fallen more than 60 percent since early August.

The company expects full year adjusted cash flow from operations to be greater than $2.95 billion compared to its prior outlook of, greater than $3.35 billion.