Valeant pressured to provide details about drug pricing

Embattled Valeant Pharmaceuticals has slashed its expectations for the fourth quarter and all of 2015, with about two weeks left in both, and issued a guarded outlook for next year as well.

Valeant, which is expected to discuss the plan at an investor meeting on Wednesday morning, forecast in a press release that another closely watched metric, cash earnings, would be $6.9 billion to $7.1 billion in 2016.

“We’ve ignored the external factors and we’re continuing to grow, grow, grow”.

Company officials refused to answer any analyst questions on the investigations or the company’s much-criticized drug price hikes.

Canadian pharmaceutical company Valeant announced a drug distribution deal with pharmacy giant Walgreens Tuesday that will lower prices of many medications by 10 percent in the US. Valeant’s share price had dropped almost 75 percent in recent months as its actions came under scrutiny from Congress and state and federal prosecutors. The company provided EPS guidance of $10.23-10.33 for the period, compared to the Thomson Reuters consensus EPS estimate of $11.18, AnalystRatings.Net reports.

Walgreens Boots Alliance Inc.

The process for receiving branded products at generic prices was also not immediately clear.

Valeant has grown rapidly since Pearson joined the then-small company in 2008 and instituted a strategy of buying smaller drug developers, hiking drug prices and then slashing spending on research on new drugs.

A separate Walgreens agreement includes price cuts on more than 30 Valeant brands that have generic competition.

Walgreens has more than 8,000 pharmacy locations across the USA, and the new prices will be available from independent retailers as well. The stock has a market cap of $51.38 billion and a price-to-earnings ratio of 86.01. “We will have double-digit organic growth, not just next year, but the year after that and the year after”, Pearson predicted. Lower prices for drugs, retention bonuses to keep workers at the company after disruptions to business, legal fees and a new patient access program will cut about $500 million next year from the company’s adjusted EBITDA, or earnings before interest, tax, depreciation and amortization, Valeant said in a presentation to investors Wednesday.

Leerink analyst David Larsen says the Walgreens deal is quite different from Valeant’s arrangement with Philidor, which was essentially a “captive” pharmacy whose only customer was Valeant.

Last month, the company severed ties with Philidor, which exclusively carried its dermatology products, after reports surfaced that the pharmacy was using aggressive, potentially illegal means to extort high insurer reimbursements for pricey, branded drugs.