Valeant offers price cuts in distribution deal with Walgreens

Stung by criticism that it jacked up the price of lifesaving medicines, Valeant Pharmaceuticals said Tuesday it will lower some prices through an agreement with Chicago-based Walgreens, the nation’s largest pharmacy retailer. The company now has an average rating of “Buy” and an average price target of $163.62.

Cummings is the top Democrat on a House committee that will be holding a hearing in the new year on increasing prices for medication. This new deal with Walgreens seems to work well for Valeant giving the company some credibility.

Valeant said it now expected 2015 total revenue of $10.4 billion-$10.5 billion, down from $11.0 billion-$11.2 billion forecast earlier.

According to Zacks Investment Research, “Valeant Pharmaceuticals International, Inc.is a pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of neurology, dermatology and branded generics”.

Valeant shares rose 4.5 percent to $114.50 in premarket trading in NY, but remain far from an August high of $263.70.

Valeant’s press release didn’t specify the reason for the reduced expectations – which come as the Quebec-based company faces investor dissatisfaction over its handling of a controversy over its pricing and distribution practices, which are being investigated by US authorities. Valeant had been administering its financial-assistance program through mail-order pharmacy Philidor Rx Services LLC.

The company expects double-digit same store organic sales growth from its business next year, due to be mainly driven through volume. “Walgreens is about as reputable as you can get”, Pearson said.

Shares of Valeant Pharmaceuticals Intl (NYSE:VRX) traded up 6.55% on Monday, hitting $116.77. The 20-year agreement will see Valeant give Walgreens a 10% discount off its branded prescription dermatological and ophthalmological products, as well as its over-the-counter portfolio.

Cummings wrote that Valeant appears to have violated US securities law by withholding from shareholders and regulatory agencies information about its relationship with Philidor until October 19.

One of the allegations over Valeant’s business practices was that the company was inflating revenue through its relationship with specialty drug distributor Philidor.

The political pressure to roll back the price increases, and a heavy debt load from last year’s purchase of Salix Pharmaceuticals as well as its stock decline, has forced Valeant to reduce its reliance on serial acquisitions and price hikes. “We are pleased to announce both a strategic fulfillment agreement with Walgreens, as well as a new agreement to offer innovator products at generic prices, which is good for consumers, good for physicians and good for the healthcare system”.