Valeant To Slash Drug Prices

Valeant said its expecting that the agreements, when implemented fully, to save the healthcare system as much as $600 million annually and allow consumers to access its different products easily from over 8,999 locations of Walgreen across the US, as well as participating retailers that are independent.

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

Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s stock had its “buy” rating restated by equities research analysts at Nomura in a report issued on Wednesday, Marketbeat reports.

Valeant’s stock price shot up by 10 percent after Tuesday’s news, as investors cheered the ‘credibility boost’ that came with the news.

On Tuesday, Valeant said it struck a deal with Walgreens Boots Alliance Inc., which runs the largest chain of drugstores in the US, to sell Valeant skin and eye drugs at a discount under a 20-year pact.

Shares for Valeant jumped 12% to reach $105.53 in morning trading.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) increased the price of Isuprel and Nitropress by 212% and 525%, respectively after acquiring the drugs in February.

“To compare us to Turing is ridiculous”, Pearson said, noting that Turing is a single-product company but Valeant employs 22,000 people around the world with thousands of products. Valeant is already under federal investigation since mid-October over its growth strategy that is purportedly hinged on acquisitions of undervalued assets and their overnight price hikes.

The deal applies to Valeant’s branded dermatology and opthalmology prescription drugs, including the high-selling Jublia treatment for toe fungus.

CVS Health CEO Larry Merlo told investors at its own investor meeting on Wednesday that the agreement between Valeant and Walgreens appeared to be an attempt to circumvent its policies meant to drive down costs for insurers and employers.

Leerink analyst David Larsen said the deal makes sense for Valeant, although it won’t meaningfully improve its payer relationships. Given that the analysts’ consensus EPS estimate for the company now stands at $11.05; the latest guidance is a sharp plunge for the company.

Valeant denied the allegations, characterizing them as part of an effort to drive down the company’s stock price.

For fiscal 2016, the company anticipates that revenue will range between $12.5 billion and $12.7 billion, while adjusted per-share earnings will be between $13.25 and $13.75. It has also pledged to cut prices.

A poll of more than 200 investors by ISI Evercore recently found about 25 percent expected 2016 earnings of about $14 per share and 23 percent expected $13 per share.