Valeant Announces New Fulfillment Agreements With Walgreens

Prices on affected drugs are expected to fall from five to 95 percent, the companies said.

For 2015, the Canadian drugmaker expects an adjusted profit of $10.23 to $10.33 per share on sales of $10.4 billion to $10.5 billion.

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

Additionally, yesterday shares of the company soared after it announced a 20-year drug pricing and distribution agreement with pharmacy chain Walgreens Boots Alliance (WBA).

Pearson said Walgreens was “courageous” for partnering with Valeant given the negative attention heaped on the company in the last few months.

Pearson declined to give an update on the investigation, or comment on investigations by USA prosecutors in NY and MA and by Congress over the company’s history of price increases and its patient access programs.

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.

In September, the Democratic members of the Committee asked Chaffetz to issue a subpoena compelling Valeant to turn over documents related to its huge drug price increases.

“Investors were looking for a definitive track forward for Valeant (in a post-Philidor world) with its pharmacy and distribution strategy”, Umer Raffat, an analyst at Evercore ISI, wrote in a note to clients.

“We have listened to what the marketplace is saying and we’ve taken positive steps to respond”, said Valeant chief executive J. Michael Pearson. The first will reduce the prices of skin and eye care prescriptions by 10% across the board.

The deal will allow consumers to get Valeant’s dermatology and ophthalmology products-including Luzu and Zylet-at a lower out-of-pocket cost from more than 8,000 Walgreens U.S. retail pharmacy locations and participating independent retailers.

Valeant had been a highflier by taking over other drugs and drug firms and hiking drug prices, as opposed to the traditional pharmaceutical-industry growth method of discovering new drugs through research and development.

Valeant has been accused of using Philidor to create a network of “phantom pharmacies” to steer pharmacy benefit managers toward Valeant’s more expensive drugs, rather than cheaper alternatives. Valeant shares have fallen more than 60 percent since early August. Finally, TD Securities cut their price target on Valeant Pharmaceuticals Intl from $260.00 to $160.00 and set a “buy” rating for the company in a report on Wednesday, November 11th.

The company plans pay down $2.25 billion in debt next year, including mandatory payments and maturities.

“It really improves their credibility”, because Valeant delivered so quickly on its pledge to line up a new distributor to replace Philidor, Malhotra said, adding that investors had anxious no pharmacies would work with Valeant in the future.