Valeant Cuts 2016 Earnings Forecast Ahead of Investor Day

“We are very excited about the strong future given our broad portfolio of brands, our upcoming launch products and our robust R&D pipeline”, said J. Michael Pearson, chairman and chief executive officer.

That doesn’t necessarily mean the two have to attend and defend their pricing strategies, but if they don’t right away, Congress has the power to issue a subpoena for them to testify. Jennison Associates increased its position in Valeant Pharmaceuticals Intl Inc (NYSE:VRX) by 0.8% during the third quarter, according to its most recent Form 13F filing with the SEC.

Cummings also wants to see documents related to Valeant and Philidor’s agreement, which has since ended.

Under the 20-year deal, which was announced a day ahead of Valeant’s investor day on Wednesday (more on that below), Valeant will also be axing prices on its branded dermatology and ophthalmology franchises by about 10% within the next year, as well as for other branded medications such as the diabetes med Glumetza (whose price Valeant bumped 8-fold after acquiring it).

The specialty pharmaceutical and medical device company now expects 2015 revenue to range between $10.4 billion and $10.5 billion, down from its previous forecast between $11 billion and $11.2 billion. Valeant also chopped its outlook for the current quarter to between $2.55 and $2.65 per share, from $4.00 to $4.20.

At the same time, Valeant lowered its 2015 sales guidance to $10.4-10.5 billion from $11-11.2 billion previously; less than the consensus estimate of $10.73 billion. It will drop wholesale prices for branded prescription-based skin and eye-care products by 10 per cent.

Congressional committees have targeted Valeant as they investigate huge hikes in prices for some drugs, which have become a top concern for consumers and a big issue in the 2016 presidential campaign. The firm has a 50-day moving average price of $90.53 and a 200-day moving average price of $187.22.

The shares rose in early trading, and were up 2.7 percent to $112.55 before the market opened in NY, after falling as much as 6 percent earlier.

Valeant Pharmaceuticals Intl (NYSE:VRX) last released its quarterly earnings results on Monday, October 19th.

Pearson had previously said that Valeant would take a short-term hit, including by focusing on debt reduction, in order to ultimately secure long-term gains.

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 had been looking for a new pharmacy partner since saying in October it would cut ties with Philidor, which had close ties to Valeant and employed aggressive tactics to get insurers to pay for its drugs.

Pearson noted the company was the first to do a tax inversion, moving its official tax headquarters from the U.S.to Laval, Quebec, to reduce its tax rate, and that it now has the pharmaceutical industry’s lowest tax rate. Among the more egregious examples, Valeant bought the life-saving heart drugs Nitropress and Isuprel in February, then tripled the price of one and raised the other sixfold.

– With files from The Associated Press and The Canadian Press.