Valeant Cuts Revenue, Profit Outlook, Gets Third Information Request From US Authorities

Valeant said the October split from specialty pharmaceutical partner Philidor Rx Services caused a big short-term disruption to its business that will reduce its expectations for the fourth quarter and 2015 as a whole.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares traded up 16% on Tuesday, Marketbeat.com reports.

Valeant Pharmaceuticals International (NYSE:VRX) announced on Tuesday a drug pricing as well as distribution agreement with pharmacy chain Walgreens Boots Alliance as the company looks to lower its prices and to expand the access to its different drugs. The new prices are scheduled to be instituted over the next six to nine months, and would be in place for at least 20 years.

“We believe it is going to save the (health care) system money”, said Pearson. Under Valeant’s partnership deal with Walgreen’s, it will offer its prescription-based dermatological and ophthalmological products at discounts as high as 10%.

The company will host a meeting with investors in New Jersey later Wednesday. That followed accusations from the short seller researcher firm Citron that Valeant used Philidor to create a network of “phantom pharmacies” to steer pharmacy benefit managers toward Valeant’s more expensive drugs, instead of lower-priced alternatives. One research analyst has rated the stock with a sell rating, eleven have assigned a hold rating, nineteen have issued a buy rating and one has assigned a strong buy rating to the company.

Cummings sent his first letter to Pearson in August requesting documents about Valeant’s decision to dramatically increase the prices of two heart medications, Isuprel and Nitropress, by 525% and 212%, after acquiring them in February.

For the full year, the company anticipates an adjusted profit of $10.23 to $10.33 a share on sales of $10.4 billion to $10.5 billion.

Valeant is under investigation by the US government and lawmakers over the price increases and is conducting an internal investigation into the situation with the pharmacy.

“Your refusal to provide any documents or witnesses is obstructing this congressional investigation and preventing a full understanding of your company’s suspect actions”, Cummings’ letter states, adding Pearson should comply voluntarily so a “subpoena will not be necessary”.

Valeant announced on Wednesday plans to cut its debt by $2.25 billion, a step backed by Bill Ackman, one of the company’s top shareholders. This new deal with Walgreens seems to work well for Valeant giving the company some credibility.

The company, which is holding its investor day on Wednesday, said it still expected double-digit sales growth through higher volumes.

Leerink analyst David Larsen said the deal makes sense for Valeant, although it won’t meaningfully improve its payer relationships.