Newspaper article The Canadian Press

Valeant Says on Road to Recovery despite Cutting Forecasts for 2015

Newspaper article The Canadian Press

Valeant Says on Road to Recovery despite Cutting Forecasts for 2015

Article excerpt

Valeant's outlook for the quarter, year and 2016 grows grim

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Valeant Pharmaceuticals says it's on the road to recovery after taking big financial and PR hits from its association with a controversial U.S. mail-order pharmacy.

The Quebec-based company expects its revenues and adjusted earnings will increase by double digits in 2016 and its battered share price will once again reflect the fundamentals of its business.

"We have been through a lot," CEO Michael Pearson told investors during a four-hour webcast.

Pearson said he was "pissed" at the "false" allegations about the company from a short seller that drove its share price collapse and prompted some calls for him to be replaced.

"If the board wants to fire me they are welcome to fire me but until they do we're going to get through this thing."

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.

However, Pearson said a new distribution deal with a prominent U.S. drugstore chain, Walgreens, is a better arrangement than the one with Philidor, a low-profile company that distributed specialty drugs for Valeant.

Despite cutting prices, Valeant expects it will make more money by gaining access to the 8,000-store network of the largest American pharmacy retailer.

"The opportunity for volume growth is huge," he told analysts.

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

"(But) we both fundamentally believe that this is going to change the industry, it's going to create enormous value for both our shareholders."

Valeant conceded the company, which has been accused of price-gouging for some of its products, has altered its strategy to pursue volume growth by lowering prices and reducing costs. …

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