Valeant Pharmaceuticals cuts financial guidance

December 17 07:16 2015

Embattled drugmaker Valeant Pharmaceuticals International (VRX) Wednesday lowered its financial guidance for the fourth quarter and full year and issued a more pessimistic outlook for 2016. The downbeat projections, issued just ahead of a presentation to investors and financial analysts, reflected fallout from the company’s recently scrapped partnership with Philidor Rx Services, the specialty pharmacy that helped Valeant sell its medications through a network of pharmacies and win insurance reimbursements on the transactions.

Valeant shares rose 3.64% to $113.58 in morning trading despite the grimmer forecasts. The company’s stock has lost 53% of its value during the last three months amid criticism and investigations of the Canada-based firm’s business practices. Valeant said it now expects fourth-quarter earnings per share between $2.55 and $2.65, down from the $4.00 to $4.20 previously forecast. The forecast fell well short of the $3.47 per share expected by Wall Street analysts.

Valeant projected total revenues between $2.7 billion and $2.8 billion for the quarter, lower than the $3.25 billion to $3.45 billion guidance previously issued. The drugmaker forecast full-year adjusted earnings per share between $10.23 and $10.33 on total revenue of $10.4 to $10.5 billion. The projection marked a drop from earlier guidance of $11.67 to $11.87 earnings per share on total revenue of $11 billion to $11.2 billion. Looking toward 2016, Valeant said it expects total revenues of $12.5 billion to $12.7 billion, with adjusted earnings per share of $13.25 to $13.75. Financial analysts had expected $12.55 billion in projected revenue and earnings per share of $14.27.

Valeant, which in the past has largely grown through acquisitions, said it expects to double same store sales in 2016, primarily driven by increased sales volume. That projection came one day after the company announced a new distribution deal with pharmacy chain giant Walgreens and agreed to slash its medication prices. The consignment agreement calls for Valeant to retain ownership of medications until they are dispensed to patients. The deal, which the drugmaker said it would offer to other pharmacies, includes plans to cut wholesale prices of Valeant’s branded prescription therapies in dermatology and ophthalmology by 10% starting in the first quarter of 2016.