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  #171  
Old 03-15-2016, 09:32 AM
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Valeant is having quite the spectacular implosion

Valeant Pharmaceuticals Slashes Guidance; Shares Fall

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Originally Posted by WSJ
Valeant Pharmaceuticals International Inc. slashed its guidance for the current quarter and reported a loss for the final quarter of 2015, also warning that it faces a potential “event of default” if it doesn’t file its already delayed annual report by an April deadline.

Shares of the company slid 20% in premarket trading to $55.41 as the Canadian drugmaker called its financial results preliminary and said it would file final results “as promptly as reasonably practicable.”

Valeant said that if it doesn’t file its annual report with the Securities and Exchange Commission by April 29, it could trigger a default. The filing was due Feb. 29 but has been delayed as a committee of Valeant’s board continues to investigate its now-ended relationship with mail-order pharmacy Philidor Rx Services LLC. Valeant said it was launching a process with its bank lenders next week, seeking to extend its deadlines for filing the 10-K and 10-Q quarterly report for the first quarter of 2016.

In addition, Valeant said it would breach a separate covenant, the reporting covenant in its bond indentures, if its 10-K isn’t filed by Wednesday. If that happens—and Valeant has indicated the report isn’t yet ready—trustees or holders of at least 25% of any series of its bonds may deliver a notice of default to the company. The company would then have 60 days after receiving that notice to file its 10-K, resolving the matter.

Valeant’s quarterly report comes after the Canadian drugmaker postponed its financial results on Feb. 28 and withdrew its guidance as it said Chief Executive Michael Pearson had returned from medical leave.

For the first quarter, the company expects earnings of $1.30 to $1.55 a share, sharply below its previous guidance of $2.35 to $2.55 a share. Revenue is expected to come in between $2.3 billion and $2.4 billion, down from prior guidance of $2.8 billion to $3.1 billion.

On a conference call with analysts, Mr. Pearson detailed some of the reasons Valeant will likely underperform in the first quarter—citing “higher-than-expected inventory reductions” and the “cancellation of almost all price increases.” Financial Chief Robert Rosiello, on the call, cited underperformance in several businesses, including its gastrointestinal and dermatology product lines, as well as product destocking related to Philidor, for weakness.

Valeant said it has lowered the growth outlook for the dermatology, gastrointestinal and women’s health products, as well as certain geographies like Western Europe, while keeping its expenses largely unchanged. The company also pointed to “management transition issues” and “continued organizational distractions” that are expected to hurt operations during the first quarter.

“We plan to work hard to improve these metrics by delivering higher revenues and reducing our costs and, if successful, we hope to beat this guidance in the quarters to come,” Mr. Pearson said.

For the full year, the company forecast adjusted earnings of $9.50 to $10.50 a share, down from previous guidance of $13.25 to $13.75 a share. Revenue is expected in the range of $11 billion to $11.2 billion, compared with previous guidance for $12.5 billion to $12.7 billion.

Mr. Pearson also said Tuesday morning on the call that the company is considering divestitures of noncore assets to improve liquidity. He didn’t outline what those assets could be, though he said the company isn’t considering a sale of a “major platform.” Last week, hedge-fund manager and Valeant investor William Ackman said at a conference that Valeant could consider selling a piece of its eye-care business, Bausch & Lomb, to reduce debt.

Valeant grew into one of the world’s most valuable pharmaceutical companies through acquisitions. Last year, Valeant bought Salix Pharmaceuticals, known for its drugs to treat stomach disorders, and the maker of female-libido drug Sprout Pharmaceuticals, among other deals.

The Quebec-based company, though, is now under investigation by U.S. prosecutors over its drug pricing and distribution practices. Its shares have lost about three-quarters of their value since peaking last summer amid questions about its business practices and disclosures of government investigations.

The drugmaker became a poster child for criticism of high drug prices and a target of congressional inquiries after The Wall Street Journal reported Valeant was buying the rights to certain treatments and quickly raising their prices by substantial amounts.

In all for the fourth quarter ended Dec. 31, Valeant posted a loss of $336.4 million, or 98 cents a share. Adjusted earnings were $2.50 a share, below analysts’ expectations of $2.51. Among other items, the company booked $96 million in restructuring, integration and acquisition-related charges in the quarter.

Revenue was $2.79 billion, topping Wall Street’s guidance for $2.75 billion.

Valeant faces an investigation by the Securities and Exchange Commission, which has requested information about Valeant’s now-terminated relationship with drug distributor Philidor. Valeant has submitted emails, financial documents and other data to comply with the request, according to a person familiar with the matter.

The Wall Street Journal has reported that former employees and others said Philidor used aggressive tactics to get insurance companies to pay reimbursements for Valeant’s often high-price drugs. A special committee of Valeant’s board has been tasked with investigating the Philidor relationship.

On Tuesday, Valeant gave more detail on Philidor than usual, saying it had $4.6 million in product sales in November and December, after Valeant said it was ending its relationship with the pharmacy. Valeant also said it had incurred $51.3 million of wind-down costs related to Philidor, and it recorded a $79 million charge for writing down Philidor’s intangible assets.

Mr. Pearson, meanwhile, has faced a fresh round of criticism and doubts about the company’s financial disclosures and business practices. Last month, Valeant said it would probably have to restate its past financial results because it booked $58 million of Philidor revenue when it delivered drugs to Philidor, rather than waiting until they were dispensed to patients.
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  #172  
Old 03-15-2016, 09:55 AM
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VRX down 32% today...currently at $47 per share (compared to a 52 week high of $263)

Bill Ackman must be shitting his pants
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  #173  
Old 03-15-2016, 10:02 AM
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Apparently hedge funds own close to 50% of the outstanding shares in Valeant...

See the table below (spoiler'ed for size)

Spoiler:

And their position in Valeant represents a huge portion of their assets:

- Brave Warrior Advisors: 17%
- Pershing Square Capital: 17%
- Brahman Capital: 17%
- Okumus Fund: 15%
- Ruane, Cunniff & Goldfarb: 14%

Diversification, amirite?

Last edited by Guest; 03-15-2016 at 10:07 AM.. Reason: additional info
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  #174  
Old 03-15-2016, 11:20 AM
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Quote:
Originally Posted by Dismal Science View Post
VRX down 32% today...currently at $47 per share (compared to a 52 week high of $263)

Bill Ackman must be shitting his pants
Down 45% now
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  #175  
Old 03-15-2016, 02:25 PM
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Biggest one day drop in the history of the company (unsurprisingly). Has gotten close to a 50% decline a few times today.
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  #176  
Old 03-15-2016, 09:20 PM
lulzEMH lulzEMH is offline
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http://www.latimes.com/business/la-f...06-column.html

VRX and their $2500 cold sore cream (40 bucks elsewhere).

Guess GlaxoSmithKline had sold the rights for the cream to VRX in the US and maintained the rights in other countries. I imagine this is the common approach for pharma's who don't want to totally screw with the prices of something (probably to stay off the radar) that is basic but is more than happy to sell the rights at an inflated price to another party knowing they plan to do exactly that.
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  #177  
Old 03-18-2016, 02:04 PM
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Valeant down even more over the last few days. Now trading at $27.37
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  #178  
Old 03-18-2016, 02:06 PM
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Pretty amazing that over the span of about 8 months a company can go from $90B to $9B in market cap.
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  #179  
Old 03-21-2016, 09:57 AM
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More Valeant news - Pearson is being replaced and the CFO has been asked to resign.

Bill Ackman is joining the Board of Directors.

Valeant pharmaceuticals international inc initiates search for new CEO
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  #180  
Old 03-21-2016, 11:28 AM
jas66Kent jas66Kent is offline
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Serves them right. Their entire business model was basically predicated on buying up patents and raising prices. They did no research whatsoever.
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