Valeant loss mounts, revenue falls but CEO says turnaround is progressing
Valeant’s US shares rose more than 25 percent, touching a two-month high, after the company outlined its reorganization and sell-off plan, and also confirmed full-year forecasts.
Valeant is still under SEC investigation over its pricing, and when it shares its second-quarter results, the Wall Street forecast is that its EPS will have tumbled 42 percent year-over-year to $1.48 per share, on $2.46 billion in revenue, which would be a almost 10 percent decline.
“We have begun the process to stabilize, turn around and transform Valeant” into a new company over the next several years, Joseph C. Papa, who became chief executive three months ago, said during a conference call to discuss a money-losing second-quarter with results far below Wall Street expectations.
Embattled drugmaker Valeant Pharmaceuticals (VRX) was up sharply in early trading Tuesday after it affirmed its full-year guidance, even though it missed Q2 estimates.
One of those hurdles includes maximizing the potential opportunity associated with a 20-year fulfillment deal that the company cut with Walgreens Boots Alliance (NASDAQ: WBA) late last year. The company also increased research and development spending by 53%, primarily due to development of brodalumab and programs picked up with the Salix acquisition previous year.
The investment management company now holds a total of 803,700 shares of Valeant Pharmaceuticals Intl Inc which is valued at $17,970,732 after selling 178,200 shares in Valeant Pharmaceuticals Intl Inc, the firm said in a disclosure report filed with the SEC on Aug 2, 2016.Valeant Pharmaceuticals Intl Inc makes up approximately 0.81% of Quantitative Investment Management’s portfolio.
Valeant’s USA shares are still down around 90 per cent since hitting a record high last August. Valeant Pharmaceuticals International has a 12 month low of $18.55 and a 12 month high of $253.62.
The company said that it had $140 in earnings per share (EPS) on $2.42 billion in revenue.
The Montreal-based company’s shares rose $5.71, or 25 percent, to close Tuesday at $28.16.
A sign for the headquarters of Valeant Pharmaceuticals International Inc is seen in Laval, Quebec June 14, 2016. It has adjusted its long-term agreement with USA pharmacy retailer Walgreens, improved its dermatology and gastrointestinal businesses, and paid down debt. Examiners on average had expected income of $2.46 billion US. Papa said Valeant is “evaluating strategic alternatives” for a number of assets that represent greater than $2 billion in revenues and could bring in as much as $8 billion if they can find buyers. The company has market value of $121.29B.
Cash flow from operations was $448 million in the second quarter, as compared to $411 million in the same quarter of 2015. 12 financial analysts are now covering the stock. “Although it will take time to implement and execute our turnaround plan, I am confident that we will show progress in the coming quarters”, Papa said in a statement on the company’s website.