Valeant cuts 2016 sales, earnings outlook; shares plunge over 47%
pharmafile | March 15, 2016 | News story | Business Services, Manufacturing and Production, Sales and Marketing | Valeant Pharma, fourth quarter, full year, results
Valeant Pharmaceuticals Inc (NYSE: VRX) cut its outlook for the first-quarter of 2016 and posted a loss for the final quarter of 2015 impacted by lower sales in dermatology and gastrointestinal products, sending the shares down over 47%.
The company said the results were hurt by a drop in sales in several businesses and sees the “continued organisational distractions to negatively impact operations during the quarter.”
For the first-quarter Valeant now sees total revenue in the range of $2.3 billion to $2.4 billion down from $2.8 billion to $3.1 billion, forecast earlier.
Adjusted earnings per share are expected to be $1.30 to $1.55 down from the earlier outlook of $2.35 to $2.55.
Michael Pearson, chief executive, says: “The challenges of the past few months are not yet behind us and our goal for 2016 is to better balance our priorities across all of our constituencies – physicians, patients, employees, payors, debt holders and shareholders.”
The company lowered the growth outlook for its dermatology, gastrointestinal and women’s health products, as well as certain geographies like Western Europe, while keeping its expenses largely unchanged.
“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,” Pearson says.
For the full year, the company expects adjusted earnings of $9.50 to $10.50 a share, down from previous view 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.
Valeant is currently under investigation by US over its drug pricing and distribution practices.
For the fourth quarter ended December 31, Valeant posted a loss of $336.4 million, or 98 cents a share. Adjusted earnings were $2.50 a share. Among other items, the company booked $96 million in restructuring, integration and acquisition-related charges in the quarter.
Revenue for the quarter stood at $2.79 billion.
Shares in the company were trading down over 47% to $36.10 on the New York Stock Exchange.
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