Is This the Turnaround Valeant Pharma Has Been Waiting For?
Valeant Pharmaceuticals International Inc. (NYSE: VRX) reported its second-quarter financial results before the markets opened on Tuesday. This stock is known for its fall from grace, trading above $250 per share as recently as 2015 but down to less than $10 this past spring. However, it’s worth pointing out that even though the stock is down about 30% from this time last year, in just the past quarter alone the stock has risen close to 60%.
As for the report, the firm said that it had $1.05 in earnings per share (EPS) and $2.23 billion in revenue. Consensus estimates had called for $0.97 in EPS and $2.24 billion in revenue.
Revenues dropped about 8% from last year’s $2.42 billion. The decrease was primarily driven by decreases in volume and price in Valeant’s U.S. Diversified Products segment, attributed to the previously reported loss of exclusivity for a basket of products, and the dermatology business. The decline also reflected the unfavorable impact of divestitures and discontinuations, primarily the skincare divestiture within the Bausch + Lomb/International segment.
During this quarter, Valeant completed its sale of Dendreon Pharmaceuticals and used net proceeds to pay down $811 million of its senior secured term loans. Also looking ahead to the second half of 2017, the firm announced agreements to sell iNova Pharmaceuticals and Obagi Medical Products businesses for $930 million and $190 million in cash, respectively.
In terms of guidance for the 2017 full year, the firm expects to see revenues in the range of $8.70 billion to $8.90 billion, down from the previous range of $8.90 billion to $9.10 billion. Valeant maintained its full-year adjusted EBITDA guidance range of $3.60 billion to $3.75 billion.
Joseph C. Papa, board chair and chief executive of Valeant, commented:
The investments we are making in our core business are delivering results. The Bausch + Lomb/International segment and Salix business, which together represented 73 percent of our revenue in the quarter, delivered strong organic growth1, and we are continuing to reduce debt and resolve legacy issues.
Shares of Valeant were last seen up more than 8% at $16.62, within a 52-week trading range of $8.31 to $32.74.