Exclusive: Valeant considers selling contact lens maker Paragon - sources
By Carl O'Donnell
(Reuters) - Valeant Pharmaceuticals (VRX.TO: Quote) (VRX.N: Quote) is reaching out to potential buyers for its specialty contact lens manufacturing division, Paragon Vision Sciences, amid scrutiny from the Federal Trade Commission, according to two people familiar with the matter.
A sale of Paragon, which Valeant’s Bausch & Lomb unit purchased earlier this year for an undisclosed sum, would deal a blow to the specialty pharmaceutical company’s attempt to consolidate the market for gas permeable contact lenses, a type of rigid lens popular among people with keratoconus, a thinning disorder of the cornea, among other eye diseases.
The FTC has been investigating Valeant for potentially cornering a portion of the lens market.
It is unclear whether the process will result in a sale and the identity of the potential buyers is unknown. A spokesperson for Valeant said the company does not comment on market rumors or speculation and noted that Valeant is cooperating fully with the FTC.
The FTC probe is one of several government reviews of Valeant’s business, which is also under scrutiny from lawmakers over steep price increases on its pharmaceutical products and from investors over its recently-disclosed ties to a specialty pharmacy that accounted for a significant portion of its overall sales.
Shares of Valeant have dropped more than 60 percent since it came under criticism for drug price hikes in September. The stock has regained ground more recently as the company sought to reassure investors it will put to rest questions about its practices.
As Reuters previously reported, Valeant has been using market power obtained through the purchase of Paragon to raise prices for the raw materials used in contact lens manufacturing, known as buttons, in some cases by more than 100 percent.
At the same time, Valeant had made attempts to buy up a significant portion of the laboratories that create finished lenses, which would position the company as the dominant player in the gas permeable lens space. Finished lens laboratories rely on buttons produced by Valeant as manufacturing inputs. Continued...