Valeant shares sink as company warns of rocky year ahead
By Rod Nickel and Ankur Banerjee
(Reuters) - Valeant Pharmaceuticals International Inc on Tuesday cut its revenue forecast for the year and warned that 2017 could be even more challenging as some products face new competition, sending shares down more than 20 percent.
Valeant's grim expectations come as U.S. Democratic presidential candidate Hillary Clinton has promised, if elected, to pursue price gouging by drug companies and as the U.S. Department of Justice investigates possible price collusion among generic drugmakers.
Nitropress and Isuprel are among Valeant's neurology drugs that lose market exclusivity by next year, and there will also be a likely "material" dropoff in its generics business, said Chief Financial Officer Paul Herendeen, who started work in September.
The result will be lower overall revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) next year, Herendeen said on a conference call.
Revenue and EBITDA in core businesses should grow, he said.
"We will dig our way out of part of the growth hole ... but we will not crawl all the way out of that hole" in 2017 Herendeen said. "It will be a down year."
Rival Endo International Plc is also facing increased pricing and competitive pressures in its U.S. generics business and the trends will likely worsen in 2017, newly appointed Chief Executive Paul Campanelli said on Tuesday.
Valeant's U.S.-listed shares were down 21.5 percent at $15.02 on Tuesday afternoon, after touching a more than six-year low. The company's high-yield bonds fell in heavy trading. Continued...