New Valeant CEO meets investors as doubts grow about drug company

Tue Jun 14, 2016 7:00am EDT
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* Greater clarity for investors "sorely needed" -analyst

* Unclear how Valeant will look in 18 months -former investor

* New CEO Papa tackling issues head-on -PR expert

By Allison Lampert

LAVAL, Quebec, June 14 (Reuters) - The new chief executive of Valeant Pharmaceuticals International Inc, Joe Papa, will appear before investors at the company's annual meeting for the first time on Tuesday, likely facing hard questions after months of bad news torpedoed its stock.

Valeant's meeting in Laval, Quebec, comes as its share price trades 90 percent lower than in August 2015, weighed down by concerns over its acquisition binge of recent years, use of a specialty pharmacy and backlash over massive price increases for some drugs.

Greater clarity on the company's direction is "sorely needed" for investors, along with evidence that it can generate substantial free cash flow, said Raghuram Selvaraju, analyst at Rodman & Renshaw, a unit of investment bank H.C. Wainwright.

"They cut guidance to a point where now if there are any additional disappointments, any further negative surprises, any further reductions in guidance, there's going to be a crisis of confidence in the company regarding whether or not they can continue to meet their debt covenants," he said.

Valeant declined to comment.   Continued...