Valeant Announces New Fulfillment Agreements With Walgreens

Valeant Pharmaceuticals International Inc. cut its earnings guidance for next year, suggesting that the US drugmaker may have more work to do to end the fallout from a scandal over its business practices and to get its operations in line.

Valeant said it would terminate its relationship with Philidor on October 30, after reports about tactics Philidor allegedly used to gain more insurance reimbursements for Valeant medicines.

Shares of Valeant Pharmaceuticals were notable gainers during the trading session. Analysts expect, on average, $3.47 per share.

– Fourth-quarter 2015 sales of $2.7 billion to $2.8 billion, down from previous prediction of $3.25 billion to $3.45 billion. (VRX.TO) is cutting its revenue and profit forecasts.

A Valeant statement, issued two hours before the 8 a.m. meeting, said it’s lowering estimates for revenue and adjusted earnings for the fourth quarter and full year ending December 31. It will also include Valeant’s over-the-counter portfolio and provide as much as $600 million in annual savings to the US health-care system. Financial analysts had expected $12.55 billion in projected revenue and earnings per share of $14.27.

Valeant has said that it will not do acquisitions in 2016 and instead focus all of its cash on paying down its $34 billion debt pile.

Patient advocates, doctors and Congressional leaders have attacked Valeant and other drug companies like Turing Pharmaceuticals for aggressively increasing prices on some prescription drugs.

Valeant will not sale their products to Walgreens, they will all be on consignment.

The company said it would rebuild lost business through a distribution agreement with Walgreens pharmacies announced on Tuesday, and said the new arrangement would also help sales of products like Xifaxin for irritable bowel syndrome and Addyi, a new sexual dysfunction treatment.

We rate VALEANT PHARMACEUTICALS INTL as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Valeant Pharmaceuticals Intl has a consensus rating of Buy and a consensus price target of $163.62.

On Wednesday, Pearson told investors that Philidor was behind them.

On Wednesday, the ranking Democrat on the House Committee on Oversight and Government Reform demanded Valeant supply previously requested and additional documents on its price hikes and its dealings with Philidor. Company officials declined to comment on the progress of that review. Valeant is also counting on the drug discounts to win back its hurt reputation and boost the stock price.

Valeant’s pricing practices have been under investigation by the U.S. Congress since the company dramatically increased prices for some specialty products this year.

Pearson sought to project a more upbeat future on Wednesday.