Valeant's fourth-quarter loss widens as sales slip 13 percent

Valeant Pharmaceuticals' fourth-quarter loss widened to $515 million versus $385 million in the same period of 2015, as sales dropped 13 percent year-over-year to $2.4 billion, the company reported Tuesday. Valeant noted that the drop in revenue was mainly due to a reduction in product sales from the existing business of $310 million. Shares in the drugmaker fell as much as 11 percent on the news. 

The drugmaker added that quarterly sales in its Bausch + Lomb/international segment fell 1 percent to $1.2 billion, while revenue from its branded prescription drug unit slumped 17 percent to $829 million. CEO Joseph Papa said the financial results "delivered on expectations," noting that "over the past few months, our teams worked to stabilise and strengthen our core businesses, resolve legacy issues, improve operational processes, launch new products, and improve the balance sheet and capital structure." 

Papa, who became CEO of the drugmaker in May last year, has pledged to eliminate non-core assets to reduce debt. In January, the Canadian drugmaker reached an agreement to sell all outstanding equity interests in its Dendreon cancer business to Sanpower Group for $820 million. Meanwhile, discussions to divest its Salix Pharmaceuticals unit to Takeda ended last November reportedly due to disagreements over price. 

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The company attributed the drop in sales in its branded prescription drug unit to decreased revenue for its Salix and dermatology business, in addition to lower average pricing and generic competition. Meanwhile, the drugmaker generated $398 million in revenue for its US diversified products segment, down from $568 million in the fourth quarter of last year. 

For the full year, Valeant recorded $9.7 billion in sales, down 7 percent versus the prior year. The company noted that the decline was attributable to an approximately $1.3-billion decrease in product sales, as well as the impact of divestitures and discontinuations and decreases in other revenues. The drugmaker noted that the decreases were offset by an incremental $735 million in product sales from acquisitions. 

For 2017, Valeant indicated that sales are expected to be in the range of $8.9 billion to $9.1 billion, with earnings between $3.55 billion and $3.7 billion. Analysts anticipate full-year revenue of about $9 billion, with earnings of $3.9 billion. Commenting on the news, Mizuho analyst Irina Koffler stated "it still doesn't appear that management has a realistic outlook on its organic growth."