Valeant cuts annual revenue guidance, as third-quarter sales fall 10 percent

Valeant Pharmaceuticals announced Tuesday that third-quarter sales slipped 10 percent year-over-year to $2.2 billion, just ahead of analyst estimates, as increases in the company's Salix and Bausch + Lomb units failed to offset lower revenue from the US diversified products and branded prescription segments. In the three-month period, net income reached $1.3 billion, up from a loss of $1.2 billion in the same quarter of last year.  

CEO Joseph Papa remarked "our strong third-quarter performance demonstrates our continued progress in the turnaround of Valeant." Papa added "driven by solid execution in our Bausch + Lomb/international segment and our Salix business, we delivered strong organic revenue growth across approximately 77 percent of our business in the quarter." The company's shares jumped as much as 16 percent on the news.  

Valeant noted that sales in the Bausch + Lomb/international segment grew 1 percent to $1.3 billion, while revenue in the Salix business rose 3 percent compared to the third quarter of 2016 to $452 million, led by Xifaxan and Apriso. Valeant said that quarterly sales of Xifaxan were up by 5 percent year-over-year, while those of Apriso climbed 7 percent.  

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"Valeant is a very different company today than it was a year ago," commented Papa, continuing "under a new management team, we have strengthened our balance sheet and stabilised the company by simplifying our business and allocating resources more efficiently."

Valeant noted that it cut its debt by about $6 billion between the end of the first quarter of last year and November 7, surpassing its target of slashing debt by $5 billion by February 2018. The company added that its long-term debt now totals approximately $27.1 billion.

The drugmaker has moved to divest a number of assets since Papa revealed in 2016 that the company would offload non-core assets to reduce its debt load, in addition to an agreement with creditors granting Valeant greater flexibility to sell assets. This year, Valeant sold its Dendreon cancer business to Sanpower Group for $820 million in cash, in addition to deals to divest iNova Pharmaceuticals and Obagi Medical Products for $930 million and $190 million, respectively.

For the full year, Valeant said it now expects sales of between $8.65 billion and $8.8 billion, down from a prior forecast of $8.7 billion to $8.9 billion. The company reaffirmed that it estimates annual earnings in the range of $3.6 billion to $3.75 billion.

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