Valeant's first-quarter sales top estimates, as records first organic revenue growth since 2015

Valeant Pharmaceuticals announced Tuesday that first-quarter sales fell 5 percent year-over-year to just under $2 billion, although the figure topped analyst estimates of $1.9 billion. The company noted that it delivered organic revenue growth for the first time since 2015, with sales up 2 percent on this measure, driven by its branded prescription drugs and Bausch + Lomb business.  

"Our first-quarter 2018 results demonstrate that we are making significant progress in our turnaround," commented CEO Joseph Papa, although he warned that despite the better-than-expected results, 2018 is still viewed as the company's "trough year." Separately on Tuesday, and as part of efforts to revitalise the drugmaker, Valeant said that it will change its name to Bausch Health Companies as of July.  

Valeant recorded a loss of nearly $2.7 billion in the first quarter, compared to net income of $628 million in the year-ago period. The company attributed the loss to a decline in the benefit from income taxes as well as an impairment charge recorded in the quarter.  

In the quarter, sales in Valeant's Bausch + Lomb unit declined 3 percent to $1.1 billion, while revenue from branded prescription medicines fell 6 percent to $593 million. The company added that sales in its Salix segment reached $422 million, up from $302 million in the prior-year period.  

Meanwhile, Valeant noted that quarterly revenue for its US diversified products segment reached $2 billion, down slightly from about $2.1 billion in the first quarter of 2017. Additionally, sales for its Ortho Dermatologics business totalled $114 million, versus $192 million in the year-ago period.  

"As a result, we are raising our full-year revenue and adjusted EBITDA guidance ranges to reflect our strong performance in the first quarter," Papa remarked. Annual sales are now predicted to be between $8.15 billion and $8.35 billion, up from an earlier forecast of $8.1 billion to $8.3 billion. In addition, full-year earnings are seen in the range of $3.15 billion to $3.3 billion, lifted from a previous estimate of $3.05 billion to $3.2 billion. 

Valeant also indicated that it reduced its debt by $280 million in the quarter, in line with plans to cut debt since the appointment of Papa as CEO in 2016. The drugmaker has divested a number of business units, including the sale of its Dendreon subsidiary to Sanpower Group for $820 million, and the disposal of its iNova Pharmaceuticals business and Obagi Medical Products unit.

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