Valeant Posts 1Q Loss on Dermatology Deal Costs
From Associated Press (May 3, 2012)
NEW YORK -- Canadian drug maker Valeant Pharmaceuticals International Inc. said Thursday it took a loss in the first quarter after selling dermatology assets as part of its continued wheeling and dealing.
Valeant was required to sell two generic dermatology products to Mylan Inc. in February as part of its acquisition of Dermik, the dermatology division of French drug maker Sanofi. The Montreal-based company said it has agreed to 11 acquisitions so far in 2012, and announced another Thursday, agreeing to buy an over-the-counter acne treatment.
Valeant said it got $66 million in revenue from the sale of the dermatology products to Mylan, but costs related to the deal pushed the company to a loss of $12.9 million, or 4 cents per share for the three months ended March 31. That compares with a profit of $6.5 million, or 2 cents per share, in the first quarter of 2011.
Excluding costs related to the dermatology product sale, Valeant said it earned 99 cents per share. Revenue climbed 52 percent, to $856.1 million from $565 million.
Analysts, on average, expected a profit of 96 cents per share, on revenue of $797.4 million, according to data provider FactSet.
Valeant said its product sales rose 54 percent to $768.4 million. Sales of the antidepressant Wellbutrin XL, blood pressure drug Cardizem CD and pain treatment Ultram ER declined because of generic competition, but dermatology revenue increased and the company reported greater sales in Europe, Latin America, and its new Southeast Asia and South Africa division.
Valeant acquired Dermik for $425 million December. Recently, it also struck a deal to buy Russian drug company Natur Produkt for $180 million and Brazilian sports nutrition and food supplement maker Probiotica for $86 million, and bought assets from Austrian drug company Gerot Lannach. The Gerot Lannach deal expands its business in Eastern Europe and is part of a partnership that includes sales in Latin America and Southeast Asia.
On Thursday, Valeant said it will buy Acne Free and other skin care products from University Medical Pharmaceuticals Corp. for $64 million. It said revenue from AcneFree and other products totaled $32 million in 2011. It expects that purchase to close by mid-year.
Excluding one-time costs, Valeant said it now expects to earn between $4.45 and $4.70 per share in 2012, up from its previous estimate of $3.95 to $4.20 per share. It now forecasts $3.4 billion to $3.6 billion in revenue, above its previous projection of $3.1 billion to $3.4 billion.
Analysts, on average, are calling for an annual profit of $4.18 per share and $3.37 billion in revenue.
Valeant merged with former competitor Biovail Corp. in late 2010, and in 2011, it bought Lithuanian pharmaceutical maker AB Sanitas for $441 million before it bought Dermik.
Shares of Valeant Pharmaceuticals International slid $1.50, or 2.7 percent, to $54.95 in midday trading.
Posted: May 2012