Drug maker Valeant Pharmaceuticals, a fast-growing Wall Street darling until its price-hiking business strategy made it a symbol of pharmaceutical company greed, said it’s undergoing a restructuring as its new CEO attempts to return the debt-laden company to growth and respectability — without big price increases.
‘‘We have begun the process to stabilize, turn around, and transform Valeant’’ into a new company over the next several years, Joseph C. Papa, who became chief executive three months ago, said during a conference call to discuss a money-losing second quarter with results far below Wall Street expectations.
The maker of Bausch & Lomb contact lenses and toenail fungus fighter Jublia said its turnaround plan includes boosting sales of its dermatology, eye care, and gastrointestinal medicines; improving its pipeline of experimental drugs in those categories; and using its cash more efficiently.
Analysts on the call, some sounding skeptical the Canadian company’s behavior has changed much, peppered Valeant executives with questions about their plan, assumptions underlying rosy performance projections, and progress repairing tattered relations with insurers, doctors, and patients. Many were alienated by years of repeated, aggressive price increases for Valeant medicines.
Papa said he’s confident Valeant’s ‘‘future is bright,’’ given its new strategy, numerous appointments and promotions to top management announced Monday, and the replacement of 10 of its 12 board members.
Investors, hurt as Valeant stock lost more than 90 percent of its value the past year, seemed reassured that Valeant reaffirmed projections for 2016 earnings of $6.60 to $7 per share, excluding one-time items, and revenue of $9.9 billion to $10.1 billion.
Shares jumped $5.71 to close at $28.16.
Valeant Pharmaceuticals International Inc., based in Laval, Quebec, has been under a microscope for repeatedly buying other drug companies and rights to older medicines with little or no competition, then quickly jacking drug prices up threefold or more, without improving those drugs or investing much on developing new ones.
Its spate of acquisitions and soaring revenue propelled its stock through the roof, but it ran up a staggering $30 billion in debt — roughly three times its annual revenue.
As soaring drug prices became a hot election-year political issue, Valeant has been hit with criticism from presidential candidates, plus three ongoing federal probes into its accounting and business practices. That heat forced it to say it will now stick with small price hikes as it pushed out J. Michael Pearson, the CEO behind the buy-and-hike strategy.
