Valeant chief executive Michael Pearson feels “very good” about next year amid pricing turmoil
Despite mounting allegations against Valeant over its drug pricing, chief executive Michael Pearson feels “very good” about 2016.
In a call with investors today, he said that while the Canadian drug company's dermatology unit will experience “significant impact” from the termination of its contract with pharmacy group Philidor, it will soon begin “regaining momentum”.
I don't view dermatology as a long-term problem, and I feel good about our organic growth overall for next year.
The firm severed ties with Philidor at the end of last month, after the pharmacy group was accused of avoiding some systems put in place to control medicine prices. But Pearson said 6.8 per cent of its third quarter sales came through the pharmacy, which means its absence will be felt.
Read more: Valeant Pharmaceuticals slams scathing note on drug sales in bid to reverse share price spiral
Over the last month, the Valeant's shares have fallen 50 per cent due to mounting concerns over its pricing, and last Thursday it fell 14 per cent in just one day. "The past few weeks have been a painful learning experience for me personally," Pearson said.
But he was adamant that the firm's relationship with Philidor did not reflect the company's own attitude: “I need to remind everyone that Philidor is a separate company, and we don't have any similar arrangement with other companies,” he said.
“The rest of our businesses we own directly.”
We continue to always look at our own controls, and we also do risk assessments every year, and will continue that practice.
We are unaware of any other issues, but then of a company this size it's impossible to have full knowledge of everything going on at any one time.
Since the call, shares in Valeant have dropped 1.1 per cent to $84.48.