Valeant Pharmaceuticals says it will reorganize
Shares jump 20% as company reaffirms full-year guidance
Valeant Pharmaceuticals shares soared more than 20 per cent on Tuesday as it announced a reorganization and said it would stand by its full-year forecast, as it attempts to restore investor confidence after facing a storm of criticism over its business practices.
The Quebec-based drugmaker has faced intense political and investor scrutiny in the past year for its steep drug price increases and unorthodox use of a specialty pharmacy.
Valeant, which has about $30.77 billion US in debt, also had to appease creditors after missing deadlines for filing financial reports, triggering default notices.
"We continue to make progress towards stabilizing the organization," CEO Joseph Papa, who took over from Michael Pearson in May, said in a statement.
"We are also announcing a new strategic direction for Valeant today, which, at its heart has a mission to improve patients' lives, and will involve reorganizing our company and reporting segments."
The net loss attributable to the company increased to $302.3 million US, or 88 cents per share, in the second quarter ended June 30 from $53 million US, or 15 cents per share, a year earlier. The company reports in U.S. dollars.
Excluding items, Valeant earned $1.40 per share, missing analysts' average estimate of $1.48. The company, which has been selling non-core assets, said it had divested the North American rights to the hereditary angioedema drug, Ruconest, to Netherlands-based Pharming Group NV in deal worth up to $165 million.
Valeant's TSX-listed shares jumped $6.13 in afternoon trading Tuesday to $35.64. They have lost about 90 per cent of their value since hitting a record high of $333.44 last August.