Under siege, Valeant chief insists short-term hits will give way to long-term gains
- Valeant Pharmaceuticals CEO Michael Pearson held yet another conference call with investors on Tuesday morning in an attempt to address growing unease with the company's crumbling stock and its relationship with specialty pharmacies.
- "The company is going to survive," said a defiant Pearson on the call. "Our cash flows are strong."
- Pearson also admitted that the firm's earnings would drop in the short term as it deals with the fallout of the Philidor Rx specialty pharmacy debacle. Valeant will also attempt to regain investors' trust and confidence by using revenues to pay down significant amounts of debt next year.
The damage control rages on at Valeant after accusations that the specialty pharmacy Philidor (whose sole client was Valeant) used shoddy sales tactics to push the drug maker's dermatology drugs. After those media reports broke in the wake of a slew of accusations of "phantom sales" by the company, Valeant chose to break off its relationship with Philidor and would set up a new program for patients using its dermatology drugs.
On Tuesday's call, Pearson said that the cost of providing free derm medications to customers affected by the Philidor issue would take a bit out of the company's 2015 earnings. However, the embattled CEO remained confident that Valeant would bolster its earnings in the future, and that the company would be focusing on repurchases and debt reduction in the coming quarters to shore up investor confidence and stem the bleeding from its plummeting stock price.
Valeant shares tumbled another 5% in the hours after the investor call. It is now down to about $81 per share, compared with $247 just three months ago.