Valeant Pharmaceuticals International Inc. reported a third-quarter loss and slashed its guidance as it continues to face scrutiny over its business practices.
The Canadian drugmaker lost $1.22 billion, or $3.49 per share, after reporting a profit in the same period a year earlier. Its revenue fell 11 percent.
A hefty $1.05 billion charge for writing down the value of assets, mainly its Salix stomach disorders business, dragged down the results. It has plans to sell the Salix business, which it bought in 2015 for $11.1 billion.
Valeant is the target of at least 11 investigations in the U.S. and Canada, and a number of class action suits. The company has been under fire for its strategy of buying smaller drug companies, then hiking the prices of the drugs that those companies make. Earlier this year, Valeant ousted Michael Pearson, the CEO who engineered the company’s acquisition strategy, replacing him with Joseph Papa.
Earnings, adjusted for one-time gains and costs, came to $1.55 per share. But, those results still missed expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.78 per share.
The company’s revenue fell to $2.48 billion on a mix of lower product sales and discontinuations. Five analysts surveyed by Zacks expected $2.49 billion.
Looking ahead, the company slashed full-year earnings guidance to between $5.30 and $5.50 per share from a prior range of $6.60 to $7 per share. Revenue is now expected to range from $9.55 billion to $9.65 billion from a previous range of $9.9 billion to $10.1 billion.
Shares of Valeant fell $1.48, or 7.7 percent, to $17.65 in premarket trading.
Valeant shares have dropped 81 percent since the beginning of the year. The stock has fallen 76 percent in the last 12 months.
(Source: Associated Press)