Valeant posts $1.22 billion third quarter loss

Valeant Pharmaceuticals has again downgraded its full-year profit and revenue forecasts, as it reported smaller-than-expected quarterly profits due to lower sales of its dermatology products and irritable bowel syndrome drug.

Already under fire for hiking prices of life-saving drugs, the FDA last week sent a warning letter suggesting the company is having manufacturing problems with some of the products it acquired through its many acquisitions. 

Most of the quarter loss can be attributed to $1.05 billion write-down associated with Salix, which Valeant purchased last year for $14.5 billion and is currently trying to unload. Total revenues in the third quarter of 2016 decreased by 11% to $2.48 billion, primarily due to a decline in product sales revenues from existing businesses, according to the press release. Bausch + Lomb, which contributed 47% of total company revenues, reported revenues of $1.16 billion, an increase of 4% from the third quarter of 2015.

Shares of the company plunged 25% on Tuesday, the stock’s lowest point in 6 years. Valeant’s stock is down 95% compared with its August 2015 high.

Additionally, the company will sell Paragon Holdings to settle allegations that its acquisition of the smaller company was illegal under antitrust law, according to the Federal Trade Commission.

Bausch + Lomb and Paragon together made more than 70% of 3 types of gas permeable polymer discs: Ortho-K buttons used to make lenses that reshape the cornea, large scleral lenses used to treat diseases and after surgery and buttons for general vision correction. According to several reports, Valeant informed laboratories that purchased the buttons of 2 price increases late last year. Antitrust regulators often see big price rises as a signal of anti-competitive practices.

Paragon will be sold to a new company called Paragon Companies, headed by Paragon’s former president. Paragon will also own Pelican Products, a contact lens packaging company that Valeant purchased.