Valeant Pharma (VRX) Misses Q2 EPS by 8c, Reaffirms Guidance; Will Divest Ruconest Rights in N.A.

August 9, 2016 6:01 AM EDT
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Valeant Pharma (NYSE: VRX) reported Q2 EPS of $1.40, $0.08 worse than the analyst estimate of $1.48. Revenue for the quarter came in at $2.42 billion versus the consensus estimate of $2.46 billion.

Valeant Pharma reaffirmed FY2016 guidance. Adjusted EBITDA (non-GAAP) is expected to be in the range of $4.80 - $4.95 billion, in-line with consensus, although many expected the company to lower EBITDA guidance.

"We continue to make progress towards stabilizing the organization," said Joseph C. Papa, chairman and chief executive officer. "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. I am continuously encouraged by the commitment of our employees who work hard daily, rebuilding our relationships with prescribers, patients and payors, and regaining the trust of our debt holders and shareholders. Although it will take time to implement and execute our turnaround plan, I am confident that we will show progress in the coming quarters."

Business Development

We have taken steps to streamline our portfolio in the second quarter. We have sold, or agreed to sell, the brodalumab EU rights, Synergetics USA OEM business, and Ruconest® for a total combined upfront payment of $181 million and additional consideration up to $329 million for achieving specific approval and sales milestones.

Specific to Ruconest, today the Company entered into a definitive agreement to divest all North American commercialization rights to Ruconest (recombinant human C1 esterase inhibitor) to Pharming Group N.V. ("Pharming"). Under the terms of the agreement, Pharming will pay Valeant aggregate consideration of up to $125 million, including an upfront fee of $60 million payable upon closing and certain sales-based milestone payments of up to $65 million. The transaction is subject to customary closing conditions, in addition to Pharming obtaining certain financing. Ruconest was classified as held for sale as of June 30, 2016 and an impairment loss of $199 million was recorded in the second quarter of 2016.

For earnings history and earnings-related data on Valeant Pharma (VRX) click here.

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