|Traded as||NYSE: VRX
S&P/TSX 60 component
|Headquarters||Laval, Québec, Canada|
|Key people||J. Michael Pearson (Chairman & CEO)|
Ribavirin (licensed to Schering Plough)
|Revenue||$3.5 billion (2012)|
Valeant Pharmaceuticals International, Inc. is a publicly traded pharmaceutical company based in Montreal, Canada. The focus of the company is on neurology, dermatology and infectious disease with several drugs in late-stage clinical trials and several currently on the market. In addition, Valeant has a portfolio of more than 500 products from its prior history as a group of specialty chemical and radiochemical research, development and supply companies with a history stretching back to the 1960s.
Valeant sells a wide range of drugs, including over-the counter medications and medical devices, as well as prescription drugs such as antidepressant Wellbutrin XL. Kinerase, which uses kinetin as active ingredient, is one of the most popular products of Valeant.
An important part of the growth strategy for Valeant has been acquisitions, sometimes in the multi-billion dollar range, of medical and pharmaceutical companies. As of May 2013, the company was valued at $29.2 billion, making it the 17th largest public company in Canada. It is the largest pharmaceutical company in Canada.
Valeant was founded as a United States business. It has undergone major management, operational and strategic restructurings since the 1990s when shareholders of several group units approved the merger of ICN Pharmaceuticals (founded by Milan Panić), ICN Biomedicals, SPI Pharmaceuticals and Viratek into a new global entity, ICN Pharmaceuticals, the immediate forebear of Valeant.
Mergers and acquisitions
In September, Valeant acquired Coria Laboratories, Ltd for $95 million, acquiring the outstanding shares from Corias parent company DFB Pharmaceuticals, Inc. In November, Valeant acquired DermaTech for about $12.6 million. In December Valeant announced there acquisition of Dow Pharmaceutical Sciences, Inc for $285 million.
In July, Valeant announced its acquisition of Tecnofarma, a Mexican generic company. In December Valeant announced its Candian subsidiary would acquire the cosmeceutical Canadian company, Laboratoire Dr. Renaud, for C$23 million.
In March, Valeant announced its aqusition of a Brazilian generics and over the counter company for $28 million and manufacutirng plant for a further $28 million.
In April Valeant announced that its Candian subsidiary would acquire Vital Science Corp. for C$10.5 million. In May 2010, Valeant announced that it was acquiring Aton Pharmaceuticals for about $318 million.
On September 28, 2010, Valeant was purchased by Biovail. The new company retained the Valeant name and kept J. Michael Pearson as CEO, but was incorporated in Canada and temporarily kept Biovail's headquarters. In May 2011, former Biovail Corporation Chairman and CEO Eugene Melnyk was banned from senior roles at public companies in Canada for five years and penalized to pay $565,000 by the Ontario Securities Commission. In the year before the merger with Valeant, Melnyk had settled with the United States Securities and Exchange Commission (SEC), agreeing to pay a civil penalty of $150,000 US having previously paid $1 million U.S. to settle other claims with the SEC.
Since the 2010 merger, Valeant has aggressively expanded through acquisition. It makes about 25 deals a year, according to CEO Mike Pearson, most of which are too small to require financial reporting. Deals usually focus on specialized high-margin markets such as dermatology and eye care. A total of 14 purchases were publicly announced from 2010-early 2013.
In March, an attempt to buy drugmaker Cephalon Inc. for $5.7 billion was unsuccessful. but Valeant acquired PharmaSwiss S.A.. In August, Valeant acquired 87.2 % of the outstanding shares of Sanitas Group for EUR314 million. In December Valeant acquired iNova for A$625 million with additional milestone payments of up to A$75 million as well as acquiring Dermik, a dermatology unit of Sanofi
In January Valeant acquired Brazilian sports nutrtion company Probiotica Laboratorios Ltda for R$150 million. In February Valeant acquired ophthalmic biotechnology company, Eyetech Inc. In April Valeant acquired Pedinol. In June Valeant acquired OraPharma for approximately $312 million with up to $144 million being paid in milestone payments. In August, Valeant agreed to buy skin-care company Medicis Pharmaceutical for $2.6 billion. The price, $44/share in cash, represented a 39% premium on Medicis' stock. Valeant projected annual R&D and overhead cost cutting of $225 million from the deal. An analyst for Forbes said "the deal ticks all the right boxes for Valeant share holders." The deal was the largest of the 14 announced mergers.
In January, Valeant acquired the Russian company Natur Produkt for $163 million. In March, Valeant acquired Obagi Medical Products, Inc. for $19.75 per share. In May, Valeant agreed to buy Bausch & Lomb, a maker of contact lens solution and surgical devices, from Warburg Pincus LLC for US$8.57 billion in cash. The deal, which was approved by shareholder, includes $4.2 billion earmarked to pay down Bausch & Lomb debt. It is Valeant's largest acquisition to date and will be financed by with $1.5-$2 billion of new equity, and $6–7 billion of new debt. The new debt will bring the company's total to approximately $18 billion. Analyst Neil Maruoka called the purchase an "excellent fit" for Valeant. The company's stock rose about 25% when the deal was announced.
Valeant's existing eye care businesses will be moved to the Bausch & Lomb headquarters in Rochester, New York. The company expects to achieve at least $800 million annually in cost savings, mostly from reduced R&D and overhead, as a result. The acquisition will help Valeant enter markets such as China that it previously did not compete in. Valeant will employ roughly 18,000 people after the deal is complete, which is expected to occur in the third quarter of 2013.Bausch & Lomb was founded in 1853 acquired by Warburg Pincus in 2007 in a leveraged buyout. Warburg Pincus had previous attempted to sell Bausch & Lomb for $10 billion. Bausch & Lomb had filled for an initial public offering after failing to find a buyer. The company had $3 billion of sales in 2012.
Valeant CEO Mike Pearson said the company would continue to pursue mergers and acquisitions in the near future, but would need three or four month to get a handle on Bausch & Lomb before deciding on its next target. "We certainly continue to explore, continue to have discussions and we hope [mergers of equals] will eventually be part of the playbook", Pearson told investors in a conference call. He added that the company would "never fall in love with any of our assets" and would sell an asset to the right buyer. Maruoka said one of Valeant's core strengths is its ability to integrate large acquisitions with its existing businesses.
In January Valeant acquired Solta Medical, Inc. for approximately $250 million. In February, Valeant would acquire PreCision Dermatology Inc for $475 million, a deal aimed at strengthening the firm’s skin products business. In May, it was announced that Nestle would acquire the commercial rights to sell Valeants filler and toxin products for $1.4 billion.
Bid for Allergan
On April 22, 2014, details were released by Valeant and hedgefund CEO, Bill Ackman, about a $46 billion (CAD) offer presented to Allergan. Valeant is proposing to exchange $48.30 in cash and 0.83 shares of Valeant per Allergan share. Allergan Inc. stockholders would own 43 per cent of the combined company. This bid was rejected by Allergan as being too risky, claiming Valeant's business model of serial acquisitions and low organic growth being unsustainable. Soon after Valeant released a statement saying a new offer will be presented May 28, 2014, where it emerged that Valeant had increased their offer to $49.4 billion. On May 31 the offer was revised and increased to $53.3 billion.
On June 18, Valeant began its tender offer for a hostile takover of Allergan.
- Alex Wayne (May 28, 2013). "Valeant Agrees to Buy Bausch & Lomb in $8.7 Billion Deal". Bloomberg. Retrieved May 28, 2013.
- Richard Blackwell; Sean Silcoff; Bertrand Marotte (May 27, 2013). "Valeant Pharmaceuticals eyes China with Bausch deal". The Global and Mail. Retrieved May 29, 2013.
- "UPDATE 1-Valeant Q1 profit beats Street; to acquire Aton Pharma". Reuters. May 3, 2010.
- "Drugmaker Biovail to buy Valeant in $3.3 billion deal". Reuters. June 21, 2010.
- "Senators owner Melnyk banned for five years from boardrooms of public companies The Financial Post by Barbara Shector, May 5, 2011". Retrieved 2011-05-05.
- "Valeant To Acquire Medicis for $2.6 Billion". Forbes. September 3, 2012. Retrieved June 2, 23013.
- Euan Rocha (4 February 2014). "Valeant to buy PreCision Dermatology for $475 million". Reuters.
- "Nestle acquires rights toValeant skincare products". Bloomberg. Retrieved 29 May 2014.
- "Valeant, Bill Ackman bid $45B for Botox-maker Allergan". Canadian Associated Press / CBC. Retrieved 22 April 2014.
- "Valeant raises offer for Allergan". Bloomberg. Retrieved 29 May 2014.
- "Valeant raises offer for Allergan for second time". Bloomberg. Retrieved 31 May 2014.