Sector News

Valeant’s still in the deal hunt, but it can grow 10%-plus without them, CEO says

January 8, 2015
Life sciences
In the wake of Valeant’s Allergan bid failure, rumors swirled that the serial buyer would swear off its modus operandi for a while to focus on cutting down debt. But according to CEO J. Michael Pearson, those who expect Valeant to stray from its dealmaking ways have another thing coming.
The company’s “business development activities will remain the priority for 2015,” he told investors on a conference call Thursday, noting that the Canadian pharma expects a “steady flow of small and medium-sized deals” to continue over the course of the year. It’s continuing to evaluate larger transactions, too, but the timing of those “remains difficult to predict.”
Still, the Quebec-based pharma is doing its best to convince its shareholders–and potential takeover targets–that it’s self-sufficient. After a months-long attack from Allergan on its business model and comparatively paltry R&D activities, Pearson Thursday touted Valeant’s pipeline and organic growth, which he expects to see climb to 10% to 12% this year.
Revenue from new products–which Pearson plans to promote aggressively–should help Valeant generate a top-line haul ranging between $9.2 billion and $9.3 billion, the pharma figures. Cash earnings will hit between $10.10 and $10.40 per share, it predicts.
In the meantime, Pearson’s putting his money where his mouth is. He’s extended his contract by 5 years, but going forward, he’ll do away with his base salary. His compensation will be wholly dependent on the company’s stock performance.
By Carly Helfand

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