Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals has had an incredibly rough time in the market as of late, and for good reason. After Citron exposed the company's relationship with Philidor and called Valeant the Enron of the pharmaceutical industry, investors got cold feet and started to push for facts. Unfortunately, Citron was correct, the relationship helped VRX to fluff the numbers. However, quite a bit that has changed since then. In fact, just last week, the company made two announcements that are fueling my bullish opinion looking ahead. Today, we'll talk about the recent changes, other changes we've seen from VRX, and what we can expect to see from the stock moving forward. So, let's get right to it...
Valeant Pharmaceuticals Partners With IBM
Recently, it was announced that a wholly-owned subsidiary of VRX, Bausch + Lomb, will be working with IBM. The goal is to develop the first app of its kind for iPhone and iPad. The app will be designed to assist surgeons who perform cataract surgery. The new app is expected to streamline the workflow for these physicians by offering patient information, clinical insights, and intraocular lens selection guidance. If this app works out well, it will likely prove to be a great thing for both VRX and IBM.
Patient Access And Pricing
One of the factors that has been haunting Valeant is patient access. Unfortunately, the company has made a name for itself as a company that overprices treatments. As a result, VRX has formed a new Patient Access and Pricing Committee. The new committee will be responsible for pricing all of the company's drugs and will initially be chaired by the CEO of the company, Joseph Papa. The committee will be made up of a team of VRX employees that will include scientists, doctors, and other executives of the company. In a statement, CEO Joseph Papa had the following to offer:
“Valeant has made mistakes in how it priced its drugs in the past, and we are committed to ensuring those mistakes are not repeated... This new committee will take a disciplined approach to reviewing the company's pricing of drugs, and will consider the impact on patients, doctors, and our health care industry partners. Valeant's number one priority is ensuring patients can access the medicines they need.”
Other Changes VRX Has Made Since The Philidor Scandal
When the Philidor scandal hit, it hit hard, and Valeant had to make some big changes in order to appease its investors. As a result, we saw management changes that would likely change the game for the company. First and foremost, when something wrong happens at a publicly-traded company, the CEO is the final point of blame. Due to the relationship with Philidor, the CEO during the scandal (J. Michael Pearson) resigned from his post, which led to to Joseph Papa taking on the role. Also, VRX added some big names, including Bill Ackman, to its board of directors.
However, management changes weren't the only changes that were made. After canceling its relationship with Philidor, VRX had to make up for losses in sales. In order to do so, the company contracted with Walgreens, which has helped pick up their prescription numbers in a big way.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from VRX. The reality is that while the company is down at the moment thanks to the Philidor scandal, the scandal is over. At this point, Valeant is making the right moves, and those moves will pay off in the long run. All in all, I'm expecting to see gains from the stock.
What Do You Think?
Where do you think VRX is headed moving forward and why? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]