Valeant Pharmaceuticals International (formerly Biovail) is Canada's largest publicly traded drugmaker. The multinational specialty pharmaceutical company specializes in developing, manufacturing, and marketing neurological and dermatological treatments, with a portfolio of branded prescription, branded generic, and OTC products. Products in its dermatology segment include genital herpes treatment Zovirax and acne treatment Acanya, while products in its neurology segment include antidepressant Wellbutrin XL. With manufacturing sites in Canada, Mexico, Brazil, and Poland, product sales are made around the world; the US is Valeant's largest market.
The US market (including Puerto Rico) accounts for more than 55% of Valeant's annual revenues. The company has significant specialty and OTC medicine offerings in Canada, Australia, and New Zealand, as well as a growing presence selling branded, generic, and OTC offerings in portions of Latin America, Europe, Southeast Asia, and South Africa.
In addition to the core areas of central nervous system, dermatology, and ophthalmology, Valeant has prescription offerings for cardiovascular and metabolic ailments. Valeant also has a handful of off-patent branded drugs, which it continues to sell but does not actively promote. These drugs include Cardizem CD (a controlled-release version of Cardizem), anxiety drug Ativan, and hypertension medication Vasotec. In addition to branded drugs, Valeant makes generic formulations, some of them generic versions of its own brands (one strategy for lessening the impact when those drugs go off-patent).
Sales and Marketing
Valeant sells its products through direct sales representatives in the US and Canada, as well as through marketing partnerships and distributors in the US and international markets. For instance, Valeant sells top-selling neurology drug Wellbutrin XL in the US, while GlaxoSmithKline sells the product in international markets. Customers include wholesale drug distributors, hospitals, physicians, and pharmacies. Valeant's marketing programs often include direct mailings, trade magazine ads, and event exhibits and sponsorships.
Valeant has embarked on an aggressive acquisition strategy that has grown the company's revenues exponentially in recent years. The company closed a record number of purchases in 2011, leading to a 108% revenue jump to some $2.5 billion attributed to increased product sales in a widening number of global markets. The company also returned to profitability, reporting a $160 million net income figure in 2011 after dropping into the red in 2010 due to acquisition and integration expenses from the Valeant/Biovail merger.
Valeant's strategy is to acquire, develop, and commercialize new products through partnerships especially in the areas of neurology and dermatology. Neurological products under development include medications for depression, schizophrenia, Parkinson's, and pain, as well as an epilepsy drug being researched through a partnership with GlaxoSmithKline. The company is looking to broaden its lineup especially as some of its older offerings, such as Wellbutrin XL (an extended-release version of GSK's antidepressant Wellbutrin) and Ultram ER (a long-acting version of J&J's chronic pain drug Ultram), face increasing levels of generic competition as their patents expire.
Under the direction of chairman and chief executive J. Michael Pearson, Valeant has made about 50 acquisitions of companies and assets since 2008. Its acquisition footprint is diverse, with several purchases in the US, Canada, Brazil, Russia, and Australia. The company tends to mix larger acquisitions with smaller ones in order to beef up its portfolio of treatments for central nervous system and skin diseases.
Mergers and Acquisitions
In terms of larger acquisitions, Valeant struck an $8.7 billion deal ($4.5 billion in cash and $4.2 billion in debt) to acquire Bausch + Lomb in 2013. The deal will give Valeant a leading position in the ophthalmology market and boost its operations in the medical device industry. Valeant plans to leverage the brand in emerging markets; its existing eye care products and pharmaceuticals will be merged into the Bausch + Lomb division following the purchase.
The company significantly strengthened its position in dermatology when it acquired US-based Medicis Pharmaceutical for $2.6 billion in December 2012. The Medicis deal gives Valeant a formidable lineup of acne, aesthetic injectable, and antiviral products, and it builds upon prior acquisitions of Dermik and Ortho in 2011 to cement Valeant's position as a leader in US dermatology.
Valeant's aggressive acquisition strategy has brought some failures along with successes, including a $5.7 billion attempt to acquire fellow neurological drugmaker Cephalon in 2011 and two unsolicited offers ($314 million and $360 million) for ophthalmic therapies maker ISTA Pharmaceuticals.
One of Valeant's largest transactions occurred in 2010 when the company, then named Biovail, acquired the former Valeant Pharmaceuticals entity for some $3.3 billion. The combined entity took on the current Valeant name.
Investors with significant stakes in Valeant include Ruane, Cuniff & Goldfarb (12%) and FMR (10%).