LONDON, Nov 10 (APM) - Valeant’s chief executive has played down the prospect of splitting up the Canadian drugmaker as he hailed growth in its eyecare and gastrointestinal businesses as proof that a turnaround was gathering pace, the Financial Times reported on Tuesday.
A potential break-up of Valeant has been discussed by investors since last year, when Bill Ackman, the activist investor and erstwhile large shareholder, proposed selling Bausch & Lomb, the company’s eyecare brand.
But in an interview with the FT, Joseph Papa, Valeant's chief executive, appeared to dismiss the suggestion of carving out any of the drugmaker’s three major businesses: eyecare, gastrointestinology and skin care.
“Together those businesses give us a footprint to drive shareholder value,” Papa said. “We’ll continue to look at whatever will drive long-term value, but we think there are some real synergies across those businesses.”
However, Valeant’s market capitalisation now stands at 4.9 billion pounds — well below the combined 20 billion pounds it paid for Bausch & Lomb and Salix — after the company’s value crumbled following an accounting scandal and fears over whether it could cope with its 26 billion of net debt.
Cancer drug firm scrutinised over 600% price hike
The health Service Executive (HSE) is helping the European Commission with its investigation into whether Aspen Pharmacare broke EU competition rules by hiking the cost of life-saving cancer medicines by up to 600% across Europe, The Times reported on Thursday.
Shaun Flanagan, chief pharmacist at the HSE’s corporate pharmaceutical unit, confirmed that it had been in contact with the commission’s antitrust investigators after The Times revealed last month that Aspen had forced through huge price increases for several cancer drugs in Ireland.
The South African pharmaceutical company hiked the cost of some life-saving drugs by almost 600% and warned the HSE that there could be “severe stock shortages” if it refused to agree to the price demands.
The HSE eventually bowed to Aspen’s demands at a cost of 200,000 euros per year, despite telling the company that it was operating under significant financial constraints caused by the economic downturn, the paper reported.
The cost of Alkeran, a drug used to treat myeloma, melanoma and ovarian cancer, rose by 437% from 12.30 euros a pack to 66 euros a pack, The Times said. Leukeran, which is mainly used in the treatment of chronic lymphocytic leukaemia and Hodgkin lymphoma, went up to 55 euros a pack after the 592% price increase was approved from 7.95 euros. The prices of Lanvis and Purinethol, two other chemotherapy drugs, have risen by more than 240%.
Aspen said that the prices of the four drugs were low “in real terms” and that they were “a fraction” of the cost of alternative cancer treatments, the paper said.
Fitch downgrades Teva to junk status on operational issues
Teva Pharmaceutical was downgraded to junk territory by Fitch on Monday, as analysts from the smallest of the three major U.S. credit rating agencies broke from their peers in cutting the Israeli drugmaker out from the investment-grade credit universe, the FT reported on Monday.
Fitch cut its rating to double-B from triple-B minus and said it held a negative outlook on Teva, signalling further downgrades could be possible. The move affected roughly $35 billion of debt.
“Teva is facing significant operational stress at a time when it needs to reduce debt,” said Patrick Finnegan, an analyst with Fitch. “Pricing pressure in Teva’s North American generics segment and erosion of sales of Copaxone will continue to weigh on free cash flow in the near term, requiring the company to continue to sell assets or find external capital resources to meet debt obligations.”
S&P Global and Moody’s rate Teva triple-B minus and Baa3, respectively, the lowest investment-grade ratings assigned by the agencies.
U.S. Senate tax plan could affect pharma multinationals
Multinational companies that generate significant non-U.S. profits from intellectual property would be hit by a new U.S. tax regime under a plan from Senate Republicans that has created fresh uncertainty over international tax, the FT reported on Friday.
On a tumultuous day, when Senate Republicans revealed one tax plan just as House Republicans approved another at committee level, companies that rely on intellectual property (IP) — notably in the tech and pharmaceutical sectors — were in the line of fire, it said.
A person familiar with the Senate plan said it would impose a tax of at least 10% on income from intangible assets such as intellectual property, though it would be levied differently on U.S. companies and the American subsidiaries of foreign companies.
For U.S. corporations, a Republican aide said the goal was to introduce a system of “carrots and sticks” to stop companies from moving profits out of the U.S. by shifting patents, copyright and other IP to low-tax countries.
The news comes shortly after President Donald Trump released his bill on tax reform (APMHE 55454
Valeant hands back 'female Viagra' maker to former owners
Valeant says it will return the maker of “female Viagra” to its former owners, in effect giving the company away less than three years after buying it for $1 billion, the FT reported on Monday.
When Valeant acquired Sprout Pharmaceuticals in August 2015, analysts and investors said the Canadian drugmaker had vastly overpaid for the first medicine designed to boost a woman’s libido.
Just a few weeks later, Valeant was rocked by an accounting scandal and its shares have since lost more than 95% of their value. Many investors worry that the group will struggle to service the debts it amassed during its years-long acquisition spree.
Valeant said it would hand Sprout to some of its former owners without charging an upfront fee. At first, it will lose money on the deal — it has agreed to loan the company $25 million to “fund initial operating expenses”.
Get Brexit deal fast, business leaders urge May
British and European business leaders are to demand an urgent breakthrough on Brexit from Theresa May in order to salvage a transition deal from the stalled negotiations in Brussels, The Guardian reported on Friday.
The news follows UK and European pharma trade bodies pushing for a quick agreement, at least for medicines regulation and trading laws (APMHE 55516
The Guardian reported that the Confederation of British Industry (CBI) and counterparts from France, Germany and Italy will meet the prime minister at Downing Street on Monday to warn that taking much longer to negotiate a transition agreement could render it useless because companies will soon be forced to assume the worst about the terms of Britain’s departure from the EU.
The employers' alliance behind the initiative, BusinessEurope, has expressed concern at the slow place of the Brexit talks.
“BusinessEurope urges both sides to make additional efforts and commit to reach a withdrawal agreement as early as possible in order to address the transition and future relations,” said director general Markus Beyrer.
One business leader briefed on Monday’s talks said: “If we don’t get a transition deal agreed fairly soon, it’s not going to be very useful.”
Mylan nudges full-year guidance higher
Mylan shares rose in early trading on Monday after the U.S. drugmaker nudged its full-year guidance higher following earlier-than-expected approval for its copycat version of Copaxone (glatiramer), the blockbuster multiple sclerosis treatment, the FT said on Monday.
The U.S. drugmaker, which sharply reduced its annual forecasts for sales and profits only three months ago, said it now expects revenue for 2017 to be between $11.75 billion and $12.5 bn this year. That is more than the $12 bn forecast it downgraded to in August, but still below the $13 bn it had originally predicted.
Adjusted earnings per share for 2017 are seen in the range of $4.45 to $4.70, compared to the $4.30 to $4.70 range it had previously forecast.
HPV jab slashes number of smear tests needed, research suggests
Women who have been given the human papillomavirus (HPV) vaccine may only need three cervical screenings in their lifetime, The Guardian and The Daily Mail report on Friday, quoting a new study.
Scientist at a Cancer Research UK-funded team at Queen Mary University of London found that smear tests at the ages of 30, 40 and 55 could offer the same benefit to vaccinated women as the 12 currently offered.
HPV is thought to cause nearly all cervical cancers and vaccination against it has been offered to girls aged 11 to 13 since 2008. The researchers said cutting the number of screenings for vaccinated women could save the NHS time and money.
Professor Peter Sasieni, Cancer Research UK’s screening expert and lead author of the study, said: “These women are far less likely to develop cervical cancer so they don’t need such stringent routine checking as those at a higher risk".
Government appoints GSK executive Patrick Vallance as chief scientific advisor
Patrick Vallance, president of research and development at GlaxoSmithKline, has been appointed as the Government’s chief scientific advisor, The Independent reported on Thursday.
The Government announced on Wednesday that Dr Vallance would take up the role in April next year (APMHE 55507
Also on Wednesday, GSK said it had poached veteran drug industry scientist Hal Barron to lead its research to replace Dr Vallance, the paper noted.