Rather like the rival company now known as Allergan, Valeant Pharmaceuticals is an upstart drug marketer that grew with meteoric speed between 2008 and 2015 through the acquisition of more than 40 brands or businesses in the US, Canada, Europe and the Middle East. Among the most notable were eyecare and contact lens manufacturer Bausch & Lomb in 2013 and a string of North American OTC healthcare products from Johnson & Johnson. A core strategy in Valeant's growth was to focus primarily on sales and distribution, leaving drug development for the most part to independent companies which could be acquired once their product had finished testing. The group's rapacious deal-making culminated in near-disaster in 2015 when its stock price crashed following a failed attempt to acquire Allergan and negative feedback from analysts and regulators regarding "price gouging" on key drugs, aggressive marketing tactics, and grey-area relationships with mail order pharmacies to boost sales. Over the course of two years, Valeant's share price plunged from highs of over $250 to under $15. That eventually resulted in the ousting of CEO and main architect Michael Pearson. Joseph Papa took over as chairman & CEO in 2016 in an attempt to engineer a turnaround, and is selling off a number of non-core assets to raise much-needed cash and pay down its huge debt mountain, still almost $30bn at the end of 2016. Group revenues peaked in 2015 at $10.4bn, falling back to $9.7bn for 2016. Bausch & Lomb's opthamology products accounted for half of that sum. Top-selling non-optho drug was irritable bowel syndrome treatment Xifaxan (sales of $932m), and the company also has a sizeable collection of high-selling dermatology drugs including Jublia, Onexton and new launch Siliq. Adbrands does not currently offer a business profile for this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
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Capsule checked 1st March 2017
Adbrands Weekly Update 12th Jan 2017: L'Oreal is spending $1.3bn on three skincare brands owned by struggling pharmaceutical group Valeant. CeraVe, AcneFree and Ambi will join the French company's Active Cosmetics division, alongside Skinceuticals, Vichy and LaRoche-Posay. It's a big price tag for brands with annual sales of only around $168m a year. The most promising of the trio, especially for international growth, is thought to be dry skin treatment CeraVe.
Adbrands Weekly Update 24th Nov 2016: In a further development in US prosecutors' investigation into illegal links between pharma group Valeant - a top 100 advertiser in the US last year - and failed Canadian online pharmacy Philidor Rx Services, two senior executives were arrested. Former Philidor CEO Andrew Davenport and Valeant executive Gary Tanner are charged with being "engaged in an illegal, concealed kickback scheme that they hoped would yield them tens of millions of dollars in personal profits". According to the charges, Tanner worked secretly with Davenport to promote Philidor's business within Valeant, and blocked relationships with rival sales channels. When Valeant acquired an option to acquire Philidor, Davenport personally received a $40m payment, almost $10m of which he kicked back to Tanner. Valeant was one of the fastest-growing pharma groups of the past decade as a result of a string of acquisitions, but its valuation crashed last year when allegations of shady dealing with Philidor began to emerge, along with criticisms for hiking prices of in-demand drugs. No charges have been brought against Valeant itself, but a separate investigation is still ongoing into that group's former CEO Michael Pearson and its former CFO, both of whom stepped down after the links were Philidor were uncovered late last year. Prosecutors are keen to discover whether Valeant was merely an unwitting victim of Davenport and Tanner's scheming, or was actively involved in improper trading through Philidor.
Adbrands Weekly Update 10th March 2016: Direct to consumer ad expenditure for US prescription pharmaceuticals came close to record levels in 2015, according to estimates from Nielsen, reported by industry blog DTC Perspectives. Total spend reached $5.17bn last year, capping three years of gains since 2012's low of $3.4bn. The latest figure is close to eclipsing the record $5.4bn spent in 2006. A key factor is the increase in drugs with high selling prices, such as Gilead's Harvoni, a course of which costs as much as $100,000 a year. At that level, it doesn't take an excessive number of users to get a return on investment in marketing if its successfully builds demand. That in turn has prompted a backlash from physicians and insurers, who believe that marketing costs contributes to high pricing of many new launches. Harvoni was itself the year's 5th most advertised drug, behind Valeant's Xifaxan, Sanofi's Toujeo, Merck's Belsomra, and GSK's Breo Ellipta.
Adbrands Weekly Update 20th Nov 2014: Next year will see a new entrant among the world's Top Ten pharma groups. Fast-expanding Actavis, best-known for generic prescription and OTC products, agreed a white knight deal to acquire Botox developer Allergan for a whopping $66bn, thwarting a hostile takeover by US rival Valeant. Assuming the deal is approved by shareholders and regulators (which seems likely), the combined company will have operations in 60 countries worldwide and sales of around $23bn, usurping Eli Lilly's position in the Top Ten. This marks the latest stage in an extraordinary growth spurt by what was originally US-based generic manufacturer Watson Pharmaceuticals. In just two years it has pulled off a string of ever-larger acquisitions, including generic rival Actavis (whose name it adopted), then Warner Chilcott (whose tax base in Ireland it also adopted), followed by Forest Laboratories earlier this year, and now Allergan.
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