Drugmaker Valeant Pharmaceuticals, a fast-growing Wall Street darling until its price-hiking business strategy made it a symbol of pharmaceutical company greed, said it’s undergoing a restructuring as its new CEO attempts to turn it around and repair its tattered reputation.
The company has come under a harsh spotlight for repeatedly buying older medicines with limited competition and then jacking their prices up threefold or more, with no changes or improvements to the drugs. The Canadian company’s spate of acquisitions and soaring revenue propelled its stock through the roof, while running up some $30 billion in debt.
As soaring drug prices became a hot political issue, Valeant has been hit with three ongoing federal probes into its accounting and business practices and criticism from presidential candidates, forcing it to renounce its price-hiking strategy and push out Michael Pearson, the CEO behind that strategy.
Meanwhile, insurers and other payers trying to reign in their costs for medicines successfully pressed for bigger drug discounts and rebates, which slashed Valeant’s revenue from sales in developed countries by 14 percent in the second quarter.
As a result, Valeant on Tuesday reported a wider loss and an 11 percent dip in total revenue during the quarter. Still, its shares jumped after the beleaguered company stuck by its financial forecast for the year and said it would unveil a new strategy.