Valeant Upgrades Views With Big Quarter

Valeant Pharmaceuticals International Inc. on Thursday boosted its outlook for the year after logging strong revenue growth in its second quarter.

Valeant said it is now forecasting per-share earnings of $11.50 to $11.80, up from its previous guidance of $10.90 to $11.20 a share. The drug maker is now looking for revenue of $10.7 billion to $11.1 billion, up from its previous guidance for $10.4 billion to $10.6 billion.

Valeant completed its $11.1 billion acquisition of Salix Pharmaceuticals Ltd. earlier this year, after raising its takeover bid by about a billion dollars in March to knock out rival bidder Endo International PLC. Salix, which contributed $313 million in revenue in the latest quarter, makes drugs to treat stomach disorders, a fast-growing area of specialty pharmaceuticals. Its drug Xifaxan recently won approval for treatment of irritable bowel syndrome, which Valeant expects to drive growth throughout the rest of the year.

In the latest quarter, Valeant said organic growth on a same-store sales basis was up 19%, driven by strength in its dermatology, contact lenses and dental businesses.

Overall, for the quarter ended June 30, Valeant reported a loss of $53 million, or 15 cents a share, compared with a prior-year profit of $125.8 million, or 37 cents a share.

Excluding foreign exchange and an impact related to Salix, per-share cash earnings were $2.56 a share.

Revenue surged 34% to $2.73 billion. Excluding the contribution of Salix and foreign exchange impacts, revenue gained 27%.

Valeant had forecast per-share earnings of $2.40 to $2.50 and revenue of $2.45 billion to $2.55 billion for the quarter.

The company estimated foreign currency brought down revenue by $173 million.

Looking to the current quarter, Valeant forecast per-share earnings of $2.60 to $2.70 a share and revenue of $2.6 billion to $2.8 billion. Analysts polled by Thomson Reuters had forecast $2.87 a share in earnings and $2.75 billion in revenue.

A serial acquirer, Valeant has grown quickly in recent years by buying companies with proven drugs, then cutting costs, rather than depending on risky research in early-stage products. Last week, Valeant struck a deal to buy Egypt's biggest drug maker, Amoun Pharmaceutical, for $800 million.

The Wall Street Journal has also reported that Valeant made a preliminary approach to buy animal-health giant Zoetis Inc.

Write to Chelsey Dulaney at [e-mail]

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