You can't fault Valeant Pharmaceuticals ($VRX) CEO J. Michael Pearson for thinking small. In an analyst call, Pearson not only predicted that 2013 revenue would hit up to $4.8 billion, up from an expected $3.4 billion to $3.6 billion in 2012; he also said Valeant could top $10 billion in annual sales. It could even hit $20 billion.
"We do have the aspiration, at Valeant, to grow into a major pharmaceutical company," he said on the call (as quoted by Reuters).
Knowing Valeant, that growth will include plenty of acquisitions. Since its reverse merger with Biovail in 2010, the Canadian drugmaker has snapped up one pharma company after another, building its stable of products--and extending its geographic reach--in such specialties as dermatology, ophthalmology and CNS meds.
Most recently, Valeant wrapped up its $2.6 billion buyout of Medicis, the Arizona-based maker of skin remedies and aesthetic treatments. It's a deal that's emblematic of Pearson's strategy: A specialty player with significant operational overlap. Immediately upon the closing, Valeant started carrying out Pearson's plan to cut $225 million in costs, with more than 300 layoffs in redundant departments.
In fact, at the beginning of 2012, Pearson set out a goal of paring $200 million in costs as it absorbed the companies it had bought over the previous 12 months--on top of $320 million saved during 2011.
Pearson's appetite for deals and his stomach for cost-cutting has endeared him to Canadian analysts, one of which hiked its price target to $74 from $70, partly because of expectations that Valeant will beat its 2013 forecast. Pearson is pretty popular with Valeant's board, too; Canada.com reports that his 2012 compensation package--$36 million, according to the Canadian Centre for Policy Alternatives, with few details on its figures--makes him the second-highest-paid CEO in Canada.