Valeant CEO touts R&D output with new dermatology approval

Less than two weeks after losing longtime acquisition target Allergan ($AGN)--which happily sold itself to Actavis ($ACT) to dodge Valeant's hostile bid and the R&D cuts it feared would come along with it--the Canadian pharma is talking up the productivity of its own labs.

Valeant CEO J. Michael Pearson

Tuesday, Valeant ($VRX) announced the FDA had green-lighted its Onexton gel for inflammatory acne in patients 12 and over--a nod CEO J. Michael Pearson says "continues to validate our output-driven approach to R&D."

"Onexton is the fourth product to be approved in our medical dermatology business in the past 12 months, three of which were conceived and developed entirely by Valeant's internal R&D team," he said in a statement.

The acne gel, which Pearson said the company expects to roll out early next year, will follow recent launches for skincare products Jublia 10%, Retin-A Micro microsphere 0.08% and Luzu 1%--part of the CEO's focus on bulking up in the fast-growing dermatology field.

Plenty of Valeant's heft in that area has come through M&A. Since taking the helm in late 2010, pickup-focused Pearson snapped up Sanofi's ($SNY) Dermik unit, Janssen Pharmaceuticals' skincare business, skin-drug specialist Medicis, boutique skin-care company Obagi Medical, and, most recently, prescription drugmaker PreCision Dermatology--to name a few.

And the gel--clindamycin phosphate and benzoyl peroxide 1.2%/3.75%--has nearly the same chemical formula as Valeant's Acanya (clindamycin phosphate and benzoyl peroxide 1.2%/2.5%), a product it grabbed with its 2008 buyout of Dow Pharmaceutical Sciences.

But Valeant may need to show its labs can bear fruit if it wants to win over future targets. Botox-maker Allergan, for one, had a big problem with the 3% of revenue the R&D-averse company put aside for research last year, claiming cuts in that department would curtail its own growth.

And right now, winning over future targets is likely what the company is focused on as it pushes toward Pearson's goal to become a top-5 global pharma player--and nurses its injured dealmaking reputation.

"Valeant probably feels some pressure to show that it can do another deal relatively soon," High Pointe Capital Management Gautam Dhingra told Reuters last week.

- read the release

Special Reports: The most influential people in biopharma today - J. Michael Pearson, Valeant | Pharma's top 10 M&A deals of 2013 - Valeant/Bausch + Lomb

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