Valeant Pharmaceuticals may be in a world of hurt business-wise, what with $30 billion in debt and a cratered share price. But it still has to produce product and so is investing in plants in Canada as it transfers production of two drugs it got in the Salix acquisition last year.
The company said last week it will invest $15 million in its Steinbach, Manitoba facility by the end of 2016, and another $12.5 million in its Laval, Quebec facility.
The company said the Steinbach work includes $7 million in upgrades to manufacturing technology and another $8 million for the transfer of North American production of Xifaxan, an irritable bowel syndrome treatment, as well as ulcerative colitis drug Apriso. Valeant picked the two gastrointestinal drugs up in its $11 billion buyout last year of Salix Pharmaceuticals. Valent said in the last four years it has transferred production of 27 products to the Steinbach facility.
The Laval investment includes $10 million to manufacturing upgrades and $2.5 million for the transfer of production of Arestin, an antibiotic used in periodontal treatments. It said the expansion in Laval will add 15 jobs to that facility.
While the investments are small by Big Pharma standards, they represent some positive news for the Canadian drugmaker and its CEO Joseph Papa. The newsly named exec is trying to revive the drugmaker as it deals with multiple investigations, a Walgreens drug-distribution pact that’s hurting key dermatology sales, a stock price in the doldrums and debt escalation, all of which have sucked the enthusiasm out of investors.
Some of those issues had to do with Xifaxan and Apriso. Earlier this month the company reported it had agreed to pay $54 million to settle federal and state marketing allegations for those two drugs and a third, Relistor, another Salix get. On top of that, in its Q1 conference call, Papa acknowledged Xifaxan has not lived up to expectations and the company cut 2016 sales projections for the drug by $390 million.
- here’s the release
Valeant wraps up Salix marketing probe with $54M deal--but it's far from in the clear
Valeant pitches deadline delays to creditors in debt rescue plan
With Salix buy, Valeant bets $10B on GI market growth