Remember when Valeant was counting on a sales force beef-up to revive its struggling gastrointestinal franchise? It may have just run into a big problem in that department.
Rumors are swirling that more than 50 GI reps have left the embattled pharma “en masse” to join Synergy Pharmaceuticals, which won FDA approval last month for constipation med Trulance, Wells Fargo analyst David Maris wrote in a Wednesday note to clients. Valeant did confirm to Maris that “a number of salespeople have left,” but it wouldn’t say how many.
Synergy, for its part, told him only that it had been “very successful in hiring a large number” of experienced salespeople, many with 10-plus years in the business.
A Valeant spokesperson did not respond to a request for comment, but the company Monday put out a release announcing the "deployment" of an expanded GI force. The company "has rapidly scaled up its sales force by nearly 40%, effective immediately," it said, noting that Valeant has hired about 250 "highly-trained and experienced sales force representatives" over the past three months.
If the rumors are true, though, it’s still a blow for Valeant, whose CEO, Joseph Papa, just last month touted the company’s rep retention comeback at the J.P. Morgan Healthcare Conference. Late last year, after a $10 billion deal to sell GI unit Salix to Takeda fell through, the company announced plans to scale up its rep ranks, adding people to focus on touting its IBS-D med Xifaxan and oral opioid-induced constipation med Relistor to potential primary care prescribers.
Especially given recent prescription trends on Xifaxan and Valeant’s overall GI franchise—which “have shown weakness,” Maris noted—the mass exodus would be one that “Valeant cannot afford,” he said.
One eyebrow-raising hire who’s still around, though? Papa’s son, who joined the company last September as a product manager for lead med Xifaxan, Maris says. As Papa told the analyst, he had no part in the hiring process. Papa said his son is one of 10 or more people in his role, he does not report to the CEO, and he is not highly compensated. He also has the right qualifications for the job, Papa maintained.
Still, though, the company’s investors are wary. “Valeant acknowledged that several investors have already raised the matter,” Maris said.