Valeant CEO J. Michael Pearson
Last year, after agreeing to buy Salix Pharmaceuticals for $10.1 billion, Valeant CEO J. Michael Pearson promised that the North Carolina drugmaker's GI sales reps would be spared his company's job-chopping ax. But now? There are no guarantees.
Amid the announcement of nearly 300 layoffs, Pearson said the various parts of Valeant's GI rep army would be integrated, now that the Canadian pharma is putting a focus on marketing Xifaxan--most recently approved for IBS-D--for hepatic encephalopathy, a condition that affects the brain when the liver can't remove toxins from the blood.
"We expect there will be new opportunities for some of those affected to take on different roles within the company," Pearson wrote in a memo to employees seen by Bloomberg.
Valeant ($VRX) was singing a very different tune last February, when it talked those reps up as crucial to its first foray into the GI market.
"We believe Salix's sales force is, by far, the strongest in the GI space and it has been a key part of their success," Pearson told investors at the time, stressing that "we believe these customer-facing roles have played and will play a huge role in the success of the company."
But then again, those were very different times for the now-embattled drugmaker--and for Pearson, who will be packing his bags as soon as Valeant finds a replacement. Over the last several months, the company has been the subject of multiple investigations, some the result of channel-stuffing allegations; taken endless heat from Congress about its aggressive price-hike strategy; and seen its stock price plummet after $58 million in accounting missteps forced it to restate earnings, delay the filing of its annual report and risk defaulting on its debt.
To top it off, several of Valeant's key businesses haven't been measuring up to expectations--and for that reason, it's not just GI reps feeling insecure about their jobs. Pearson's memo unveiled 140 cuts that will span its GI, dermatology and women's health divisions, and it's dismissing more than 140 contract workers that promote its dismally performing and ever-controversial female libido pill, Addyi.
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