Embattled drugmaker Valeant has one less thing to worry about. The company agreed to pay $54 million to settle federal and state marketing allegations for three drugs it picked up in its Salix Pharmaceuticals buyout, Xifaxan, Relistor and Apriso, according to a Tuesday securities filing.
Of course, Valeant isn’t totally in the clear when it comes to Salix, which it nabbed last spring for $11 billion after winning a bidding war with Endo. Before Salix put itself up for sale, it revealed a wholesaler pile-up that forced it to restate earnings and bid farewell to its CFO (with its CEO retiring shortly thereafter). And the SEC is still conducting a formal probe into possible securities law violations relating to those inventory disclosures, Valeant said. Shareholders also filed three class-action lawsuits in late 2014.
On top of that, Xifaxan--the GI drug Valeant was most eager to get its hands on with the acquisition--hasn’t been living up to expectations. On Tuesday’s Q1 conference call, new CEO Joseph Papa cited sales force turnover, shifts in strategy, changes in leadership and an increase in enrollment in high-deductible healthcare plans as factors forcing the Canadian drugmaker to lop $390 million off its 2016 sales predictions for the med.
Still, Valeant and Papa must be happy to get one item off their plates as they grapple with a host of other issues, including multiple investigations, a Walgreens drug-distribution pact that’s hurting key dermatology sales, a stock price in the doldrums, a debt pileup, and a well of investor confidence that’s nearly run dry.
“Negative external attention … continues to adversely impact the business and our reputation with patients, physicians, and all of you, our shareholders, as well as our distracted organization,” Papa said on the call.
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