Valeant, working to rehab R&D image, gets FDA snub on potential blockbuster

Valeant

Just a couple of days after Valeant board member Bill Ackman touted the company’s R&D program as an industry leader, it’s run into a snag.

On Friday, the Canadian drugmaker announced that the FDA had turned away a new drug application for its latanoprostene bunod ophthalmic solution, a candidate therapy for open angle glaucoma or ocular hypertension. It is a drug that recently departed CEO J. Michael Pearson had touted as a potential blockbuster before his exit in April. But it is off track now after regulators handed down a CRL citing deficiencies at a manufacturing plant in Tampa, FL, operated by Valeant’s Bausch + Lomb unit.

The setback capped a big regulatory week for the drugmaker that was mostly positive. Tuesday, an FDA advisory committee voted unanimously to recommend approval of Valeant psoriasis candidate brodalumab, despite a link to 6 suicides that cropped up in trials. And later that day, the agency green-lighted an oral form of GI med Relistor, a constipation med that’s battling AstraZeneca’s Movantik in the marketplace.

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To activist investor and new director Ackman, those positive developments are proof that “people have mischaracterized Valeant’s R&D programs,” he said on a conference call, as quoted by Bloomberg. “This company has one of the most productive R&D programs" out there.

But that description certainly doesn’t match Valeant’s reputation. Pearson was notoriously averse to R&D, devoting little in the way of resources and instead fueling growth through serial buyouts and price hikes.

Now, though, with the company’s stock price battered by pricing controversy, channel-stuffing allegations and debt-default worries, things are changing at the Quebec-based pharma. Valeant’s R&D spending nearly doubled in Q1, reaching $103 million, or about 4.3% of sales, Bloomberg notes. But that figure is still well below normal in the pharma industry, which trade group PhRMA says spent an average of 18% of sales on R&D in 2013. Shares were off 3% today in early trading.

- read Valeant's release (PDF)
- get more from Bloomberg

Special Report: The most influential people in biopharma today - 2016 - J. Michael Pearson - Valeant

Related Articles:
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When is silence not deadly? Ask Valeant CEO Joseph Papa, whose latest turnaround talk didn't send shares tumbling
Embattled Valeant doesn't 'need to sell anything,' new CEO says
Valeant investors fret as new Perrigo CEO slams Papa's performance​
It's official: Pearson out, Papa in as Valeant CEO
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