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.
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.
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