|Valeant CEO J. Michael Pearson|
Salix ($SXLP) may have just agreed to sell itself to Valeant ($VRX), a company known for squeezing every penny out of its acquisitions. But never fear, specialty sales reps: CEO J. Michael Pearson says you're safe.
Though it expects to slash more than $500 million in operating costs, the Canadian pharma isn't planning any reductions to its specialty force or to its hospital, key account and field reimbursement teams, Pearson told investors Monday on a conference call
"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," he said, noting later that "we believe these customer-facing roles have played and will play a huge role in the success of the company."
Indeed, Pearson will need those staffers around as Valeant takes over the launches of Salix's Uceris Foam, which the FDA approved last October, and constipation treatment Relistor Oral, which in late September won a label expansion for use in patients on opioids for chronic pain unrelated to cancer.
But their biggest test may be coming later this year. The FDA is expected to hand down a decision on a new indication for the North Carolina drugmaker's lead product, Xifaxan, in irritable bowel syndrome associated with diarrhea, and the way ISI Group analyst Umer Raffat sees it, the success of the Valeant buyout depends on the rollout in that market.
"Unlike Valeant's prior acquisitions, there is a large single product exposure in this deal," he wrote in a Sunday note to clients.
But Salix's primary care army may not be breathing as easily as their specialty counterparts. The Quebec-based drugmaker hasn't "had the time to fully determine the optimal size of the primary care sales force," Pearson said, but it'll do so between now and when the deal closes--an event Valeant expects next quarter.
As company spokeswoman Laurie Little told FiercePharmaMarketing by email, Salix right now has about 150 primary care sales reps on staff--a number it was planning to increase to about 230 or more. The tally Valeant ends up with "could be lower, higher, or just the way it is," she wrote. "We will be evaluating the group through the integration process."
Pearson says he isn't worried about getting the job done in the IBS-D market, which Valeant can expand "through DTC and other commercial levers." And the company has shown it's not afraid to spend on consumer ads. Its Super Bowl spot for the new antifungal product Jublia cost an estimated $4.5 million.
The company is relishing the opportunity to dive into GI issues, which Pearson called "significantly undertreated," and it will be looking for other ways to expand into underserved indications for "additional avenues of growth."
- read the call transcript from TheStreet
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