Valeant shares plunge 45% on revised forecasts

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New York (AFP)

Canadian drugmaker Valeant's share price plunged 45 percent to $38 in morning trading in New York on Tuesday after the company lowered its forecast for 2016 financial results.

Valeant Pharmaceuticals International said it now expects to make $1.5 billion less in sales this year, or between $11 and $11.2 billion in total.

It also lowered its 2016 earnings per share forecast to between $9.50 and $10.50, from $13.25-13.75.

The troubled company, under US investigations over alleged deceptive practices, has delayed the release of fourth-quarter and 2015 financial results. It said in February it would have to restate financial results for 2014 and 2015 after $58 million of sales were incorrectly recorded.

On Tuesday Valeant posted preliminary fourth-quarter results showing a loss of $336.4 million in the fourth quarter.

"The quarter was worse than we expected, the guidance was worse than we expected," said analyst Alex Arfaei of BMO Capital Markets.

This morning's plunge in Valeant's share price to a four-and-a-half-year low, at 1600 GMT, follows a slide from a high of $257 set in July 2015.

The stock has slumped following news of a US Securities and Exchange Commission investigation into alleged accounting manipulation. In late February, Valeant confirmed it is the target of "several" investigations by US authorities including the SEC.

Valeant has endured months of criticism and hits to its share price over its drug pricing and distribution policies.

While rejecting accusations that it engaged in deceptive practices, Valeant cut ties in October with mail-order pharmacy Philidor Rx Services LLC.

Their partnership had seen Philidor aggressively market Valeant's more expensive drugs over cheaper generics preferred by insurers, which caught the attention of US lawmakers.