Valeant Posts a Loss, Says It Will Retool

Valeant Pharmaceuticals International Inc. posted a wider loss in its latest quarter, and the company said it would reorganize, continuing a push to remake itself as a normal pharmaceutical firm.

The company also affirmed its yearly guidance after a string of cuts, easing fears of triggering a debt-covenant breach. Shares in the company added 7% premarket to $24.

It has been just over a full year since Valeant shares hit an all-time closing high. Since that peak last August at $262.52, the stock has erased more than 90% of its value amid a slate of concerns, including drug-price hikes, accounting problems, a brush with a potential debt default, and investigations by Congress and federal regulators.

Investors have been watching for signs of what kind of profitability Valeant can deliver as it distances itself from big acquisitions and severe price increases for its drugs, the method it used to build its business.

Chief Executive Joseph Papa, who took the helm from Michael Pearson in May, said the company would be going in a "new strategic direction" that involves reorganizing the company and its reporting segments. The company didn't further outline the plan Tuesday morning. Mr. Papa said the new direction for Valeant "has a mission to improve patients' lives."

For the quarter ended in June, Valeant posted a loss of $302.3 million, or 88 cents a share, wider than its loss of $53 million, or 15 cents a share, a year earlier.

On an adjusted basis that strips out some costs and uses a new tax-reporting method, earnings fell to $1.40 a share from $2.14. Revenue slid 11% to $2.42 billion. Analysts were looking for adjusted earnings of $1.48 a share on $2.46 billion in revenue, according to Thomson Reuters.

Valeant backed its guidance for the year—which it had cut sharply at the end of the previous quarter—for earnings of $6.60 to $7 a share and revenue between $9.9 billion and $10.1 billion. By backing its guidance, Valeant essentially endorsed that it thinks it can earn enough to keep its ratios high enough to stay in compliance with its debt covenants.

Valeant also said it agreed to sell all North American commercialization rights to Ruconest to Pharming Group NV for $60 million upfront and additional sales-based milestone payments of up to $65 million.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

August 09, 2016 07:05 ET (11:05 GMT)

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