Valeant Pharmaceuticals Intl Inc (VRX) Indicates Double-Digit Organic Growth


Valeant Pharmaceuticals Intl Inc (NYSE:VRX) indicated to its shareholders during the annual meeting that the company expects to achieve double-digit organic growth in the current year, as well as, next year. Thereafter too, the company expects to deliver strong growth.

Low-Risk Profile

Even as Valeant Pharmaceuticals Intl Inc (NYSE:VRX) was holding its annual meeting, the company’s negotiators were busy in talking to an Egyptian Drug maker, Amoun Pharma, to buy it. The acquisition price could be between $700 and $800 million. However, the company has not disclosed anything about it in its recent annual meeting.

In the annual meeting, the company said that it’s diversified product portfolio and geographical presence creates lower risk-profile for the pharmaceutical firm. Valeant also believes that its durable product portfolio restricts exposure to any patent expiry that normally comes across to any pharmaceutical company.

R&D Programs

One of the critics charge against Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is that it spends less on research and development for growth opportunities. This was not the company’s primary objective too. However, the company views it as an advantage citing that there is less risk coming from its R&D programs though it has rich product pipeline. The company listed key milestones for 2015 in respect of its R&D.

The company’s product pipeline confidence comes from product acquisition or licenses like Emerade and Croma. Similarly, the acquisition of the firms brought Vesneo, Ultra and Luminesse. There was also internal development, which are Onexton, IDP 118 and IDP 120.

Strong Cash Flows

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is predicting EBITDA of $7.5 billion by next year. The company told its shareholders about its commitment to cut down leverage to 4x by the second half of next year. The company expects this to provide improved capability to continue its acquisition spree actions and opportunistically pay down its debt, as well as, repurchase shares.

The pharmaceutical firm is confident and will continue to be disciplined in respect of capital deployment so that it would be in a position to deliver above average returns to its shareholders. The company has a strong execution track record in that regard with shares having a 3,000 percent price adjusted growth since 2008. Valeant also claimed that it consistently exceeded the expectations.

Salix Advantage

Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s most recent acquisition was Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP). Valeant showcased the advantages of Salix by pointing out its leadership in the GI market since it was ranked number one in GI sales in the last three out of four years. This apart, it has Xifaxan, which was approved for hepatic encephalopathy, as well as, traveler’s diarrhea. It also has low-risk short-term pipeline, which were attractive.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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