Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX), a “roll-up” company embroiled in a bitter battle to take over Botox-maker Allergan, Inc. (NYSE:AGN), reported earnings Thursday that showed climbing and strong growth.

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Valeant’s stock price tumbles after earnings

While the company was making a case to purchase Botox maker Allergan, Inc. (NYSE:AGN), which relies on its stock price as a currency in the acquisition, its saw this stock price tumble after its earnings announcement.

This is a problem for Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX), which Allergan, Inc. (NYSE:AGN) has accused of relying on buyout deals to expand its business, rather than strong management of its products. Valeant has acknowledged cost cutting after it takes over a company as a standard business practice.

Often the most expensive department, among the first on the chopping block, is research and development, where results can be rather hit and miss. Cutting R&D, while a quick method to boost earnings, is short sighted and will eventually lead to the company losing its its most important competitive advantage, critics say.

What sunk Valeant’s stock was the forward guidance, however.

Valeant looking to lower 2014 forecasts

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) said it was lowering 2014 forecasts to reflect the sale of its rights to several skincare products, a technical accounting issue that should not have come as a dramatic surprise as selling rights and the accounting consequences can be predicted to various degrees.

“People were disappointed in Valeant’s outlook for the remainder of 2014, and especially its 2015 earnings guidance, which is about $1 (U.S.) per share below expectations,” said Raghuram Selvaraju, an analyst with Aegis Capital, said in a Global and Mail report.

To put a fine point on the trouble, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) projected earnings per share of nearly $9.65, a number well shy of the average analyst forecast of $10.42, the report said.  Next year revenue expectations are at $9.3-billion and bumping to to $11.4-billion in 2016, short of expectations. For 2016, Valeant projected earnings of $12.30 per share.

With the company’s stock closing the day down more than seven percent, if price momentum continues to erode Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX)’s value it will impact its Allergan, Inc. (NYSE:AGN) deal. A large percentage of the currency used in the acquisition is stock, and when the value of the stock dips it re-engineers the payout formula.

As Valeant shares tumbled, Allergan, Inc. (NYSE:AGN) shares dropped by more than 4%, the Journal noted, due to concerns that Valeant would have trouble securing a cash-and-stock deal if its stock weakens.