Valeant Pharmaceuticals Shares Rise Ahead Of Earnings As Questions Linger

After delaying the release of its 10-K and fourth quarter earnings report, Valeant Pharmaceuticals is now planning to release them on Monday. CEO Mike Pearson is back at the helm after a months-long medical leave, and he’s moving fast to right the ship, meeting with executives to reassure them and dealing with the many investigations his company is facing.

Despite the quick movements, he’s apparently still suffering from serious complications from his pneumonia as he’s unable to walk. According to Bloomberg, Pearson is still weak, having lost at least 30 pounds since he became sick. He also said at the meeting earlier this month that he is still learning how to walk again.

Valeant Pharmaceuticals to focus on guidance

In Valeant Pharmaceuticals’ earnings report on Monday, investors will likely focus on guidance and look for reassurance on some of the many concerns. RBC Capital Markets analyst Douglas Miehm expects the drug maker’s 2016 sales guide to be a range of $12 billion to $12.4 billion and earnings guide to be $12 to $13 per share. He expects an adjusted EBITDA guide of $6.5 billion to $6.8 billion. He thinks Valeant stock could weaken even further from the company’s historically low valuation if management’s guide is weaker or climb if their guide is stronger.

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Among the issues he expects to be addressed on the earnings call on Monday is the timing of the 10-K release, which he doesn’t expect until after the ad hoc committee completes its review. He also expects an update on the committee’s progress, more color around guidance, updates on the SEC and government probes, and comments regarding plans to “enhance market access for products and defend formulary positions.”

Valeant CEO learning to walk again

Bloomberg reported last night that Pearson has met with some of Valeant Pharmaceuticals’ top executives to set out a plan to begin fixing the many challenges the company has been facing. He said all the serious issues are now in the open and that most of their businesses are still doing well. He also made it clear that Valeant isn’t on the verge of bankruptcy and that they are making paying down debt one of their top priorities. He lost up to 40 pounds and the ability to walk during his illness.

Valeant is facing investigations from almost all sides, although Pearson thinks the reaction to the SEC probe is “overblown” and that it was to be expected because they complained about the bad report released by Citron Research, which is known for its scathing short recommendations. However, he also said he didn’t know exactly what the SEC is looking into, which sounds like a contradiction.

Valeant Pharmaceuticals shares climbed 4.26% to $68.97 in afternoon trading today.