Valeant Pharmaceuticals expects to file its next earnings report on June 7, but there are a lot of unknowns swirling around the company right now. Guidance will be in focus as some analysts question whether the new chief executive will cut the company’s outlook, and fallout continues today from the delay in the filing of its 10-Q.
Valeant receives another default notice
Valeant said this morning that it has received another default notice related to the delay in its 10-Q filing. The company said the notice was for two of its senior note indentures, although it added that the notice “does not result in the acceleration of any indebtedness of Valeant or any of its subsidiaries.” It intends to file its 10-Q on June 10, which is well ahead of the 60-day deadline it has to file it.
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The company delayed filing its 10-Q on time in the wake of the investigation related to its relationship with Philidor, a mail-order pharmacy it no longer does business with. Valeant had to restate $58 million in earnings to push them back from 2014 to 2015, but then in April, its board said it found no other errors and closed the investigation.
What to expect in Valeant Pharmaceuticals’ earnings reports
Analysts from multiple firms are putting out their views on Valeant Pharmaceuticals ahead of Tuesday’s earnings report. Canaccord Genuity analyst Neil Maruoka expects the drug maker to post $2.4 billion in sales for the first quarter, which is in line with consensus and at the high end of management’s guidance. He believes many of the problems the company faced last year dragged on into the first quarter and expects the company to keep losing sales due to the termination of the relationship with Philidor. Valeant is in the process of implementing a new distribution with Walgreens to replace that relationship.
He sees drug pricing as remaining in the spotlight for Valeant, particularly since the “ferocious grilling” by the U.S. Senate Special Committee on Aging. He is also concerned about the drug maker’s relationships with managed care providers and believes that its internal controls are still a major risk. He also noted that scrutiny on the company and its business practices has intensified. He believes that Valeant’s management made things very hard on the company by emphasizing profits far above anything else—even at the cost of all of the company’s relationships, whether with customers, payors, or the government.
Valeant’s new CEO might cut guidance: BMO
BMO Capital Markets analyst Alex Arfaei is concerned that new CEO Joseph Papa might cut guidance when he hosts the first earnings call since taking the helm. Previous CEO Michael Pearson had said that his guidance was conservative, although the analyst said there was no evidence of any room for upside.
Valeant Pharmaceuticals shares slipped by as much as 1.22% to $29.05 during regular trading hours on Friday.