) recently entered into an agreement with
). As per the agreement, effective immediately, Actavis will
exclusively market and distribute an authorized generic of
Valeant's Zovirax ointment.
The agreement allows Actavis to record all the net sales of
the generic ointment while Valeant will receive a share of the
same. The other terms of the agreement were not disclosed.
Actavis will also have the exclusive rights to co-promote
Zovirax cream to obstetricians and gynecologists in the US by
using its existing Specialty Brands sales and marketing
In return, Valeant gained exclusive right to co-promote
Actavis' Cordran Tape (flurandrenolide) in the US, which is
indicated for treating inflammation and itching caused by skin
allergic reactions, eczema and psoriasis.
Valeant will co-promote the drug using its dermatalogy sales
and marketing structure for a co-promotion fee on sales.
We note that Zovirax (ointment) is indicated for the
management of initial genital herpes and limited non-life
threatening mucocutaneous herpes simplex infections in
Zovirax cream is indicated for the treatment of recurrent
herpes labialis (cold sores) in patients above 12 years.
We believe that Valeant is now making efforts to somewhat
offset the adverse impact of
) recent launch of the first generic version of Zovirax
Mylan recently received approval from the US Food and Drug
Administration (FDA) to sell the first generic version of Zovirax
Consequently, Valeant cuts its earnings guidance for 2013 as
Zovirax accounted for 7% of Valeant's total revenue in 2012.
Valeant estimates the launch of Mylan's generic version to
adversely impact its bottom line on a cash basis by 30 to 40
cents in 2013.
Concurrent with the fourth quarter results in Feb 2013,
Valeant reaffirmed its guidance provided in January. Earnings per
share were then projected around $5.45 - $5.75.
Valeant intends to provide an updated guidance in May along
with its first quarter 2013 results.
It remains to be seen if Valeant is able to shield its
top-line growth following the entry of generics.
Valeant currently carries a Zacks Rank #3 (Hold). Right now,
Avanir Pharmaceuticals Ltd.
) looks better positioned with a Zacks Rank #2 (Buy).
ACTAVIS INC (ACT): Free Stock Analysis Report
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VALEANT PHARMA (VRX): Free Stock Analysis
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