Valeant Pharmaceuticals International Inc.
) recently provided its guidance for 2013. Valeant expects to
generate additional revenue of about $1 billion in 2012, despite
a $200 million decline due to the genericization of Cesamet in
Canada, Cardizem CD, Ultram ER and Wellbutrin XL in the US.
Valeant expects to report revenue between $3.3 billion and
$3.5 billion in 2012, up 40% year over year.
Same store sales are expected to experience organic growth of
approximately 8% and pro-forma (including acquisitions) growth of
Management is quite upbeat about its future prospects having
launched quite a few patented and over the counter (OTC) products
in 2012 such as Regederm in Brazil, Potiga in the US, Sublinox
and Lodalis in Canada and many OTC line extensions such as the
CeraVe family of products.
Meanwhile, along with organic growth, the company is pursuing
acquisitions as well to boost overall growth in
In December 2012, Valeant acquired Medicis Pharmaceutical
Corporation for $44.00 per share in cash. Medicis' portfolio
includes prescription brands such as Solodyn, Restylane, Perlane,
Ziana, Dysport and Zyclara.
Medicis' launch of Zyclara Pump in September in the US will
further fuel top line growth in 2013. In addition, Valeant
received regulatory approval for Dysport in Canada at the end of
December and a lip indication for Restylane plus lidocaine in the
The company seems to progressing well with the Medicis
integration with sales force product training to commence in late
January. Valeant plans to have approximately 350 sales reps in
the US targeting prescription dermatology, aesthetics and
Medicis' pipeline is promising as well with Dysport scheduled
to launch in Canada in the first quarter of 2013 and a regulatory
application having been filed for luliconazole for athletes'
foot. A regulatory application for MetroGel for vaginal
infections will be filed in the first half of 2013.
For 2013, Valeant expects to generate revenue between $4.4
billion and $4.8 billion, up 30% from 2012, excluding potential
acquisitions other than the Natur Produkt acquisition, scheduled
to close in January. EPS is projected at around $5.45 - $5.75.
Valeant expects generics to hit revenue by about $100
Solodyn revenue is expected in the range of $250 million to
$275 million in 2013. Valeant plans to divest several assets
generating approximately $40 million to $50 million in annual
Valeant expects to obtain synergies over $275 million in 2013.
However, the company does not expect these synergies to
materialize before late 2013 as most of it relates to the
restructuring of certain legal matters and the winding down of a
number of R&D programs.
Valeant has been quite aggressive on the acquisition front in
the last two years contributing to its solid growth. We are
impressed by the company's broad product portfolio, strategic
acquisitions and synergies obtained from the same. We believe
that the lower tax rate and buyback of stock by the company will
enable Valeant to achieve its goal in 2013.
Hence, we currently have an Outperform recommendation on
Valeant Pharmaceuticals which carries a Zacks #1 Rank (Strong
Another stock which currently looks attractive in the
pharmaceutical sector is
Ironwood Pharmaceuticals, Inc.
) which carries a Zacks #1 Rank.
IRONWOOD PHARMA (IRWD): Free Stock Analysis
VALEANT PHARMA (VRX): Free Stock Analysis
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