Valeant Pharmaceuticals International IncVRX

Morningstar Rating

Stock Research and Analysis

by David Krempa

With new CEO J. Michael Pearson at the helm, Valeant Pharmaceuticals has gone on a transformative acquisition spree. These transactions have significantly expanded the firm, reduced its patent exposure, and realigned its focus on attractive pharmaceutical Read more

Bulls Say

CEO Pearson's experience as head of pharmaceuticals at McKinsey has helped Valeant quickly and efficiently integrate acquisitions.

The firm has minimal patent exposure.

Valeant is well positioned to benefit from the rising incomes and growing demand for health care in Latin America and Central Europe.

Valeant has worldwide rights on the recently FDA-approved epilepsy drug Potiga, which should be a very profitable agreement for the company.

The Medicis acquisition will make Valeant the biggest player in the U.S. prescription dermatology industry. Read more

Bears Say

If any Big Pharma firms chose to compete directly with Valeant, their size and scale would dwarf the latter company's.

Valeant faces pricing pressure from government payers. Poland has recently seen price cuts of 2%-3% per year.

Valeant's aggressive acquisition strategy brings significant financial and operational risks.

Valeant has taken on a significant amount of debt to acquire Medicis, exceeding the 4.0 times debt/EBITDA ratio it has previously used as a soft ceiling. Read more

Management

We award Valeant an exemplary stewardship rating. J. Michael Pearson joined Valeant as CEO in February 2008. Before Valeant, he spent 23 years at McKinsey & Company, where he rose to head of global pharmaceuticals and gained significant experience Read more

Profile

Valeant Pharmaceuticals is a specialty pharmaceutical firm focused on dermatology and neurology in the United States, Canada, and New Zealand. The firm also has a branded Read more