Valeant slips as psoriasis treatment denied

Shares of Valeant Pharmaceuticals International Inc. slid more than 12 per cent after its plaque psoriasis treatment did not get approval from U.S. health regulators, a setback for the company which had high hopes for the lotion.

A possible delay in approval of the treatment could be a blow to the company, as the treatment is one of the seven products, dubbed as the “Significant Seven,” highlighted in Valeant’s pipeline projected to raise over US$1 billion over the next five years.

“We wonder if Valeant will need to update this expectation for the ‘Significant Seven’ peak sales following the setback to Duobrii,” Wells Fargo analyst David Maris said in a note.

The company’s Toronto-listed shares closed 12.35-per-cent lower to $31.09 on Monday.

The U.S. Food and Drug Administration’s letter to the company did not cite any deficiencies related to clinical safety or efficacy of the treatment, Duobrii, but highlighted questions regarding the company’s pharmacokinetic data, Valeant said.

Pharmacokinetic data shows how the body reacts to a treatment, including the duration and intensity of the drug’s effects.

Valeant did not elaborate further on the data that the FDA had questioned. Additional data, if required by the FDA, may take as much as six or more months to be generated, Maris said in a note.

WE SUSPECT THAT DUOBRII IS NO LONGER A 2018 LAUNCH.

“We suspect that Duobrii is no longer a 2018 launch, as Valeant had previously guided, and may not even be a 2019 event,” Maris added.

Valeant chief executive Joseph Papa has worked for the past two years to regain investor confidence following a flurry of investigations into Valeant’s accounting and pricing practices and has been building on the company’s product portfolio.

Valeant in May said it would change its name to Bausch Health Cos. Inc., as it seeks to distance itself from a series of scandals and accounting issues under the its previous management.

Valeant has requested a meeting with the U.S. health agency as it worked toward Duobrii’s approval, Papa said on Monday.

Duobrii sales could reach up to US$175 million in 2022, according to Mizuho analyst Irina Koffler, who said the estimate was still achievable, provided Valeant could rapidly address the FDA’S questions.

About 7.5 million people in the United States suffer from psoriasis, according to the American Academy of Dermatology.