Valeant CEO vows firm will recover

Company’s stock plunged 90% after price-fixing probe and other controversies

LAVAL, QUE.— Valeant’s new chairman and CEO hopes the battered drug manufacturer will one day be ranked among Canada’s most valuable companies, as it was before a series of crises decimated the value of its stock.

“I believe that the point of view of being one of the largest companies in Canada is an admirable goal I would absolutely like to do,” Joseph Papa told the media Tuesday after speaking to Valeant shareholders at their annual meeting.

“I’m a sports fan and competitive, so trying to get back to a size to where we were before — earnings per share — would be important for me.”

Once Canada’s most valuable company by stock market value, Valeant’s stock has plunged early 90 per cent amid various controversies including investigations in the U.S. over drug-pricing practices, a board of directors shuffle, misstated earnings and concerns about its debt.

Papa, who joined the firm six weeks ago, said restoring the company’s value will be the result of doing a better job providing patients with the medications they want.

But when a shareholder pressed him for an explanation of what went wrong, Papa said he’s focused on the future, including up to six months of stabilization that will be followed by efforts to revive Valeant’s long-term fortunes.

Long-time Montreal investor Philip Harrison said he’s hopeful but disappointed with Papa’s response.

“What I’m really surprised about is that there weren’t more substantial questions from people much more important and more heavily invested than me,” he said in an interview.

With $1.3 billion (U.S.) in cash and projected cash flows, Papa said the company will adhere to its debt covenants for 2016 and repay more than $1.7 billion of debt this year.

He said a priority is cutting the company’s $30-billion debt.

Additional money will be directed to reducing that overhang if the company manages to sell non-core assets, which excludes Bausch & Lomb and Salix, as well as its dermatology, gastrointestinal and consumer products operations.

Papa said he has already been approached by potential buyers.

Vicki Bryan, an analyst with corporate bond research company Gimme Credit, said she believes the company may struggle to meet its reduced guidance for 2016 and amended debt covenants.