Valeant expects cost savings between $20 million and $30 million this year

By Jennifer Lanning Drey

Eugene, Ore., June 29 - Valeant Pharmaceuticals International expects to achieve cost savings between $20 million and $30 million this year, said Bary Bailey, executive vice president and chief financial officer of Valeant, at the 26th Annual William Blair & Company Growth Stock Conference on Thursday.

The company expects that number to increase to between $50 million and $70 million in 2007 and 2008, said Bailey.

Valeant said the cost savings are the result of its aggressive implementation of a restructuring plan the company announced in April.

As a result of the restructuring, Valeant also expects earnings per share to exceed $0.50 in 2006, $1 in 2007 and $1.90 in 2008, Bailey said.

"The benefits of these actions are a leaner organization and an increase in near-term earnings performance while maintaining long-term sustainable growth opportunities," said Bailey.

The restructuring also shifted Valeant's focus toward a select few late stage pipeline products it believes will deliver the greatest value in the future, he said.

The company is now most focused on commercializing Viramidine for treatment of the hepatitis C virus and Retigabine, which is for partial onset seizures in patients with epilepsy, Bailey said.

However, Bailey also said Valeant's path to achieving regulatory approval for Viramidine is not clear.

The company announced in March that Viser 1, the first of two pivotal trials evaluating Viramidine, did not meet its non-inferiority efficacy endpoint.

Valeant had hoped to demonstrate that patients treated with Viramidine had a higher sustained viral response rate than patients treated with ribavirin.

The study did show a clear dose response based on weight, Bailey said.

Valeant said Thursday that the last patient came out of its second pivotal Viser 2 study earlier this month, and the company is now consulting with outside experts in preparation for a meeting with the Food and Drug Administration.

The company is planning to meet with the FDA soon to finalize an analysis plan for Viser 2 prior to unblinding the database, Bailey said.

Valeant expects to report results from Viser 2 in the second half of the year, he said.

Enrolling phase 3 epilepsy trial

The company is also in the process of enrolling epilepsy patients in two phase 3 clinical trials for Retigabine.

The first trial will enroll 280 patients at 45 sites, mainly in the United States, while the second will involve 500 patients at sites around the world, Bailey said.

"The enrollment process in both trials is proceeding well, but enrollment in epilepsy studies can take some time," he said.

The company expects to be able to submit data on Retigabine to the FDA in late 2007 and launch the drug in late 2008, Bailey said.

Valeant is a specialty pharmaceutical company based in Costa Mesa, Calif., that discovers, develops, manufactures and markets a broad range of pharmaceutical products.

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