Valeant Creditors Spooked by Possibility of Revenue Squeeze
- Loss of mail-in pharmacy casts doubt on ability to cover debt
- Some analysts are more optimistic about cash flow than others
This article is for subscribers only.
In the course of a three-year, $23 billion borrowing binge that allowed Michael Pearson to turn Valeant Pharmaceuticals International Inc. into a drug-industry juggernaut, he reassured yield-hungry debt investors with this: lend us the money and watch the cash stream in.
Pearson, the chief executive officer, said in a Tuesday conference call that Valeant’s drug-pricing scandal and the severing of ties with mail-order pharmacy Philidor Rx Services will “significantly” disrupt its dermatology and neurology businesses. Together they account for about 24 percent of company revenue, according to KDP Investment Advisors Inc.