- Papa says finances must be centralized, hired new controller
- New CEO promises more transparency after months of turmoil
Valeant Pharmaceuticals International Inc.’s new Chief Executive Officer, Joe Papa, said that while there’s more work to do in dermatology, the company has a “very good pipeline” of new drugs that hasn’t been fully appreciated.
Papa, speaking at the UBS Global Healthcare Conference in New York, said he has spent the first few weeks of his tenure getting comfortable with Valeant’s new distribution agreement with Walgreens Boots Alliance Inc. The deal was set up by his predecessor, Mike Pearson, who left after months of turmoil over Valeant’s accounting, price increases and a now-severed relationship with a controversial mail-order pharmacy.
Valeant needs to work its way through “speed bumps” with Walgreens in dermatology, Papa said.
Papa also spent his time getting acquainted with sales staff and understanding the company’s debt holders, a critical part of his job given that Valeant has more than $30 billion of bonds and loans. Valeant doesn’t need to sell any of its businesses, but there are opportunities to divest non-core assets, the CEO said.
The shares declined 3 percent to $26.64 at 10:33 a.m. in New York. The stock has lost about 90 percent of its value since its August 2015 peak.
While the decentralized management model can work for some of Valeant’s business functions, the finance department has to be centralized, Papa said. Valeant restated past earnings earlier this year, because about $58 million in revenue recognized in 2014 should have been booked in subsequent periods.
“We’re going to bring some additional talent, we just recently hired a new controller to join our company,” Papa said. “There will be some centralization in some of the areas like finance, because it has to happen.”
He also said Valeant could do a better job being more transparent, and that he plans to give investors more details on how individual business units and product categories are performing.
In a breakout session with investors at the conference, Papa said Valeant has strong patent protection on its intestinal drug Xifaxan, and that the company needs to relaunch the female libido pill Addyi, which has had a slow start since being brought to the market late last year.