Valeant Pharmaceuticals International will restructure its operations to reduce costs and accelerate its earnings growth, and to focus its research and development resources on select late stage pipeline products. The broad-based program is primarily focused on the company's research and development operations and selling, general and administrative expenses across all divisions.
The company also announced that it expects to report approximately break-even adjusted earnings per share in the first quarter of 2006, excluding the impact of any restructuring charges, as a result of slightly lower than anticipated revenues that are consistent with historical trends, and higher selling and research and development expenses.
The restructuring program includes: Rationalize discovery and pre-clinical development operations; Out-license pradefovir, the company's compound in development for the treatment of hepatitis B, and VRX-840773, its HIV compound; Restructure the clinical and product development organization to focus on completing the development of Viramidine (taribavirin), retigabine and Infergen; Reduce selling expense to a range of 29-31 per cent of product sales in 2006; Reduce general and administrative expenses to a range of 11-13 per cent of product sales in 2006; Reduce commercial regions from four to three; and, Rationalize manufacturing facilities further to assure achievement of the company's cost of goods sold goal of 20-25 per cent by 2008.
Timothy C. Tyson, president and chief executive officer, said, "The steps we are taking are driven by our goal to deliver a significant increase in earnings over the next three years. We continue to expect our revenues to grow at an annual rate of 5 to 10 per cent. We remain committed to the development of Viramidine, retigabine and Infergen, which we will continue to pursue aggressively. As we near the completion of our second pivotal, phase 3 trials for Viramidine, we are evaluating the best path to advance this development program to regulatory approval."