Valeant Pharmaceuticals dethrones Royal Bank atop the TSX after raising outlook
Posted July 23, 2015 4:28 am.
Last Updated July 23, 2015 2:40 pm.
This article is more than 5 years old.
MONTREAL – Valeant Pharmaceuticals International Inc. dethroned the Royal Bank on Thursday as the most valuable company on the Toronto Stock Exchange after it raised its financial outlook for the year.
Valeant (TSX:VRX) says it expects revenue this year to total between US$10.7 billion and $11.1 billion, up from its earlier guidance of between $10.4 billion and $10.6 billion.
Shares in the Quebec drug company closed Thursday on the TSX at a high of C$341.02, up 9.2 per cent, or $28.77.
That gave it a market value of C$116.35 billion, compared with $109 billion for the Royal Bank (TSX:RU).
Valeant’s US$11.1-billion acquisition of Salix after a bidding war is one of the reasons for the revised expectations, Valeant management said in a conference call to discuss the company’s second quarter, which saw it lose US$53 million or 15 cents a share.
“The business is also accelerating and growth continues to be very strong,” said CEO Michael Pearson.
With the U.S. Food and Drug Administration having approved Xifaxan, which is produced by Salix to treat irritable bowel syndrome with diarrhea, Valeant expects revenues at the subsidiary to climb to US$1.2 billion from $1 billion.
Pearson refused to be drawn when asked about rumours Valeant has approached Zoetis, which makes medicine and vaccines for animals.
“We’re not going to comment on future acquisitions,” said Pearson, who has overseen more than 140 takeovers or agreements since he landed the company’s top job in 2008.
He noted that Valeant would continue to target small- and medium-sized firms while not closing the door on bigger deals.
“One can never predict the timing of a larger acquisition,” he said. “So when those happen, those happen. We don’t put them on a timeline.”
Valeant announced plans last week to expand its reach in the Middle East and North Africa with a deal to buy Egyptian pharmaceutical company Amoun for about US$800 million.
It has said emerging markets are expected to account for about 20 per cent of its revenues in 2015, including 10 per cent from eastern Europe, Africa and the Middle East.
The second-quarter loss of US$53 million or 15 cents per share compared with a profit of $125.8 million or 38 cents per share a year ago.
Valeant said its cash earnings per share for the quarter totalled $2.56 per share, up from $1.91 a year ago.
Revenue grew to $2.73 billion from $2.04 billion in the same quarter last year.
