Valeant Pharmaceuticals International Inc (VRX.TO) (VRX.N), Canada's biggest publicly traded drugmaker, raised its full-year adjusted earnings forecast for the second time and reported a quarterly profit, boosted by sales from its skin-care acquisitions.
The company has aggressively pursued acquisitions since its 2010 takeover by Biovail Corp, which assumed the Valeant name. Valeant bought contact lens maker Bausch & Lomb Holdings Inc for $8.7 billion in the second quarter.
Valeant has favored businesses where patients often pay out-of-pocket, such as dermatology and opthalmology, cutting its exposure to cost-sensitive insurers.
The company said it now expects a 2013 adjusted profit, which it calls cash earnings, of $6.00-$6.20 per share, up from its prior estimate of $5.55-$5.85. Analysts were expecting, on average, adjusted profit of $5.93, factoring in the accretive acquisition of Bausch & Lomb, according to Thomson Reuters I/B/E/S.
Valeant forecast 2013 total revenue of $5.8 billion to $6.2 billion.
Valeant's stock rose about 1 percent in early trading to C$100.70 in Toronto and $96.63 in New York, and has almost doubled in value in the last year.
Even as it digests Bausch, Valeant will be active for the rest of 2013 with smaller acquisitions that fit into its existing divisions - the company's "bread and butter" - said Chief Executive Michael Pearson. Valeant, which has a market cap of about $31.8 billion, is also holding discussions about a possible merger of equals, even though completing such a deal "can't be predicted," he said.
The company's growth strategy to become one of the world's largest health care companies will not change, Pearson said.
"We think we can be successful by not doing what large pharma companies are doing," he said. That means targeting specialty segments of the sector - segments he would not identify - in a preference for cash-pay products, and holding spending in check on research and development, Pearson said.
Valeant is well on its way to exceeding its target of wringing $800 million in synergies from the Bausch deal, he said.
Valeant reported net income of $10.9 million, or 3 cents per share, for the quarter ended June, compared with a loss of $21.6 million, or 7 cents per share, a year earlier. Cash earnings for the quarter amounted to $1.34 per share.
Total revenue rose nearly 34 percent to $1.1 billion in the second quarter, boosted by contributions from skin-care businesses such as Obagi Medical, which Valeant bought in March, and Medicis Pharma, bought last September.
Revenue from Valeant's developed markets unit, comprising businesses in the United States, Canada and Australia, rose 37 percent to $791.8 million.
(Reporting by Krithika Krishnamurthy in Bangalore and Rod Nickel in Winnipeg; Editing by Joyjeet Das and Jim Marshall)