Valeant Pharmaceuticals International Inc sees close to 50 opportunities for mergers or acquisitions, its chief executive said on Thursday, as it aims to become one of the world's five biggest pharmaceutical companies.
The company, Canada's largest listed drugmaker and maker of antidepressant drug Wellbutrin and over-the-counter remedy Cold-FX, swung to a higher-than-expected fourth-quarter profit driven by the acquisition of contact lens maker Bausch & Lomb Holdings Inc.
Shares rose 2 percent and 1.5 percent in Toronto and New York respectively in morning trading, touching all-time highs before paring gains. The Toronto-listed stock is up 33 percent so far in 2014.
Valeant, which aims to become one of the world's top five pharmaceutical companies by market capitalization by 2016, has grown rapidly through acquisitions amid a consolidation wave in the specialty pharmaceutical sector.
Chief executive officer Michael Pearson said the company is in multiple deal discussions, as it typically is, and has no set plan for how it will triple its market cap to $150 billion.
"In terms of the number of opportunities out there, it's not five, 10 or 15, it's probably closer to 50," Pearson said on a conference call with analysts. Some of the opportunities are with privately held companies, others are based outside the United States and there are also pieces of larger companies that interest Valeant, he said.
"A lot of this is very opportunistic. A lot of it depends on the price."
Pearson said Valeant was not interested in Forest Laboratories Inc, which generic drugmaker Actavis Plc said on February 18 it would buy for about $25 billion in cash and stock.
Valeant is likely this year to pull off an acquisition similar in size to the $8.7 billion Bausch & Lomb purchase, Pearson said, and is also looking for smaller deals in China, Russia, the Middle East, Southeast Asia and Latin America.
Pearson seemed to be keeping all of his options open, said Stifel Nicolaus analyst Annabel Samimy.
"To me, it seems right now he's got a lot of bolt-on opportunities that he's looking at" in preferred consumer-pay areas of opthalmology and aesthetics, or even dental and animal health, she said.
"He's trying to get people to think bigger and beyond what their myopic ideas are about who he can potentially buy."
Merck & Co Inc and Swiss drugmaker Novartis have both signaled in recent months they are considering options for their animal health businesses.
Valeant's net income attributable to the company was $123.8 million, or 36 cents per share, for the fourth quarter ended December 31. The company reported a loss of $89.1 million, or 29 cents per share, a year earlier.
Cash earnings, or profit adjusted for one-time items, were$731.5 million, or $2.15 per share.
Revenue more than doubled to $2.06 billion.
Analysts had expected cash earnings of $2.06 per share on revenue of $2.06 billion, according to Thomson Reuters I/B/E/S.
The company reaffirmed its 2014 guidance of cash earnings per share ranging from $8.25 to $8.75 and revenue of $8.2 billion to $8.6 billion. It expects to raise guidance once its $475 million acquisition of PreCision Dermatology has closed.
(Reporting by Ashutosh Pandey in Bangalore and Rod Nickel in Winnipeg, Manitoba; Editing by Ted Kerr, Kirti Pandey and Meredith Mazzilli)