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June 25, 2010

Pharmaceuticals: Biovail To Acquire Valeant In A $3.3 Billion Deal

Rick Mullin

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Canadian specialty pharmaceutical firm Biovail will buy Valeant Pharmaceuticals of Aliso Viejo, Calif., in a complex stock deal valued at about $3.3 billion.

The transaction will create a company, to be called Valeant Pharmaceuticals, with combined annual revenues of about $1.75 billion. The firm will specialize in central nervous system therapies, dermatology treatments, and generic drugs, with a focus on Canada and emerging markets.

Current Valeant CEO J. Michael Pearson will head the combined company, which will be based in Mississauga, Ontario.

The deal significantly expands Biovail’s drug portfolio beyond its current concentration on extended-release technology and central nervous system therapies. The Canadian firm’s products include Wellbutrin XL, an extended-release antidepressant acquired from GlaxoSmithKline, and Ultram ER, an extended-release pain therapy. Valeant markets a number of products in dermatology and neurology and manufactures branded generics.

In recent years, Biovail has operated under the shadow of accounting scandals, including allegations that the firm manipulated financial results and paid doctors to prescribe its blood pressure drug Cardizem LA. Although Biovail has settled claims with U.S. and Canadian authorities, Neil Maruoka, an analyst with Toronto-based investment banking firm Canaccord Genuity, says the decision to take the name Valeant may have been made to distance the company from the “stain” on the Biovail name.

The new Valeant expects to achieve at least $175 million in cost savings in the first year. According to Pearson, the firm plans to reduce its combined workforce of 4,400 by 15–20%.

Chemical & Engineering News
ISSN 0009-2347
Copyright © 2011 American Chemical Society
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