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Valeant faces PhRMA attack, will discuss fraud allegation
PhRMA posted an article Thursday attacking Valeant Pharmaceuticals International Inc. , saying the company’s “strategy is more reflective of a hedge fund than an innovative biopharmaceutical company.” The article, by PhRMA SVP of Communications Robert Zirkelbach, contrasted Valeant’s business model with those of the “vast majority of innovative biopharmaceutical companies that invest a significant share of their revenues into developing new treatments and cures for patients.”
Zirkelbach wrote that while PhRMA member companies invest an average of 20% of total revenue on R&D, Valeant invests less than 3% on average.
PhRMA compared Valeant to Turing Pharmaceuticals AG (New York, N.Y.), which drew fire recently for raising the price of a generic drug fiftyfold. The article concluded: “Unlike Valeant and Turing, innovative biopharmaceutical companies have R&D at the core — and the numbers prove it.”
In a statement to BioCentury, Valeant responded that it believes innovation should be judged based on how many products a company brings to market, rather than how much it spends. The company said it has spent money to acquire innovative companies that develop valuable pharmaceuticals, and therefore allocates capital to development-stage products "in a more nimble fashion."
"We recognize that this is not the R&D model that has governed the pharmaceutical industry in past decades," the company said. "But it is a model that allows us to bring new products to market (Valeant last year launched 20 products in the United States), while also supporting R&D by similar companies that benefit from our investments."
Also on Thursday, Valeant said it would hold a conference call Monday to clarify its relationships with specialty pharmacies and its accounting practices. Valeant said it would "address and refute recent allegations" on the call.
Research firm Citron Research, whose principals hold a short position in Valeant, published a report Wednesday that alleged Valeant's relationship with two specialty pharmacies was part of a "fraud to create invoices to deceive auditors and book revenue." Valeant issued a statement disputing the allegations Wednesday (see BioCentury Extra, Oct. 21).
The company also is under a U.S. federal investigation concerning its drug pricing and distribution practices (see BioCentury Extra, Oct. 19).
Valeant slipped $8.74 to $109.87 in New York and C$10.16 to C$144.05 in Toronto on Thursday. The company has lost 25% of its value since its shares closed at $146.74 on Tuesday. It has lost 58% since it reached a 52-week high of $263.81 in New York on Aug. 6. Back to top
PhRMA posted an article Thursday attacking Valeant Pharmaceuticals International Inc. , saying the company’s “strategy is more reflective of a hedge fund than an innovative biopharmaceutical company.” The article, by PhRMA SVP of Communications Robert Zirkelbach, contrasted Valeant’s business model with those of the “vast majority of innovative biopharmaceutical companies that invest a significant share of their revenues into developing new treatments and cures for patients.”
Zirkelbach wrote that while PhRMA member companies invest an average of 20% of total revenue on R&D, Valeant invests less than 3% on average.
PhRMA compared Valeant to Turing Pharmaceuticals AG (New York, N.Y.), which drew fire recently for raising the price of a generic drug fiftyfold. The article concluded: “Unlike Valeant and Turing, innovative biopharmaceutical companies have R&D at the core — and the numbers prove it.”
In a statement to BioCentury, Valeant responded that it believes innovation should be judged based on how many products a company brings to market, rather than how much it spends. The company said it has spent money to acquire innovative companies that develop valuable pharmaceuticals, and therefore allocates capital to development-stage products "in a more nimble fashion."
"We recognize that this is not the R&D model that has governed the pharmaceutical industry in past decades," the company said. "But it is a model that allows us to bring new products to market (Valeant last year launched 20 products in the United States), while also supporting R&D by similar companies that benefit from our investments."
Also on Thursday, Valeant said it would hold a conference call Monday to clarify its relationships with specialty pharmacies and its accounting practices. Valeant said it would "address and refute recent allegations" on the call.
Research firm Citron Research, whose principals hold a short position in Valeant, published a report Wednesday that alleged Valeant's relationship with two specialty pharmacies was part of a "fraud to create invoices to deceive auditors and book revenue." Valeant issued a statement disputing the allegations Wednesday (see BioCentury Extra, Oct. 21).
The company also is under a U.S. federal investigation concerning its drug pricing and distribution practices (see BioCentury Extra, Oct. 19).
Valeant slipped $8.74 to $109.87 in New York and C$10.16 to C$144.05 in Toronto on Thursday. The company has lost 25% of its value since its shares closed at $146.74 on Tuesday. It has lost 58% since it reached a 52-week high of $263.81 in New York on Aug. 6. Back to top