Valeant shares plunge after it slashes profit forecast

Valeant Pharmaceuticals' stock plunged Tuesday after the Canadian drug maker posted a hefty loss and slashed it profit forecast.

Its share price fell nearly 22 percent in morning trading in New York, before clawing its way back to $24.20 (1430 GMT) -- about 16 percent down from Monday's close.

Hammered by accusations of accounting manipulation and prescription drug price gouging, and under constant threat of default to creditors, the company has struggled over the past year.

Recently amended filings revealed accounting mistakes going back three years. This was followed by the ouster of longtime chief executive Michael Pearson and most of the board.

"The first quarter's results reflect, in part, the impact of significant disruption this organization has faced over the past nine months," said new chief executive Joseph Papa, who took over a month ago.

Valeant posted a loss of US$374 million, compared to a $97.7 million profit in the first quarter of last year. Quarterly revenues were up nine percent to $2.4 billion, but weaker than expected.

Going forward, 2016 annual revenues are expected to be $9.9 billion to $10.1 billion, down $2.5 billion from guidance given only six months ago.

Papa told an investor teleconference that Valeant needs to focus on its core assets in order to turn around its fortunes.

He identified Valeant's lines of eye health and consumer products, treatments for gastrointestinal disorders, and dermotogolgy drugs as most promising.

The company, he said, will possibly look at sales of other assets to generate cash flow and pay down debt.

mbr-amc/pmh