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Valeant Pharmaceuticals International Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 3, 2010 04:18PM
Valeant Pharmaceuticals International (VRX) filed Quarterly Report for the period ended 2010-03-31. Valeant Pharmaceuticals International has a market cap of $3.52 billion; its shares were traded at around $45 with a P/E ratio of 20.27 and P/S ratio of 4.24.VRX is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates, RS Investment Management, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
During the three months ended March 31, 2010 and 2009, the combined research and development expenses and pre-commercialization expenses incurred under the Collaboration Agreement by us and GSK were $11.3 million and $13.4 million, respectively. Total combined expenses by us and GSK for the Collaboration Agreement through March 31, 2010 were $89.6 million. For further information regarding the Collaboration Agreement see Note 4 of notes to condensed consolidated financial statements included elsewhere in this Quarterly Report.
Product Sales Revenues: In the Specialty pharmaceuticals segment, revenues from product sales for the three months ended March 31, 2010 were $120.7 million, compared to $86.3 million for the corresponding period in 2009, representing an increase of $34.4 million (40%). The increase in product sales in the three months ended March 31, 2010 was driven primarily by net growth of $20.2 million in existing products, including Acanya which was launched in March 2009, as well as from sales of products acquired in late 2009 as part of the acquisitions of Private Formula International Holdings Pty Limited and Laboratoire Dr. Renaud, which contributed $7.3 million in the three months ended March 31, 2010. In the three months ended March 31, 2010, the appreciation of the Canadian Dollar and Australian Dollar relative to the U.S. Dollar resulted in additional increases of $5.3 million.
In the Branded generics Europe segment, revenues for the three months ended March 31, 2010 were $41.7 million, compared to $35.3 million for the corresponding period in 2009, representing an increase of $6.4 million (18%). The appreciation of foreign currencies, particularly the Polish Zloty, relative to the U.S. Dollar resulted in increases of $6.5 million in product sales revenue in the three months ended March 31, 2010, in addition to revenues of $2.7 million in the three months ended March 31, 2010 from the April 2009 acquisition of EMO-FARM sp. z o.o. These increases were partly offset by decreases in sales volume of existing products and decreased revenue from distribution contracts.
In the Branded generics Latin America segment, revenues for the three months ended March 31, 2010 were $42.1 million, compared to $31.2 million for the corresponding period in 2009, representing an increase of $10.9 million (35%). Product sales revenue increased $5.0 million due to the appreciation of foreign currencies, particularly the Mexican Peso, relative to the U.S. Dollar in the three months ended March 31, 2010. Revenues attributable to the third quarter 2009 acquisition of Tecnofarma S.A. de C.V. (Tecnofarma) contributed an additional $4.7 million.
We receive royalties from patent protected formulations developed by Dow and licensed to third parties. These royalties were $3.4 million and $1.9 million for the three months ended March 31, 2010 and 2009, respectively. Beginning in the third quarter of 2009, we receive profit sharing payments equal to a majority portion of the net profits on the sale of 1% clindamycin and 5% benzoyl peroxide gel by Mylan, which totaled $9.3 million in the three months ended March 31, 2010. In the three months ended March 31, 2010, we received $0.7 million in initial fees pursuant to licensing agreements for various products.
Alliance Revenue (Ribavirin Royalties only): Ribavirin royalty revenue was $5.0 million and $13.2 million for the three months ended March 31, 2010 and 2009, respectively, representing a decrease of $8.2 million (62%). We expect ribavirin royalties to continue to decline in 2010 as royalty payments from Merck will continue for European sales only until the ten-year anniversary of the launch of the product, which varied by European country and started in May 1999.
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