I think what is important about this WSJ article is 1) that you could not have a better or more experienced man as the new CEO and 2) When comparing VRX to Perrigo's Sales and EDITDA and valuation, it is obvious that VRX should be trading at more than 3X the Market Cap of Perrigo or above $60 per share right now, and it is just a matter of time until VRX is above $60.
At Valeant, Mr. Papa said, he brings 34 years of experience in the pharmaceutical industry, including in R&D and the launch of two billion-dollar-selling drugs, inspired by the successful treatment of his childhood bout with migratory arthritis.
“I’ve got debt to pay off—I know that. I know I’ve got to grow sales. But the real way you have success in the pharmaceutical industry is you make a difference in patients’ lives,” he said.
Valeant was one of Wall Street’s highest-flying stocks. Under CEO Michael Pearson, it expanded sales through aggressive deal making and dramatic price hikes, while relocating to Canada to lower its tax rate and limiting spending on research.
But all of those deals saddled Valeant with more than $30 billion in debt, prompting Wall Street to rethink the virtues of unfettered acquisitions. Meanwhile, Valeant’s price increases have been the subject of congressional hearings and government investigations.
Dublin-based Perrigo is a leading seller of cough and cold remedies that stores like Kroger, Walgreen’s and Wal-Mart sell under their own labels. It also sells generic prescription drugs.
Generic drug prices rose significantly in 2013 and 2014, said Richard Evans, an analyst at SSR Health LLC, and Perrigo upped the list prices of its generics more than many rivals.
The list prices of Perrigo’s drugs rose 52% over the past four years, compared with an average 18% across manufacturers, according to an SSR analysis of generic drugs not in shortage.
Desonide cream cost 85 cents a gram until Perrigo increased the price twice in 2013, lifting the list price to $5.35, according to average wholesale price data from Connecture, a provider of price-comparison software for health care. Desonide treats psoriasis and other skin conditions.
Perrigo raised the list price of lice treatment permethrin in 2011, 2013 and last January. It is now priced at $3.09 a gram, up from 49 cents, according to Connecture.
Perrigo increased list pric