They effectively said growth was misleading last Q. Things are not growing as fast as it appeared last Q. There was nothing in the earnings report that would justify an expansion in valuation. I don't see how any analyst could logically increase their price target.
So these guys have admitted that the price increases are wrong. They claim they will longer do this. In some cases, they will even roll back prices by 30%. Where will the growth come from? How do you value this company?
I remember it clearly. The senator did say exactly that. The senator said the price before they acquired one of the drugs was $200 for 100 pills / 1 month supply. The senator said Valeant raised the price to $22,000. The senator said even with 30% reduction, the price would be $16,000 which is way too excessive? I believe Ackman said something like he would bring it to the board.
That's exactly what I'm wondering. Ackman said things that would suggest a reduction in earnings and future growth. Will analysts latch onto this and reduce estimates and price targets?
So either 1) Valeant follows through and reduces profitability and future growth or 2) this was all smoke and mirrors and the Senate comes after Valeant down the road?
My understanding is that Valeant's growth came from consistently raising drug prices year after year. So it's not just a matter of getting rid of a few drugs. It's about how they will refine the company to be not based on yearly price raises.
Bausch and Lomb is part of the other? It's not growing that fast. They tried to but wasn't able to get a monopoly. Thank goodness. Otherwise, I would be paying thru the roof for contact lenses and solution. Prices have been relatively stable in this area?
I see references to 4/28 Thursday but it's not listed on Valeants website. Did it get delayed due to 10K? Doesn't make sense to have earnings report until 10K is fixed? Also, need to give analysts and investment community advanced notice on when it will be held?
My gut feeling is that Ackman doesn't really intend on following thru with sincere reform. He's really the master politician. Knows what to say and knows what is the minimum to do to get the Senate off his back. It looked really awkward when he said that Valeant was wrong to raise prices and he would look into cutting back prices. This coming from a hedge fund manager who's objective is to maximize profit not to be charitable. He's already down big on his investment in this company.