More plant closings for Valeant
Valeant Pharmaceuticals CEO Mike Pearson is at it again, whittling down manufacturing capacity Valeant picked up in some of its many acquisitions.
In a recent conference call with analysts, he said the company had closed down a plant in Brazil late last year and has another one targeted for closing in the first half of this year. That will leave it with one plant in that country where last year it acquired over-the-counter drugmaker Probiotica Laboratorios. At the time of that deal, Valeant ($VRX) separately bought a 165,000-square-foot facility for $28 million that it liked better than the facilities it got from Probiotica.
Pearson also said plants in Canada and Mexico are on the closer list. None of this is surprising. It has been the pattern for the Canadian pharma company, buy a company and then cut costs by closing plants and whacking jobs. This time last year, Valeant said it had cut $320 million by shutting 11 facilities and earmarking 1,100 jobs for deletion in its merger with Biovail.
Then last month, shortly after closing on its $2.6 billion merger with dermatology drugmaker Medicis Pharmaceutical, the inevitable happened. The deal was closed and 200 employees were told they were no longer needed, a move projected to save $225 million a year. In that case, however, manufacturing was spared because, as Pharmafile points out, Medicis relied to a large degree on contract manufacturers.