Valeant is a sham

You misrepresent my argument - I'm not talking about "CSR" or being a "good company in the community". I'm talking about being a "smart company" and running the business with an eye on long-term viability and that requires treating employees, customers and vendors with respect. How the hell is he going to maintain his current business when he treats his customers like shit? Even worse, the ever increasing debt load will force him to make even deeper cuts to essential personnel on all future acquisitions. Every single acquisition cuts to the bone (by their own admission) and I'm not talking about simply eliminating "duplicate" functions - entire departments are wiped out - on both sides. Anyone still working at a Valeant acquired site will tell you that most departments in nearly every area of the company are not meeting their business or regulatory requirements. This may not matter in a Bicycle Shop but it does matter in an FDA regulated company that makes prescription drug products - and that is a "bottom line" issue. So, you actually support my argument with your rant. Valeant's fiduciary responsibility to its shareholders includes organic growth (talk to any financial analyst), and ignoring the core business by chasing the stock price is full of risk and typically ends badly. So can we please dispense with the one-dimensional "Cash is King" argument and apply a more balanced view to the problem?

 

Speaking of "being a good company in the community"...did Valeant take over "Passion to Heal?"

 

Say what you want about his business decisions, but bringing in family is really low.

 

I am not sure what business school you attended but the words fiduciary responsibility for organic growth is no where in any analyst requirements given each analyst focus is dependant on if they are in a hedge or equity position with the company. Please stop trying to generalize a position on business in general when the single most KPI is profit and cash flow where without both the organization fails to exist - organic growth or not. Here is something for you to think about: a company can have organic growth and still run in a loss position. So when you present organic growth diatribes without adding profits to the mix makes this argument of yours rather moot - please think in terms of profitable organic growth and we will agree that there needs to be a pause in the M&A game to ascertain bottom line sustainability. This is where the uncertainty exists - can the assets support the cost of debt in the short and long run.

Now lets look at things more theoretical, Pearson is using a roll-up strategy to acquire assets using cash that would have been otherwise dumped into expensive R&D. R&D has been proven to be one step short of a crap shoot that has high risk int he face of the intense regulatory equation needed to get to market. His concept of buy everyone else's past R&D success seems to be enticing the shareholders to buy shares demonstrating a clearly positive confidence in his model - this has been driving the share price upwards quite dramatically.

So for all the criticisms we read about VPI's strategy we see there is a balance of opinion for and against his business design. People are treated as resources and if they are deemed deadweight or not needed to move forward with the next strategic decision, they will be sold (packaged) off. Business is not a democracy employees can only vote with their feet and may are doing that.

 

[Pearson is using a roll-up strategy to acquire assets using cash that would have been otherwise dumped into expensive R&D. R&D has been proven to be one step short of a crap shoot that has high risk int he face of the intense regulatory equation needed to get to market. His concept of buy everyone else's past R&D success seems to be enticing the shareholders to buy shares demonstrating a clearly positive confidence in his model - this has been driving the share price upwards quite dramatically.

So for all the criticisms we read about VPI's strategy we see there is a balance of opinion for and against his business design. People are treated as resources and if they are deemed deadweight or not needed to move forward with the next strategic decision, they will be sold (packaged) off. Business is not a democracy employees can only vote with their feet and may are doing that.[/QUOTE]

Thanks for your thoughtful response. I don't disagree about the cost of R&D - I think his approach will ultimately change the way all of pharma operates with respect to R&D. The issue I take with his model is that due to the speed of the typical acquisition, inadequate decisions are being made regarding headcount, leaving the company vulnerable to regulatory risk (wrong people in the wrong positions or inadequate coverage in key functions). There is simply no time to conduct appropriate evaluations to ensure the business will be managed appropriately. As you say, employees vote with their feet and any qualified personnel that are retained 'by chance' don't stay long, further weakening the operation. Again, thanks for the thoughtful response - a refreshing change on this board.

 

Mikey's business decisions affect employees families! Do you think for one minute he cares about any of the families and how their lives have changed! Health insurance comes to mind.

 

[I think his approach will ultimately change the way all of pharma operates with respect to R&D]

If the VPI approach were to be adopted across the pharma world, the industry would crash. Someone has to innovate, or there aren't going to be any cast-offs for the "buy innovation" crowd to scoop up. This is only a valid strategy when just a few companies are operating this way. And the more companies there are doing this, the bigger the bidding wars will be for the few new products on the market, making the approach less and less effective over time. So I don't see that this is a long term strategy, or one that will be adopted by pharma in general.

But past the dollars and cents, and business strategy discussion, let's not lose sight of the fact that these are health care companies we're discussing. Any ethical person in this business understands that patient safety is top priority, therapeutic efficacy is #2. Financials are never higher than #3. Regulatory compliance isn't just a business risk, it's primarily an ethical choice.

 

[But past the dollars and cents, and business strategy discussion, let's not lose sight of the fact that these are health care companies we're discussing. Any ethical person in this business understands that patient safety is top priority, therapeutic efficacy is #2. Financials are never higher than #3. Regulatory compliance isn't just a business risk, it's primarily an ethical choice.]

Unfortunately, McKinsey and company don't agree. We can only hope that Valeant tanks before too many companies are destroyed in Mike's little "experiment" - only then will this sorry chapter in the industry's history be over.

 

Ethical isn't part of Valeant.

 

I think you're living in a dream world. it would be nice if that were the case. Having worked for several companies. Some big and some small. I have never seen patient safety put first (until after a lawsuit penalized them and forced them to). Efficacy is a selling point, but with so many me too drugs, that's a joke. Money is #1. always will be. would be nice to find a place where it isn't, and your 3 criteria are in that order, but I've never seen it.

 

Interesting

 

http://www.sec.gov/Archives/edgar/data/850693/000119312514212107/d732921dex992.htm

The real Valeant !

 

Dude, Allergan's smear campaign was exposed as BS. At the hearing last year, they failed to identify their "mystery" analyst.

 

Dude that's BS & you know it ! After all Allergan won the war & it sucks for you .... I feel your pain as I work for Allergan

 

Allergan knew better but Salix got shit on

 

Allergan is just a name now.