Valeant's new CEO holds first annual meeting since taking over drug company

LAVAL, Que. – Valeant’s new chairman and CEO will be sharing his turnaround plan directly with shareholders today at his first annual meeting since assuming leadership of the embattled drug company in late April.

Joseph Papa says he has developed a stabilization plan that the Quebec-based company will pursue over the next three to six months before turning his attention to reviving Valeant’s long-term fortunes.

And, according to Papa, cutting the company’s US$30 billion in debt will be job one.

Papa, a veteran pharmaceutical executive, says he’s looking to sell non-core assets, but plans to keep Bausch & Lomb and Salix, as well as its dermatology, gastrointestinal and consumer products operations.

One of the first items on the sale block is expected to be Egypt-based drugmaker Amoun Pharmaceuticals, purchased last fall for US$850 million.

Its sales have dropped by a third and its top drug slipped off Valeant’s 30 best-sellers list in the first quarter.

Vicki Bryan, an analyst with corporate bond research company Gimme Credit, doubts Valeant will quickly find a buyer and believes the company may struggle to meet its reduced guidance for 2016 and amended debt covenants.

Papa recently tried to reassure investors that the company was on the mend following a year of “major distractions,” including investigations in the U.S. over drug pricing practices, a board of directors shuffle, misstated earnings and concerns about its debt.

In addition to presenting his outlook, Papa will head a new slate of directors standing for election.

Among the seven of 14 board members not seeking re-election are former CEO Michael Pearson and former chief financial officer Howard Schiller, as well as five independent directors.

The names of three new independent nominees are being presented as the board is being reduced to 11 members.

Once Canada’s most valuable company by stock market value, Valeant’s (TSX:VRX) stock has plunged by nearly 90 per cent amid the various controversies.

On Friday, Papa bought 202,000 shares for US$24.48 apiece, increasing his stake in the company to 2.44 million shares, worth about US$58 million. The share price fell 36 cents or 1.49 per cent to US$23.78 on Monday.