VRX - Valeant Pharmaceuticals International Inc.

[giofranchi]

yep they are not going to be able to answer all the questions tomorrow. in fact they may raise some new ones.

 

wellmont,

if they won’t be able to answer all the questions today, I want another conference call tomorrow, and if other questions are raised, I want yet another conference call the day after tomorrow, and the day after that, and so forth.

There is nothing else Pearson should do or be thinking about except defending his shareholders’ interests. And to do that, he needs to devote every minute of his time to responding to ALL THE QUESTIONS. It doesn’t matter how much time is needed! He should do nothing else except setting the record straight.

You have tweeted a few hours ago the following: “after 325 pages of vrx discussion on a forum I still don’t know if it’s a fraud or not”… And that’s precisely why Pearson should devote all his time and energy to this topic alone, until there is no doubt anymore! No one knows VRX like Pearson does: if accusations are truly unfounded, he must be able to prove they are false.

Any other behavior is not acceptable imo, and I will not accept it.

 

Cheers,

 

Gio

 

[giofranchi]

Gio--care to share with us a rough breakdown of your portfolio and the qualities you look for in the stocks you buy.  Your comments seem very astute, and we'll crafted.

 

Sure! No problem. I'll send you a PM.

 

Cheers,

 

Gio

[Picasso]

Hmm, a few more thoughts before the call.

 

If you read the actual definition for a specialty pharmacy you get something like this:

 

As part of this patient-focused model, specialty pharmacies offer services above and beyond those typically offered at the retail level as part of their standard of care. These may include the following:

 

24-hour access to pharmacists

Adherence management

Benefits investigation

Communication and follow-up with the physician

Dispensing of specialty pharmaceuticals and shipping coordination

Enrollment in patient assistance programs

Financial assistance

Patient education and medication adverse effect counseling

Patient monitoring for safety and efficacy

Payer and/or manufacturer reporting

Proactive patient outreach for prescription refill and renewal

Prior authorization assistance

 

And it's for diseases like this:

 

A medication considered a specialty pharmaceutical may have some or all of the following key characteristics:

 

Treatment of complex, chronic, and/or rare conditions

High cost, often exceeding $10,000, with some costing more than $100,000 annually

Availability through exclusive, restricted, or limited distribution

Special storage, handling, and/or administration requirements

Ongoing monitoring for safety and/or efficacy

Risk Evaluation Mitigation Strategy

 

The drugs that Philidor ships isn't anything that requires special handling, or ongoing monitoring, etc.  I would say that it really only fits the definition in that they 1) dispense drugs that treat chronic conditions, 2) enroll in patient assistance, and 3) follow up for refills.  Beyond that this isn't really your typical specialty pharmacy.  It's actually just a mail-order pharmacy which also provides patient assistance. 

 

I've tried searching long and hard but have not found any other pharmaceutical which owns or controls their own mail-order pharmacy.  If I had to guess how this all came about, I bet it was something like this:

 

Valeant buys Medicis

Existing distribution of Solodyn leads to not so great sales

Davenport (who is a consultant to Valeant) tells Pearson we should just expand our own patient assistance and mail-order pharmacy using the model Medicis has created

Pearson agrees to fund Philidor and the idea starts to show fruit

Pearson then purchases an option to buy Philidor (for reasons I'm not sure why)

Philidor takes advantage of the ability to offer branded products at minimal out-of-pocket expense

Unable to get a license in California, they partner up with Reitz @ R&O under the Isolani name for $350k and 10% interest in R&O

Philidor likely used the Isolani name so as to hide how much potential volume could flow through R&O

Due to massive volumes, employees of Philidor completed the paperwork needed to ship the products

Reitz realizes he sold a part of the pharmacy well below market value as he understands who Philidor is

Reitz becomes upset and decides to withhold payments which belong to Philidor under the pretense of fraud

Reitz hires the only lawyer dumb enough to argue that the $20 million dollars of net product sold belongs to Reitz and not Philidor/Valeant

 

You just have to stand back and admire how great of an idea this was until the owner of Philidor decided to get greedy and not disclose the volumes of Philidor and bought R&O for pennies.  But Philidor doesn't really need R&O.  There are many other pharmacies out there and so Reitz never really had the upper hand except to try and extort money out of Philidor.  And there was always the chance that Philidor appealed and won their California license in December.  So I'm confused as to why Philidor has an option to acquire R&O.  But now you can bet that R&O is going to lose Philidor volumes so his pharmacy isn't worth a heck of a lot anymore.  So his only chance to cash out now is to sue Philidor and try and retain some of those payments.  What a classy guy.

 

As a side note, there was an FTC study that was done a long time ago to look into PBM ownership of mail-order pharmacies.  https://www.ftc.gov/sites/default/files/documents/reports/pharmacy-benefit-managers-ownership-mail-order-pharmacies-federal-trade-commission-report/050906pharmbenefitrpt_0.pdf  Not the same as what we're dealing with here, but they were worried that the conflict of interest would cause extra cost burdens on customers and federal insurance programs, etc.  They found that to not be the case at all:

 

For large PBMs, average total prices at owned mail-order pharmacies typically were

lower than at mail-order pharmacies not owned by the large PBMs.

The data showed that mail prescriptions are typically three times as large as retail prescriptions

(e.g., 30 days at retail and 90 days at mail).13 Moreover, the mix of drugs dispensed varies

substantially across dispensing channels – mail-order pharmacies dispense a higher proportion of

maintenance drugs for chronic conditions.

 

Anyway you'll notice they found that the mail-order stuff was done for reasons like chronic treatment (required refills).  And despite what appears to be a conflict of interest, it didn't show up in the pricing.  Is the conflict of interest similar between a pharma and it's own pharmacy?  I mean that's kind of debatable.  Doctors don't prescribe the generic version of something so it's not like Philidor is going to ship out generics when someone asks for the branded product.  I bet it's some funny loophole like Philidor has to ship out the generic if the patient asks for it, but who would ask for the generic?

 

If you look at the price per script, it's not up a lot from a year ago.  Insurance has agreed to cover those prescriptions so again I fail to see what is the big deal there.  Valeant has created a model that allows for better and cheaper distribution for the drugs doctors are prescribing for their patients.  They also give out a lot of product for free in the process.  The downside is the commercial insurance which ends up paying on the higher end of what they agreed to pay in their coverage universe.  Since Valeant is probably the only one doing this, it's got to be a very, very small percent of industry sales.

 

So is Congress going to come out and stop Valeant from giving out lots of assistance in the form of free zit and fungal creams?  So Valeant shipping a zit cream to California through a subsidiary of a subsidiary is going to bring down a (previously) $70 billion company?  Is that really what this bear thesis has come down to?  That and a scorned business partner who doesn't want to give back $20 million of money that isn't his?

 

Jesus those are risks to the long thesis that I would never have seen coming.

 

 

[giofranchi]

http://www.prnewswire.com/news-releases/valeant-pharmaceuticals-confirms-appropriateness-of-accounting-appoints-ad-hoc-board-committee-to-review-philidor-300165850.html

 

As we have said previously, our accounting with respect to the Company's Philidor arrangements is fully compliant with the law," J. Michael Pearson, Chairman of the Board and Chief Executive Officer of Valeant said. "However, other issues have been raised publicly about Philidor's business practices, and it is appropriate that they be fully reviewed. This decision to create an ad hoc committee of the board, which I fully support, will help free management to focus on continuing to serve doctors and patients and run our business.

 

I don't like it... "will help free management to focus on continuing to serve doctors and patients and run our business?... Really?! In such a climate of uncertanty for shareholders?? ???

 

Cheers,

 

Gio

 

 

[KCLarkin]

Gio, if you have read all the facts, there is nothing to add. Picasso sums up the situation nicely. Philidor is a legal competitive advantage. There might be small issues with the California sub but nothing out of the order for such a large pharma company.

 

The shorts turned a minor issue into a major issue by shouting Enron. They have manipulated you. I listened to the earnings call last night. Everything Pearson said on that call has since been confirmed by the WSJ and Picasso and the more rational shorts.

 

 

[Liberty]

http://ir.valeant.com/files/doc_presentations/2015/10-26-15-Investor-presentation-Final4.pdf

 

Call in 10 minutes.

[Guest Grey512]

The funny thing is, if this goes down the way I think it will, it will be painfully obvious to people in hindsight. The signs were all there.

 

CEO comp structure motivating risky behavior - check.

 

Excessively complex industry where companies AT BEST legally yet immorally take advantage of complexity to generate abnormal profits, and AT WORST engage in fraud - check. (The US healthcare / pharma reimbursement system is just a tragic joke)

 

Overcrowded trade - I mean, who was the marginal buyer here? Check. Everyone "knew" that platforms and roll-ups are a perfect model for value creation.

 

Huge leverage - check.

 

Huge multiple of free cash flow - check. Yes, still. Still not cheap.

 

Dependence on open and steadily-functioning capital markets to continue doing deals - check.

 

 

This is still a short. This is no Transdigm. This is no Berkshire. Whomever is long VRX at this point should go out and get their head examined.

 

But Ackman bought more, you will say. Surely the smart money is staying long. Time will tell who was right. I posit that Ackman's move was one driven by emotion, denial. If this goes the way I think it will, Ackman's reputation will take a massive beating. Not just Ackman - Sequoia, Brave Warrior, etc. It will be like there are no more geniuses among the modern value investor crowd.

 

That was the case when it was trading for $250+. Are you saying a company at $40 billion doing $4 billion of free cash flow is now too expensive?

 

Current LTM pro-forma FCF is around US$3b, traded EV is around US$70b. Analyst consensus NTM FCF is around $5.5b. I question how anyone can get fully comfortable with the NTM FCF numbers given the business uncertainty and standard of disclosures in the past.

[giofranchi]

Gio, if you have read all the facts, there is nothing to add. Picasso sums up the situation nicely. Philidor is a legal competitive advantage. There might be small issues with the California sub but nothing out of the order for such a large pharma company.

 

The shorts turned a minor issue into a major issue by shouting Enron. They have manipulated you. I listed to the earnings call last night. Everything Pearson said on that call has since been confirmed by the WSJ and Picasso and the more rational shorts.

 

Maybe… But would you define this environment “business as usual”?

All I am saying is I would like to see Pearson deeply concerned and involved in proving all the accusations unfounded… Then he could go on with his M&A strategy! Am I asking too much? When someone call you a liar, shouldn’t it be your first priority to reply and convincingly prove you are not a liar?

 

Cheers,

 

Gio

 

[original mungerville]

http://www.prnewswire.com/news-releases/valeant-pharmaceuticals-confirms-appropriateness-of-accounting-appoints-ad-hoc-board-committee-to-review-philidor-300165850.html

 

As we have said previously, our accounting with respect to the Company's Philidor arrangements is fully compliant with the law," J. Michael Pearson, Chairman of the Board and Chief Executive Officer of Valeant said. "However, other issues have been raised publicly about Philidor's business practices, and it is appropriate that they be fully reviewed. This decision to create an ad hoc committee of the board, which I fully support, will help free management to focus on continuing to serve doctors and patients and run our business.

 

I don't like it... "will help free management to focus on continuing to serve doctors and patients and run our business?... Really?! In such a climate of uncertanty for shareholders?? ???

 

Cheers,

 

Gio

 

This is meant to be a more independent committee (with a group of highly reputable people) rather than have Pearson lead the charge on these outstanding issues.

[giofranchi]

This is meant to be a more independent committee (with a group of highly reputable people) rather than have Pearson lead the charge on these outstanding issues.

 

I agree. And I think that might be a good move. But I still would like to see Pearson deeply involved with this. He is the person we all are looking at to find a way to navigate these troubling waters. I want to see him facing this situation with the same relentless strength he has shown building his company.

 

Cheers,

 

Gio

 

[jay21]

I have been following this from about 10,000ft. Can I try to distill the facts:

 

1) Philidor is an un-owned distributor of VRX products

2) Philidor is not licensed in California and uses R&O to sell into California

3) R&O refused to pay VRX and VRX sues

 

I can see how 2 might be an issue if they are circumventing the law somehow (I would assume liability would rest solely with Philidor though). The rest seems pretty normal.

 

Anything I am missing?

[original mungerville]

Gio, if you have read all the facts, there is nothing to add. Picasso sums up the situation nicely. Philidor is a legal competitive advantage. There might be small issues with the California sub but nothing out of the order for such a large pharma company.

 

The shorts turned a minor issue into a major issue by shouting Enron. They have manipulated you. I listed to the earnings call last night. Everything Pearson said on that call has since been confirmed by the WSJ and Picasso and the more rational shorts.

 

Maybe… But would you define this environment “business as usual”?

All I am saying is I would like to see Pearson deeply concerned and involved in proving all the accusations unfounded… Then he could go on with his M&A strategy! Am I asking too much? When someone call you a liar, shouldn’t it be your first priority to reply and convincingly prove you are not a liar?

 

Cheers,

 

Gio

 

He is deeply concerned and involved, but the independent committee is leading/chairing.

[ourkid8]

Exactly, it's in his/shareholders full interest to put this issue behind him...

 

Gio, if you have read all the facts, there is nothing to add. Picasso sums up the situation nicely. Philidor is a legal competitive advantage. There might be small issues with the California sub but nothing out of the order for such a large pharma company.

 

The shorts turned a minor issue into a major issue by shouting Enron. They have manipulated you. I listed to the earnings call last night. Everything Pearson said on that call has since been confirmed by the WSJ and Picasso and the more rational shorts.

 

Maybe… But would you define this environment “business as usual”?

All I am saying is I would like to see Pearson deeply concerned and involved in proving all the accusations unfounded… Then he could go on with his M&A strategy! Am I asking too much? When someone call you a liar, shouldn’t it be your first priority to reply and convincingly prove you are not a liar?

 

Cheers,

 

Gio

 

He is deeply concerned and involved, but the independent committee is leading/chairing.

[S2S]

The conference call raised more questions than answers. When questioned about the legality of their style of specialty pharmacy, Pearson cited "Abbvie" instead of any state legislature.

 

Current LTM pro-forma FCF is around US$3b, traded EV is around US$70b. Analyst consensus NTM FCF is around $5.5b. I question how anyone can get fully comfortable with the NTM FCF numbers given the business uncertainty and standard of disclosures in the past.

 

+1. It's crazy to value the levered equity stub on FCF/equity instead of FCF/Enterprise Value. A 20% move in enterprise value, like that in recent weeks, means that you're already down 40%...

[S2S]

Also, I suppose those like to attack the messenger can now go after ProPublica's Jesse Eisinger (Putlizer prize and all) and the WSJ as well?

[ourkid8]

What did everyone think? I thought they were very thorough and will investigate all the remaining issues that were raised. 

[petec]

http://www.prnewswire.com/news-releases/valeant-pharmaceuticals-confirms-appropriateness-of-accounting-appoints-ad-hoc-board-committee-to-review-philidor-300165850.html

 

As we have said previously, our accounting with respect to the Company's Philidor arrangements is fully compliant with the law," J. Michael Pearson, Chairman of the Board and Chief Executive Officer of Valeant said. "However, other issues have been raised publicly about Philidor's business practices, and it is appropriate that they be fully reviewed. This decision to create an ad hoc committee of the board, which I fully support, will help free management to focus on continuing to serve doctors and patients and run our business.

 

I don't like it... "will help free management to focus on continuing to serve doctors and patients and run our business?... Really?! In such a climate of uncertanty for shareholders?? ???

 

Cheers,

 

Gio

 

Gio,

 

I am no expert here but would you really want a management team to ignore their business and focus on the stock market during a short attack?  That seems crazy to me.  I have far more respect for management teams that ignore the market and the stock price and get on with creating value.

 

I'm not saying they should not answer questions or investigate issues.  But creating a separate committee to do that and then running the business seems sensible to me.

 

Also re: one of your earlier posts, I don't think it is up to the management to prove there isn't a fraud.  It's up to them to provide full and fair disclosure but if they have to go further than that and actively disprove every accusation levelled against them they'll end up doing little else.  Fraud is an odd thing: it's hard to prove, but it's even harder to disprove.  The only thing that will do that is generating cash over time!

 

P

 

 

[KCLarkin]

No one knows VRX like Pearson does: if accusations are truly unfounded, he must be able to prove they are false.

 

What accusations? The only accusation I am aware of is Citron's claim that Valeant is using Philidor for Enron-style off-balance sheet accounting fraud. This has been proven false. And some accusations by R&O which will be settled in a long legal dispute. The rest, I think we can accept as fact. But of course, when an unsubstantiated allegation is disproved, the shorts can always invent a new one.

 

The shorts are preying on your emotions. The company is responding with facts. Emotions will win:

 

 

[cmlber]

The funny thing is, if this goes down the way I think it will, it will be painfully obvious to people in hindsight. The signs were all there.

 

CEO comp structure motivating risky behavior - check.

 

Excessively complex industry where companies AT BEST legally yet immorally take advantage of complexity to generate abnormal profits, and AT WORST engage in fraud - check. (The US healthcare / pharma reimbursement system is just a tragic joke)

 

Overcrowded trade - I mean, who was the marginal buyer here? Check. Everyone "knew" that platforms and roll-ups are a perfect model for value creation.

 

Huge leverage - check.

 

Huge multiple of free cash flow - check. Yes, still. Still not cheap.

 

Dependence on open and steadily-functioning capital markets to continue doing deals - check.

 

 

This is still a short. This is no Transdigm. This is no Berkshire. Whomever is long VRX at this point should go out and get their head examined.

 

But Ackman bought more, you will say. Surely the smart money is staying long. Time will tell who was right. I posit that Ackman's move was one driven by emotion, denial. If this goes the way I think it will, Ackman's reputation will take a massive beating. Not just Ackman - Sequoia, Brave Warrior, etc. It will be like there are no more geniuses among the modern value investor crowd.

 

That was the case when it was trading for $250+. Are you saying a company at $40 billion doing $4 billion of free cash flow is now too expensive?

 

Current LTM pro-forma FCF is around US$3b, traded EV is around US$70b. Analyst consensus NTM FCF is around $5.5b. I question how anyone can get fully comfortable with the NTM FCF numbers given the business uncertainty and standard of disclosures in the past.

 

What about the standard of disclosures in the past makes the forward guidance not believable?  Because they didn't disclose they had an option to buy Philidor?  Haven't they had a history of at least hitting guidance and in most cases beating?

[Picasso]

The conference call raised more questions than answers. When questioned about the legality of their style of specialty pharmacy, Pearson cited "Abbvie" instead of any state legislature.

 

Current LTM pro-forma FCF is around US$3b, traded EV is around US$70b. Analyst consensus NTM FCF is around $5.5b. I question how anyone can get fully comfortable with the NTM FCF numbers given the business uncertainty and standard of disclosures in the past.

 

+1. It's crazy to value the levered equity stub on FCF/equity instead of FCF/Enterprise Value. A 20% move in enterprise value, like that in recent weeks, means that you're already down 40%...

 

What are you guys talking about?  We aren't trying to value the stock on the enterprise value to levered free cash flows.  Also, can you point to exactly what disclosures and uncertainties is going to impact free cash flow going forward? 

 

Similar to the AGN attempt at an acquisition, restructuring costs are rolling off and using TTM isn't how you're going to value this stock.  Free cash flow after interest expense will be around $4 billion next year and before interest expense around $5.5 billion.  So it trades for 10x levered FCF and 12.7x unlevered FCF.  Take your pick whether you want to use an unlevered or levered metric. 

[Guest Schwab711]

What did everyone think? I thought they were very thorough and will investigate all the remaining issues that were raised.

 

Better than I would have expected. I think some things were answered in very specific ways that I would have preferred more broad explanations for. VRX is still greatly overvalued.

 

We also got our balance sheet/cash flow statement!

 

Highlights (through 3Q15):

- $1.5b in FCF < D&A  (where are we getting these $3b or $4b estimates? I see $2.1b...)

- DTLs are decreasing

- Cash taxes > GAAP net income >> book taxes

 

http://financials.morningstar.com/cash-flow/cf.html?t=VRX&region=usa&culture=en-US

 

I honestly just don't see what is so interesting about VRX. It looks like an extremely risky, low-upside pharma. Average products (one mid-sized and a few other small orphan drugs), tax structure that no longer makes sense for their portfolio, and too much leverage because the initial portfolio didn't work. They NEED Amoun to do well. Pharmacy business just isn't that great outside the US because of strict controls.

 

The only way VRX looks good is if you avoid calculating the NPV of their drugs after debt (maybe use a multiple of D&A + I, which are set up to match cash flows?) and make extremely optimistic assumptions for post-patent revenues. If you are going to make those assumptions, you should check out GILD or PFE. It's going to be more difficult to "grow" without the ability to sell stock or raise bonds with ease. I don't see how any value was ever created. I see negative TBV in a royalty-like business (with non-royalty-like liabilities). The best move VRX ever made was to sell stock at nose-bleed levels.

[Liberty]

Good call. As usual, there's quite a gap between the hysteria and innuendos and the reality.

 

"WHY DIDN'T VALEANT DISCLOSE PHILIDOR WHAT ARE THEY TRYING TO HIDE OBVIOUSLY FRAUD AND CHANNEL STUFFING!"

 

Actually, it's way below materiality threshold so no special reason to disclose at the time, specialty pharmacies are common in dermatology, sales are only booked when products are dispensed, and inventories are consolidatad anyway. Philidor has been through a ton of audits from PBMs, etc.

 

"WHY IS R/O BEING ASKED FOR MONEY WHEN THEY NEVER HEARD OF VALEANT MUST BE PHANTOM PHARMACIES FRAUD ENRON"

 

Actually, R/O received and paid 75 invoices from Valeant in just the past few months prior. Sometimes your distributors just don't want to pay you and you have to resort to lawyers to collect.

 

Nice to see Mason Morfit back on the board. From the few interviews that I've seen, that man is wicked smart and thoughtful, and I doubt he'd go back in there unless he had complete confidence. Also probably a sign that ValueAct isn't selling or even thinking of selling.

[Guest Schwab711]

 

What about the standard of disclosures in the past makes the forward guidance not believable?  Because they didn't disclose they had an option to buy Philidor?  Haven't they had a history of at least hitting guidance and in most cases beating?

 

EM revenue guidance from 04/22/2014? They completely changed the way they provided guidance after that presentation. I believe it was also the last mention of "durable" in any presentation. Those are major shifts that I don't think investors have caught up with.

 

 

Similar to the AGN attempt at an acquisition, restructuring costs are rolling off and using TTM isn't how you're going to value this stock.  Free cash flow after interest expense will be around $4 billion next year and before interest expense around $5.5 billion.  So it trades for 10x levered FCF and 12.7x unlevered FCF.  Take your pick whether you want to use an unlevered or levered metric. 

 

What is the weighted-life expectancy of the product portfolio? This is why I have been showing the low durability of their portfolio. There is a revenue cliff in 10-12 years with very little means to replace it. It just so happens that VRX's debt/interest/D&A all align with this date (those bankers are smart). The fact that VRX is paying cash taxes shows that EM profits are likely negative or negligible. So you are paying 12.7x FCF for ~12 years of FCF and negligible terminal value (worth maybe one more year of proj 2016 FCF in aggregate).

[giofranchi]

Gio,

 

I am no expert here but would you really want a management team to ignore their business and focus on the stock market during a short attack?  That seems crazy to me.  I have far more respect for management teams that ignore the market and the stock price and get on with creating value.

 

I'm not saying they should not answer questions or investigate issues.  But creating a separate committee to do that and then running the business seems sensible to me.

 

Also re: one of your earlier posts, I don't think it is up to the management to prove there isn't a fraud.  It's up to them to provide full and fair disclosure but if they have to go further than that and actively disprove every accusation levelled against them they'll end up doing little else.  Fraud is an odd thing: it's hard to prove, but it's even harder to disprove.  The only thing that will do that is generating cash over time!

 

P

 

Pete,

of course you'd be right in most cases… But this is no “business as usual”… Here reputation is at stake. Ask WB how much he thinks reputation is worth… because in an economy that is solely based on trust, if people call you a liar, and you don’t answer firmly and convincingly, you are out of business. Period. And if you are out of business, you won’t be able to show how much cash you generate over time!

 

This being said, I think the conference call and the presentation were good. Of course, page 47 of the presentation is particularly relevant to me.

 

Cheers,

 

Gio

 

[cmlber]

Gio,

 

I am no expert here but would you really want a management team to ignore their business and focus on the stock market during a short attack?  That seems crazy to me.  I have far more respect for management teams that ignore the market and the stock price and get on with creating value.

 

I'm not saying they should not answer questions or investigate issues.  But creating a separate committee to do that and then running the business seems sensible to me.

 

Also re: one of your earlier posts, I don't think it is up to the management to prove there isn't a fraud.  It's up to them to provide full and fair disclosure but if they have to go further than that and actively disprove every accusation levelled against them they'll end up doing little else.  Fraud is an odd thing: it's hard to prove, but it's even harder to disprove.  The only thing that will do that is generating cash over time!

 

P

 

Pete,

of course you are right most of the times… But this is no “business as usual”… Here reputation is at stake. Ask WB how much he thinks reputation is worth… because in an economy that is solely based on trust, if people call you a liar, and you don’t answer firmly and convincingly, you are out of business. Period. And if you are out of business, you won’t be able to show how much cash you generate over time!

 

This being said, I think the conference call and the presentation were good. Of course, page 47 of the presentation is particularly relevant to me.

 

Cheers,

 

Gio

 

Do you think even one person on earth is considering not using Valeant products because Andrew Left claimed they are channel stuffing and the WSJ claimed Valeant employees had Philidor email addresses?