VRX - Valeant Pharmaceuticals International Inc.

[muscleman]

Who the hell is buying this thing at this point. Not Ackman, not Sequoia that's for sure. Nobody who follows Buffett/Munger. Analyst ratings are all being cut. Delayed financials and guidance, SEC investigation, and even a Hillary commitment to go after them.

 

So was that the low today? Is it time to buy? Or is this thing going lower in the next week or two prior to the financials being released? Do we really think with an SEC investigation underway that the board is going to hide major problems at this point?

 

I'm buying.  My limit order at $60 went through today.

 

As a Buffett disciple, I don't take guidance from the fluctuation of VRX stock price (or bonds or CDS) or any analysts' reports (upgrades/downgrades/no coverage).

 

The only thing that I care about is the business performance (B+L, GI, Derm+SkinCare, Oncology+Dentistry+W Health+Neuro etc, Emerging markets).  I'd love it if the VRX stock price continues to decline. 

 

This board is supposed to be Corner of Berkshire, but the discussions that i've seen so far have nothing to do with VRX business performance.

 

Really? You don't think the multiple downward revisions to guidance, an announcement of an SEC investigation and Hillary Clinton promising to crack down on Valeant (given that she mentioned the company by name) would have an impact on intrinsic value?

 

Those aren't red flags to you?

 

Nope.  I used very conservative assumptions that resulted in numbers far below their last guidance. 

 

I've seen the SEC investigates many companies (including Buffett himself, Blue Chip Stamps, General Re) and as long as no fraud is uncovered, and the company's business performs, those companies move on. 

 

With Hillary, there are limits to what even a President can do.  I trust VRX management will settle this issue, just like BAC did.

 

You mean BAC in 2011? I think problems caused by external forces are much easier to fix than problems caused internally.

[KCLarkin]

I saw that Donville interview and then scaled up my VRX short. Donville is the kind of contrarian indicator that you want to bet against. I just hope that Donville's investors noticed and redeemed. That's not the guy you want managing your money, IMHO.

 

Grey, if you are using Donville as a contrarian indicator you should be buying VRX. He sold his position in November. Unlike Ackman and Sequioa, he will cut positions that aren't working. If you are hiring a growth hedge fund, I'd argue that you want someone who will cut his losses quickly. If you are a value investor trying to clone, Donville is a bad choice.

 

Despite owning VRX and Concordia, he beat his index by over 1200 basis points last year. He has beat his index by 10%+ in 6 of the last 8 years. The odds of redemptions are pretty low.

[Guest Grey512]

I saw that Donville interview and then scaled up my VRX short. Donville is the kind of contrarian indicator that you want to bet against. I just hope that Donville's investors noticed and redeemed. That's not the guy you want managing your money, IMHO.

 

Grey, if you are using Donville as a contrarian indicator you should be buying VRX. He sold his position in November. Unlike Ackman and Sequioa, he will cut positions that aren't working. If you are hiring a growth hedge fund, I'd argue that you want someone who will cut his losses quickly. If you are a value investor trying to clone, Donville is a bad choice.

 

Despite owning VRX and Concordia, he beat his index by over 1200 basis points last year. He has beat his index by 10%+ in 6 of the last 8 years. The odds of redemptions are pretty low.

 

I'm being hard at Donville because I think it's poor form to go on live TV, trash someone else as a 'turkey', huff-n-puff and generally act emotional. Bad behavior. So this is not someone who should be entrusted with managing 3rd party capital, IMO, regardless of how much he out/underperformed in the past.

 

[eggbriar]

Valeant settles with R&O

 

http://ir.valeant.com/news-releases/2016/03-09-2016-223135596

 

March 09, 2016

LAVAL, Quebec, March 9, 2016 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) and R&O Pharmacy, LLC (R&O) today announced that they have jointly requested the Court to dismiss the litigation between them pursuant to a confidential settlement agreement that resolves all claims between them.  While the terms of the settlement are confidential, the resolution includes a payment by R&O to Valeant.  As noted at the onset of the matter, Valeant firmly believes it acted appropriately and refutes any suggestion of wrongdoing.

[ZenaidaMacroura]

 

 

I'm being hard at Donville because I think it's poor form to go on live TV, trash someone else as a 'turkey', huff-n-puff and generally act emotional. Bad behavior. So this is not someone who should be entrusted with managing 3rd party capital, IMO, regardless of how much he out/underperformed in the past.

I  think it's quite incredible that someone can just blow out of a position after all that.  If the moment you think you are wrong/think you have better opportunities and are thick-skinned enough to act on your new conviction despite having talked about it publicly/all that huffing and puffing you probably have the correct disposition for money management.  (Assuming he wasn't talking it up for a better exit.  I think he thought he was in the right)

[ccplz]

 

 

I'm being hard at Donville because I think it's poor form to go on live TV, trash someone else as a 'turkey', huff-n-puff and generally act emotional. Bad behavior. So this is not someone who should be entrusted with managing 3rd party capital, IMO, regardless of how much he out/underperformed in the past.

I  think it's quite incredible that someone can just blow out of a position after all that.  If the moment you think you are wrong/think you have better opportunities and are thick-skinned enough to act on your new conviction despite having talked about it publicly/all that huffing and puffing you probably have the correct disposition for money management.  (Assuming he wasn't talking it up for a better exit.  I think he thought he was in the right)

 

What happened?

[ZenaidaMacroura]

 

 

I'm being hard at Donville because I think it's poor form to go on live TV, trash someone else as a 'turkey', huff-n-puff and generally act emotional. Bad behavior. So this is not someone who should be entrusted with managing 3rd party capital, IMO, regardless of how much he out/underperformed in the past.

I  think it's quite incredible that someone can just blow out of a position after all that.  If the moment you think you are wrong/think you have better opportunities and are thick-skinned enough to act on your new conviction despite having talked about it publicly/all that huffing and puffing you probably have the correct disposition for money management.  (Assuming he wasn't talking it up for a better exit.  I think he thought he was in the right)

 

What happened?

 

I was just commenting broadly that I wouldn't poo-poo a person for publicly touting a position if they later changed their minds (I just think it would be difficult to change your mind after that -but more power to you if you have the grit).

 

I watched the market call segment just now -it's not clear to me that he's not in valeant/hasn't reacquired the position??

[Guest Grey512]

I think it's OK to publicly defend a position if the position is coming under public assault, but the manner in which Donville did it (getting worked up, emotional and rude to the TV host and to Left) just made suggest that the guy does not have what Eveillard calls 'the capacity to suffer'. Another way to look at it is that the guy possibly does not have the capability to entertain two opposing possibilities in his head without excessive anguish. The guy can't take (market) criticism without exploding.

 

If he has gone out and reversed his view (i.e. sold VRX), then great, but to me it does not automatically render my above observation irrelevant.

[Guest Grey512]

Another data-point: the contrast collar shirt and thick-rimmed glasses. They just scream "d bag".

 

;D

[ZenaidaMacroura]

I think it's OK to publicly defend a position if the position is coming under public assault, but the manner in which Donville did it (getting worked up, emotional and rude to the TV host and to Left) just made suggest that the guy does not have what Eveillard calls 'the capacity to suffer'. Another way to look at it is that the guy possibly does not have the capability to entertain two opposing possibilities in his head without excessive anguish. The guy can't take (market) criticism without exploding.

 

If he has gone out and reversed his view (i.e. sold VRX), then great, but to me it does not automatically render my above observation irrelevant.

 

I think we might be splitting hairs here but I'd argue that if he only entertains one possibility but he's not married to the position and is open to dumping it if he thinks the facts have changed then it effectively emulates the capacity to suffer/ability to entertain two opposing possibilities.

 

The capacity to suffer effect comes from the ability to be totally convinced of a position.  And the ability to entertain two opposing possibilities manifests itself in being able to admit when one is wrong. 

[KCLarkin]

Source here:

 

http://m.bnn.ca/article?url=http%3A%2F%2Fbsympatico.vo.llnwd.net%2Fo35%2Ffeeds%2Fufs%2Fxml%2Fbnn_mobile%2Fbnn%2Fbnn_news.xml&itemId=Top-Picks-from-Jason-Donville-Concordia-Healthcare-MTY-Food-Group-and-CGI-Group&pageName=Home&feedId=318

[LongTermView]

Valeant settles with R&O

 

http://ir.valeant.com/news-releases/2016/03-09-2016-223135596

 

March 09, 2016

LAVAL, Quebec, March 9, 2016 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) and R&O Pharmacy, LLC (R&O) today announced that they have jointly requested the Court to dismiss the litigation between them pursuant to a confidential settlement agreement that resolves all claims between them.  While the terms of the settlement are confidential, the resolution includes a payment by R&O to Valeant.  As noted at the onset of the matter, Valeant firmly believes it acted appropriately and refutes any suggestion of wrongdoing.

 

This seems like a big deal.  The WSJ mentions it in their http://www.wsj.com/articles/valeant-adds-three-board-members-1457529904 article but it doesn't seem to be getting much attention in the media overall.

[ourkid8]

It's huge as I believe the lawsuit is what fueled this whole disaster...

 

Valeant settles with R&O

 

http://ir.valeant.com/news-releases/2016/03-09-2016-223135596

 

March 09, 2016

LAVAL, Quebec, March 9, 2016 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) and R&O Pharmacy, LLC (R&O) today announced that they have jointly requested the Court to dismiss the litigation between them pursuant to a confidential settlement agreement that resolves all claims between them.  While the terms of the settlement are confidential, the resolution includes a payment by R&O to Valeant.  As noted at the onset of the matter, Valeant firmly believes it acted appropriately and refutes any suggestion of wrongdoing.

 

This seems like a big deal.  The WSJ mentions it in their http://www.wsj.com/articles/valeant-adds-three-board-members-1457529904 article but it doesn't seem to be getting much attention in the media overall.

[Picasso]

Probably the bigger news is this:

 

*HOUSE OVERSIGHT CMTE LEADERS SAY VALEANT WITHHOLDING DOCUMENTS

 

Also some of the documents we've seen so far don't exactly paint Valeant in the best light...

[fareastwarriors]

Valeant Pharmaceuticals Weighed Replacing CEO

 

Valeant’s board considered alternatives to Michael Pearson before his return from medical leave in late February

 

 

http://www.wsj.com/articles/valeant-pharmaceuticals-weighed-replacing-ceo-1457726369

[Guest roark33]

Not sure if this was already posted, but it is pretty good example of almost every drug in VRX's portfolio. 

 

http://www.latimes.com/business/la-fi-lazarus-20150306-column.html

[gfp]

I had a very similar anecdotal Valeant story this week.  I was prescribed Elidel cream for a minor skin condition on my face/cheeks -from sun damage, unfortunately.  It is a non-steroidal cream for your skin.  The dermatologist told me it was being filled through a mail order pharmacy so her office didn't have to 'fight with the insurance company' over the cost.  Apparently the mail order pharmacy handles all that, which would normally fall to the doctors office staff.  I was surprised that my share of the single tube of Elidel was $150 or something like that, since that's a lot for a tube of ointment.  Then this week I got the statement from Blue Cross Blue Shield showing they paid $800 for the tube.  It really lowered my opinion of Valeant and their prospects going forward under a Clinton presidency (politics aside, currently the most probable outcome).  You've even got a CVS exec shining light on the insane inflation in dermatology products.  They took some awfully aggressive price increases over the years.

 

Not sure if this was already posted, but it is pretty good example of almost every drug in VRX's portfolio. 

 

http://www.latimes.com/business/la-fi-lazarus-20150306-column.html

[sampr01]

What ever on statement price is NOT the actual price paid by insurance. They will pay negotiated price NOT the listed price on the statement.

 

I had a very similar anecdotal Valeant story this week.  I was prescribed Elidel cream for a minor skin condition on my face/cheeks -from sun damage, unfortunately.  It is a non-steroidal cream for your skin.  The dermatologist told me it was being filled through a mail order pharmacy so her office didn't have to 'fight with the insurance company' over the cost.  Apparently the mail order pharmacy handles all that, which would normally fall to the doctors office staff.  I was surprised that my share of the single tube of Elidel was $150 or something like that, since that's a lot for a tube of ointment.  Then this week I got the statement from Blue Cross Blue Shield showing they paid $800 for the tube.  It really lowered my opinion of Valeant and their prospects going forward under a Clinton presidency (politics aside, currently the most probable outcome).  You've even got a CVS exec shining light on the insane inflation in dermatology products.  They took some awfully aggressive price increases over the years.

 

Not sure if this was already posted, but it is pretty good example of almost every drug in VRX's portfolio. 

 

http://www.latimes.com/business/la-fi-lazarus-20150306-column.html

[Picasso]

So if you have a high deductible health care plan (which I do) what price would you pay for that Elidel cream if it's not $800?

[gfp]

I get what you are saying.  I am reporting the price paid by the insurance company.  Not a hypothetical price that is higher than the negotiated price.  Apparently there is a better deal through Walgreens at http://www.valeantaccessprogram.com/ - that option was not mentioned by my Dermatologist.  She filled the prescription through Cardinal Health Specialty Pharmacy.

 

What ever on statement price is NOT the actual price paid by insurance. They will pay negotiated price NOT the listed price on the statement.

 

I had a very similar anecdotal Valeant story this week.  I was prescribed Elidel cream for a minor skin condition on my face/cheeks -from sun damage, unfortunately.  It is a non-steroidal cream for your skin.  The dermatologist told me it was being filled through a mail order pharmacy so her office didn't have to 'fight with the insurance company' over the cost.  Apparently the mail order pharmacy handles all that, which would normally fall to the doctors office staff.  I was surprised that my share of the single tube of Elidel was $150 or something like that, since that's a lot for a tube of ointment.  Then this week I got the statement from Blue Cross Blue Shield showing they paid $800 for the tube.  It really lowered my opinion of Valeant and their prospects going forward under a Clinton presidency (politics aside, currently the most probable outcome).  You've even got a CVS exec shining light on the insane inflation in dermatology products.  They took some awfully aggressive price increases over the years.

 

Not sure if this was already posted, but it is pretty good example of almost every drug in VRX's portfolio. 

 

http://www.latimes.com/business/la-fi-lazarus-20150306-column.html

[xtreeq]

I had a very similar anecdotal Valeant story this week.  I was prescribed Elidel cream for a minor skin condition on my face/cheeks -from sun damage, unfortunately.  It is a non-steroidal cream for your skin.  The dermatologist told me it was being filled through a mail order pharmacy so her office didn't have to 'fight with the insurance company' over the cost.  Apparently the mail order pharmacy handles all that, which would normally fall to the doctors office staff.  I was surprised that my share of the single tube of Elidel was $150 or something like that, since that's a lot for a tube of ointment.  Then this week I got the statement from Blue Cross Blue Shield showing they paid $800 for the tube.  It really lowered my opinion of Valeant and their prospects going forward under a Clinton presidency (politics aside, currently the most probable outcome).  You've even got a CVS exec shining light on the insane inflation in dermatology products.  They took some awfully aggressive price increases over the years.

 

Not sure if this was already posted, but it is pretty good example of almost every drug in VRX's portfolio. 

 

http://www.latimes.com/business/la-fi-lazarus-20150306-column.html

 

This $150 is just crazy, I went to a pharmacy site here in Israel to check the price:

Elidel cream 1% 15gr costs ~$20

Elidel cream 1% 30gr costs ~$38

This is without a doctor's prescription which will probably give you a further discount 

[dontdodebt]

WOW.

 

This crazy price gouging can not be seen as suistainable what so ever. It´s crazy. Why is this?! Is it the insurance companies that haven´t made the effort to lower the prices or why is this? I do not live in the states so I do not really understand your healthcare system.

[Guest roark33]

http://api40.10kwizard.com/cgi/convert/pdf/ValeantPharmaceuticalsInternationalInc-20160315-8K-20160315.pdf?ipage=10815892&xml=1&quest=1&rid=23&section=1&sequence=-1&pdf=1&dn=1

 

Does not look good...

[Ballinvarosig Investors]

Down 17% pre-market - hitting new lows.

 

Sharon Osberg will be feeling vindicated this morning, Sequoia, Biglari, and Ackman on the other hand will be throwing their guts up.

[Uccmal]

I have been following this saga for months now. 

 

For those who are long the stock.  One question:

 

How can you have confidence in any of the numbers, historical or future,  when the CEO doesn't seem to know what is going on? 

 

Any investment in this company at any price point is pure speculation.