Valeant sheds final facilties

The buyer is Swiss firm Legacy Pharmaceuticals International, who has snapped up the two sites in Puerto Rico and Switzerland for an undisclosed sum, in sale that also includes the rights to Valeant's drug Reptilase. The sale is the last step in Valeant's restructuring plans that were announced in April last year in a bid to reduce costs and accelerate earnings growth for the company. From the 33 manufacturing plants the company held just two years ago, the restructuring plans aimed to consolidate production facilities to focus on just five strategic plants. Shortly after the restructuring plans were announced, Valeant sold off its Warsaw, Poland plant to Strides Polska for an undisclosed sum, giving them the flexibility to expand operations in Eastern Europe. These last two plants sold off this week leave Valeant with facilities in Brazil, Canada and Mexico. The re-evaluation of the company's facilities resulted in the decision to reduce excess capacity in manufacturing. The plans to restructure sought to minimize costs of goods sold by increasing capacity utilization at remaining plants or by employing third party manufacturers to improve efficiency. Rationalization of manufacturing facilities is due to contribute to Valeant's aims of reduce the cost of goods sold to 20-25 per cent by 2008. The cutbacks (which also included the sale of the company's former headquarters in California for $38m), have been carried out in order to allow Valeant to reduce costs and focus more tightly on projects it has in development. The company develops and manufactures products targeting the therapeutic areas of neurology, infectious disease and dermatology and has around a dozen products in its current portfolio. The restructuring process which is now essentially complete, frees up the company to concentrate intently on its R&D activities, with particular emphasis being laid on completing the development of Viramidine (taribavirin) and retigabine as potential treatments for Hepatitis C and epilepsy respectively, as well as Infergen (interferon alfacon-1), another Hep C treatment. The company is also actively pursuing partnering opportunities for taribavirin and retigabine to help reduce development costs, as well as looking to license in additional compounds in clinical development in order to widen its net, and as a precautionary measure to protect against risks associated with developing new drugs.