MONTREAL – Valeant Pharmaceuticals International Inc. (TSX:VRX), citing acquisition and other costs, has seen a sharp drop in third-quarter profits despite a healthy increase in revenue.
Canada’s largest publicly traded drug maker reported Friday that its net income for the three months ended Sept. 30 fell to just US$7.6 million or two cents per diluted share.
That compared with net earnings of US$40.9 million or 13 cents in the same 2011 period.
Revenue soared to US$884.1 million from US$570.4 million.
On a cash EPS basis, adjusted income was $357.5 million, or $1.15 per diluted share. Analysts expected Valeant’s adjust earnings to be US$1.12 per share based on 17 estimates compiled by Thomson Reuters.
Revenue was estimated at US$873.35 million, based on 15 estimates.
Acquired in-process research and development costs amounted to $145.3 million in the quarter, compared with nil in the year-earlier period, while restructuring, acquisition-related and other costs were up some $22 million at $47.5 million. The company also booked $218.2 million for amortization of intangible assets, up some $80 million from the year-earlier period.
Valeant has made more than a dozen acquisitions this year to help strengthen its position as a global leader in dermatology products, including the recent purchase of U.S.-based Medicis Pharmaceutical Corp. for $2.6 billion.
Valeant also bought Dermik, a dermatological unit of Sanofi in the U.S. and Canada that manufactures, markets and sells a range of therapeutic and aesthetic dermatology products.
Last year, it bought Edmonton-based Afex Life Sciences, maker of the popular over-the-counter cold and flu remedy Cold-FX.
Another acquisition was iNova, which sells and distributes a range of prescription and over-the-counter products in Australia, New Zealand, Southeast Asia and South Africa.
Valeant, formed from the combination of California-based Valeant and the former Biovail pharmaceutical company, announced in April that it would move its global headquarters to Quebec to focus on over-the-counter dermatology products. It’s also setting up a research and development centre for consumer dermatology in Laval, north of Montreal.
On the Toronto Stock Exchange, Valeant shares were up 24 cents at $56.77 in early afternoon trading Friday.