Valeant Pharmaceuticals on Wednesday gave a weaker-than-expected revenue forecast for 2018, as several of its major drugs face more competition from generics.
The Canada-based drugmaker’s revenue will also be pressured as the company continues selling off businesses to free up cash and reduce its debt burden of some $25 billion.
Valeant has already divested its Dendreon cancer treatment unit as well as several skin care brands acquired during a debt-fueled deal-making binge under former CEO Mike Pearson.
“Since the end of the first quarter of 2016, we’ve reduced our total debt by more than 20 percent, and we will continue to address our debt, as well as reduce expenses,” said Valeant Chief Executive Officer Joseph Papa.
Valeant has also sharpened its focus on more profitable products including its Bausch and Lomb eye care line and treatments for Wilson’s disease and gastrointestinal diseases.
The Wilson’s disease treatment is expected to face competition from Teva Pharmaceuticals’ generic version launched earlier in February.
Other Valeant products including heart drug Nitropress, a top-selling product once criticized for its steep price, also face mounting competition from generics.
Valeant forecast 2018 revenue of $8.10 billion to $8.30 billion. Analysts on average were expecting $8.34 billion, according to Thomson Reuters I/B/E/S.
The drugmaker’s U.S.-listed shares fell 9 percent to $16.84 in premarket trading following the news.
The stock, which hit a peak of over $250 in 2015, has languished under $30 for much of the past two years amid intense scrutiny into the company’s drug price hikes and its unorthodox use of a specialty pharmacy to boost sales.
On Wednesday, Valeant said it would pay $58 million to resolve a class action lawsuit by buyers of its acne medication Solodyn, who allege that a Valeant-owned company sought to delay the launch of cheaper, generic versions of Solodyn, in violation of antitrust laws.
Valeant reported a net income of $513 million in the fourth quarter ended Dec. 31, compared to a loss of $515 million a year earlier, helped by a one-time benefit of $1.32 billion from new U.S. tax laws.
Excluding one-time items, Valeant earned 98 cents per share, edging past analysts’ estimates of 97 cents.
Revenue fell 10 percent to $2.16 billion, just shy of analysts’ expectations of $2.17 billion.