The FDA has approved a generic version of Valeant Pharmaceuticals’ heart drug Nitropress, according to its website, and shares of Valeant are down almost 5% on the news.
“This news comes ahead of our expectations, as we had modeled this as a mid-2017 event. Nitropress is, according to Valeant’s last earnings release, Valeant’s 7th largest product with sales of approximately $128 million in YTD 2016,” wrote Wells Fargo analyst David Maris on Monday.
“We estimate at approximately 90% gross margins, and little associated SG&A costs, Nitropress represents approximately 4% of Valeant’s YTD 2016 adjusted operating income.”
Nitropress, as well as Valeant’s other heart drug, Isuprel, became the center of a firestorm last year. The company had raised the prices of the drugs 525% and 212%, respectively, and that caught the ire of Congress.
At the same time, short seller Andrew Left called the company out for alleged accounting malfeasance and the stock came crashing down over 90% from its highs.
All of this created quite the controversy and after Congressional hearings and investigations, the company promised to lower the price of the two drugs.
Unfortunately, hospitals told Bloomberg they’re not getting the discount Valeant promised. So you can see why the FDA would fast track this one. Makes you wonder what else they’re working on.