WEBVTT - Bloomberg's Krutoholow on Valeant Filing Annual Report (Audio)

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<v Speaker 1>You're listening to Taking Stock with Kathleen Hayes and Pim

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<v Speaker 1>Fox on Bloomberg Radio. Breaking news from a Latin America,

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<v Speaker 1>Columbia's Central Bank, Columbia, I should say, raising their lending

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<v Speaker 1>rate to seven percent from six and a half percent.

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<v Speaker 1>That's a fifty basis point move, much more than analysts

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<v Speaker 1>have been forecasting. As inflation surges to its highest level

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<v Speaker 1>since two thousand one after the worst drought in decades.

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<v Speaker 1>A big story will be covering in the three o'clock

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<v Speaker 1>Wall Street Time hour of Taking Stock. Now, let's get

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<v Speaker 1>to another very big story today. Valiant Pharmaceuticals attempting to

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<v Speaker 1>put the worst of its problems behind it today announcing

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<v Speaker 1>a shake up of its board and filling along awaited

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<v Speaker 1>annual report where it excuse me, filing along awaited annual

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<v Speaker 1>report where it promised significant changes to its strategy and

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<v Speaker 1>better oversight of its executives. This Credoholo joins US now

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<v Speaker 1>specialty Pharma and Biotech analyst for Bloomberg Intelligence. So, Liz,

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<v Speaker 1>a big move from Valiant. Yeah, I would say that,

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<v Speaker 1>you know, the company had been saying April nine, where

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<v Speaker 1>we are going to file by them, even though they

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<v Speaker 1>had much more of a cushion with their lenders, so

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<v Speaker 1>in terms of keeping its integrity, which is already completely

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<v Speaker 1>battered at this point, they really needed to file by today,

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<v Speaker 1>So meeting that deadline was certainly a positive. I think

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<v Speaker 1>that the company is very focused on the fact that

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<v Speaker 1>they have new management in place. Now. We have Joe

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<v Speaker 1>Papo joining from Parago. He's slated to begin his reign

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<v Speaker 1>in May. And with the new board shake up, you know,

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<v Speaker 1>they're kind of saying we are an entirely new company.

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<v Speaker 1>Any update on the investigation that is ongoing by the SEC. Yeah,

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<v Speaker 1>so that is still ongoing. We saw the Senate price

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<v Speaker 1>probe earlier this week as well, and in that discussion

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<v Speaker 1>Bill Ackman essentially said, I'm going to go back to

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<v Speaker 1>the board. We're going to discuss slashing the price of

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<v Speaker 1>some of these drugs that we've increased. He suggested perhaps

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<v Speaker 1>a thirty percent cut across the board. But again, I

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<v Speaker 1>mean this is on products that have gone up five

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<v Speaker 1>so at that point, what's giving it back not really

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<v Speaker 1>all that great. That's what would you say. The biggest

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<v Speaker 1>challenge is for this this new management team. One, I

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<v Speaker 1>think they need to get investors back on their side.

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<v Speaker 1>There are certainly people who have been burned by this company,

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<v Speaker 1>yet there are still many that are loyal. But they

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<v Speaker 1>still need to convince them that they're capable of turning

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<v Speaker 1>the ship around. But I think one of the bigger

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<v Speaker 1>things is really going to be returning to the growth

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<v Speaker 1>levels that they had seen. I mean, that was what

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<v Speaker 1>had attracted investors to begin with. They were this m

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<v Speaker 1>and A powerhouse picking up assets that were, you know,

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<v Speaker 1>they claimed undervalued, but essentially they increased the price to

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<v Speaker 1>drive sales. I don't think we'll see that same level

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<v Speaker 1>of growth that investors are used to, so they need

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<v Speaker 1>to convince them that this new model is something that's

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<v Speaker 1>still attractive. It's not going to be the same as

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<v Speaker 1>one Investors had initially gone after borrow money, spend the

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<v Speaker 1>money on other pharmaceutic golden drug companies, lay people off

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<v Speaker 1>for cut costs, increased the price of drugs. That was

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<v Speaker 1>kind of the business models that accurate absolutely. I mean,

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<v Speaker 1>that's that's the harsh reality of it. How do you

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<v Speaker 1>do a one eight on that now, while at the

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<v Speaker 1>same time throwing X executives under the bus. And I'm

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<v Speaker 1>thinking of Howard Schiller and Tanya Carol. Right, these are

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<v Speaker 1>Howard Schiller was the former CFO and uh Tanya carrout

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<v Speaker 1>of former corporate controller. Yeah, and Schiller took the rain

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<v Speaker 1>when Pearson went into the hospital, so you know, he's

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<v Speaker 1>he's been around, he's been there when the company needed him,

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<v Speaker 1>and now he's you know, the scapegoat on pretty much

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<v Speaker 1>all things. I think the difficulty will be that most

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<v Speaker 1>of their products, when you look at them, they're not

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<v Speaker 1>like the traditional blockbuster that you might think of. So

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<v Speaker 1>one of their leading drugs that they recently acquired from

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<v Speaker 1>salex for it's called FAS and it's for IBS, essentially

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<v Speaker 1>brought in two fifty million dollars last year. That's not

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<v Speaker 1>you know, the kind of products that we're seeing out

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<v Speaker 1>of someone like Fiser, who's key product is something like

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<v Speaker 1>seven billion dollars. These are it's a collection of very

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<v Speaker 1>small products. I just wanted to say, and I'll take

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<v Speaker 1>responsibility for it. I b S is irritable bows syndrome.

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<v Speaker 1>That's correct. Maybe they would have a little bit of

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<v Speaker 1>that at all. Right, thank you very much. Liz grud

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<v Speaker 1>A Hollow, a specialty format and biotechnology analyst for Bloomberg

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