health

Valeant to move work to Quebec

July 19, 2011
Author: Winnipeg Free Press

MONTREAL -- Valeant Pharmaceuticals announced plans Friday to shift its U.S. production to Quebec as it continued a shopping spree to become the world's largest dermatological treatment company.

"We like Quebec a lot because of the skill set of the workforce; there's a lot of pharmaceutical companies that you can draw the experience (from) and we have a great team there," chairman and CEO Michael Pearson said in an interview.

Earlier, the company said it has agreed to buy Ortho Dermatologics division of Janssen Pharmaceuticals Inc. for $345 million. The company had $150 million in sales last year.

The acquisition will give it ownership of prescription brands such as acne treatment Retin-A Micro and Renova, a wrinkle reduction drug. Although its global headquarters are near Toronto, Valeant's Canadian operations are run from the Montreal area, where it has one of its two manufacturing facilities for pills. The other is in Steinbach.

On Monday, the company signed a separate agreement to purchase skin-care treatment company Dermik, a unit of multinational pharmaceutical firm Sanofi, for $425 million.

The Sanofi transaction comes with an administrative office and a 27,000-square-metre state-of-the-art plant in Laval employing 200 workers that makes various topical creams.

The plant will continue to make 70 formulations for Dermik, 200 prescriptions for Sanofi and outsourced contracts for three years. Over the next two to three years, Valeant expects to move outsourced U.S. production of its existing brands to this location.

"Now that we have a topical plant, our plan would be to move that manufacturing into our own facility. It will be lower cost for us and will be good, obviously, for our Canadian operations."

Pearson said the company doesn't yet know how many manufacturing jobs will be created on top of the hiring of a Canadian sales force.

With the acquisitions, Valeant's Canadian workforce will grow by more than 300 to 1,500.

Valeant has been bulking up even before it abandoned its $5.7-billion bid in May for U.S. drugmaker Cephalon.

In addition to Ortho Dermatologics and Dermik, Valeant agreed to pay international specialty pharmaceutical company Meda $176 million in cash plus upfront royalty payments for the rights in the U.S., Canada and Mexico for two dermatological creams.

It also agreed to acquire U.S. and Canadian rights to anti-cold sore drug Zovirax from GlaxoSmithKline for $300 million.

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"We like Quebec a lot because of the skill set of the workforce; there's a lot of pharmaceutical companies that you can draw the experience (from) and we have a great team there," chairman and CEO Michael Pearson said in an interview.