Valeant just got blindsided

The last week or so was supposed to be one of tiny tidbits of happy news for Valeant Pharmaceuticals, but the company was just blindsided, as one of its drugs was rejected by the US Food and Drug Administration.

The drug in question is glaucoma product candidate latanoprostene bunod, and its approval was supposed to be a walk. Every analyst on Wall Street was thinking about it that way. Even Valeant bear David Maris of Wells Fargo had the approval of all of these new drugs modeled into his Valeant projections.

From Maris' note out this morning:

This morning (7/22), Valeant announced that it has received a Complete Response Letter (CRL) from the FDA regarding its glaucoma product candidate latanoprostene bunod. The CRL sites concerns regarding manufacturing deficiencies pertaining to an inspection of a Bausch & Lomb manufacturing facility in Tampa, Florida. The CRL was unexpected and we had included latanoprostene bunod in our model with peak sales of $150 million in 2020.

This interrupts what was supposed to be a schedule of approvals for the embattled pharmaceutical company, which has seen its stock plummet around 90% since October. That is when accusations from a short seller combined with government scrutiny over its pricing practices to turn Wall Street against what was once one of its darlings.

Valeant got approval on two other drugs in the last week or so. One was Relistor, an anti-constipation tablet that had no issue with approval.

The other was brodalumb, a new psoriasis drug that 14 of the 18 members on the FDA's advisory panel actually decided to "approve... but only if certain risk management options for suicidal ideation and behavior (SIB) beyond labeling are implemented."

Valeant's stock is down slightly over 4% on this news.