Valeant Pharmaceuticals International of Costa Mesa said Thursday that its loss narrowed in the fourth quarter despite a 63% plunge in royalty payments on ribavirin, a drug used to treat hepatitis C.
The company, formerly called ICN Pharmaceuticals, reported a net loss of $1.8 million, or 2 cents a share, compared with a net loss of $100.7 million, or $1.20, in the year-earlier quarter.
Revenue fell 12% to $176.2 million from $199.6 million because of the lower royalty payments.
Excluding one-time charges related to debt repayment, income was $10.8 million, or 13 cents a share. Wall Street had expected 20 cents, according to a survey of analysts by Thomson First Call.
Despite the disappointing results, Valeant's shares rose Thursday by $1.44, or 6%, to $24.20 on the New York Stock Exchange.
Analysts said investors were enthused about the company's plans to present clinical trial data on an experimental hepatitis C drug at medical meetings in April and May.
The drug, Viramidine, is a modified form of ribavirin -- Valeant's longtime cash cow. Valeant licenses the older drug to Schering-Plough Corp. and receives royalties on sales of the medication. But Valeant's royalties have been falling lately because its drug faces competition from a similar medication sold by Roche, the Swiss pharmaceutical company.
Valeant announced last year that patients on Viramidine in a clinical trial had reductions in their virus levels with smaller drops in hemoglobin, a measure of anemia, than patients on ribavirin. However, the company did not provide detailed results from its human tests.
The company is conducting two additional head-to-head tests that pit Viramidine against ribavirin in patients with hepatitis C. Some analysts said Viramidine could reach the market in 2006 if those tests were successful.
Valeant spokesman Jeff Misakian said the company missed earnings estimates in part because of increased expenses related to the development of Viramidine.
"We are investing in the company," he said.
Valeant is in the midst of a restructuring under new management after founder Milan Panic, who built the company into a global enterprise, resigned in 2002. The company has slashed its workforce to 3,800 from 12,000 and pared the number of factories it operates to 15 from 33.
For the year, Valeant had a net loss of $55.6 million, or 67 cents a share, compared with $134.8 million, or $1.61, in 2002. Excluding one-time charges, income in 2003 was $61 million, or 71 cents, compared with $87.2 million, or $1.04, in 2002.
Revenue for all of 2003 fell 7% to $686 million from $737 million a year earlier.