Why Valeant’s CEO prefers acquisitions over R&D

Valeant Pharmaceuticals International is one of the largest Canadian companies by market cap.

And, even though the company’s share price has slipped from summer highs over the last three months, reports Canadian Business, one thing hasn’t changed: “Industry watchers still worship [Mike] Pearson, Valeant’s 55-year-old CEO. In a short time, Pearson has made his investors—and himself—very rich.”

CB adds, “Valeant has grown at a clip previously unheard of for Canadian companies,” due mainly to acquisitions–in 2014 alone, it snapped up 20 companies.

But Valeant has drawn some criticism for this growth strategy, says CB. It reports, “Valeant’s apparent lack of interest in R&D has drawn concern from some analysts and industry observers, who say research and development is the most important expenditure for pharmaceutical companies.”

Click here to see how Pearson responds to such criticism.

Also read:

Canada gets “C” grade for innovation: Conference Board

Consider private equity for untapped healthcare opportunities

Should you judge a bond by its label and Why companies issue high-yield bonds, for more on Valeant’s bonds

4 ways to enhance Canadian healthcare

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.