Valeant-Biovail deal to result in bigger cut in jobs

The combined workforces of Valeant Pharmaceuticals International, based in Aliso Viejo, and Biovail Corp., in Ontario, Canada, will be reduced more than originally announced when Biovail said it was taking over the local firm.

According to an e-mail included in a Securities and Exchange Commission filing Tuesday, Valeant Chief Executive J. Michael Pearson said that about 25% of the workforce would be laid off when the transaction was complete.

In the June announcement, the companies placed job losses at 20%.

As of the end of last year, Valeant had about 3,100 employees, and Biovail, Canada’s largest drug company, had about 1,300, according to regulatory filings. It has not been determined when the job losses would be completed, or which company’s workforce would suffer more layoffs, said Laurie W. Little, a Valeant spokeswoman.

The companies are hoping to complete the integration by the end of the year, after securing shareholder approval, Little said.

Once Biovail completes its purchase of Valeant, it would take the Valeant name.

The headquarters of the new Valeant would be in Mississauga, Ontario, but Valeant’s current Orange County office would remain open, the companies said. Pearson, Valeant’s current CEO, would head the new company.

Both companies have had well-publicized troubles over the years. Valeant was founded by the flamboyant Milan Panic, who started the company in his garage. In 1998 the SEC sought to have him ousted in connection with alleged trading violations, and in 2001 the company pleaded guilty to securities fraud and agreed to pay a $5.6-million fine.

Biovail’s founder, Eugene Melnyk, resigned in 2007 after the company was accused of accounting fraud.

After the disclosure of the reduction in workers, Valeant shares rose $3.86, or 6.4%, to close at $63.84. Biovail shares jumped $2.29, or 9.6%, to $26.25.

nathan.olivarezgiles@latimes.com