Valeant tumbled to a loss in its first quarter, and the embattled drug maker, squeezed by higher costs, cut its profit and revenue expectations for the year.
Shares, which have plunged almost 90% in the last year, fell 14% before the opening bell Tuesday.
The Canadian pharmaceutical company disclosed last week that it had been served with default notices from two lenders because the first-quarter earnings report had been postponed.
Swamped by government investigations into its business and accounting practices, Valeant posted long-overdue results from 2015 in April.
That same month, Chief Executive J. Michael Pearson was excoriated in a congressional hearing at which lawmakers accused Valeant of gouging patients to reward Wall Street investors.
Valeant’s stock price surged for years, fueled by a strategy of gobbling up smaller companies and raising prices on niche drugs — bypassing the huge research and development investments typical of the drug industry.
But the company’s approach has drawn scrutiny from federal prosecutors, Congress and its own investors.
Shares that traded above $260 around this time last year, fell below $25 in pre-market trading.
For the three months ended March 31, Valeant lost $373.7 million, or $1.08 per share. That compares with a profit of $97.7 million, or 28 cents per share, a year earlier.
Earnings, adjusted for one-time gains and costs, were $1.27 per share, but that’s well below the $1.42 that Wall Street had expected, according to a survey by Zacks Investment Research.
Selling, general and administrative expenses climbed to $620.2 million, from $507.9 million, while research and development costs increased to $103.1 million, from $55.8 million. Amortization and impairments surged to $694.5 million, from $365.2 million.
Revenue rose to $2.37 billion, from $2.17 billion, mostly because of acquisitions it completed last year. The results beat the $2.35 billion that Wall Street predicted.
Valeant now anticipates a full-year adjusted profit in a range of $6.60 to $7 per share on revenue between $9.9 billion and $10.1 billion. Its prior guidance was for an adjusted profit in a range of $8.50 to $9.50 per share on revenue between $11 billion and $11.2 billion.
Analysts polled by FactSet had expected full-year earnings of $8.43 per share on revenue of $10.9 billion.