Valeant Pharmaceuticals International Inc. is changing up its Southern California operations after closing its $8.7 billion buy of diversified eye product maker Bausch + Lomb Inc. this month.
The Canada-based drug maker with Orange County roots is consolidating its California operations into an Irvine office previously occupied by Ista Pharmaceuticals Inc., company spokesperson Laurie Little said in an email. It’s also shedding some employees, including top executives.
The Irvine office, on 50 Technology Drive in the Irvine Spectrum, will house an unspecified number of employees from Bausch and Valeant, Little said.
Bausch, formerly headquartered in Rochester, N.Y., bought Irvine-based Ista, a maker of eye drugs, last year for $500 million.
One face that won’t be staying: John Barr, head of Bausch’s eye surgical hub in Aliso Viejo.
Cuts
Barr is one of 11 Bausch and Valeant executives who “will all transition out of the [combined] company,” Valeant Chief Executive J. Michael Pearson said in an employee memo filed with the Securities and Exchange Commission this month in connection with the deal’s closing. Those cuts include one person who is retiring.
“These executives have all created significant value … and we wish them well in future endeavors,” Pearson said in the memo.
“We are planning to eliminate the global structure and to reduce significantly the regional structure currently in place at Bausch + Lomb,” Pearson said, referring to the consolidation and employee reductions.
Pearson also said the combined company will cut about 10% to 15% of its total workforce. Bausch had some 11,000 workers, while Valeant had about 7,000 as of the end of 2012, according to their annual reports filed with the SEC. Bausch’s Aliso Viejo office had an estimated 175 workers.
Valeant filed a notice with the state Employment Development Department showing it laid off 77 workers in Long Beach in April, but it hasn’t filed anything for Orange County.
Its Southern California consolidation also includes the move of Valeant’s Obagi Medical business from Long Beach to Irvine. Valeant bought Obagi Medical Inc., a maker of dermatology products, this year for $420 million.
Valeant at the same time is consolidating its eye health group, now known as Bausch + Lomb Eye Health, to Madison, N.J., where Bausch’s eye drug business is based.
Valeant announced plans in May to buy Bausch, a maker of contact lenses, contact lens solutions, prescription drugs and eye surgical equipment. Bausch had filed for an initial public offering prior to Valeant’s deal that analysts said could raise up to $1.5 billion, which placed its value at $9 billion to $10 billion.
Analysts generally had a favorable impression of the deal and Valeant’s foray into eye products, where it competes with companies such as Irvine-based Allergan Inc.
Ophthalmology
“[The ophthalmology industry is] growing at a solid pace, it has a high cash-pay component and generic products face strict barrier to entry,” said David Krempa and Damien Conover, analysts with Chicago-based Morningstar Research, in a research note. “Ophthalmology is much more attractive than other specialty pharma segments like women’s health and central nervous system drugs.”
Bausch made Orange County its eye surgery hub after buying Aliso Viejo-based surgical replacement lens maker Eyeonics Inc. in 2008. It then added to its local presence with its buy of Ista.
Bausch had $508.1 million in sales in 2012, about 17% of Bausch’s overall revenue, according to regulatory documents. Products include the Crystalens; SofPort, Akreos and enVista replacement intraocular lenses; and Victus, a femtosecond laser for cataract, vision correction and therapeutic procedures.
Valeant has its roots in Costa Mesa-based ICN Pharmaceuticals Inc., founded in the early 1960s by immigrant and former Serbian prime minister Milan Panic. ICN changed its name to Valeant in 2003 after activist shareholders forced out Panic.
Canadian drug maker Biovail Corp. bought Valeant, which had moved from Costa Mesa to Aliso Viejo, in 2010 for $3.2 billion and took on the Valeant name.
