Costa Mesa-based Valeant Pharmaceuticals International boosted its research spending in the fourth quarter as it looks to offset lower sales of a former key drug, the company said Thursday.
Valeant reported a 52% decline in operating profit to $9.5 million in the quarter, versus a year earlier. Overall sales were up 7% to $188 million in the period.
The company was encouraged by the overall sales gain.
“Product sales were strong in the quarter and year and almost completely compensated for the decline in revenue from Ribavirin royalties on the top line,” said Timothy C. Tyson, Valeant’s chief executive, in a statement.
Sales of Valeant’s hepatitis C treatment, Ribavirin, fell 58% to $13 million amid stiffer competition from generic drug makers.
The company boosted its research and development spending in the quarter by 80% to $28 million, versus a year earlier.
Valeant shares were up nearly 3% to $24.2 at close of trading Thursday. The company reported its earnings results before the market opened.
The drug maker has spent most of the past 2.5 years distancing itself from its past under former chief executive and founder Milan Panic, when the company was known as ICN Pharmaceuticals Inc.
Valeant has cut jobs and facilities, concentrated on neurology, infectious diseases and dermatology and focused its sales and marketing efforts on promising markets such as North America and Europe.
To boost its presence in the neurology market, Valeant recently said it plans to buy Xcel Pharmaceuticals Inc. of San Diego for $280 million plus expenses, including $44 million of debt retirement.
