Aliso Viejo drug maker Valeant Pharmaceuticals International has come up with its bill to correct misdated stock options.
Valeant restated earnings for 2003, 2004 and 2005, as well as some numbers for 2001, 2002 and 2006. The company restated the results to add stock compensation expenses, correct accounting errors and record tax impacts.
The final bill: $31.1 million before taxes and $23 million after.
Last month, Valeant also released restated third-quarter earnings. It swung to a profit of $13.7 million from a loss of $2.7 million in 2005’s third quarter.
Analysts expected the drug maker to earn $12 million in the quarter.
Third-quarter revenue was $220 million, slightly higher than the $219.4 million Valeant initially reported in November.
Valeant is among scores of companies caught up in stock options controversy.
The company reviewed its stock option practices after the Securities and Exchange Commission asked it for information on how it granted options as part of an informal inquiry.
A special committee of Valeant’s board found some errors as late as January 2006. But most related to options granted prior to a shakeup in Valeant’s board and management in mid-2002, when the company was known as ICN Pharmaceuticals Inc.
The day after announcing its restatements, Valeant had several financial ratings confirmed by Moody’s Investor Service.
Moody’s rated Valeant’s outlook as positive and confirmed its Ba3 rating on $300 million worth of debt due in 2011, along with confirming a B2 corporate cash-flow-to-debt rating and a B1 default rating.
In a statement, Moody’s said Valeant’s recent re-filing of results had “minimal to no effect” on the drug maker’s previously reported revenue, cash flow, cash balances or debt.
Edwards Cuts, Shifts Jobs
Edwards Lifesciences Corp., the Irvine heart valve maker, cut 70 workers in Irvine as part of a previously announced end of a product.
Many of those workers have found other positions within the company, said Jared Adams, an Edwards spokesman.
The cut came about after Edwards said in December that it was ending its Optiwave 980 cardiac laser ablation system, which was used to treat abnormal heart rhythms. Edwards plans to take a $16 million fourth-quarter charge as a result.
Edwards wants to focus on products with greater growth prospects, including its mainstay heart valve business.
In December, Chief Executive Michael Mussallem said focusing on Edwards’ core products and restructuring the company “best prepares us for the new technologies and growth platforms Edwards is pursuing.”
Bone Graft Moves
Radius Medical LLC of Newport Beach has sold some of its technology and assets for treating spinal injuries to NuVasive Inc., a publicly held company from San Diego. NuVasive said it paid $16 million, including $10.2 million in stock and $5.8 million in cash.
NuVasive bought exclusive licensing and marketing rights to Formagraft, a line of bone graft strips and granules used in spinal surgery, and underlying collagen technology. NuVasive also said it would make a separate $2 million equity investment in Maxigen Biotech Inc., a Taiwanese company that makes Formagraft and owns a portion of its core technology.
The products acquired from Radius generate yearly sales of about $3 million.
The company said it expects sales from them to add $4 million to $5 million in revenue this year and about $10 million of revenue in 2008.
Separately, Isotis Inc., an Irvine developer of bone graft substitutes, now trades on Nasdaq.
Its debut followed an exchange offer in which it bought 75% of the shares of its Lausanne, Switzerland-based parent, Isotis SA.
Isotis said it wanted to become a U.S. company for several reasons, including easier access to capital and to align its listing with its primary market and operations base.
The company sells natural and synthetic substitutes for bone grafts to orthopedic and spinal surgeons. They’re used for spinal fusion, trauma repair, joint revision and surgery for head and facial fractures.
Isotis was formed in 2003 when Irvine-based GenSci Orthobiologics Inc. combined with Isotis SA.
Bits and Pieces:
Dallas Salisbury, president of the Employee Benefits Research Institute, gives a national healthcare update during the Thursday breakfast meeting of the Orange County Employee Benefit Council. Meeting runs from 7:30 a.m. to 9:30 a.m. at the Hilton Orange County in Costa Mesa. Information: www.ocebc.org Spectrum Pharmaceuticals Inc. of Irvine said it started a phase 2b trial for ozarelix, its drug candidate for treating benign enlarged prostate. Spectrum also said it’s on track to start a third-phase trial in the second half of this year Memorial Prompt Care and Family Medicine, in association with Fountain Valley’s Orange Coast Memorial Medical Center, opened a center at Adams Avenue and Magnolia Street in Huntington Beach New Directions for Women, a Costa Mesa facility that helps women, families and children recover from drug and alcohol addiction, signed a management contract with Dual Diagnosis Management LLC, a Nashville, Tenn.-based company that owns and manages several behavioral health facilities nationwide.
