The beleaguered drug maker is firing the 140-person contract sales force that markets the pill and another 143 sales reps who peddle dermatology medicines and a treatment for irritable bowel syndrome that is marketed to hospitals.
“We must adapt to headwinds that … are impacting anticipated growth rates in certain franchises and geographies,” Michael Pearson, the Valeant chief executive, wrote in a memo to employees Monday.
The move comes amid ongoing turmoil at Valeant. The drug maker faces several government probes into its pricing and accounting practices as well as tough negotiations with creditors as the company seeks to waive a default and loosen restrictions on $30 billion in debt. Valeant stock has lost about $75 billion in value since August, and Pearson is on his way out.
The firings come shortly after some investors reportedly criticized Valeant for failing to successfully promote the drug and setting its price too high. Last fall, Valeant bought Sprout Pharmaceuticals, which had just won regulatory approval for the Addyi pill amid controversy over its safety and effectiveness. Valeant is charging $800, or roughly double what Sprout market research had reportedly anticipated.
Although Valeant paid $1 billion for Sprout, the investment was expected to pay off quickly with sales forecasts showing $1 billion in sales over the past few months following a launch last September. Instead, Addyi has been a disappointment. Last December, however, Valeant dialed back projections to between $100 million and $150 million. And last month, the forecast was cut yet again.
Pearson, however, maintained that Valeant isn’t giving up on the pill. Rather, he wrote employees that Valeant will develop its own internal sales force to market the drug, although he did not offer details about those plans. A Valeant spokeswoman declined to comment.
Meanwhile, the company is firing 85 sales reps who promote dermatology medicines and another 45 who market gastrointestinal drugs, including a drug that came with its $11 billion purchase last year of Salix Pharmaceuticals. Expectations for both product categories were recently lowered. Another dozen positions are being eliminated from the company’s women’s health business.