Valeant Pharmaceuticals Intl (NYSE:VRX) is considering the possibility of selling Paragon Vision Sciences, its specialty contact lens manufacturing unit. The Canadian company contacted potential buyers, according to a report from Reuters based on information familiar with the situation.
The Canadian pharmaceuticals company is exploring the idea amid the investigation of the Federal Trade Commission (FTC) related to its acquisition of Paragon Vision Sciences earlier this year through its unit Bausch & Lomb.
Market observers suggested that selling contact lens manufacturing unit could upset Valeant Pharmaceuticals endeavor to consolidate the market for gas permeable contact lenses.
FTC investigation on Valeant’s acquisition of Paragon Vision
The FTC is examining whether Valeant Pharmaceuticals cornered a portion of the contact lens market particularly the Ortho K-lenses, which reshape the patient’s cornea to counteract nearsightedness and other vision problems when worn at night.
In October, the Canadian pharmaceuticals company disclosed that the FTC is conducting a non-public investigation and intended to cooperate with the Commission regarding the matter.
Reuters previously reported that Valeant Pharmaceuticals has been using its market power to increase the prices for raw materials used for manufacturing contact lens called buttons.
The company also tried to acquire a significant portion of laboratories that produces finished lenses to dominate the gas permeable lenses segment of the market. Market observers suggested that Valeant Pharmaceuticals will lose its monopoly on Ortho-K lenses if it would sell Paragon Vision Sciences.
Other challenges facing Valeant
Aside from the FTC investigation, Valeant Pharmaceuticals is also facing inquiry from lawmakers regarding the huge price increases on its two drugs— Nitropress, a blood-pressure drug and Isuprel, a heart-rhythm treatment.
Valeant Pharmaceuticals increased the price of Isuprel by 525% to $1,346 and Nitropress by 212% to $805.61 after acquiring the rights for both medicines earlier.
Citron Research also accused the company of inflating sales using pharmacies such as Philidor and called it as the “Enron of pharmaceutical.” The accusation prompted investors to sell their stakes in the company.
The shares of Valeant Pharmaceuticals closed $92.19 per share, down by 3.27% on Monday. The company lost almost 60% of stock value over the past three months.
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