Valeant Pharmaceuticals International announced second quarter 2016 financial results. Total revenues decreased 11% to $2.42 billion in the second quarter of 2016 as compared to $2.73 billion in Q2 of 2015.
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That was driven primarily by a decline in product sales revenues from company's existing business, as well as negative foreign currency exchange impact, partially offset by incremental product sales revenues from acquisitions completed in 2015.
In the Developed Markets segment, revenues declined 14%, driven mainly by a decline in product sales revenue from company's existing business, primarily as a result of lower average realized prices which were in turn impacted by higher managed care rebates, lower price appreciation credits, company's fulfillment agreement with Walgreens, and higher group purchasing organization (GPO) rebates.
These factors were partially offset by an increase in contribution from acquisitions completed in 2015, primarily from Salix Pharmaceuticals, Ltd. and certain assets of Dendreon Corporation.
In the Emerging Markets segment, revenues were flat as compared to the second quarter of 2015, primarily due to a small decline in the existing business and negative foreign currency exchange impact, which were partially offset by incremental product sales revenue from acquisitions completed in 2015.
Cost of goods sold were $647 million in the second quarter of 2016 as compared to $670 million in the second quarter of 2015, a decrease of 3% primarily due to a decline in sales volumes, partially offset by increased sales from acquisitions completed in 2015, primarily of Salix and Amoun Pharmaceutical Company S.A.E.
Selling, general and administrative expenses ("SG&A") were $672 million in the second quarter of 2016, as compared to $686 million in the second quarter of 2015. As a percentage of revenue, SG&A was 28% in the second quarter of 2016, as compared to 25% in the second quarter of 2015.
Research and development (R&D) expenses were $124 million in the second quarter of 2016 as compared to $81 million in the second quarter of 2015, primarily due to the development programs related to the Company's dermatology product portfolio, as well as spending on brodalumab and programs acquired in the Salix acquisition.
Net loss in the second quarter of 2016 was $302 million as compared to a net loss of $53 million in the second quarter of 2015. Adjusted net income (non-GAAP) in the second quarter of 2016 was $488 million as compared to $751 million in the second quarter of 2015.
Cash flow from operations was $448 million in the second quarter of 2016 as compared to $411 million in the second quarter of 2015, an increase of 9% over the same period in 2015. ■