[PascalsMugger]

It's one thing to buy a company and then do layoffs to realize efficiency gains, and another to buy a company essentially for its IP and fire everybody. Sure, it's "cost cutting" taken to its logical extreme. But it's also incredibly wasteful and disruptive.

Valeant's was able to overpay for these companies because it was betting that its shady practices would allow it to realize outsize gains for the IP acquired, and that's turning out to be a bad bet. So not only have they gutted numerous companies, disrupting the lives of many researchers and others, but they are also now under a mountain of debt and have a bunch of husks of companies that aren't worth near what they were paid for. It's lose/lose/lose. The only people who made out are the ones who original owned the companies Valeant bought.

[refurb]

The issue is that Valeant's business model of buying assets and firing everyone else except sales and marketing was/is pretty attractive to Wall Street. Pharma's return on R&D investment has been horrible, so when Pearson said "we don't do R&D", it got some people pretty excited.

Regardless, that business model has been proven to be a poor strategy. Good drugs come from R&D. Can you snap up a bunch of "ok" drugs and sell them through shady techniques? Sure, but it catches up with you eventually.

Take a look at their product line.[1] Jeeze. It's either branded medication that has no real use (since you can get products that are just as good for cheaper) or brand name drugs where the generic already exists. If either a doctor or insurance company was paying attention, none of those drugs would ever be used. Maybe I'm going overboard with that statement, but it's mostly true.

Valeant never was a pharmaceutical company, it was a sales and marketing company for a bunch of low quality drugs.

[1]http://www.valeant.com/operational-expertise/valeant-united-...

[hkmurakami]

>It's one thing to buy a company and then do layoffs to realize efficiency gains, and another to buy a company essentially for its IP and fire everybody.

Isn't that basically what Google did with Motorola?

[eitally]

No, not at all. Motorola Mobility was bleeding cash for years (basically since the end of life for the original Razor -- they didn't have any profitable phones again until the X & G). Yes, Google wanted their patent portfolio, but it's not like MMI was making money before the acquisition ... which was why even prior to the Google purchase Motorola had split into MMI & MSI, which is absolutely profitable selling radio gear & services.