My bankrupt uncle's business strategies make more sense than Valeant's

[Anonymous]

So after buying B+L, Valeant now has a debt-to-equity ratio (D/E) of approximately 3.6 times. This means that for every dollar of equity, the company owes 3.6 dollars. To buy B+L (cash+pay loans), the company had to borrow money at a higher interest than that which B+L was already buying. After the buyout, the executives at Valiant promised the board and the investors that they would slash 15% of B+L's jobs (approx 1725 jobs). So far they've laid off 500, which means they have 1225 souls to kick out on the curve. B+L was already running a pretty tight ship, which means that this move is going to sacrifice today's quality and kill growth opportunities. All to show in the books that they've cut "costs" down.

This buyout is equivalent to my bankrupt drunk uncle borrowing money from the loan sharks to buy the gas station down the street, and then drink all the beer and wine coolers inside, and finally run it down and burn it down with a fantastic explosion at the end.

Of course, in the case of the buyout, B+L and Valeant executives have some nice golden parachutes that will spear them from the explosion.

 

[Anonymous]

bravo!! you sir (or madam) are brilliant..thanks for the analogy..it is spot on

 

[Anonymous]

Sorry, but B+L was NOT running a tight ship, at least in pharma. Too many incompetent people who couldn't do the jobs they were in. They employed too many consultants to do the work that their employees could not do. Dan DID NOT clean up anything when he took over. He kept the wrong people at the top and listened to them. If he had really done his job, B+L could have been in a better position to go public earlier.

And when are you going to realize that Valeant does not want to be a pharma company in the traditional sense? They want products to sell, not products to develop. MP vastly overpays for the products, jettisons the development, and ends up with this huge debt. He has led the stockholders to believe that product sales will pay off the debt -- what a terrific con man!

 

[Anonymous]

second the point that b&l was definitely not a tight ship. tons of redundancy and ineffective management. Under the old management you could have laid off 50% of the sales force, half of marketing, and half of management without impacting business.

under valeant, add in reasearch, HR, regulatory, and all the other redundant departments they don't need. Be happy it's only 15% they're looking at, I bet long term it's closer to 50% of B&L original headcount, just like medicis. Given a long enought time line, original B&L headcount ----> goes to 0.

 

[Anonymous]

second the point that b&l was definitely not a tight ship. tons of redundancy and ineffective management. Under the old management you could have laid off 50% of the sales force, half of marketing, and half of management without impacting business.

under valeant, add in reasearch, HR, regulatory, and all the other redundant departments they don't need. Be happy it's only 15% they're looking at, I bet long term it's closer to 50% of B&L original headcount, just like medicis. Given a long enought time line, original B&L headcount ----> goes to 0.

If Valeant looked at how many people were hired in R&D in the last 7 years they would be shocked. In fact half of all B&L R&D was likely hired in the last 7 years. Also since almost everyone with over 10 years experience were let go or left the number of people in R&D with less than 7 years experience is likely 75%. These people are expendable and replaceable as they have not been around long enough to have special skills. A 50% cut in R&D followed by a 25% rehiring would be the best move to revitalize a dysfunctional organization.

 

[Anonymous]

If Valeant looked at how many people were hired in R&D in the last 7 years they would be shocked. In fact half of all B&L R&D was likely hired in the last 7 years. Also since almost everyone with over 10 years experience were let go or left the number of people in R&D with less than 7 years experience is likely 75%. These people are expendable and replaceable as they have not been around long enough to have special skills. A 50% cut in R&D followed by a 25% rehiring would be the best move to revitalize a dysfunctional organization.

THERE IS NO REVITALIZATION OF R&D or B&L. GET IT THROUGH YOUR HEAD. IT'S OVER!

 

[Anonymous]

THERE IS NO REVITALIZATION OF R&D or B&L. GET IT THROUGH YOUR HEAD. IT'S OVER!

I can't believe I survived the cuts. Easy street for now on as Valeant can not cut anymore in Rochester. Not a bad deal. Also, no one is going to be hired at B+L for the next 5 years so it is the best of all worlds. Can not be let go and no competition from new hires over the next 5 years. Not a bad place to work.

 

[Anonymous]

Sorry, but B+L was NOT running a tight ship, at least in pharma. Too many incompetent people who couldn't do the jobs they were in. They employed too many consultants to do the work that their employees could not do. Dan DID NOT clean up anything when he took over. He kept the wrong people at the top and listened to them. If he had really done his job, B+L could have been in a better position to go public earlier.

And when are you going to realize that Valeant does not want to be a pharma company in the traditional sense? They want products to sell, not products to develop. MP vastly overpays for the products, jettisons the development, and ends up with this huge debt. He has led the stockholders to believe that product sales will pay off the debt -- what a terrific con man!

I've seen the analogy "house of cards" used all over Cafepharma with respect to previous [smaller] deals. It's the same with B+L, just on a much larger scale. :-\

 

[Anonymous]

I can't believe I survived the cuts. Easy street for now on as Valeant can not cut anymore in Rochester. Not a bad deal. Also, no one is going to be hired at B+L for the next 5 years so it is the best of all worlds. Can not be let go and no competition from new hires over the next 5 years. Not a bad place to work.

hahaha, boy does the liars at Valeant have you fooled. Hope your resume is updated.

 

[Anonymous]

hahaha, boy does the liars at Valeant have you fooled. Hope your resume is updated.

The politicians have Valeant by the balls and the current employees in Rochester know it. The game is to make it look like you are working but really do very little work. If you work too hard you may actually become more efficient or approve a new product which then puts your current job at risk. Slow it down as much as you can. These guys reward hard work with a pink slip and either a white or black folder.

 

[Anonymous]

BL exec says I want resources to do the job.
Valeant says no
BL exec says but I can't do what you want me to do
Valeant says sorry figure it out
BK exec says but this will get us in trouble
Valeant says our processes are lean and we will nog allow this
BL exec says then you tell me how to do my job
Valeant says easy we will let you go and find someone
BL exec says but that is nog the way to run business
Valeant says but we grew 32% year over year doing exactly that

BL people smell the above and leave now of your career will be tarnished due to Valeant's reputation. You are smart, better than dumb ass Valeant, smell the leaves, do the right thing before it is too late.

 

[Anonymous]

BL exec says I want resources to do the job.
Valeant says no
BL exec says but I can't do what you want me to do
Valeant says sorry figure it out
BK exec says but this will get us in trouble
Valeant says our processes are lean and we will nog allow this
BL exec says then you tell me how to do my job
Valeant says easy we will let you go and find someone
BL exec says but that is nog the way to run business
Valeant says but we grew 32% year over year doing exactly that

BL people smell the above and leave now of your career will be tarnished due to Valeant's reputation. You are smart, better than dumb ass Valeant, smell the leaves, do the right thing before it is too late.

Answer. Do not get the job done. Make Valeant lay you off. Collect severance and unemployment. Why care. Whether you get the job done or not Valeant will eventually lay you off. So don't take the job so seriously. Enjoy the roses, sit back and let things not work out. Just refuse to sign anything that might get you into trouble with the FDA.

 

[Anonymous]

Valeant should graph out the number of employees in each department over the past 10 years. The number of employees in each department is probably at its highest point now minus the 15% layoff from a few weeks ago.

Still a lot of cutting that can be done.