Valeant will get a new name — again — hoping to shed its scandals

Valeant will get a new name — again — hoping to shed its scandals

Valeant Pharmaceuticals International Inc. is hoping that a new name will put a rocky few years and an accounting scandal behind it — again.

The change, to Bausch Health Companies Inc. and the new ticker BHC, is scheduled for July.

It will be the corporate’s second scandal-inspired name change in lower than 10 years. In 2010, after the troubled pharmaceutical firm Biovail acquired Valeant

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the mixed firm glided by the name Valeant as a substitute.

Rebranding is a time-honored software for corporations, giving them a contemporary begin and bringing them nearer to what they need to be recognized for, stated Carreen Winters, chairman of popularity and chief technique officer at public affairs company MWWPR.

In Valeant’s case, that may be its well-known Bausch + Lomb eye merchandise line, which sells contact lenses, dry eye merchandise, prescription eye merchandise, surgical merchandise and extra. The enterprise unit introduced in $four.9 billion in income final yr, making it by far Valeant’s largest unit by income.

But any name-change should be each understood and accompanied by actual change, Winters and different specialists say. And whereas it could work to shed a unhealthy popularity amongst customers, it received’t work on everybody.

“Investors are incentivized to follow your company. So you’re not going to fool them when you change your name,” Winters stated. “Financial statements don’t go away — they follow you.”

Related: Valeant’s tangled web of allegations


Many corporations have used new names to sign one thing totally different about themselves, or escape the taint of scandal. Bed ’n Bath, for instance, modified to Bed Bath & Beyond

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 to present that it had expanded and bought a wider number of merchandise.

After a main crash that killed greater than 100 individuals on board, low cost airline ValuJet purchased AirTran and glided by that name; it was later acquired by Southwest

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And the Lance Armstrong Foundation modified its name to the Livestrong Foundation after the doping scandal surrounding its founder.

But a name change received’t achieve success until the enterprise is substantively modified, branding specialists say.

In latest years, Valeant was residence to a main accounting scandal relating to its specialty pharmacy community, Philidor, in addition to criticism of its observe of shopping for medication and climbing their costs.

Valeant later shut down Philidor and now has new management, together with new Chief Executive Joseph Papa.

Read: Coca-Cola rebrands Diet Coke for millennials, but what’s in the can may be the problem

The firm has additionally been working to repay its vital long-term debt, although it’ll be a lengthy street.

See: How a ‘new’ Valeant could emerge under change of leadership

The firm’s newest rebranding dates again to a comparable transfer by the Canadian pharmaceutical firm Biovail, which acquired drugmaker Valeant, then primarily based within the U.S., in 2010, in a tax inversion deal.

After the acquisition, the mixed firm took Valeant’s name, tagging an “Inc.” to the tip, and put Valeant’s CEO, J. Michael Pearson — who oversaw Valeant’s more moderen scandals — in cost.

The firm, nonetheless, stored Biovail’s company construction and remained primarily based in Canada.

At the time, Biovail was in the midst of its personal accounting scandal and embroiled in litigation, together with a cost of accounting fraud, with the Securities and Exchange Commission.

The SEC alleged that Biovail had overstated earnings and hidden losses, and misled buyers and analysts in regards to the causes for its poor monetary efficiency; Valeant later settled a civil go well with.

It is frequent for a firm to change its name after merging, specialists say. But it could possibly solely do it so many occasions earlier than it turns into much less efficient, Winters stated.

Associating the corporate extra intently with its Bausch + Lomb line helps Valeant leverage and escalate optimistic associations with the road, stated Richard Swain, vp of name technique and id for digital advertising and marketing agency Huge.

But “the challenge with that is, if they ever had the intention of divesting Bausch + Lomb as an entity, it’s going to be difficult now that they’ve attached the name to the corporate, brand name,” Swain stated. Moreover, “if behaviors don’t change, the negative association could transfer to Bausch + Lomb, which obviously wouldn’t be a good thing.”

(For what it’s price, Valeant did get subpoenaed by the Department of Justice relating to Bausch + Lomb in 2015).

Valeant was reportedly contemplating promoting a part of its Bausch + Lomb enterprise final summer time, Bloomberg reported, and promoting your complete enterprise unit has been floated as a approach to cut back or get rid of the corporate’s debt.

The new name is probably going to be met with criticism, as a result of individuals don’t like change, Swain stated.

Aligning itself with Bausch + Lomb additionally received’t tackle a frequent criticism of Valeant, that it doesn’t develop any new medication itself. The firm purchased Bausch + Lomb in 2013.

Valeant shares have risen almost 17% over the past three months, in contrast with a three.three% rise within the S&P 500

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and a 1.eight% rise within the Dow Jones Industrial Average

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