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A coterie of state and local public officials have banded together to take Valeant Pharmaceutical International Inc. CEO Michael Pearson to task over his firm’s plans to move Bausch & Lomb Inc.’s headquarters to New Jersey.
In addition to Democratic Rochester Mayor Thomas Richards and Republican Monroe County Executive Maggie Brooks, a clutch of New York officials on Wednesday dashed off a letter to Pearson expressing outrage over the planned headquarters move. It also addressed the plan to eliminate 10 percent to 15 percent of the eye-care company’s and Valeant’s combined workforce after Valeant’s proposed $8.7 billion takeover of Bausch & Lomb closes.
Signers of the communique include the state’s two Democratic U.S. Senators, Kirstin Gillibrand and Charles Schumer, Rep Louise Slaughter, D-Fairport, Rep. Dan Maffei, D-Syracuse and Gov. Andrew Cuomo, also a Democrat.
Pearson outlined plans to move Bausch & Lomb’s headquarters and cut workers in a memo to employees that was publicly released as a Securities and Exchange Commission filing on Tuesday.
While the Valeant CEO promised to keep Valeant’s manufacturing operations including the post-acquisition’s Bausch & Lomb plant in Rochester, the public officials fear that his promise to cut back on the “high margin” eye-care company expenses will mean longer term woes for Rochester.
“You have thus far made no commitment that (manufacturing operations) will remain in Rochester for the long term, and will not be replaced or phased out as new products come on line. Please respond by describing in detail your medium- and longer-term plans for manufacturing in Rochester,” the letter states.
The officials also called Pearson out on statements he has made concerning research and development that would appear to not bode well for Bausch & Lomb’s substantial Rochester R&D facilities.
“You are on the record as stating that R&D ‘is not a good use of shareholder money,’ and …that ‘R&D investment has not provided a good return for most pharmaceutical companies over the last two decades,’ ” the officials wrote.
Whether their concern would move Pearson—a former McKinsey & Co. consultant turned CEO whose plans for Bausch & Lomb follow a playbook that has won Wall Street plaudits for Valeant in past acquisitions— remains to seen.
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