Valeant CEO Michael Pearson
Quebec's pharmaceutical sector – hit recently by layoffs and closures of research facilities – finally got some good news Tuesday with the announcement that Valeant Pharmaceuticals International Inc. is moving its global head office to the Montreal region.
The company, created two years ago when U.S.-based Valeant merged with Canada's Biovail Corp., said it will also beef up its research work in the province, making it a centre for the company's consumer skin-care products.
A big factor in getting Valeant to move its headquarters from Mississauga was a $6-million incentive kicked in by the Quebec government, which will help offset the $38-million cost to move to Montreal and expand there. The government help consists of a $3.5-million non-repayable contribution and a $2.5-million interest-free loan.
"The Quebec government was quite generous and accommodating," Valeant chief executive officer Michael Pearson said in an interview. At the same time, the recent cutbacks at other pharma operations in the province mean there are many highly-qualified workers the company can hire, he added. "We plan to keep growing, and the upside for us, from all the other companies downsizing or moving out, is that there are a lot of talented people [available]"
Valeant will expand its existing facilities in Montreal and initially hire about 50 new people – in addition to the 320 it already has there – but has no plans to build any new offices for the time being. It owns several buildings in Laval, just north of the city, including the Laboratoire Dr. Renaud where dermatology research is conducted. Valeant's headquarters will eventually be located in a building formerly used by Dermik, an arm of Sanofi that Valeant bought late last year.
Mr. Pearson said the company has given up the lease on its Mississauga headquarters building, but will retain the 75 or so people it has in Ontario. Some of them will help manage the Cold-FX product that Valeant acquired last year when it bought Edmonton's Afexa Life Sciences Inc. Valeant's manufacturing facility in Steinbach, Man., will not be affected.
While Valeant's corporate headquarters has been Canada since the merger with Biovail, it is a decentralized company where many operating decisions are made elsewhere. Mr. Pearson lives in New Jersey and spends much of his time travelling.
Still, having a new corporate head office move to Quebec is a big boost for the province's biotech sector, said Paul Karamanoukian, Canadian leader for the life sciences practice at consultant Ernst & Young. The region still has a significant presence in the pharmaceutical industry, lots of research facilities and a large talent pool, he said, but "any head office that moves to Montreal is excellent news for the area."
Quebec Premier Jean Charest said Valeant's move helps solidify the presence of industrial pharmaceutical companies in the province, and his government will continue to support the sector.
That's an irresistible combination, Mr. Pearson said: "Talent, plus a hospitable government, attracts investment."