Valeant Pharmaceuticals International Inc., which has been accused of price gouging, said it would sell its skin and eye products at a discount in more than 8,000 Walgreens Boots Alliance Inc.'s pharmacies in the United States. Valeant's U.S.-listed shares rose 12 percent to $105.42 in early trading on Tuesday. The Quebec-based company's Toronto-listed shares were up about 12 percent at C$144.70.
The 20-year deal with Walgreens, the biggest drugstore operator in the U.S. by the number of pharmacies, is the latest by the Canadian drugmaker to allay shareholder concerns following federal investigations and criticism from the company's top stakeholders.
One of the allegations over Valeant's business practices was that the company was inflating revenue through its relationship with specialty drug distributor Philidor. The company cut its ties with Philidor on Oct. 30.
Valeant Chief Executive Officer Michael Pearson told CNBC on Tuesday that the company's agreement with Walgreens "more than replaces" its deal with Philidor.
He said he expected the Walgreens deal to grow business through volume.
Earlier in December, people familiar with the matter told Reuters that Valeant was reaching out to potential buyers for its specialty contact lens manufacturing division, Paragon Vision Sciences, amid scrutiny from the Federal Trade Commission.
Billionaire Bill Ackman, one of Valeant's largest shareholders, has said the company made a "meaningful mistake" of underinvesting in public relations as it dealt with questions about its business practices.
Veleant said on Tuesday prices of the skin and eye products would be reduced by 10 percent.
The drugmaker said it will offer the discounted drugs over the next six to nine months under the deal, which will take effect in the first quarter of 2016.
The company will offer 30 branded products at a discount of 5 to 95 percent through Walgreens pharmacies, according to a separate agreement between the companies.
Valeant said it expects the deal to provide about $600 million in savings to the American healthcare system.
From mid-October through Monday's close, Valeant's U.S.-listed shares lost nearly 44 percent of their value.