UPDATE 1-FTC looking at Valeant's contact lens dealings -source

(Adds Reuters source, details of FTC probe)
Oct 27 (Reuters) - The U.S. Federal Trade Commission is
looking into whether Canadian drugmaker Valeant Pharmaceuticals (N:VRX)
International Inc VRX.TO VRX.N illegally cornered the market
for a component of a new type of contact lens, an industry
source told Reuters.
Valeant said on Monday it had received a letter from the FTC
on or about Oct. 16 seeking more information about Valeant's
recent acquisition of Paragon Vision Sciences, which produces a
material used to make gas permeable lenses.
That probe focuses primarily on a small subset of the
contact lens market, Ortho-K lenses, according to the contact
lens industry source, who asked not to be named to protect
business relationships.
The Ortho-K lens, when worn overnight, reshape the patient's
cornea to counteract nearsightness and other vision problems.
After acquiring the Paragon Vision Sciences in May, Valeant
obtained a de facto monopoly on Ortho-K lenses, because Paragon
and Bausch + Lomb, which Valeant already owned, are the only
holders of the FDA approvals required to manufacture the lenses.
The FTC also asked questions about whether Valeant used
distribution contracts as leverage to persuade manufacturers to
exclusively sell other Valeant contact lens products, the person
said.
Valeant did not immediately respond to questions regarding
this story.
ProPublica, a non-profit newsroom that produces
investigative journalism, was the first to report the probe. [http://bit.ly/1jNZTWP
]
Valeant said earlier this month that it had been subpoenaed
by U.S. prosecutors seeking information on its pricing
decisions, drug distribution and patient assistance programs.
The company has come under intense scrutiny for increasing
drug prices. The New York Times also reported last week that
Valeant and other drugmakers were using specialty drug
distributors to circumvent barriers to raise prices.
Valeant's shares went into a tailspin last week after
short-seller Citron Research said the company was using
specialty pharmacies to inflate its revenue.
The company denied the allegation and asked the U.S.
Securities and Exchange Commission to look into Citron.
Valeant's U.S.-listed shares closed up just under 1 percent
at $145.46 on Tuesday. Up to Monday's close, the stock had lost
about 38 percent of its value since Oct. 14 when the company
disclosed that it had received a federal subpoena.