If the formula was real, then the alchemist offers him the reward from him thus completing the quest and Geralt can leave things at that, or Geralt can bring up the fact that he recalls exactly what Bleinheim did in Vizima and kill Pugg and the guards (There appears to be a bug in this part of the quest. For unknown reasons Geralt is not given the option to kill Pugg and the guards if he has given him the real formula and was not blindfolded. However, one can still choose to kill Pugg and the guards in this situation simply by drawing your weapon at that point. The guards will attack and all, including Pugg, can be slain).
I played the quest yesterday and can confirm that this is the case. While I can kill them afterwads the journal still marks the quest as completed and says that Geralt took the money and couldn't care less. I'm affraid of the consequences this outcome might cause if I import my save into Witcher 3.