Wednesday, May 18, 2016
Valeant's thinking about shedding some assets
Valeant Pharmaceuticals is thinking about selling some of its skin and cancer drugs in order to pay down some of its over $30 billion debt pile, according to Manuel Baigorri, Ed Hammond and Cynthia Koons at Bloomberg.
What's up for grabs? Obagi, a dermatology company Valeant acquired in 2013, and Provenge, a prostate cancer treatment.
Bloomberg reports that the sales could raise $1 billion for the company.
Valeant started to unravel in October, when allegations of malfeasance from a short seller combined with government scrutiny over its pricing practices to drag the stock down. The company was also forced to make some embarrassing revelations about a secret pharmacy called Philidor that was selling Valeant drugs almost exclusively.
Former CEO Michael Pearson said that 2016 would be the year that Valeant would focus on reducing debt, but through all the chaos of Valeant's scandal — its delayed annual and quarterly reports, its ousted CEO, its several beatings from Washington — that promise got lost in the uncertainty.
Now it seems new CEO Joe Papa will keep that promise. Hedge fund billionaire Bill Ackman who sits on Valeant's board and has been involved with the company since 2014, said that the company would not sell Bausch & Lomb, a core consumer business. So it seems they've found another way to raise money.
It is worth noting that Philidor pushed a lot of skin drugs for Valeant, so maybe they're just not worth as much to the company anymore. In fact, Bill Ackman suggested selling that part of the business ages ago, according to a bunch of e-mails leaked in a government document dump earlier this month.