Valeant Said to Weigh Sale of Skin, Cancer Drugs to Cut Debt

Valeant Said to Weigh Sale of Skin, Cancer Drugs
  • Assets for sale could include drugs acquired from Marathon
  • Sale of all products could fetch about $1 billion in total

Valeant Pharmaceuticals International Inc. is exploring the sale of some of its smaller cosmetic and pharmaceutical assets, according to people familiar with the matter, as the Canadian drugmaker scrambles to raise cash and reduce debt.

The company is considering the disposal of Obagi Medical Products Inc., a dermatology company it acquired in 2013, as well as Provenge, a treatment for advanced prostate cancer that was purchased last year, said the people, who asked not to be identified because the matter is private.

Valeant may also sell drugs acquired from Marathon Pharmaceuticals last year, one of the people said. Those treatments include Isuprel and Nitropress, which came under scrutiny after Valeant boosted their prices by 525 percent and 212 percent, respectively, shortly after buying them. The company said Monday it would expand the discounts to hospitals on both drugs.

The divestitures could raise as much as $1 billion and attract other drugmakers with an interest in those areas, two of the people said. The process is at a preliminary stage, no decision is imminent, and the company may decide against selling some or all of the assets, they said.

A spokeswoman for Valeant declined to comment.

The drugmaker has previously said that it might dispose of certain “non-core” assets as it seeks to pay down some of its more than $30 billion in debt and return to stable footing after a disastrous eight-month run. Valeant needs to sell assets “to more aggressively delever” and the vision-care business Bausch & Lomb would command a “reasonable multiple" if sold, BTIG analyst Timothy Chiang wrote in a note last month.

Valeant’s new Chief Executive Officer Joe Papa is seeking to turn around the beleaguered company, whose shares have plunged almost 90 percent since their peak in August amid an accounting scandal and investigations by the U.S. federal government.

The stock plunge may have an upside, Andrew Left, the short seller whose report on Valeant triggered the drugmaker’s tailspin, said earlier this week. Left, owner of Citron Research, is a buyer of the stock now that many funds are exiting.

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