Valeant $2 Billion Assets Sale Will Pare Debt
Canadian-headquartered, US-managed drugmaker Valeant said it will sell around $2 billion worth of assets as it sets about paring down its staggering debt burden of around $30 billion. Among other things, the asset sale calls for divestment of three skincare brands to French cosmetic giant L'Oréal for $1.3 billion. The three product lines, CeraVe, AcneFree and AMBI, account for about $168 million in annual revenue.
Earlier, the company officially based at Laval, Quebec, announced it would sell Dendreon Pharmaceuticals to China's Sanpower for about $820 million. The deal with Sanpower will give the Chinese firm control over Provenge, an immunotherapy treatment for prostate cancer. Valeant bought Dendreon out of bankruptcy in 2015 for $445 million and is selling it at a premium to that price.
Analysts told the news agency Bloomberg that Valeant is getting “solid prices” for the assets, with the French company offering the biggest premium, of 7.7 times the skin care products’ annual revenue. The L’Oreal transaction is expected to close in the first half of this year, while the sale to Sanpower should close in the first quarter.
The company has been beset by numerous problems, many of its own making, which have led to investigations into aggressive price hikes for cardiology drugs in particular. It also saw its CEO, Michael Pearson step down last year and be replaced by Joseph Papa.
At the same time, former executives were charged with running a fraud-and-kickback scheme that extorted millions of dollars from corporate coffers. The drugmaker remains the target of multiple US government probes as well as shareholder lawsuits.
In November 2016, Valeant said its third quarter loses had soared to $1.2 billion, after mounting progressively over the year.
