A Big Deal Could Be Coming For Valeant Pharmaceuticals


On Tuesday, shares of struggling pharmaceutical company Valeant Pharmaceuticals Inc.

"It's not something that's a critical priority but it's something certainly that I will continue to look at if I think it's getting in the way", Joe Papa said in an interview after releasing Valeant's second-quarter results.

Mr. Papa, who took the helm in May, said Tuesday that Valeant would be going in a "new strategic direction" that involves reorganizing the company and its reporting segments, breaking them into three main units. The company reports in USA dollars. The investment firm sold 78,727 shares of VRX which is valued $1,760,336.Seven Bridges Advisors boosted its stake in VRX in the latest quarter, The investment management firm added 890 additional shares and now holds a total of 41,393 shares of Valeant Pharmaceuticals Intl Inc which is valued at $972,322.

The analyst in the research note on Valeant commented that since its 1Q earnings results, it was expected that the business would recover in 2H of the year as it's strives to move past its problems related to dermatology business.

The company's shares, however, got a big bounce Tuesday after it confirmed its previously reduced earnings guidance for the year would remain the same despite some investor concerns about a further reduction, said BMO Capital analyst Gary Nachman. The stock has lost almost 90 percent of its value since hitting a record high of $253.57 last August. Over the last 30 and 90 trading days the company share price has increased 2.45 points and decreased 2.96 points respectively. The company, which has been selling non-core assets, said it had stripped the North American rights to the inherited angioedema drug, Ruconest, to Netherlands-based Pharming Group NV in an arrangement worth up to $165 million.

The company also announced that they have agreed to sell the brodalumab European Union rights, Synergetics USA OEM business, and Ruconestfor a total upfront payment of $181 million in order to streamline its portfolio on the second quarter.

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Papa said he'd love to trim about US$10 billion off Valeant's debt.

For now, the company plans to spend more on drug development by reducing administrative costs.

Papa stressed to analysts on a conference call that Valeant was focused on selling pieces that are not central to its business. It was up nine per cent to US$448 million. Revenue fell by 11% compared to the year before.

Revenue fell to $2.42 billion from $2.73 billion.

Despite slightly missing forecasts, the company is showing signs of a turnaround, said Neil Maruoka of Canaccord Genuity.