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iNova Scores Nearly $1 Billion for Valeant Pharmaceuticals (VRX) in New Sale Transaction

Valeant Pharmaceuticals (VRX)

Valeant Pharmaceuticals International Inc. just announced its intentions to sell one of its asset companies for under $1 billion. On Thursday, the Canadian drugmaker produced a report stating iNova Pharmaceuticals is sold for $930 million. The move forms part of Valeant’s debt-shedding strategies. The company says iNova will be bought by a firm owned and advised by both The Carlyle Group and Pacific Equity.

Valeant’s long-term liabilities sat at $28.54 billion as off March 31. The sale of iNova promises to go a long way towards shedding its debts. A range of diverse over-the-counter and prescription drugs are produced and marketed by iNova. The entity specializes in cold and flu treatments, medicines for weight management, pain management and cardiology.

CEO and chairman Joseph Papa commented of the company’s decision. He assures investors and the public that iNova is favorable, diversified and works in more than 15 countries worldwide. The company on sale holds a dominant market stake in southern regions like South Africa and Australia. Beyond that, iNova “also has an established platform in Asia.”

Papa made a point of assuring investors that Valeant will not lose its stake in the countries iNova operates in. “Valeant will maintain a strong footprint in these countries primarily through its Bausch + Lomb franchise,” the CEO said.

Valeant Pharmaceuticals
Photo: Ryan Remiorz/The Canadian Press via AP, File

As stated, the proceeds of the iNova sale will be dedicated to shedding the pharmaceutical major’s sky-high debts. This will be done under the drugmaker’s Senior Secured Credit Facility. The sale is set to be completed sometime in the second part of this year, CNW reports. This is on a few conditions, though, including the acquirement of the relevant regulatory approvals.

Valeant had Goldman, Sachs & Co. serve as its financial advisor in this transaction. It also saw Baker McKenzie serve as its legal advisor.

The Valeant Pharmaceuticals (VRX) issue beyond iNova

Valeant Pharmaceuticals International Inc. is a Canadian-based, multinational drug corporation. The firm owns and holds interests in drugmarkers across the board. These includes makers of products for eye health, dermatology, branded genetics, neurology and gastrointestinal disorders to name but a few. The company soared to peaks in 2015 before getting knocked down by its huge debts, regulation scandals and subsequent loss of influence.

Valeant’s stock price spiked to great peaks back in July 2015. A number of setbacks have since gradually chipped away at its all-time highs, and persist to the current day.

Moving deeper into 2017, analysts continue to cite Valeant’s, public image and reduced influence among its biggest challenges. These issues weigh so badly on the drugmaker that it considers changing its name. Yet recent months show just how set the fallen giant is on getting back on its feet. The drug maker is now looking forward, set on rebuilding portions of the confidence lost over the past two years.

Valeant is expected to make a few more moves to reduce its large debt pile this year. Legal issues and a weakened grip over drug markets have also cast skepticism over the company and its public image. Couple that with an unfavorable financial situation, and you find a stock which has forced investors to withdraw and shy away from it.

The shares of Valeant have been on a steep downhill path in recent months. VRX stock soared beyond $250 after July 2015. Today, those same shares are seen battling to stay above $10.

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