Valeant Evaluates Divestitures

Valeant Pharmaceuticals International has confirmed that it is evaluating certain divestitures, including of Salix Pharmaceuticals, a Raleigh, North Carolina-headquartered specialty pharmaceutical company that Valeant acquired in 2014 for approximately $15.8 billion.

In a statement that Valeant issued on November 1, 2016, the company said: “In accordance with its duties to shareholders and other stakeholders, management evaluates any transaction relating to core or non-core business units in accordance with the best interest of its shareholders and stakeholders. We are currently in discussions with third parties for various divestitures including but not limited to Salix. The discussions may or may not lead to a definitive agreement. Valeant does not intend to comment further on market speculation or disclose any developments unless and until it otherwise deems further disclosure is appropriate or required.”

With the 2014 acquisition of Salix, which specializes in gastrointestinal drugs, Valeant added to its specialty pharmaceutical portfolio with Salix’s portfolio at the time of the acquisition of 22 gastrointestinal drug products. Salix’s chief product is Xifaxan (rifaximin) tablets, a gastrointestinal-specific oral antibiotic, which accounted for 36% of the company’s product sales in 2014, or $405.4 million. Prior to its acquisition by Valeant, Salix said that it was exploring potential additional indications, formulations, clinical trials, and co-promotion arrangements to capitalize on the potential for Xifaxan, including development programs in irritable bowel syndrome, Crohn’s disease, and early decompensated chronic liver disease.

Amid published reports that Takeda may be a buyer for Valeant’s divestiture, Takeda issued the following statement in which it said: “[C]ertain media reported Takeda is negotiating with Valeant Pharmaceutical International Inc. about acquisition of its gastroenterology business unit. These articles are not based on any announcement by Takeda,” said Takeda in a November 2. 2016 statement.”Takeda is continuously considering various options aiming to accelerate its growth focusing on prioritized therapeutic areas of gastroenterology, oncology and central nervous system plus vaccines. At any given time, Takeda is in discussion with many parties in these therapeutic areas. At this point, we have nothing to be disclosed. When any agreement is reached, we disclose the agreement in a timely manner.”

Valeant has also released its third-quarter 2016 financial results that showed a fall in earnings. The company reported total revenues of $2.48 billion in the third quarter of 2016, an 11% decrease from $2.79 billion in the third quarter of 2015, primarily due to a decline in product sales revenues from its existing businesses, the company said. For the nine months ended on September 30, 2016, total revenues were $7.27 billion, reflecting a 5.5% decline from $7.69 billion in the nine months ended on September 30, 2015.

Source: Valeant Pharmaceuticals International and Takeda Pharmaceutical 

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