Valeant Pharmaceuticals International Inc. has decided to keep and invest in its gastrointestinal-drugs division after talks to sell the unit to Takeda Pharmaceutical Co. fell apart, according to people familiar with the matter.
The discussions broke down mainly because of disagreements over the price, according to one of the people, who asked not to be identified because the matter is private. The decision to keep the business doesn’t prevent Valeant from pursuing future interest in the unit, another person said.
Valeant’s shares dropped 7.3 percent to $15.91 at 2:21 p.m. in New York.
Both Valeant and Deerfield-based Takeda declined to comment.
A failure to sell Salix, considered one of Valeant’s crown jewels, would put new pressure on the company to find ways to pay down its about $30 billion in debt. Since buying Salix for $11.1 billion in 2015, Valeant has been embroiled in scandals about its high prices and accounting that led to legal and regulatory investigations as well as a slump in some of its biggest products’ sales.
Valeant announced on Tuesday that it was making a “significant” expansion in the size of the sales force for two Salix products, gastrointestinal treatment Xifaxan and constipation treatment Relistor, a sign that it had plans to keep the drug in-house. The drugmaker, based in Laval, Quebec, emphasized sales toward primary-care doctors.
Valeant debt plunged as much as 3.63 cents. The company’s most actively-traded bond, $3.25 billion of 6.125 percent coupon notes due in 2025, sank 2 cents to 75 cents at 1:54 p.m. in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. The bonds earlier fell to 74.25 cents, the lowest price since they were issued in March 2015.
Xifaxan had sales of $273 million in the third quarter, and another drug, ulcerative colitis treatment Uceris, sold $40 million. Together, they made up about 13 percent of the company’s third-quarter revenue.
Chief Executive Officer Joe Papa, who joined in May, has said that he’s willing to divest marquee assets in his attempt to turn around the struggling drugmaker and lower its debt load. Shares have lost more than 90 percent of their value since their August 2015 peak.
The Wall Street Journal earlier reported that discussions to sell Salix to Japan’s Takeda for about $10 billion had broken down.
