Valeant Pharmaceuticals announced that it reached an agreement to sell all of its outstanding equity interests in its Dendreon cancer business to Chinese conglomerate Sanpower Group for $820 million in cash. "With this sale, we are better aligning our product portfolio with Valeant's new operating strategy by exiting the urological oncology business, which is one of our non-core assets," commented Valeant CEO Joseph Papa.
Dendreon's first and only commercialised product is the autologous cellular immunotherapy Provenge (sipuleucel-T), which was approved in the US in 2010 and in the EU in 2013 for the treatment of certain men with prostate cancer. Dendreon filed for bankruptcy protection in 2014 after Provenge sales had fallen short of expectations, with Valeant later reaching a deal to purchase some of the company's assets, including global rights to the prostate cancer immunotherapy, for $296million. In 2015, Valeant acquired all of Dendreon's assets for over $400 million.
Valeant indicated that it will use proceeds from the Sanpower transaction, which is expected to close in the first half of this year, to begin easing its debt burden. The Canadian drugmaker also said it reached a deal to divest three consumer skincare brands to L'Oréal for $1.3 billion. Papa has pledged that Valeant would shed non-core assets in an effort to reduce debt.
Commenting on the news, BMO Capital Markets Gary Nachman suggested "there is a lot more to do regarding asset sales to help reduce the leverage more meaningfully, but we view this as a good start." Meanwhile, analyst Irina Koffler of Mizuho Securities noted that Valeant is selling Dendreon at a premium to what it paid to take the company out of bankruptcy, which is "pretty good in our view."
Last year, Valeant reportedly entered into talks to offload its Salix Pharmaceuticals unit, acquired in 2015 for about $11 billion, to Takeda for approximately $10 billion. However, negotiations were said to have fallen through due to disagreements over price, with the Japanese drugmaker recently agreeing to acquire Ariad Pharmaceuticals for about $5.2 billion in cash.
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