Valeant Pharmaceuticals said Thursday that it agreed to sell its iNova Pharmaceuticals business for $930 million in cash to a company jointly owned by funds managed by Pacific Equity Partners and The Carlyle Group. iNova markets a portfolio of prescription and over-the-counter products in several therapeutic areas, including weight management, pain management and cardiology, as well as cough and cold.
"The sale of iNova is part of the company's ongoing efforts to both simplify our operating model and strengthen our balance sheet," remarked Valeant CEO Joseph Papa, adding "we will continue to evaluate opportunities that will enable us to deliver on our commitments and unlock value for shareholders." However, Valeant noted that it will "maintain a strong footprint" in countries served by iNova, mainly through its Bausch + Lomb eye-treatment franchise.
The drugmaker said it plans to use proceeds from the iNova transaction, which is expected to close in the second half of 2017, "to permanently repay term loan debt under its senior secured credit facility." Valeant stated in recent filings that it had a long-term debt load of $28.2 billion as of March 31. In August, the drugmaker said that it would pay down $5 billion in debt by February 2018. Papa remarked the company is "well on our way to over-delivering" on its debt-reduction pledge, with a goal of ending up with $15 billion to $20 billion of debt long-term.
Last year, Papa suggested that Valeant would look to divest certain non-core assets in an effort to pay off debt, with the company later reaching an agreement with lenders that would provide it more flexibility to offload assets. Earlier this year, Valeant agreed to sell its Dendreon cancer business to Sanpower Group for $820 million in cash. Meanwhile, The Wall Street Journal reported last November that Valeant had ended discussions to sell its Salix Pharmaceuticals unit to Takeda for $10 billion, citing sources as saying the Canadian drugmaker was now more focused on building the business.
Valeant has sought to regain investor trust following allegations in 2015 that the drugmaker had used its relationship with specialty pharmacy Philidor Rx Services to artificially inflate revenue. The company has also faced scrutiny over details concerning its financial statements.
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