Valeant to sell assets
for $2.12 billion to ease debt load
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[January 10, 2017]
Pharmaceuticals International is selling its Dendreon cancer business
and three skincare brands for about $2.12 billion as the troubled
Canadian drugmaker looks to pay down its more than $30 billion debt.
Valeant's U.S.-listed shares rose 15 percent to $17.65 in premarket
trading on Tuesday.
The company is trying to regain investor confidence after its stock
declined nearly 90 percent in the past year over disclosures that it
secretly worked with a specialty pharmacy to boost sales of its
Laval, Quebec-based Valeant is the subject of a number of recent
investigations related to specialty pharmacy, including by congressional
panels and the U.S. Securities and Commission.
French cosmetics group L'Oreal <OREP.PA> is buying CeraVe, AcneFree and
Ambi from Valeant for about $1.3 billion in cash.
Valeant is also selling its Dendreon unit to China's Sanpower Group Co
Ltd [SPGCL.UL] for $819.9 million.
Valeant bought bankrupt Dendreon in 2015 for about $300 million.
"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," Valeant Chief Executive
Joseph Papa said in a statement on Monday.
The deals could be the first of a series of divestitures for Valeant,
whose growth was fueled by an acquisition spree that left it saddled
with a huge pile of debt.
Mizuho Securities USA analyst Irina Koffler said she also expects
Valeant to divest its dental business as well as its interests in some
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A customer walks past a cosmetics display of French cosmetics group
L'Oreal in Nice, France, April 6, 2016. REUTERS/Eric Gaillard/File
Founded in 2005, CeraVe develops cleansers, moisturizers and baby
products and is one of the fastest-growing active skin care brands in
the United States, L'Oreal said.
AcneFree provides acne treatments and skin cleansers, while Ambi makes
products to treat dark spots and brighten skin.
L'Oreal said the three brands would stand alongside the likes of Vichy
and La Roche-Posay in its Active Cosmetics division, which is among its
strongest in terms of growth and resilience to slowdowns in consumer
spending in the past three to four years.
L'Oreal paid nearly eight times the brand's combined annual revenue of
$168 million as it expands into one of the fastest growing areas of the
Separately, Valeant said its lotion for plaque psoriasis, IDP-118, which
is a combination formulation of two common treatments - halobetasol
propionate and tazarotene - was more effective and reduced irritation in
patients in a key study.
(Reporting by Sudip Kar-Gupta in Paris and Ankur Banerjee in Bengaluru;
Editing by Andrew Callus, Louise Heavens and Saumyadeb Chakrabarty)
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