The news flow around once-embattled drugmaker Valeant has been quiet lately. in addition to in which may be exactly what CEO Joe Papa is actually aiming for.
however on Tuesday, he said Valeant plans to meet a major milestone in which week: in which will pay off one more $125 million in debt, exceeding a goal set in August 2016 to pay down $5 billion in debt by February 2018. The company still carries a significant debt load — more than $26 billion — however no obligations until 2020, Papa said in an interview.
“We’ve over-delivered on strong cash flow, in addition to we were also able to sell assets at double-digit multiples,” Papa told CNBC.
The company has divested the cancer drug Provenge, skin-care businesses Obagi in addition to Cerave, in addition to a unit called iNova to aid in its debt sales. The Obagi sale hasn’t yet closed in addition to isn’t included within the debt paydown announced Tuesday.
The moves come after a tumultuous year for Valeant in which saw its stock crater coming from a high of more than $250 a share in mid-2015 to less than $10 as the company’s business practices came into question. Valeant was held up, along with Martin Shkreli, as an example of excessive drug cost increases, in addition to its management resigned. Its debt obligations have weighed heavily on the stock.
Valeant shares are still trading at a tiny fraction of their all-time high, closing Monday at $11.41.
Papa emphasized in which as Valeant divested units, in which was able to keep its “core” franchises: the Bausch + Lomb eye care business, the Salix unit in gastrointestinal products, in addition to its dermatology unit.
“We did get some inbound interest” on those assets, Papa said. “We have to listen because we still have a lot of debt,” however the company wouldn’t sell them for less than in which perceives them to be worth, he said.
Some of Valeant’s asset sales did come at prices lower than what the company originally paid for them: Obagi’s sale, announced in July for $190 million, was at least $150 million less than what Valeant paid for in which in 2013. however Valeant acquired Provenge-maker Dendreon out of bankruptcy in early 2015 for $495 million, in addition to in January announced its sale for $820 million.
Papa said “the metrics are reset” in terms of assets. The previous management team, led by CEO Mike Pearson, built the company through a series of acquisitions at valuations many currently question.
As for Valeant’s future growth, Papa said acquisitions aren’t the plan.
“Right currently we’re actually focused on growing our business organically,” he said. Drug cost increases will be limited to less than 10 percent a year.
“We’re actually excited about the progress we’ve made.”