Tag Archives: vrx

Valeant Dives As Bondholder Seeks Default; Buyout Buzz Lifts Medivation

Valeant Pharmaceuticals ( VRX ) fell in late trade after Valeant said bondholders submitted a default notice, citing delays in the drugmaker’s annual report. Meanwhile, Medivation ( MDVN ) jumped late on a Bloomberg report , citing sources, that the drugmaker rejected a takeover overture from Sanofi ( SNY ). Valeant fell more than 6% in early after-hours action, pared losses to 4%. Shares closed up 2% at 31.99. Dow Jones, which initially reported the news, said Centerbridge Partners was a bondholder seeking the default notice. Valeant has until June 11 to file its 10-K annual report or be compelled to repay bonds early. Valeant has said it will file by April 29. Centerbridge, which holds some $250 million in Valeant debt, may be seeking concessions rather than a default. Meanwhile, Medivation jumped more than 9% after hours following a 1.1% gain to 45.73 at the close. Sanofi was little changed after hours. Sanofi hasn’t ruled out a hostile bid for Medivation, Bloomberg reported. Sanofi would like to expand its cancer drug portfolio. It was a wild day for some drugmakers. Horizon Pharmaceuticals ( HZNP ) dived 26%, close to its October lows. Horizon gave  weak sales guidance . Meanwhile, Clovis ( CLVS ) fell 5.4% to 14.24 after tumbling intraday to 12.25. An FDA advisory panel overwhelmingly opposed early approval for Clovis’  lung cancer drug, saying the agency should await phase 3 data for rociletinib. The stock had fallen 17.7% on Friday and 4.5% on Monday after the panel’s documents were released  

Valeant Creditors Give Company More Time Before Default; Stock Up

Shares of Valeant Pharmaceuticals International ( VRX ) rose sharply for the third day in a row Thursday, after the company came to an agreement with its creditors to avoid a default. Valeant said lenders had agreed to an amendment extending the filing deadline for its 10-K annual financial report to May 31, and its 10-Q for Q1 to July 31. Previously, both were due at the end of March, though the agreement gave Valeant 30 days after that to file to prevent a default. The amendment also waives the cross-default to Valeant’s indentures, which was set off when the company failed to file its 10-K by March 15. Valeant is late in its filing because of a review of its financial records that it started after a scandal erupted last fall surrounding its relationship with now-defunct pharmacy Philidor. On Tuesday, the company said the review was complete , so it expects to file the 10-K this month. The new agreement gives it a bit more breathing room. Valeant said the amendment also will affect its M&A capabilities. “The terms of the amendment will restrict the company’s ability to make certain acquisitions and other investments and to pay dividends and other restricted payments until the financial statements are filed and the company achieves certain leverage ratios,” Valeant’s statement said. “While these restrictions are in place, the company will also be required to apply substantially all net asset sale proceeds to prepay its term loans.” Valeant has become highly levered through a series of acquisitions that have quickly bulked up the company, but the management put acquisitions on hold after the Philidor scandal broke. No asset sales have been announced, though Wall Street has been speculating that the company will be slimmed down or even broken up. On Wednesday, several analysts and reporters asked Allergan ( AGN ) CEO Brenton Saunders if Allergan might acquire Bausch & Lomb , a business that Valeant bought in 2013 back when Saunders was running it. Valeant stock was up almost 6% in late morning trading on the stock market today , near 36. The stock has risen about 30% this week despite hitting a five-year low on Monday, as investors have been heartened by the completion of the financial review as well as promises of a new CEO in the near future.

Allergan Touts Future Without Pfizer; Teva Deal Still On Track

The leadership of Allergan ( AGN ) moved to reassure investors Wednesday of the company’s bright future after its huge buyout by Pfizer ( PFE ) was canceled in the wake of new tax regulations. Allergan stock was up 3.5% in afternoon trading, near 245. On a conference call with analysts Wednesday morning, CEO Brenton Saunders maintained that the Treasury Department’s action against tax inversions  will have no impact on the stand-alone Allergan, which redomiciled to Ireland through an inversion deal with Warner Chilcott three years ago. The company will retain its 14% corporate tax rate, he said, and it should also be free to deploy capital however it chooses. Saunders also said Allergan’s $40 billion sale of its generic unit Actavis to Teva Pharmaceutical Industries ( TEVA ) is unaffected by the spiking of the Pfizer deal  and is on track to close in June. The timeline for that buyout was delayed from its original Q1 closing date, as Teva works its way through a multi-country regulatory clearance process, but Saunders said the two companies are determined to get it done. “Teva is doing a lot of work,” said Saunders. “They’ve restructured their company; they have named their entire leadership through a few levels that include 200 Allergan executives moving to Teva. … This is a great deal for Allergan, but also a great deal for Teva.” Teva stock was up almost 3% in afternoon trading on the stock market today , near 56. The closing of the Actavis sale should also give Allergan a big wad of cash, so many of the analysts’ questions on the call related to what it will do with the money. Several seemed to be rooting for share buybacks, given that Allergan stock is trading near a 52-week low in the wake of the Pfizer breakup. Saunders said all options are on the table, but he emphasized that Allergan’s “growth pharma” model means that it’s constantly on the hunt for growth assets. He said that Allergan’s business-development team has stayed active since the Pfizer deal was announced, and if the right opportunity came along “we could announce it tomorrow.” A couple of analysts raised the name of contact-lens giant Bausch & Lomb, with which Saunders has a personal history. He headed the company from 2010 until 2013, when it was sold to Valeant Pharmaceuticals International ( VRX ) for $8.7 billion. Given Valeant’s recent spectacular crackup , many on Wall Street have speculated that B&L might again go on sale, with Allergan a suitable buyer not only because of Saunders, but also because of Allergan’s large ophthalmology business. Saunders’ response to this seemed to be a swipe at Valeant’s infamously opaque financial reporting. “It sold for $8.7 billion four years ago, with a late-stage pipeline of 30-some programs, and a strong organic growth profile,” he said. “I can’t tell that any of those things today are still true. Based on public information, it’s impossible to tell that it’s worth more than it sold for four years ago.”