Valeant Slaps 'For Sale' Sign on iNova Pharma, Deal Could Bring in $1 Billion+
September 23, 2016
By Alex Keown, BioSpace.com Breaking News Staff
LAVAL, Quebec – Embattled Valeant is putting a for sale sign on its subsidiary, iNova Pharmaceuticals. Asking price is more than $1 billion, Financial Review reported this morning.
The move comes as no surprise as Valeant, once one of the kings of M&A, is looking to sell off non-core assets in order to pay down $31 billion in debt. According to Financial Review’s report, Valeant has secured Goldman Sachs to oversee the sale. iNova, which has annual earnings of about $100 million, manufactures drugs primarily sold in Australia and New Zealand. The company also has a presence in Africa and parts of Asia. iNova manufactures weight management drug Duromine, as well as over the counter cough and cold brands, Difflam and Duro Tuss. Valeant acquired iNova in 2011 for an upfront price of $625 million, with an additional $75 million in milestone payments. At the time of the acquisition, Valeant said the company has annual revenues of about $200 million.
In August, after a year of struggles that has seen a tremendous loss of revenue, Valeant announced a strategic reorganization, although the new vision was not fully outlined at the time. Part of that work is attempting to appease the company’s creditors for failing to meet several financial reporting deadlines, which triggered default notices. Valeant has an estimated debt of $30 billion, largely due to its aggressive M&A practices, which has led the company to look at unloading its non-core assets like iNova. Although once thought to be up for sale, Valeant has said it does not plan to sell its subsidiary Bausch + Lomb, which it acquired in 2013 for $8.7 billion. The company known for its contact lens and lens-care products, generates about $1.5 billion in annual revenue.
In the second quarter of this year, Valeant saw total revenues decline 11 percent to $2.42 billion compared to the second quarter of 2015, where the company posted revenues of $2.73 billion. The company said the revenue decline was passed on drops in sales as well as negative foreign currency exchange.
As part of its new strategic focus, Valeant said it has begun to streamline its portfolio with sales of the brodalumab EU rights, Synergetics USA OEM business and Ruconest for a total combined upfront payment of $181 million and additional consideration up to $329 million for achieving specific approval and sales milestones, the company said. Additionally, Valeant said all North American rights to Ruconest will be sold to Pharming Group N.V. for up to $125 million.