Valeant Agrees To Sell Dendreon -- WSJ
January 10 2017 - 3:02AM
Dow Jones News
By Dana Mattioli, Jonathan D. Rockoff and David Benoit
Valeant Pharmaceuticals Inc. agreed to sell its Dendreon cancer
business to Chinese conglomerate Sanpower for $820 million, part of
an effort by the beleaguered drugmaker to unload assets and pare
debt.
Selling the Dendreon business will help Valeant simplify and
focus on core areas and innovating, according to a person familiar
with the matter.
Valeant, under former Chief Executive Michael Pearson, bought
Dendreon, known for prostate-cancer treatment Provenge, for about
$500 million in a bankruptcy auction in 2015. The acquisition was
Valeant's first big transaction after losing a hostile bid in 2014
for Botox maker Allergan, which went instead to Actavis PLC for
about $67 billion.
But Valeant wasn't a big player in cancer, and Provenge proved a
disappointing fit. Provenge had $300 million in sales the year
before the acquisition; it isn't clear what revenue has been more
recently. Valeant, which reported $7.3 billion in total revenue
during the first nine months of last year, doesn't break out
Provenge sales.
The company's acquisition spree came to a halt when an
accounting scandal engulfed it in late 2015. That has helped pummel
the Canadian drugmaker's shares, which topped out at over $250 in
2015 and closed Monday at $15.35, giving Valeant a market value of
just over $5 billion.
The sale is part of new Valeant CEO Joseph Papa's efforts to
focus the company on its key franchises in skin drugs, stomach
treatments, eye care and consumer health, while either selling
noncore assets or milking them for cash to pay down a $30 billion
debt load. Valeant has put a number of assets on the auction block,
but has struggled to strike sale agreements at acceptable prices.
Most notably, it came close but ultimately failed to seal a deal to
sell stomach-drug maker Salix Pharmaceuticals Ltd. to Japan's
Takeda Pharmaceutical Co. for $10 billion. Even if Valeant manages
to clinch an agreement with Sanpower there is no guarantee
regulators will approve it.
Sanpower is a sprawling group with a range of holdings. It
teamed up in 2014 to buy Brookstone Holdings Corp., known for
selling massage chairs, travel gadgets and other novelties, for
more than $100 million at a bankruptcy auction. Sanpower, which
owns one of China's oldest department stores, had been on an
international acquisition spree, also agreeing to buy House of
Fraser, a 165-year-old department-store chain, in a deal that
valued the U.K. company at $745 million.
--Kane Wu and Jacquie McNish contributed to this article.
Corrections & Amplifications: Valeant has already sold its
Vietnam and Indonesia businesses. An earlier version of this
article incorrectly stated that it plans to divest the business.
(Jan. 9)
Write to Dana Mattioli at dana.mattioli@wsj.com, Jonathan D.
Rockoff at Jonathan.Rockoff@wsj.com and David Benoit at
david.benoit@wsj.com
(END) Dow Jones Newswires
January 10, 2017 02:47 ET (07:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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