Valeant plans to grow Salix

Photo: The Canadian Press

More than a month after Valeant Pharmaceuticals received takeover offers for the stomach-drug business Salix, the company says it's planning to grow the franchise it views as core to its turnaround.

Chief executive Joseph Papa said Wednesday the Quebec-based company will try to expand the sale of prescriptions for products like Xifaxan by launching a program early next year selling to primary care physicians.

Valeant is also looking at identifying additional uses for the drug after early research suggested it could be helpful for C. difficile hospital infections and NASH patients that suffer from liver damage.

"It's a great asset as evidenced by other external people that also view it as a great asset so we're going to invest in it," Papa told a BMO health-care conference Wednesday in New York City.

Takeda Pharmaceutical had tried to buy the Salix business but talks reportedly broke down.

Valeant (TSX:VRX) is hoping to reduce its US$30 billion of debt by selling non-core assets for about US$8 billion.

Papa insisted that Valeant has a good future despite enduring "a very turbulent year" in 2016.

Even with about US$10 billion in annual sales and a large debt, Papa likened Valeant to a startup, with a new board, new management and a pipeline of new products to launch.

He said Valeant has been able to reduce the number of people fleeing the company and also attracted top talent.

"They come to us because they see this is the turnaround opportunity of a lifetime," he told investors.

Still, its shares, which lost 90 per cent of their value in the past year, hit a six-year low of $18.30 in early trading on the Toronto Stock Exchange.

The drop followed the announced departure of three senior executives and the sale of a US$3.47 million worth of shares by director Bill Ackman of Pershing Square Capital Management to generate year-end losses for tax purposes.

They partially recovered to $18.77 in later trading, down almost four per cent on the day.