Embattled biotech giant Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares flew higher in late trading today, after a report said the company is in talks to sell one of its valuable drug units.
According to the Wall Street Journal, Valeant is looking to jettison its Salix stomach-drug business for approximately $10 billion.
Once-mighty Valeant has seen its share price drop over 90% from its mid-2015 peak. The company’s prior growth was fueled by high-profile roll-ups of biotech treatments, but the prices of its drugs have come under fire as it now faces federal fraud charges. The company has replaced most of its upper management over the past year amid a far-reaching turnaround plan.
A long-standing rumor linked fellow biotech Allergan as a possible takeover suitor, but that company dumped cold water on that idea during a CNBC interview in September.
Valeant’s last resort to put a floor under its shares and keep its company in business is likely to sell off some of its most valuable assets in an effort to remain afloat, hence the Salix sale news today. Otherwise, the company some are calling “The Next Enron” could well live up to its dubious moniker.
VRX shares rose $4.61 (+25.84%) to $22.45 in late trading Tuesday. Year-to-date, Valeant has plunged $79.48%.