Valeant Pharmaceuticals Intl Inc (VRX) Announces Completion of Divestiture of Sprout Pharmaceuticals Subsidiary


Valeant Pharmaceuticals Intl Inc (NYSE:VRX) announced that its affiliate has completed the divestiture of the Sprout Pharmaceuticals subsidiary to Sprout2 Inc., an entity affiliated with certain former shareholders of Sprout, in exchange for a 6% royalty on global sales of ADDYI® (flibanserin) beginning in May 2019.

In connection with the sale, Valeant has provided a $25 million loan to fund initial operating expenses. In connection with the completion of the sale, Valeant has been released from the ongoing obligations of the original transaction to split future profits related to the sale of ADDYI® (flibanserin) with the former shareholders of Sprout, as well as certain related provisions, including the obligations to make certain marketing and other expenditures. Additionally, the parties to the existing litigation against the Company brought on behalf of the former shareholders of Sprout have filed a joint stipulation with the court that such claims be dismissed with prejudice.

More healthcare insights: A Growing Medical Device Player Aiming to Rule the $6.3 Billion Pain Market; An Exclusive Interview with Zynex CEO Thomas Sandgaard

“Returning Sprout to its former owners will enable us to further streamline our portfolio and reduce complexity in our business,” said Joseph C. Papa, chairman and CEO, Valeant. “As we transform Valeant, we are focusing our resources on our core businesses to best serve our shareholders, customers and patients. These areas include eye health, gastroenterology and dermatology.”

Shares of Valeant closed today at $20.89, up $0.03 or 0.14%. VRX has a 1-year high of $22.81 and a 1-year low of $8.31. The stock’s 50-day moving average is $16.39 and its 200-day moving average is $15.00.

On the ratings front, VRX stock has been the subject of a number of recent research reports. In a report issued on December 14, J.P. Morgan analyst Chris Schott downgraded VRX to Sell, with a price target of $12, which implies a downside of 43% from current levels. On November 30, Deutsche Bank’s Gregg Gilbert maintained a Hold rating on the stock and has a price target of $18.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Chris Schott and Gregg Gilbert have a yearly average loss of 4.5% and 5.9% respectively. Schott has a success rate of 40% and is ranked #4355 out of 4725 analysts, while Gilbert has a success rate of 40% and is ranked #4483.

Valeant Pharmaceuticals engages in the development, manufacture, and market of a broad range of pharmaceutical products in the areas of dermatology, gastrointestinal disorders, eye health, neurology and branded generics. It operates through the following segments: The Bausch + Lomb/International; The Branded Rx; and The U.S. Diversified products.

Stay Ahead of Everyone Else

Get The Latest Stock News Alerts