Valeant confirms it’s in talks to potentially sell Salix stomach drug business

MONTREAL – Valeant Pharmaceuticals said Tuesday it’s in discussion that may lead to the sale of its core stomach drug business Salix.

The comment was issued in response to published reports that the drugmaker is in advanced talks to sell Salix Pharmaceuticals Ltd. in order to trim its hefty US$30-billion debt load.

“We are currently in discussions with third parties for various divestitures including but not limited to Salix,” Valeant said in a release. “The discussions may or may not lead to a definitive agreement.”

The Wall Street Journal said Tuesday, citing people familiar with the matter, that the Quebec-based company is looking to unload Salix to Japan’s Takeda Pharmaceutical Co. for about US$10 billion.

The purchase price includes about US$8.5 billion in cash and future royalty payments to Valeant, the paper said, adding another unnamed potential bidder is also interested.

Valeant bought Salix in 2015 for US$11.11 billion. It makes gastrointestinal products like Pepcid for ulcers and Zegerid for heartburn.

Valeant’s (TSX:VRX) shares surged on the report, closing up 30.24 per cent per cent, or $7.24, to $31.18 in trading on the Toronto Stock Exchange. In New York, they rose nearly 34 per cent.