Valeant and Takeda's $10B Salix deal talks scuttled by price squabbles: WSJ

Valeant
Valeant's talks with Takeda over a sale of the Canadian drugmaker's Salix business have broken down.

So much for Valeant’s $10 billion plan to sell its Salix business to Takeda.

Talks have broken down at the last minute because of disagreements over price, among other things, The Wall Street Journal reports.

Takeda, which has reportedly tried multiple times to get its hands on Salix—first as a bidder in the auction Valeant eventually won, and earlier this year with an offer to buy the whole Valeant company—wanted to shell out a lower sum for the GI business, the WSJ says.

The portfolio has underperformed lately, as many of Valeant’s key meds have, compounding the problems of a company that’s already faced channel-stuffing allegations, a slew of investigations, political pricing pushback and debt-default worries from investors.

The deal’s scuttling will also erase a chance for Valeant to pay down a good chunk of the M&A-fueled debt that’s been making investors nervous. They didn’t take the news well, sending Valeant shares plummeting.

While there’s still a chance talks could be restarted, Valeant has already decided to move forward with plans to build Salix up on its own—and it’s already announced some of those plans to the public, too.

The company has “initiated a significant sales force expansion” to focus on potential primary care physician prescribers of IBS-D med Xifaxan and opioid-induced constipation drug Relistor, it said in a statement Tuesday.

“Xifaxan and Relistor are integral to our gastrointestinal franchise which remains a core asset for future growth potential in the hands of Valeant," CEO Joseph Papa said in the statement.

Meanwhile, Valeant has plenty of other issues to deal with. It’s reportedly still working to sell off other assets in moves that could ease its debt burden, including a surgical equipment business that could snag $2.5 billion. And industry watchers are also still wondering whether more charges are on the way in a federal kickbacks case for Valeant or its former top brass; U.S. authorities have already charged former Valeant exec Gary Tanner and Andrew Davenport, the former CEO of Valeant-linked specialty pharmacy Philidor, with engineering a multimillion-dollar fraud and kickbacks scheme.