Valeant looks at what it might sell to raise cash: Reuters

Valeant's headquarters in New Jersey
Valent's headquarters in New Jersey

As Valeant's ($VRX) problems have mounted, watchers have waited to see which pieces it might sell off to raise much-needed cash. The wait is nearly over.

The company has called in some investment banks, Reuters reports, which will help it look over its extensive portfolio and give ideas on what might be worth unloading to help pay back debt without undermining its future. Goldman Sachs Group, Centerview Partners Holdings and perhaps others are on the case, the service reports, pointing out that the company has not decided for sure it will sell anything.

The phone calls had already started coming in from buyers interested in products after hedge fund CEO and board member William Ackman said that Valeant was looking at selling "noncore assets" to help trim its $30 billion in debt.

Valeant has some products that others would love to get their hands on. One of those is Xifaxan, a drug it picked up last year with its $11 billion acquisition of Salix Pharmaceuticals, sources told Reuters. Last year, before Valeant’s business practices became the subject of federal probes and congressional hearings, CEO Michael Pearson pointed to the gastrointestinal drug as one reason it was able to raise its forecast for the year. Other goodies are its Obagi dermatology products, as well as some other aesthetics products, sources said.

Valeant certainly could use some extra money in its pockets to hold off the creditors at the door, particularly since its debt has gotten more expensive to service. The company negotiated new terms with some creditors last week after it violated loan conditions by not filing its annual report on time. They agreed to a filing extension and eased some loan conditions. But it is costing the company big time, including a fee of $50,000 per $10 million of loans and another 1% on the interest rate, though that rate could return to normal if Valeant hits certain financial targets.

The drug company has also taken steps to cut costs. It is whacking 280 sales jobs in women's health, gastrointestinal and dermatology drugs. Meanwhile, the company is still on the hunt for a successor to Pearson, who was told his services will no longer be needed after the debt fiasco triggered a one-day share-price drop of 51%. Ackman has said Valeant expects to have a new CEO in a matter of weeks.

- read the Reuters exclusive