When is silence not deadly? Ask Valeant CEO Joseph Papa, whose latest turnaround talk didn't send shares tumbling

Almost every time Valeant Pharmaceuticals tried to share “good news” in recent months, that news somehow turned bad. Attempted reassurance sent stock prices tumbling. More reassurance, more declines.

Earlier this week, with its annual general meeting set for Tuesday, the question was whether that company showcase would turn to ashes in Valeant’s hands once again. The answer? It didn’t.

Rather than reporting an investor backlash after presentations from CEO Joseph Papa and his colleagues, headlines highlighted the lack of a stock decline. Or they actually focused on Papa’s promises of a turnaround, and ideas for how he’d get there.

During a media briefing after the shareholder meeting, Papa said he’d like to get Valeant back to the highest echelons of Canadian business--and back to its previous earnings performance. And he reiterated the idea of selling off some of Valeant’s assets to raise cash and pay down more than $30 billion in debt.

The company is already reportedly working with advisers on potential sales of its skin-care unit Obagi Medical Products, its Egyptian subsidiary Amoun Pharmaceuticals and its aesthetic devices business Solta Medical. And it might consider selling some of its linchpin businesses, such as the Bausch & Lomb ophthalmology business; its dermatology portfolio, once considered a key growth engine; or its gastrointestinal meds, also previously pegged for growth.

All of these potential sell-offs are companies or portfolios Valeant bought up in its years-long M&A spree--the very spree that grew its debt load to that $30 billion level.

As Bloomberg notes, Valeant’s shares ended the day essentially where they started Tuesday, rising by up to 1.1% during the meeting and then declining a just a bit more afterward. After its Q1 earnings call last week, the stock dropped 15%, and after its Q4 release, dropped by more than half.

Perhaps one of the reasons Valeant’s annual meeting didn’t jinx the shares as recent conferences and CEO appearances have is that major shareholders didn’t take their grievances public, presumably because they’ve already aired them in private. In fact, the meeting didn’t attract hordes of shareholders, period.

"What I'm really surprised about is that there weren't more substantial questions from people much more important and more heavily invested than me," Montreal investor Philip Harrison told The Canadian Press after the meeting.

That’s something Papa wants to continue. He says he’s confident he can rehab Valeant’s image with investors and patients after the string of scandals, investigations, price-hike hearings, restated financial statements and free-falling sales of top products. ”I believe I fundamentally can do that," Papa said. "I'm not trying to suggest anything can happen overnight."

- see the Canadian Press story
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