Exclusive: Endo considers sale of Paladin Labs to Knight Therapeutics - sources
By John Tilak and Carl O'Donnell
(Reuters) - Endo International Plc ENDP.O has discussed a sale of Paladin Labs Inc, its Montreal-based specialty pharmaceutical subsidiary, to Canadian drug maker Knight Therapeutics Inc GUD.TO, people familiar with the matter said on Friday.
The potential deal would help Endo, which has been struggling to cope with pressure on drug prices, pay down some of its $8 billion in debt, while enabling Knight, another specialty pharmaceutical company, to expand further in Canada.
There is no certainty that the discussions will result in a deal, the people said. Endo has also received interest in the business from other companies besides Knight, they added. Any deal would value Paladin at significantly less than the $1.6 billion Endo paid for it in 2014, the people said.
The sources asked not to be identified because the negotiations are confidential. Endo and Knight declined to comment.
Knight's shares, which were down about 1.5 percent, climbed on the Reuters report. They were up 5 percent early on Friday afternoon.
Reuters reported earlier this year that Endo has been exploring asset sales as it seeks to pare back the debt pile it accumulated over the course of several years of fast-paced, acquisition-driven growth.
Endo slashed its earnings guidance in May amid fierce competition from generic drug makers, joining the litany of other specialty drug makers, including Valeant Pharmaceuticals International Inc (VRX.TO: Quote) and Concordia International Corp CXR.TO, that have taken similar actions.
Endo acquired Paladin Labs in 2014 to build out its presence in markets outside the United States. As part of the transaction, a portion of Paladin Labs' assets that were not added to Endo were placed into a new company called Knight Therapeutics, which was awarded to Paladin Labs' shareholders. Continued...