UPDATE 1-Valeant CEO Papa plans to lower debt by more than $1.5 bln in 2016

Mon May 23, 2016 10:29am EDT
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(Adds details from Papa comments, background)

By Caroline Humer

NEW YORK May 23 (Reuters) - Valeant Pharmaceuticals Inc plans to lower its debt by at least $1.5 billion this year, Chief Executive Officer Joseph Papa said on Monday during his first large meeting with investors since taking the top job three weeks ago.

Valeant has about $30 billion in debt and has had to appease creditors, who had the option of forcing early payment of some loans and bonds after Valeant missed deadlines for filing financial records with regulators and triggering default notices.

Papa told investors at the UBS Global Healthcare Conference that the company would fund the payoffs in part through the sale of non-core assets outside of its main franchises if it can get attractive prices for the assets.

Papa said core assets include the dermatology business, Bausch & Lomb eyecare, and its gastroenterology products, many of which were acquired in its purchase of Salix Pharmaceuticals last year.

The company has been working on trying to regain its footing after sharp drug price increases last year drew criticism and investigations from U.S. lawmakers. The states of Massachusetts and New York are also conducting inquiries into its patient assistance programs and pricing.

When distribution for its dermatology products with Philidor RX Services fell apart last year, the company replaced it with a deal with Walgreens Boots Alliance, which Papa said has had some "speed bumps."

Papa said the company will launch a second phase of the program this summer.

Valeant last week announced plans for a new discount program on the price of two heart drugs, Isuprel and Nitropress, and is now working on potential changes in the price of other drugs that have come under scrutiny in Congress. Those include Cuprimine and Syprine, two drugs that are used to treat a genetic disorder that causes copper to build up in the body's organs.

"I have a couple more of those products that I still need to work on," Papa said. "And I told Congress I would work on those." (Reporting by Caroline Humer; Editing by Jonathan Oatis)