LAVAL, Quebec (Reuters) - Valeant Pharmaceuticals International Inc’s VRX.TOVRX.N new chief executive officer left the door open to selling major assets on Tuesday as the company tries to reduce its massive debt load.
Joe Papa, who replaced former CEO Mike Pearson in May, said last week that Valeant would take offers for assets other than its key dermatology, consumer products, Bausch + Lomb eyecare and Salix gastrointestinal drug businesses.
But Papa told reporters in Laval, Quebec, after his first annual meeting with investors that Valeant might sell more if the price was right.
“If there is a significant offer, we would always have to assess any offer that comes in to us,” he said.
Valeant has faced scrutiny over its acquisition binge of recent years, use of a specialty pharmacy and backlash over massive price increases for some drugs. Last week it cut its 2016 forecast.
Papa said he would avoid breaking Valeant up entirely: “I took this job to rebuild this company.”
He said Valeant would pay off at least $1.7 billion of its $31 billion debt this year, with further payments depending on asset sales. Papa said he already had fielded inquiries for non-core assets and had several bankers working on potential sales.
While Papa was expected to face tough questions at the meeting held in the Montreal suburb of Laval, it lasted just 40 minutes, and some shareholders were cordial.
“We’re glad you’re here,” said a shareholder who identified himself as a doctor from New Jersey.
Billionaire investor Bill Ackman, whose Pershing Square Capital Management is Valeant’s biggest shareholder, attended the meeting but declined to comment.
Valeant shares, down 90 percent since last August, fell more than 1 percent in Toronto and New York.
“Given the past 12 months have been fairly traumatic, I’m rather surprised there wasn’t more discussion or explanation of some of the things that have gone on,” shareholder Philip Harrison told Papa.
Harrison questioned the compensation paid to former management. Pearson will receive a $9 million severance payment and has a consulting agreement worth hundreds of thousands of dollars.
Papa said the payment was required under Pearson’s contract.
He emphasized the company’s brands and determination to fix problems.
“There are some distractions and other things that have occurred in the business,” he said. “I felt the important thing I needed to do here is really focus on the future.”
Additional reporting and writing by Rod Nickel in Winnipeg; Editing by Matthew Lewis and Lisa Von Ahn