(Adds quotes from CEO)
By Allison Lampert
LAVAL, Quebec, May 2 (Reuters) - Valeant Pharmaceuticals International Inc, weighed down by debt from years of acquisitions, is on pace to meet its target of repaying $5 billion in debt between August, 2016 and February, 2018, Chief Executive Joe Papa told shareholders on Tuesday.
Repayment is expected to come from asset sale proceeds and free cash flow, and the maker of Bausch + Lomb contact lenses and Xifaxan irritable bowel syndrome treatment earlier announced sales that will generate up-front proceeds of $2.35 billion.
Valeant’s shares jumped as much as 8.9 percent in Toronto to C$14.39, a nearly one-month high, following Papa’s comments at Valeant’s annual meeting in Laval, Quebec, before paring some gains.
“We feel very comfortable that we will achieve that $5 billion debt paydown through a combination of asset sales plus the operational results,” Papa told reporters after the meeting.
Canada-based Valeant’s debt climbed to a total of more than $30 billion under former CEO Mike Pearson, whom Papa replaced one year ago.
Papa repeated that the company sees its core business around gastrointestinal drugs, eye care and dermatology products, but has not ruled out selling those assets.
Valeant’s asset sales pace has been disappointing, and recent debt refinancing is a sign that significant asset sales soon are unlikely, Wells Fargo analyst David Maris wrote in a note last month.
Papa told reporters that a process was underway for the sale of certain non-core assets, but would not specify whether he expected any transactions to conclude in 2017.
“We have flexibility on time,” he said. “We don’t need to sell things at prices that are not acceptable to our shareholders.”
Papa said Valeant is still considering changing its name, a proposal that was looked at last year given the controversies surrounding the company. Valeant’s stock has lost 96 percent of its value in Toronto since hitting a record high in August 2015, on concerns about excessively high prices of some drugs under Pearson, investigations of some of its practices and towering debt.
Papa declined to specify an alternative name or give a specific time frame for when such a decision would be taken.
“It is something that we have under consideration,” he said.
Reporting by Allison Lampert in Laval, Quebec; writing and additional reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Chizu Nomiyama and Dan Grebler