Valeant higher amid debt offering, insider buying

Valeant moves higher amid debt offering, insider buying

Insurers are dropping Valeant's top products. See Market RadarValeant moves higher amid debt offering, insider buying

Shares of specialty pharmacy company Valeant (VRX) are higher this afternoon amid a relatively weak market backdrop.


On March 12, Valeant announced a private offering of $1.25B aggregate principal amount of unsecured senior notes due 2026. The proceeds of the newest offering will help fund the repurchase of $1.25B of outstanding debt, including its 6.375% Senior Notes due 2020, 5.375% Senior Notes due 2020 and up to $100M of its 6.750% Senior Notes due 2021.

Wells Fargo analyst David #Maris said earlier this week that less than two weeks after filing a shelf offering, Valeant Pharmaceuticals launched a $1.25B offering of unsecured senior notes due 2026.

Based on discussions with his firm’s high yield debt analyst, Maris estimates the debt likely has a 9%-plus coupon.

Valeant is looking to push out 2020 maturities, which may be reflective of its business outlook for the period between now and maturity, Maris told investors earlier in the week.


In a regulatory filing after the close of trading Tuesday night, Valeant chairman and CEO Joseph Papa disclosed the purchase of 30,000 common shares of the company at a price of $16.05 per share.


Late in February, Valeant reported adjusted EBITDA was $875M for Q4, as compared to $1.047B for Q4 of 2016, a decrease of $172M. Revenue for Q4 was $2.16B, just below forecasts for $2.2B.

Unfortunately, Valeant also said it expects sales of $8.1B-$8.3B in 2018, below the $8.37B consensus. Shares of the drug maker dropped precipitously after the recent earnings report.


Soon after Valeant’s Q4 results, Wells Fargo analyst David Maris said Valeant reported “weak” Q4 results, noting that when adjusted for divestitures, two of the company’s three business units showed revenue declines and the third, B&L/International, had a slowdown from Q3 to “only” 4% growth.

Valeant didn’t give an adjusted EPS figure, but he calculates its Q4 adjusted EPS at 98c, compared to his 99c estimate and consensus of 97c. Maris, who said at the time, he does not see “the stabilization, the turnaround, or the transformation Valeant mentions in its earnings presentation.”

Maris kept an Underperform rating on the stock.


Shares of Valeant are up 5.7% to $16.99.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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