Why This Week Is Critical For Valeant Pharmaceuticals Intl Inc (VRX)?
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) prospects should become clear this week as big announcements hit the wires. The naming of a new CEO, to replace outgoing Michael Pearson has already provided a hint on what to expect going forward. However, the filling of 10-K report is expected to evoke the most reaction given the kind of ramification it could have on a company struggling to revitalize its growth prospects.
The Canadian company has intensified its efforts in the search for a new CEO in recent days as it eyes management changes that it believes will help bolster investors’ confidence. Perrigo has already named a new CEO, a move that fuelled talk of the imminent departure of Joseph Papa, who Valeant has been courting for some time.
Papa main task at his new post will be leading Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s efforts, as it bids to reverse its month’s-long stock plunge. The drug maker has shed nearly $80 billion in market value since its controversial relationship with specialty pharmacy Philidor came to the limelight.
The new CEO joins the embattled drug maker with a record of accomplishments having led a number of companies through times of transition. His experience and connections will be key to the company mending relationship with payers as one of the ways of bolstering drug sales.
10-k Filling Concerns
Concerns that Valeant Pharmaceuticals Intl Inc (NYSE:VRX) would not file its 10-K report on time has already sent the stock crashing. The filling is important, as it will prevent the company from defaulting on a number of notes. The same should also go a long way in according the company a clean bill of health.
The due date for the 10-k filing is April 29. Failure to meet the deadline could get the company into trouble with creditors. The same would also go a long way in spooking investors on suggesting there is more trouble brewing in the background.
Any negative news would certainly go a long way in causing more trouble on a stock that has been battered for months on the slightest of concerns. Investor’s as it stands believe there are no more accounting irregularities that could justify a further delay in the filling.
Auction of Businesses and Assets
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is also expected to shed more light on how it intends to pare down its $30 billion debt. There are already reports the company is considering offloading some assets to raise funds to cater for part of the payment. Choosing which assets to offload without compromising any of the company’s key business remains the biggest challenge.
The company has already enlisted the services of Goldman Sachs Group Inc (NYSE:GS) and Centerview for providing insight on which assets to divest. Spearheading efforts in shoring up the company’ finances are activist investor William Ackman, who joined the board last month.
The selloff could see the drug maker parting ways with a handful of coveted drugs and coveted skin drugs under the Obagi, Cerave, and Solta brand lines.
The filing of the 10-K report should evoke the most reaction from the Street given that it will provide a clear insight into the health of the business. Shares could rise above the $40 a share mark on positive news and on Valeant affirming its prospects.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) also needs to prove it is in the initial stages of a restructuring process that has the potential of taking it back to its glory years.
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