Valeant Pharmaceuticals International Inc. is a single-digit stock once again.
Valeant dropped as much as 6.4 per cent (U.S.) to $9.52 on Wednesday, its lowest intraday level since 2009, after the Australian Business Review reported that the company was struggling to sell a pharmaceutical distribution unit for as much as it sought.
The news report added to recent signs that Valeant is having trouble divesting some of its businesses. The company announced two deals worth $2.1-billion combined in one day in January, an important first step in its endeavor to raise cash -- but not enough to drastically lower its $30-billion borrowing load. Chief Executive Officer Joe Papa said last year that the company could sell about $8-billion in non-core assets.
"This is another disappointment in what was promised to be $8-billion worth of asset sales that so far has only been approximately $2-billion," David Maris, an analyst at Wells Fargo & Co. who rates the stock the equivalent of sell, said in a note to clients. He called $10 a share a "critical psychological price point ."
Three final bids for the Australian iNova unit came in at around A$900m ($681-million), below Valeant's expectations for around A$1-billion, the Australian Business Review reported without saying where it got the information.
Valeant is now back to its 2009 levels, way below its August 2015 peak of $262.52 a share.
The company, domiciled in Laval, Quebec, but run out of the U.S., has plummeted amid government investigations into its pricing strategy and use of a now-defunct mail-order pharmacy to sell drugs. And after rolling up a series of drug companies to reach its staggering heights, Valeant has had a hard time selling units for as much as it's seeking.
Hedge-fund manager Bill Ackman, who's been one of Valeant's biggest supporters through the heyday and the following turmoil, sold out of his stake last month after losing billions of dollars on the bet -- weighing even more on the shares.