No, this is not an assumption but fact. Read HZNP 10k and it tells you so:
"Loss on Sale of Long-Term Investments. The loss on sale of long-term investments during the year ended December 31, 2015 was $29.0 million. During the third quarter of 2015, we purchased 2,250,000 shares of common stock of Depomed, Inc., or Depomed, representing 3.75% of Depomed’s then outstanding common stock. The shares were acquired at a cost of $71.8 million. During the fourth quarter of 2015, following our decision to withdraw our offer to acquire Depomed, we sold all of our shares in Depomed, receiving sales proceeds of $42.8 million and recognized a realized loss of $29.0 million in the consolidated statement of comprehensive income (loss)."
DEPO went below Lower Bollinger Band which is sitting at 14.68. This is an indication of bottom. This drop is not because of DEPO weaknesses but it is in sympathy of other stocks in the sector.
HZPO and VRX are down because of investigations.
ENDP is down because of losses to litigation.
The only weakness in DEPO is its outlook which is a little smaller than what analysts were predicted but DEPO was punished after the earnings and current weakness is just a drag from other stocks.
As soon as HZNP dropped the its offer, it sold out all its 2.25m shares of DEPO. I think, HZNP lost over $34m on the shares. It looks like HZNP management has no patience for anything. This kind of mentality will put HZNP in trouble eventually. Just looking at Tim action when he bought DEPO shares at its peak and then sold them at low with no regards to losses. So, money management is very poor at HZNP side. Tim looks more like a gambler who is looking for a quick gain. That mentality clashes with DEPO that is looking forward for long term and stability instead of hit and run mentality of HZNP.
Probably this is one of the reason for DEPO is going down in past 3 years.
However, nothing like kind of problems that HZNP has or it will face in future.
DEPO is a slow car but it does not have mechanical problems. It will get better as time passes and when it reduces its debt which is very manageable. I see many other stocks that have less income but they are trading as twice as DEPO. ACOR is one. Probably, some investors are worry about DEPO debt but that is something that will be solved as time passes.
Anyway, at current prices, DEPO offers a good opportunity for future gains.
DEPO have be slow and growth may not be as great as HZNP in past few years but there are something about DEPO that I like a lot.
1- Share dilution is avoided
2- Not labeled as price gouger
3- Reducing debt this year means increasing income.
4- New drug development is great for DEPO future.