Research Desk Line-up: Bio-Path Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 13, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Valeant Pharmaceuticals International, Inc. (NYSE: VRX) ("Valeant"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=VRX. The Company announced on November 10, 2017, that it has completed the sale of the Obagi Medical Products business for $190 million in cash to Haitong International Zhonghua Finance Acquisition Fund I, L.P. and its affiliate Obagi Cosmeceuticals, LLC. For immediate access to our complimentary reports, including today's coverage, register for free now at:
Discover more of our free reports coverage from other companies within the Drug Delivery industry. Pro-TD has currently selected Bio-Path Holdings, Inc. (NASDAQ: BPTH) for due-diligence and potential coverage as the Company announced on November 09, 2017, its financial results for Q3 2017 which ended on September 30, 2017 and also provided an update on recent corporate developments. Tune in to our site to register for a free membership, and be among the early birds that get our report on Bio-Path when we publish it.
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Overview of the Obagi Medical Products Business
Obagi Medical Products is a global specialty pharmaceutical company founded by leading skin care experts in 1988. Valeant had acquired the Obagi business for approximately $344 million in 2013. The Obagi Medical Products unit comprises skin-care products, which have been specifically designed to help minimize premature skin aging, skin damage, and hyperpigmentation. These products are mostly available at dermatologists, plastic surgeons, and medical spas. Revenue and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), non-GAAP, for the Obagi business for the full-year 2017 is estimated to be around $85 million and $30 million, respectively. Valeant announced its plans to sell Obagi in July 17, 2017, and it completed the sale on November 10, 2017.
Obagi Sold to Industry Veterans
- The buyer for the Obagi Medical Products business is a fund managed by a limited partnership that includes industry veterans China Regenerative Medicine International Ltd (CRMI) and Haitong International Securities Group, both of which are headquartered in Hong Kong.
- China Regenerative Medicine International is engaged in the research, development, and commercialization of innovative bio-medical, healthcare products, and medical techniques.
- CRMI operates seven production plants in Mainland China and Hong Kong and its business is organized across four strategic areas comprising of tissue engineering, cell therapy, cosmetics, and hospital management.
Valeant to Use Sales Proceeds to Repay Debts
- Out of the total sales proceeds of $190 million, Valeant will use $180 million to repay term loan debt under its Senior Credit Facility. The divestiture of non-core assets would help Valeant streamline its product portfolio and focus on core areas of dermatology.
- In this regard, Joseph C. Papa, Chairman and CEO at Valeant, highlighted that with the closing of the Obagi deal, the Company has decreased its total debt by over $6 billion, since the end of the first quarter of 2016. He reaffirmed that his team would continue to work diligently to focus on the core businesses and create greater value for shareholders, customers, and most importantly, patients.
- However, analysts believe that the Company still remains highly leveraged. A net debt of around $26 billion and an expected adjusted EBITDA of around $3.6 billion for fiscal 2017 still leaves the Company stretched at 7.2 times.
Financial and Legal Advisors
For this transaction, Morgan Stanley & Co. LLC served as the financial advisor to Valeant, while Norton Rose Fulbright acted as its legal advisor.
Last Close Stock Review
On Friday, November 10, 2017, the stock closed the trading session at $15.38, marginally rising 0.20% from its previous closing price of $15.35. A total volume of 19.96 million shares have exchanged hands, which was higher than the 3-month average volume of 12.34 million shares. Valeant Pharma's stock price rallied 11.21% in the last one month, 11.69% in the past three months, and 8.54% in the previous six months. Furthermore, since the start of the year, shares of the Company have gained 5.92%. The stock currently has a market cap of $5.33 billion.
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