The rumor mill is spinning after an anonymous source said Canada's Valeant Pharmaceuticals is in advanced talks to sell Salix Pharmaceuticals to Japan's Takeda for $10 billion to help cover Valeant's debt load, The Wall Street Journal reports.
Here's what you need to know.
1. Valeant purchased Salix for $11 billion in 2015.
2. The potential sale would include $8.5 billion in cash and royalty payments to Valeant.
3. A representative of Valeant said the company was "in discussions with third parties for various divestitures including but not limited to Salix. The discussions may or may not lead to a definitive agreement.
4. The company issued the following statement:
"In accordance with its duties to shareholders and other stakeholders, management evaluates any transaction relating to core or non-core business units in accordance with the best interest of its shareholders and stakeholders. We are currently in discussions with third parties for various divestitures including but not limited to Salix. The discussions may or may not lead to a definitive agreement. Valeant does not intend to comment further on market speculation or disclose any developments unless and until it otherwise deems further disclosure is appropriate or required."
5. With news on the deal, Valeant shares rose 34 percent to close at $23.86 yesterday, Nov. 1, 2016.
6. After its accounting scandal last year, Valeant began working on addressing its debt load which was a major concern to investors.
7. If Valeant does sell Salix, it would likely work on rebuilding its skin and eye drug franchises.
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