Valeant (VRX) Shares Got Crushed After Huge Talks With Japan Fall Apart

Valeant Pharmaceuticals shares fell almost 8% on Wednesday after news surfaced that the company’s talks to sell its stomach-drug unit Salix Pharamceuticals, to Takeda Pharmaceutical of Japan, have fallen through.

Rumors from earlier this month said that Valeant was in talks with Takeda to sell its Salix unit for around $10 billion.

According to sources that talked to CNBC, the initial deal had Takeda making an $8.5 billion payment up front in cash, as well as a large royalty. The same sources said that Takeda was looking to renegotiate the terms of the deal to cut the overall price down by $1 billion.

Valeant refused to agree and the sources said that the pharma giant will instead focus on building its stomach-drug business. The huge deal with Japan would have allowed Valeant to pay 80% of its debt.

Was this a wise move, considering that the stock is down 84% year to date?

Disclaimer: We have no position in Valeant Pharmaceuticals Intl Inc. (NYSE: VRX) and have not been compensated for this article.