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Valeant (VRX) to Settle Allergan Litigation for $290 Million
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Valeant Pharmaceuticals International, Inc. announced that the parties in the cases of Basile v. Valeant Pharmaceuticals International, Inc. et al. (Case No. 14-cv-02004-DOC) and Timber Hill LLC v. Pershing Square Capital Management, L.P., et al. (Case No. 17-cv-04776-DOC) have agreed to resolve the claims of the litigation with Allergan plc for $290 million, subject to the court's approval.
Under the terms of a recently revised Litigation Management Agreement with the other defendants, the company will pay $96.25 million or 33% of the settlement while Perishing will pay the remaining. Valeant was earlier required to pay 60% of the claims of the litigation.
We remind investors that in December 2014, Anthony Basile, an alleged shareholder of Allergan filed a lawsuit on behalf of a putative class of Allergan shareholders against Valeant, Pershing Square, PS Management, GP, LLC, PS Fund 1 and William A. Ackman in the U.S. District Court for the Central District of California.
Valeant’s stock has rallied 28.4% in the last six months against the industry’s decline of 5%.
The company has been mired in various controversies due to price hike of specialty drugs, erroneous financial reporting and termination of contracts with Philidor Rx Services. Valeant started a rebuilding process with the new CEO, Joseph C. Papa in 2016.
Even though it is still too early to comment on its reformation but the company’s efforts to sell non-core assets and clear huge levels of debt are commendable and should bode well in the upcoming quarters.
Valeant sold its equity interests in Dendreon Pharmaceuticals, Inc. to the China-based Sanpower Group Co. Ltd. It has also announced plans to divest Obagi. Additionally, the company sold iNova Pharmaceuticals for $930 million.
The company is also divesting Sprout Pharmaceuticals and ADDYI businesses. As of Nov 7, 2017, the company lowered debt by approximately $6 billion since the end of first-quarter 2016. The divestiture of non-core assets should help the company streamline its product portfolio and focus better on the core areas of dermatology and clear its debt as well.
Sucampo’s earnings per share estimates moved up from $1.07 to $1.19 for 2018 over the last 60 days. The company delivered positive earnings surprises in three of the trailing four quarters with an average beat of 15.63%.
Exelixis’ earnings per share estimates increased from 70 cents to 73 cents for 2018 over the last 60 days. The company came up with positive earnings surprises in the trailing four quarters with an average beat of 572.92%. The company’s shares have climbed 105.2% in the last twelve months.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
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Valeant (VRX) to Settle Allergan Litigation for $290 Million
Valeant Pharmaceuticals International, Inc. announced that the parties in the cases of Basile v. Valeant Pharmaceuticals International, Inc. et al. (Case No. 14-cv-02004-DOC) and Timber Hill LLC v. Pershing Square Capital Management, L.P., et al. (Case No. 17-cv-04776-DOC) have agreed to resolve the claims of the litigation with Allergan plc for $290 million, subject to the court's approval.
Under the terms of a recently revised Litigation Management Agreement with the other defendants, the company will pay $96.25 million or 33% of the settlement while Perishing will pay the remaining. Valeant was earlier required to pay 60% of the claims of the litigation.
We remind investors that in December 2014, Anthony Basile, an alleged shareholder of Allergan filed a lawsuit on behalf of a putative class of Allergan shareholders against Valeant, Pershing Square, PS Management, GP, LLC, PS Fund 1 and William A. Ackman in the U.S. District Court for the Central District of California.
Valeant’s stock has rallied 28.4% in the last six months against the industry’s decline of 5%.
The company has been mired in various controversies due to price hike of specialty drugs, erroneous financial reporting and termination of contracts with Philidor Rx Services. Valeant started a rebuilding process with the new CEO, Joseph C. Papa in 2016.
Even though it is still too early to comment on its reformation but the company’s efforts to sell non-core assets and clear huge levels of debt are commendable and should bode well in the upcoming quarters.
Valeant sold its equity interests in Dendreon Pharmaceuticals, Inc. to the China-based Sanpower Group Co. Ltd. It has also announced plans to divest Obagi. Additionally, the company sold iNova Pharmaceuticals for $930 million.
The company is also divesting Sprout Pharmaceuticals and ADDYI businesses. As of Nov 7, 2017, the company lowered debt by approximately $6 billion since the end of first-quarter 2016. The divestiture of non-core assets should help the company streamline its product portfolio and focus better on the core areas of dermatology and clear its debt as well.
Zacks Rank & Key Picks
Valeant carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the pharma sector are Sucampo Pharmaceuticals, Inc. and Exelixis, Inc. (EXEL - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sucampo’s earnings per share estimates moved up from $1.07 to $1.19 for 2018 over the last 60 days. The company delivered positive earnings surprises in three of the trailing four quarters with an average beat of 15.63%.
Exelixis’ earnings per share estimates increased from 70 cents to 73 cents for 2018 over the last 60 days. The company came up with positive earnings surprises in the trailing four quarters with an average beat of 572.92%. The company’s shares have climbed 105.2% in the last twelve months.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>