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Point72 Reduces Its Stake in Valeant Pharmaceuticals

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Nov. 20 2020, Updated 12:16 p.m. ET

Point72 Asset Management and Valeant Pharmaceuticals 

Point72 reduced its stake in Valeant Pharmaceuticals (VRX) by selling 924,400 shares. The fund held 132,300 Valeant shares. It accounted for 0.13% of the fund’s 4Q14 portfolio.

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About Valeant Pharmaceuticals 

Valeant Pharmaceuticals is a multinational specialty pharmaceutical and medical device company. The company develops, manufactures, and markets a broad range of branded, generic, and branded generic pharmaceuticals. It also markets OTC (over-the-counter) products and medical devices—like contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices. The company markets its offerings in over 100 countries.

Over the past few years, the company expanded its portfolio offerings and geographic footprint through numerous acquisitions—including Bausch & Lomb Holdings and Medicis Pharmaceutical.

Endo withdrew bid to acquire Salix Pharmaceuticals 

On February 20, Valeant agreed to acquire Salix Pharmaceuticals (SLXP). It’s a gastrointestinal company with a portfolio of 22 total products. Valeant acquired it for $158 per Salix share. The combination is expected to achieve annual cost synergies of $500 million.

On March 11, Endo International (ENDP), a Dublin-based pharmaceutical company, made an unsolicited offer for Salix at the price of $175 per share. Endo’s bid consists of $45 in cash and 1.4607 shares of Endo per share.

On March 16, Valeant challenged Endo’s offer. Valeant raised its cash offer from $158 to $173 per Salix share. Endo withdrew its offer after Valeant’s new offer price.

Solid 4Q14 growth

In 4Q14, the revenue was $2.3 billion. It was up 10% on a YoY (year-over-year) basis. The increase was mainly driven by the US operations. It was partially offset by negative foreign exchange. The cash EPS (earnings per share) grew 20% to $2.58. GAAP (generally accepted accounting principles) EPS was $1.56. GAAP cash from operations was up 191% to $816 million. This included a $287 million gain from investment in Allergan (AGN).

For full-year 2014, revenue grew 43% to $8.3 billion. GAAP EPS was $2.67. The adjusted operating cash flow was $2.5 billion.

For 1Q15, the company expects cash EPS to be at least $2.30. For full-year 2015, revenue is projected to grow by 14%–15%. It’s expected to be $9.2–$9.3 billion.

You can gain exposure to Valeant Pharmaceuticals by investing in the Vanguard FTSE All-World Ex-US Index Fund (VEU). Valeant accounts for 0.25% of VEU.

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