Valeant Pharmaceuticals Intl Inc (NYSE: VRX) is having an incredibly strong day in the market today, and for good reason. The company announced that it has paid down a massive amount of debt. Of course, this led to excitement among investors, sending the stock running for the top. Today, we’ll talk about the news, what we’re seeing from the stock, and what we’ll be watching for with regard to VRX ahead.
VRX Announces The Repayment Of Debt
Valeant Pharmaceuticals is a company that struggled for some time following the Philidor scandal. Unfortunately, this scandal left the company in a position where it had a massive amount of debt, and revenue just wasn’t what anyone thought it was. However, since Joseph C. Papa took over the company as the CEO, he made it clear that the repayment of debt would be his top priority, and he’s done a great job of keeping that promise thus far.
Today, VRX released even more news with regard to the repayment of debt. In fact, in a press release issued early this morning, the company said that it has paid back an additional $300 million in senior secured term loans. The payment was made using cash on hand.
This is incredible news. After all, with this additional $300 million on the books, the company has reduced its outstanding debt by $6.5 billion since the end of the first quarter of the year 2016. As of December 31st, the new total debt owed by the company is approximately $25.7 billion, a number that is shrinking far faster than most expected it to. In a statement, Joseph C. Papa, Chairman and CEO at VRX, had the following to offer:
“We have reduced our debt by an additional $300 million due to ongoing strong cash flow from operations… In 2018, we will continue to invest in the core business that will drive the future growth of the Company, including durable product franchises and our innovative pipeline.”
How The Stock Is Reacting To The News
As investors, one of the first things that we learn is that the news moves the market. So, with the news of more debt being repaid, yet again at a faster rate than expected, it’s no surprise that Valeant Pharmaceuticals is making a run for the top. Currently (1:10), VRX is trading at $23.17 per share after a gain of $1.38 per share (6.33%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on VRX. In particular, we’re interested in following the story surrounding the company’s plans to continue its reduction of debt as well as plans to expand upon its robust pipeline and franchising business. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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