Valeant redeems $33 million of convertibles in November

By Jennifer Lanning Drey

Portland, Ore., Dec. 10 - Valeant Pharmaceuticals International redeemed $33 million principal amount of its 2010 convertible debt in November, J. Michael Pearson, chief executive officer of Valeant, said during a company conference call held Wednesday.

The company plans to continue to repurchase debt, Pearson said.

"Our cash position remains strong, which will give us flexibility to execute our current securities repurchase program as well as to make selective future acquisitions," Pearson said.

Valeant also announced Wednesday that it has signed a definitive agreement to acquire Dow Pharmaceutical Sciences, Inc. for $285 million.

In 2008, nearly $530 million, or two-thirds, of Valeant's cash outflow went to repurchasing equities and debt. The remaining one-third was spent on acquisitions, Pearson said.

"We plan to be both buyers and sellers as we upgrade our portfolio with sustainable growth assets and divest those assets, which we are either not the natural owner of, or those assets that produce lower growth and margin opportunities for Valeant in the long term," Pearson said.

Sources of cash in 2008 included divestitures in Asia and Argentina.

Valeant plans to continue to increase cash from operations through growth, margin improvements and expense management, he said.

Valeant's net cash position going forward will allow the company to continue its $200 million securities repurchase program, address its 3% convertible note maturity in 2010 and make selective future acquisitions, according to slides accompanying Pearson's presentation.

Based in Costa Mesa, Calif., Valeant is a specialty pharmaceutical company.

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