Valeant ‘firmer’ despite new lawsuit over drug; oil sees new lows as supply increases

By Colin Hanner

Chicago, Nov. 2 – Oil and its regularly traded distressed notes continued to slump for the third straight day, and more news surrounding Valeant Pharmaceuticals International Corp. surfaced in the distressed debt realm on Wednesday.

Seen as an effort to ease its debt, Valeant stole late-afternoon headlines on Tuesday when news came out that it is in talks to sell Salix Pharmaceuticals Ltd., its stomach-drug business, to Takeda Pharmaceutical Co. for roughly $10 billion.

News surrounding Valeant didn’t stop Wednesday, but didn’t cause as much volatility as in the past week.

The company was sued by Sprout Pharmaceuticals Inc. over claims surrounding Addyi, a female-libido drug that Valeant acquired for $1 billion in 2015, and whether Valent properly marketed and priced the drug.

Though its equities reacted to the news, there was not much downward movement in its notes.

“They opened up pretty wide, then settled in the low-80s,” another trader said. “They held a number of the gains made after the news of the potential sale.”

Oil companies saw another declining day in Distressed Land as prices continued to fall due to increases in U.S. crude stockpiles and continued predictions on supply cut talks around the Organization of Petroleum Exporting Countries.

Perhaps the biggest decliner of the day was EXCO Resources Inc. Its 7˝% notes due 2018 were down 5 points to 52 2/5, a market source said, while its 8˝% notes due 2022 were down 1˝ points to 41 3/5.

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