Valeant's plans to sell its Salix subsidiary to Japan's Takeda are in disarray after negotiations fell apart at a late stage, according to reports.
Citing unnamed sources, the Wall Street Journal says the proposed $10bn deal is on the rocks because of disagreements over price and "other matters", and Valeant now intends to hang onto the business and try to grow it.
Salix – a specialist in gastrointestinal treatments – only became part of Valeant last year after a bidding war between the firm and rival suitors including Takeda and Endo.
Valeant ended up paying $11bn for the company, but since then has run into a host of troubles, becoming embroiled in drug pricing scandals, investigations into its business practices and shareholder concerns that its policy of growth by acquisition has left it saddled with too much debt.
Now, the Canadian company has decided to build up Salix' salesforce to push its flagship brand – Xifaxan (rifaximin) for diarrhoea caused by irritable bowel syndrome – which has been tipped by some analysts to become a $2bn product at peak.
That push will also extend to opioid-induced constipation drug Relistor (methylnaltrexone bromide), and comments made by the company in its announcement lend some credence to the rumours of the breakdown in talks.
"Our goal in building a primary care sales force is to maximize opportunities for Xifaxan and Relistor to help our products reach full potential," said Valeant chief executive Joseph Papa.
"Xifaxan and Relistor are integral to our gastrointestinal franchise which remains a core asset for future growth potential in the hands of Valeant."
With the launch of the expanded sales force effort over the coming weeks, the company said it expects to reach "a significant majority of likely Xifaxan and oral Relistor primary care prescribers".
Takeda, which was said to have been eyeing up the possibility of buying Valeant earlier this year, is reported to have been pushing for a lower price for Salix, perhaps hoping Valeant's debt burden would encourage it to do a deal at a knockdown price. The WSJ's sources suggested that the talks may resume in future.