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Valeant to pay down $5 billion in 18 months to reduce debt, CEO Joseph Papa says

Valeant Pharmaceuticals will pay down $5 billion of its debt over the next year and a half, CEO Joseph Papa told CNBC on Tuesday, in the company's latest effort to make a turnaround after a troubled year.

"(A) combination of asset sales — additional asset sales of our noncore assets — plus the operation results of our company. It's the combination of both of those that we think will get us that $5 billion over the next 18 months," Papa said on CNBC's "Halftime Report."

The Canadian drugmaker, which has been accused of fraud and price gouging, has recently been trying to sell off its noncore assets to reduce its acquired mass amounts of debt. Shares of the pharmaceutical company, down 80 percent in the past year, soared on Tuesday after it agreed sell three skin care products to L'Oréal for $1.3 billion.

"We believe these products will benefit even further from the resources and capabilities of a global beauty company like L'Oréal, which is well equipped to build on the success of these brands and expand into new global markets," Papa said in a statement about the deal. "Our remaining consumer products business is well positioned for continued advancement within Valeant's portfolio."

Valeant will also sell its Dendreon Pharmaceuticals unit to China's Sanpower for about $820 million.

Joseph Papa, CEO of Valeant speaks with Jim Cramer on the set of Mad Money
Ashlee Espinal | CNBC
Joseph Papa, CEO of Valeant speaks with Jim Cramer on the set of Mad Money

Late last year, former executives of Valeant and mail-order pharmacy Philidor were charged with running a fraud-and-kickback scheme that bilked Valeant out of millions.

Valeant has been under scrutiny for raising prices of old drugs with little or no competition and for questionable accounting practices. The company has reportedly recently implemented more price increases to dozens of its products.

Papa said on Tuesday he put a pricing committee together in May in response to the scrutiny, and said the company continues to attempts to be balanced on prices.

"During the year 2016 our average price increase was lower than the consumer price index. I think it was approximately 2.3 percent, to be specific. As we look at 2017 we said let's look at some of the products. We have not raised any of our ophthalmology products, our dermatology products since 2015.

Papa said there is some "fiction" out there about Valeant's attitude toward drug prices.

Papa, who was named CEO last year, said previously the company has been "a distracted organization."

—The Associated Press contributed to this report.