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Valeant CEO reiterates plans to rebuild embattled company

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

Valeant Pharmaceuticals International new CEO, Joseph Papa, met with shareholders Tuesday at the company's annual meeting, outlining his stabilization plan to rebuild the company's reputation amid accusations of accounting abnormalities, price gouging and channel stuffing.

Papa, who was named CEO in April, said the company has been "a distracted organization," but he is focused on paying off $1.7 billion of its $30 billion debt by 2016.

"If we can sell some of those noncore assets to pay off the debts, it will allow us to pay down our additional debt," he told shareholders.

This means for the moment the company will be looking to sell businesses rather than make acquisitions as it has done in recent years. Valeant will likely keep is Bausch & Lomb and Salix businesses as well as its dermatology, gastrointestinal and consumer products operations.

The dermatology business, however, faces significant challenges as sales have fallen significantly in recent months. But Papa expressed some confidence in the business.

"We have the leading portfolio of dermatology brands and the strongest new product pipeline in dermatology," he said.

Valeant's meeting in Laval, Quebec, comes as the company's stock has plunged more than 90 percent in the past year, weighed down by concerns over its acquisition binge of recent years, use of a specialty pharmacy and backlash over massive price increases for some drugs.

On April 25, Valeant tapped Papa, who has 35 years experience in the pharmaceutical industry, for the role of chairman and CEO, succeeding Michael Pearson.

Among questions from shareholders about the state of the company, one investor asked Papa about how the embattled company plans to handle its government inquires on its drug pricing.

Papa said the company plans to deal with the matter as quickly as possible and "whatever we face we are going to cooperate and we are going to deal with them appropriately."

Shares of Valeant slipped slightly after the meeting, falling less than 1 percent.