Market Insider

Valeant slumps 8% after talks to sell stomach-drug unit fall apart

Valeant and Takeda disagree on price for Salix

Shares of Valeant Pharmaceuticals fell nearly 8 percent Wednesday after a report said the company's talks to sell its stomach-drug unit to Japan's Takeda Pharmaceutical have fallen apart.

Takeda's shares were down about 1 percent in Tokyo trading Wednesday after the report.

Earlier this month, Takeda was rumored to be in discussions with Valeant to acquire Salix Pharmaceuticals for about $10 billion. The talks have ended amid a disagreement over the price and other matters, CNBC confirmed. Dow Jones was the first to report the news.

The initial deal, which was nearly done, called for Takeda to make an $8.5 billion payment up front in cash as well as fairly large royalty, sources told CNBC. Takeda was seeking to renegotiate terms of the deal to cut the overall price by about $1 billion, the sources said. Valeant refused to agree to those terms.

Valeant will now focus on building up its stomach-drug business, people familiar with the matter told CNBC, and the deal could be all but dead.

The report comes as the embattled drugmaker has been trying to sell off its noncore assets to reduce its acquired mass amounts of debt.

The deal would have allowed Valeant to pay 80 percent of its debt, people familiar with the matter said.

The company has also been accused of fraud and price gouging and has witnessed its top executives depart. Moreover, the company has suffered along the entire industry as pressure from regulators about drug prices intensifies.

Valeant's stock is down more than 84 percent year to date.

Valeant Pharmaceuticals International 5-Day Chart

—CNBC's David Faber and Scott Wapner contributed to this report.