Stocks That Won’t Exist in a Decade: Valeant Pharmaceuticals (VRX)
The Way Out: Bankruptcy
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is another binary play. Valeant is trying to navigate a $30 billion-plus debt load through cost-cutting and asset sales. If that strategy doesn’t work, bankruptcy likely follows.
I continue to believe that’s the most likely scenario for Valeant. Clearly, the market agrees, as VRX stock continues to slide. But even if Valeant somehow can muddle through, a sale becomes the most likely option. Valeant has had to cut back on R&D spend, won’t have the same scale as majors like Pfizer Inc. (NYSE:PFE) after asset sales, and from a branding standpoint would be better served under the umbrella of a less-controversial company.
Again, Valeant’s prospects of surviving even the next few years look slim. But should Valeant manage to make it through to the next decade, the next step will not be selling assets — but the entire company.