Once Valeant Pharmaceuticals Intl Inc (NYSE:VRX) was a Wall Street darling, but no one loves you when you’re down and out. Even news about pricing for its recently approved plaque psoriasis treatment wasn’t enough to give VRX stock a lift.

VRX opened Friday, April 21, trading at $8.88 per share, giving it a market cap of just less than $3 billion — despite 2016 revenues of $9.674 billion. Just two years ago, shares went for more than $200 and couldn’t get enough of it. Now some are predicting it will soon be worthless. 

What happened?

Valeant’s appeal was based on a scam tied to its market cap. It bought drug companies, raised product prices, fired the researchers and moved the profits to Canada and its lower rate. Once the bubble was popped, that was the end of VRX stock.

But aren’t the pieces worth something? They are, but only to someone else.

Valeant Is Buried Under a Mountain of Debt

Valeant Pharmaceuticals borrowed money to acquire its assets, which at its height included a host of well-known skin care, eye care, digestive health and cancer drug brands. Many of these assets were bought at a market top, and once VRX became a distressed seller, buyers weren’t willing to pay those prices any more.

Valeant still owns many top brands — Wellbutrin for depression, Boston contact lens cleaner, Solodyn for acne and Jublia for toenail fungus. But these brands are in competitive markets, they require marketing to maintain their market shares, and Valeant is now husbanding cash.

The analysts who say the company is worthless only need to point to the balance sheet. At the end of 2016 it showed $29.845 billion in debt carrying $43.529 billion in assets. But are those assets still worth $43.529 billion?

Not in today’s market.

For instance. Valeant had bought Salix, which makes drugs to treat digestive disorders, for $14.5 billion. A year later it moved to sell the company, to a Japanese firm, for $10 billion. Then the Japanese firm backed out, soon after Valeant reported a loss of $1.218 billion $3.49 per share, for its September quarter.

Valeant recently said it would expand its sales force for Salix, focusing on primary care physicians, but every primary care physician has read of the “Valeant scandal,” its abuse of specialty pharmacies to force payments on high prices.

To these doctors, the Valeant name is worthless.

What Can Management Do to Save VRX Stock?

Current CEO Joseph Papa, who previously ran Perrigo Co. plc Ordinary Shares (NYSE:PRGO), has been making all the moves you would expect for someone in his position — increasing marketing, trying to sell assets, even pushing new drugs toward the market.

Today, Valeant announced it would price its injectable Siliq psoriasis treatment at $3,500 a month, making it the cheapest such treatment on the market when it goes on sale in the second half of this year. Even that couldn’t prevent a nearly 3% selloff on Friday.

Papa has an unplayable hand.

Dramatic moves are called for. The Valeant name must go. The assets could be split into two companies — one focused on consumer products and another on branded drugs. The company could sell the consumer brands or spin them off while maintaining the debt on the branded drugs. VRX could do a pro-active bankruptcy filing and try to reorganize.

But none of this leaves current shareholders with much of value. With the whole sector showing signs of decline — even Johnson & Johnson (NYSE:JNJ) is seeing slower drug sales — the situation around VRX stock has become desperate.

In this kind of situation, two things are possible:

• Someone could do something, which would at least throw new shareholders the possibility of a profit down the road.
• Or no one could do anything, leaving the whole company circling the drain.

This is not the kind of game I like to play with my money.

I was seeing sangfroid, and sell signals, in Valeant back in 2015. Those who did not get out then are out of luck, but if you still find someone willing to take you out, do what Bill Ackman did and just get out.

Dana Blankenhorn is a financial and technology journalist. He is the author of the political polemic Saving Trumpistan, Restoring Democracy, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he was long AAPL, AMZN, FB, GOOGL and MSFT.