All the cigarette butt investors out there, get ready to take a few more puffs. I’m about to go out on a limb and describe a terrifying trade only the most brave (or troubled) investors would consider — going long the fallen angel Valeant Pharmaceuticals Intl Inc (NYSE:VRX).

As most investors who have followed the drama know, VRX stock has had a pretty rough go of it over the past two years. Peaking well above $250 in mid-2015, the company is now treading water at the $12 level, culminating in a price drop of more than 95% over two short years.

In this article I’m going to present a few ideas for deep value investors who have looked at VRX stock to perhaps consider, given the fact that the pharmaceutical company is now trading barely above book value.

Stabilization Happening, Debt Decreasing

Currently, I find two trends with Valeant’s business model to be quite encouraging. From the perspective of an investor with a sufficiently long time horizon and the ability to wait out the market (which can be much longer than the time horizon of most investors), I would argue that picking up shares of VRX at around book value are a steal for two main reasons.

First of all, much of the steep revenue and profit decline stemming from expired patents appears to have slowed and has largely dissipated. During the past two years, a significant portion of the company’s “end of life” products, which were acquired with short lifespans (typically a few years left on a patent spanning 10 years or more) have seen these patents expire, resulting in a situation where the revenue and profit declines the company experienced, while steep at first, have now begun to plateau.

VRX does still carry a portfolio of such drugs on their books, however. As of last year, the total amount of such drugs has been estimated by analysts to be approximately 10% of the total portfolio of drugs under VRX’s portfolio, meaning the downside effects from these drugs can be expected to continue to slow over time.

An equilibrium with respect to the decline of certain drugs and the growth of others may be hard to call at this time. One thing is for certain, however: once a drug’s patent expires, it can’t come back. The declines, while steep at first, dissipate quickly and affect the overall portfolio at a slower rate over time. In this case, the rate of decline should be the focus for investors, rather than the absolute monetary value of the loss of revenue each quarter.

The second promising trend I see with Valeant Pharma right now is the company’s solid debt reduction activities amid declining sales. Between strategic divestitures and cash flow management, the company has piled nearly everything it has into paying back a whopping debt load of nearly $30 billion.

In fact, during the previous fiscal quarter, the company paid back $1.3 billion, putting management on track to meeting its $5 billion debt reduction target by 2018. With a current debt load of $28.5 billion, should the company maintain a $5 billion debt reduction plan and begin to deliver on providing profitable organic growth, this business model may still have a chance.

Bottom Line on VRX Stock

I agree that management has a very difficult job in managing the expectations of investors. As a former high-growth company incorporating an acquisition and price-hiking model, shifting toward an organic growth model relying on an existing pipeline of products that has performed modestly (to put it lightly) can be very difficult.

What Valeant has done very well, however, is finding a way to de-lever, slow down the rate of revenue and profit decline, and create a stronger base from which the pharmaceuticals company can eventually return to growth.

From a fundamentals standpoint, it is hard to ignore the fact that VRX’s decline has completely obliterated any premiums Valeant investors once enjoyed.

As a fallen growth company, VRX has been reduced to a deep value play for investors interested in the book value of the assets carried by the company, as well as the debt reduction plan currently in place by management. For investors eager to go dumpster diving, I’d encourage digging around VRX stock.

As of this writing, Chris MacDonald did not hold a position in any of the aforementioned securities.