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Why Valeant Stock Just Plunged Into the Single Digits

Perrigo Co. Chief Executive Officer Joe Papa InterviewPerrigo Co. Chief Executive Officer Joe Papa Interview
Valeant CEO Joseph PapaPhotograph by Chris Godney—Bloomberg via Getty Images

Valeant Pharmaceuticals (VRX) hit an unfortunate milestone Wednesday morning: the troubled drug maker’s shares fell to a 52-week low, slipping into the single digits.

Shares of Valeant dropped from a $10.12 cent open to about $9.62 around 11:30 A.M. The firm’s market cap now stands at about $3.2 billion—a 66% cut in value from just one year ago and an astonishing 95%-plus drop from early April 2015.

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So what’s going on this time? It appears the latest plunge may be linked to the company’s struggles to get the types of bids it wants for its iNova unit, according to the Australian Business Review. Valeant snapped up iNova Pharmaceuticals, a chain that sells and distributes over-the-counter and prescription drugs in Australia, New Zealand, Southeast Asia, and South Africa, in November 2011 for $625 million cash up front (in addition to various milestone payments down the line). It brings in about $100 million annually.

But the drug giant, beleaguered by regulatory probes, earnings disappointments, bad PR over lavish executive compensation, and various lawsuits—including one by its own former chief executive, Michael Pearson, who claims Valeant hasn’t paid more than three million shares owed to him—has been trying to hawk the unit since last fall. The asking price? Upwards of $1 billion.

It hasn’t had much luck hitting that target. A variety of bids from private equity firms and others reportedly came in at $900 million. That’s bad news for Valeant, which is struggling to pull off a series of sales to secure some desperately-needed cash. “To us, this is another disappointment in what was promised to be $8 billion worth of asset sales that so far has only been approximately $2 billion,” wrote Wells Fargo’s David Maris in a research note.

Tuesday’s 5%-plus slide has some investors asking just how low the stock can go and when a turnaround may finally be possible. But even the most die-hard long positions have been jumping ship. Just ask activist investor Bill Ackman and his hedge fund Pershing Square, which lost more than $4 billion as Ackman refused to cut the financial albatross from his neck until just last month. In fact, according to an analysis by my Fortune colleague Jen Wieczner, Ackman actually lost even more money over his Valeant stake—to the tune of $7.7 million every day of trading for more than two years.