What happened

Shares of Valeant Pharmaceuticals (NYSE:VRX) closed up 9%, having been up as much as 10.7% today, after the drugmaker announced that it is selling its iNova Pharmaceuticals business to a pair of private equity groups for $930 million in cash.

Magnifying glass and pen on top of a balance sheet report

Image source: Getty Images.

So what

iNova Pharmaceuticals sells prescription and over-the-counter drugs in areas such as weight management, pain management, heart disease, and cough and cold in more than 15 countries around the world. While Valeant loses some of its international footprint through the sale, it will still remain a strong global player through its Bausch + Lomb franchise.

The fact that iNova is being sold isn't a big surprise, but there were reports that Valeant was having trouble finding a buyer at a reasonable price, so part of today's jump likely reflects investors' relief that it was able to find a buyer close to the $1 billion figure being thrown around.

The cash will help Valeant Pharmaceuticals pay down some of its massive debt load. It reduced its debt by $3.6 billion over the year that preceded the end of the first quarter, but still had $28.2 billion worth of long-term debt on its books. The proceeds from selling iNova will help, but it will put a relatively small dent in the debt load.

Now what

Valeant Pharmaceuticals set a goal of reducing its debt by $5 billion between August 2016 and next February, which it appears to be well on its way to meeting if you add the $930 million for iNova to the $3.6 billion it's paid down over the last year and the $820 million it will receive later this year after the close of the sale of Dendreon announced in January.

Brian Orelli has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Valeant Pharmaceuticals. The Motley Fool has a disclosure policy.