Bausch Health Companies Inc. said it plans to vigorously defend its intellectual property after a U.S. judge ruled some patents for one of its drugs were invalid.

Shares of the Laval, Que.-based health care firm were decimated Thursday, falling as much as 54 per cent before being halted for the remainder of the trading day after the news.

In an oral ruling, a Delaware judge found that some patent claims tied to the company’s Xifaxan drug to treat irritable bowel syndrome were invalid, opening up the door for Norwich Pharmaceuticals Inc.’s planned generic version of the drug.

“We are disappointed with today's development. We strongly disagree with any conclusion that our patents are not valid and intend to file an appeal to any such order," Bausch’s Chief Executive Officer Thomas J. Appio said in a press release on Thursday.

“We intend to vigorously pursue all available options to challenge any final ruling.”

It’s been a dramatic fall from grace for Bausch, which in its former incarnation as Valeant Pharmaceuticals International Inc. briefly eclipsed Royal Bank of Canada as the nation’s largest publicly-traded company.

That moment in the sun proved extremely short-lived, as the company was soon engulfed by fraud accusations levelled by short sellers, including Citron Research, around its relationship with specialty pharmacy Philidor in one of the most dramatic Canadian corporate scandals in recent history.

Valeant and three former executives, including former CEO Michael Pearson, agreed to penalties to settle charges of misleading disclosures and improper revenue recognition with the U.S. Securities and Exchange Commission two years ago. The company neither admitted nor denied the regulator’s findings, nor did the executives.

Another former Valeant executive and the former head of Philidor were sentenced to a year in prison in 2018 after being convicted of fraud.

That scandal and subsequent drop in the company’s share price compounded Valeant’s debt problems, after it piled on debt to finance a string of acquisitions.

Since those lofty heights reached in the summer of 2015, the company has lost more than 98 per cent of its value, wiping out $116 billion worth of shareholder value. The company formally changed its name from Valeant to Bausch in the summer of 2018.

Bausch Health Companies has been shedding assets by spinning out its Bausch + Lomb eye-care division earlier this year. It also announced plans to do the same with its Solta skin-care unit before shelving that offering due to challenging market conditions.

Even before Thursday’s swoon, shares had badly underperformed this year after the company reported disappointing first-quarter earnings and trimmed its forecast. There has also been a shakeup at the board level, as Joseph Papa resigned as chair earlier this summer, mere months after relinquishing his role as chief executive.