Valeant shares slide on news of probe by US SEC

The Pak Banker - - COMPANIES/BOSS -

Shares in Valeant Phar­ma­ceu­ti­cals In­ter­na­tional Inc fell as much as 21 per­cent on Mon­day af­ter the drug­maker re­vealed that it was un­der in­ves­ti­ga­tion by the U.S. Se­cu­ri­ties and Ex­change Com­mis­sion.

"Valeant con­firms that it has sev­eral on­go­ing in­ves­ti­ga­tions, in­clud­ing in­ves­ti­ga­tions by the U.S. At­tor­ney's Of­fices for Mas­sachusetts and the South­ern District of New York, the SEC, and Congress," said Lau­rie Lit­tle, a Valeant spokes­woman. She said the com­pany con­firmed that it "re­ceived a subpoena from the SEC in the fourth quar­ter of 2015 and, in the nor­mal course, would have in­cluded this dis­clo­sure in its 2015 10-K. We do not have fur­ther de­tail to pro­vide at this time." The com­pany's U.S.-traded shares fell 18.4 per­cent to close at $65.80 per share.

The SEC probe is sep­a­rate from an ex­ist­ing in­ves­ti­ga­tion into a com­pany pur­chased last year by Valeant, Salix Phar­ma­ceu­ti­cals Ltd, ac­cord­ing to a per­son fa­mil­iar with the mat­ter.

News of the probe came a day af­ter the Cana­dian com­pany can­celed the re­lease of fourth- quar­ter earn­ings, with­drew 2016 fi­nan­cial guid­ance and said its chief ex­ec­u­tive had re­turned from med­i­cal leave.

Valeant then at­tempted to hold a con­fer­ence call with sell side an­a­lysts but later backed out af­ter news of the call was leaked to mem­bers of the press, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. News that the call had been sched­uled was first re­ported by Bloomberg.

The can­cel­la­tion was first re­ported by CNBC. Valeant is still hold­ing one-on-one con­ver­sa­tions with sell-side an­a­lysts and ma­jor in­vestors, the peo­ple said.

The com­pany has told a num­ber of large in­vestors that it is op­ti­mistic about its 2016 fi­nan­cial guid­ance, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. It said that it with­drew guid­ance as a pre­cau­tion­ary mea­sure and that in­vestors should not as­sume that the up­dated guid­ance will be sig­nif­i­cantly lower than what was pre­vi­ously an­nounced, the peo­ple said.

Valeant does not ex­pect to file the an­nual re­port on its 10-K within the 15-day ex­ten­sion pe­riod since it has not yet de­ter­mined if any re­state­ments are re­quired, the com­pany said in a fil­ing. In De­cem­ber, Valeant pro­vided 2016 ad­justed earn­ings guid­ance of be­tween $13.25 and $13.75 per share. "At this point, in­vestor anx­i­ety is pri­mar­ily fo­cused on the up­com­ing earn­ings re­port and 10-K," said Umer Raf­fat, an equity an­a­lyst at Ever­core.

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