No more fallout as Valeant probe wraps up
Drugmaker’s shares rise 10% as it nears debt default deadline
Embattled drugmaker Valeant Pharmaceuticals International reported Tuesday that a special board committee had completed an internal investigation without discovering additional financial fallout from the firm’s previous ties to a controversial pharmacy company.
The announcement sent Va- leant shares up 10.0% to $28.73 Tuesday as the drugmaker also said it plans to meet a key April 29 filing deadline required to avoid potential default on debt obligations.
Before Tuesday, Valeant shares had lost roughly 90% of their value in a seven-month slump as the Canada-based company struggled with investigations and questions about its price hikes for prescription drug price increases.
The drugmaker has also been criticized about its since-severed relationship with specialty mailorder pharmacy Philidor Rx Services, which distributed Valeant medications to patients.
An October report by promi- nent short-seller Andrew Left’s Citron Research accused Valeant of creating a “network of phantom captive pharmacies” to boost sales of its more expensive drugs. The company denied the allegations, but ordered the board investigation that eventually resulted in plans to restate $58 million in financial earnings from late 2014 into 2015.
Valeant Chairman Robert Ingram, who also chaired the ad hoc committee, said the special panel “believes that its review of various Philidor and related accounting matters is complete, and that it has not identified any additional items that would require restatements beyond those required by matters previously disclosed.”
Concurrently, Ingram said Valeant expects to file its annual re- port on or before April 29, in compliance with a deadline written into the drugmaker’s financing agreements.
The report had been delayed pending the results of the board investigation.
Still, Valeant remains under scrutiny from federal officials. Soon-to-depart CEO J. Michael Pearson was recently subpoenaed to testify during an April 27 hearing of a Senate committee that is examining drug price increases.
Additionally, the company’s pricing and distribution practices are the subject of probes by federal prosecutors in Massachusetts and New York as well as the Securities and Exchange Commission.