Valeant likely to restate financial results after Philidore review
pharmafile | February 23, 2016 | News story | Manufacturing and Production, Medical Communications, Sales and Marketing | Howard Schiller, Philidore, Valeant
Valeant says it is likely to restate its financial results for the last two years, in the wake of the drugmaker’s investigation into its relationship with the specialist pharmacy Philidore.
Shares in the Canada-based company slid some 18% Monday, after it said about $58 million of net revenues previously recognised in the second half of 2014 should not have been recognised upon delivery of product to Philidor, and should have been booked for 2015.
Valeant said corrections to the misstatement are expected to reduce 2014 earnings per share (EPS) by $0.10 and increase 2015 EPS by nearly $0.09. The company, currently led by interim boss Howard Schiller, has until next week to release its Q4 earnings report (known as a 10-K) or to request an extension.
In October last year, Valeant was rocked by claims originated by online research newsletter Citron that the company had used its relationship with Philidor to inflate its revenues, and used aggressive tactics to increase insurer reimbursement. This culminated in Valeant severing its ties with the pharmacy chain and promising an internal investigation of the matter- in which it yesterday reported “substantial progress.”
In October last year, online investment newsletter Citron Research questioned Valeant’s relationship with Philidor and accused the company of artificially inflating its revenue. Valeant, which subsequently severed ties with Philidor, created a panel to review the accusations.
People familiar with the matter have indicated that Valeant’s board has discussed the matter in recent days, but has of yet not decided whether or not to restate the company’s financial earnings. Nevertheless, the speculation has wiped some $6 billion from Valeant’s value.
Interim chief executive Howard Schiller said: “This determination and the need to delay our 10-K filing are very disappointing but necessary,” stated Howard Schiller, interim chief executive officer. “We remain committed to improving reporting procedures, internal controls and transparency for our investors.
Schiller continued by noting the strength of the company’s healthcare brands and said Valeant was focused on “rebuilding trust” after a “challenging” few months.
Joel Levy
Related Content
FDA rejects Valeant plaque psoriasis lotion over pharmacokinetic concerns
Beleaguered pharma firm Valeant has come up against another bump in the road as its …
Top Ten most popular articles on Pharmafile.com this week
It’s been a week in which one of the largest pharmaceutical takeovers in history took …
Valeant seeks clean slate with rebrand, new company name
In the latest attempt to reverse its ailing fortunes and distance itself from its polluted …
