Valeant shares slide on SEC investigation announcement
pharmafile | March 1, 2016 | News story | Manufacturing and Production, Research and Development, Sales and Marketing | Philidore, Valeant, regulation
Shares at troubled Valeant plummeted some 20% Monday after the company said it was under investigation by the Securities and Exchange Commission (SEC) over its former relationship with the specialist pharmacy Philidore.
Last year, Valeant was accused by former employees of using aggressive tactics to get insurance companies to pay reimbursements for its drugs and inflate sales figures.
The Canadian drugmaker yesterday released a statement, confirming that it has “several ongoing investigations, including investigations by the US Attorney’s Offices for Massachusetts and the Southern District of New York, the SEC, and Congress.”
The statement continued: “With respect to the SEC investigation 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.”
Valeant’s internal investigation has concluded, although the company has as yet not revealed its outcome.
The SEC probe statement capped a turbulent few days for Valeant, coming a day after the company confirmed chief executive Michael Pearson returned from medical leave after suffering a severe bout of pneumonia in the New Year. Pearson comes back to a diminished role, with Valeant having split the roles of chief executive and chairman. Pearson formerly held both positions, but the chairman job has gone to Robert Ingram, although Pearson’s return to the company does however end speculation that he would be replaced permanently. Howard Schiller served as acting chief executive during his absence.
Also playing on investors’ minds was Valeant’s decision to postpone a conference call scheduled for Monday to discuss fourth-quarter financials and the drugmaker revealing it would withdraw previous guidance for 2016. This lack of guidance, in particular, troubled some shareholders, who have faced months of uncertainty over Valeant’s performance.
In addition, people close to the company said a finance executive, Tanya Carro, left Valeant following its internal review found it had booked some revenues from Philidor too early in 2014. Valeant did not confirm her departure.
Joel Levy
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