March 11, 2016
By Alex Keown, BioSpace.com Breaking News Staff
LAVAL, Quebec – Since returning to the helm of embattled Valeant Pharmaceuticals , Chief Executive Officer J. Michael Pearson met with company executives to assure them that the worst may be over and that the company is not going to go bankrupt, Bloomberg reported.
Citing an unnamed attendee of the conference, Bloomberg reported that Pearson, who recently returned to the company after being hospitalized with pneumonia, told his fellow executives “there is no other big shoe to drop that I am aware of.” Pearson also said that to his knowledge the company is not “sitting on any other big issues” that could bring trouble to Valeant. Since Pearson returned to Valeant and the company made a few new additions to its board, including Bill Ackman, one of Valeant’s biggest stockholders, the stock made a slight turnaround from the new low it hit last week. Valeant’s stock is down about 75 percent since an August high of $262.52 per share. The stock is currently trading at $66.15 per share.
Pearson faces several challenges with Valeant, including paying off its approximately $31 billion debt. But, paying down that debt will not include selling off its Bausch & Lomb unit, something Ackman wanted the company to do, Bloomberg said. New board member Ackman has also threatened to replace Valeant leadership if they do not turn the company around, Bloomberg said. Before Pearson’s illness and hospitalization, he and Ackman had some friction over leadership and company scandals, although Ackman later publicly supported Pearson’s leadership.
Valeant is still under scrutiny over its drug pricing practices, as well as its relationship with Philidor Rx Services, a specialty pharmacy company. That relationship has caused Valeant to reassess some prior earnings reports. Most recently the company saw a loss of $6 billion in market value due to the planned restatement of earnings following an internal review. In a statement issued Feb. 22, Valeant said an ad hoc committee delving into the company’s involvement with Philidor that provided a number of the company’s prescription medications.
According to the statement, Valeant said it believes approximately $58 million of net revenues reported in the second half of 2014 “should not have been recognized upon delivery of product to Philidor.”
During Pearson’s medical leave, interim CEO Howard Schiller, the company’s former chief financial officer, appeared before a U.S. congressional committee to answer questions about the company’s pricing practices, particularly surrounding a price increase of two recently-acquired cardiac drugs, Nitropress and Isuprel, which the company gained after acquiring Salix Pharmaceuticals, Ltd. The committee released Valeant’s emails and memos that showed Valeant anticipated that both drugs would eventually face competition from generic manufacturers, but wanted to ensure the company could benefit from its “temporary monopoly” by “increasing prices dramatically to extremely high levels very quickly.”
Valeant is also working with Express Scripts and CVS Health Corp. on a possible drug discount program after those two companies began to place restrictions on Valeant’s drugs in favor of less costly prescriptions.
