Embattled Canadian drug manufacturer Valeant Pharmaceuticals International Inc. has stated that activist investor William Ackman will join its board while CEO Michael Pearson is slated to step down.
With this information hitting the news circuits, Valeant’s shares rose by 3.8% to $28 in early trading.
So far Valeant deferred filing its audited quarterly earnings and has stated that it will re-file its first quarter earnings for this financial year. Furthermore, it has pledged to file its annual report on or before April 29.
Valeant is now searching for a successor to replace Pearson, who has in the past used strategic deals and has priced drugs appropriately to arrive at double digit profits and push its stock to a high of $263 last August.
That strategy however backfired last fall, with attorney generals from two states opening investigations into its drug pricing mechanisms. To make matters worse, Valeant’s cash cow, its dermatology franchise faltered, as it had to walk away from a distribution deal with Philidor Rx Services, due to media and investor scrutiny.
"It's been a privilege to lead Valeant for the past eight years. While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership," said Michael Pearson.
For the last two months, Pearson, was on medical leave and returned to the company only a few weeks ago. During this time, Howard Schiller, a member of the board and its Chief Financial Officer, took over as its interim CEO. On Monday, Valeant had said Schiller had been asked to leave the board and refused to do so.
Ackman, who now joins Valeant’s board, has lost billions of dollars on its shares, said he would work more closely with the company and has named a proxy to the board.
Last week, Valeant had announced that it is on track to meet its 2016 earnings target and would most probably need waivers from lenders due to delays in its annual reporting.
With Valeant’s shares falling sharply, Ackman lost more than $700 million, in a single day of trading.
With this information hitting the news circuits, Valeant’s shares rose by 3.8% to $28 in early trading.
So far Valeant deferred filing its audited quarterly earnings and has stated that it will re-file its first quarter earnings for this financial year. Furthermore, it has pledged to file its annual report on or before April 29.
Valeant is now searching for a successor to replace Pearson, who has in the past used strategic deals and has priced drugs appropriately to arrive at double digit profits and push its stock to a high of $263 last August.
That strategy however backfired last fall, with attorney generals from two states opening investigations into its drug pricing mechanisms. To make matters worse, Valeant’s cash cow, its dermatology franchise faltered, as it had to walk away from a distribution deal with Philidor Rx Services, due to media and investor scrutiny.
"It's been a privilege to lead Valeant for the past eight years. While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership," said Michael Pearson.
For the last two months, Pearson, was on medical leave and returned to the company only a few weeks ago. During this time, Howard Schiller, a member of the board and its Chief Financial Officer, took over as its interim CEO. On Monday, Valeant had said Schiller had been asked to leave the board and refused to do so.
Ackman, who now joins Valeant’s board, has lost billions of dollars on its shares, said he would work more closely with the company and has named a proxy to the board.
Last week, Valeant had announced that it is on track to meet its 2016 earnings target and would most probably need waivers from lenders due to delays in its annual reporting.
With Valeant’s shares falling sharply, Ackman lost more than $700 million, in a single day of trading.