Valeant shares rise after plunge due to CEO's medical leave

LAVAL, Que. - Valeant Pharmaceuticals stock was showing signs of recovery early Tuesday after its shares plunged with the news that chief executive Michael Pearson is taking a medical leave of absence.

See Full Article

Shares of Canada's largest publicly traded drug company (NYSE:VRX) fell about 10 per cent Monday in New York to close at US$102.14 following Valeant's announcement that Pearson was being treated in hospital for pneumonia.

They regained some ground overnight, rising to US$104.66 in pre-market trade on Tuesday morning before North American stock markets opened.

The Toronto Stock Exchange was closed Monday and Friday for holidays. Valeant shares (TSX:VRX) last traded in Toronto on Thursday at C$157.68. At the same time, they were worth US$114.12 on the New York Stock Exchange.

Valeant says Pearson's duties will be shared on an interim basis between Robert Chai-Onn, Valeant's general counsel, as well as board chairman Ari Kellen and chief financial officer Robert Rosiello.

The company, headquartered in Laval, Que., has been facing a series of scandals that have slashed its stock price by more than half since record highs posted in August.

Pearson himself had been facing criticism and recently struck a defiant tone after calls for his dismissal surfaced.

"If the board wants to fire me they are welcome to fire me, but until they do we're going to get through this thing," Pearson told investors during a Dec. 16 webcast.

The company is facing a congressional investigation in the U.S. over its pricing practices and has been forced to revise its 2016 outlook after ending a drug distribution agreement with the controversial Philidor mail-order pharmacy.

Valeant said on Dec. 16 that the October split from specialty pharmaceutical partner Philidor Rx Services caused a big short-term disruption to its business that would reduce its expectations for the fourth quarter and 2015 as a whole.

But Pearson indicated that a new distribution agreement with major U.S. drug store chain Walgreens had set the company back on the road to recovery.

Pearson, 56, joined Valeant in 2008 after a 23-year career with the consulting firm McKinsey & Co., for which he served as head of its global pharmaceutical practice.

He used a string of acquisitions to turn a relatively small business that made generic drugs and chronic illness treatments into a major pharmaceutical company.

Valeant, formerly based in California, combined with Canadian drug maker Biovail in 2010 and moved the head office to Mississauga near Toronto and later to Laval near Montreal. During those years, it made numerous acquisitions and diversified into new product groups, including the Bausch & Lomb contact lens business.

Its sales climbed from US$2.46 billion in 2011 to an expected US$10.4 billion to US$10.5 billion for this year.


Latest Economic News

  • NYC agency investigating more than a dozen Kushner buildings

    Economic CTV News
    New York City's buildings regulator launched investigations at more than a dozen Kushner Cos. properties Wednesday following an Associated Press report that the real estate developer routinely filed false paperwork claiming it had zero rent-regulated tenants in its buildings across the city. Source
  • Tesla shareholders approve Elon Musk pay package that could net him $50B US

    Economic CBC News
    Shareholders of electric car and solar panel maker Tesla Inc. have approved an ambitious pay package for iconic CEO Elon Musk that could net him more than $50 billion US if he meets lofty milestones over the next decade. Source
  • Manitoba Hydro board resigns prompting accusations from premier, talk of lawsuit

    Economic CTV News
    WINNIPEG -- The board of directors at Manitoba Hydro resigned en masse Wednesday, leading to counter-accusations from Premier Brian Pallister and the spectre of a lawsuit from the Manitoba Metis Federation. Nine of 10 board members at the provincial Crown corporation issued a written statement in which they cited an inability to work with Pallister and his Progressive Conservative government. Source
  • Mark Zuckerberg says Facebook made mistakes on Cambridge Analytica

    Economic CBC News
    Breaking more than four days of silence, Facebook CEO Mark Zuckerberg admitted mistakes and outlined steps to protect user data in light of a privacy scandal involving a Trump-connected data-mining firm. Zuckerberg said Wednesday that Facebook has a "responsibility" to protect its users' data and if it fails, "we don't deserve to serve you. Source
  • Facebook crisis-management lesson: What not to do

    Economic CTV News
    NEW YORK -- The crisis-management playbook is pretty simple: Get ahead of the story, update authorities and the public regularly, assume responsibility and take decisive action. Crisis-management experts say Facebook is 0-for-4. Facebook's two top executives, CEO Mark Zuckerberg and chief operating officer Sheryl Sandberg, have gone radio silent since news broke on Sunday that political consulting firm Cambridge Analytica may have used data improperly obtained from roughly 50 million Facebook…
  • U.S. moving to limit warning labels on junk food: report

    Economic CTV News
    U.S. Trade Representative Robert Lighthizer has all but confirmed a New York Times report that U.S. trade negotiators are using the NAFTA talks to try to limit efforts to place warning labels on junk food. Source
  • What's likely as Fed meeting ends and Powell takes questions

    Economic CTV News
    WASHINGTON -- U.S. Federal Reserve officials are meeting this week for the first time under their new chairman, Jerome Powell, whose news conference to follow is stirring high anticipation. The Fed is set to announce its first interest rate increase of the year, a testament to the continued strength of the economy and of the job market in particular. Source
  • Fed raises key interest rate by a quarter-point

    Economic CTV News
    WASHINGTON -- The Federal Reserve is raising its benchmark interest rate and signalling that it is sticking with a gradual approach to rate hikes under its new chairman, Jerome Powell. The Fed on Wednesday boosted its key short-term rate by a modest quarter-point to a still-low range of 1.5 per cent to 1.75 per cent and said it will keep shrinking its bond portfolio. Source
  • In search of higher margins, Canada Goose to make more of its own luxury coats

    Economic CBC News
    Luxury coat maker Canada Goose plans to bring more manufacturing in-house in a bid to boost margins and help it live up to lofty investor expectations as the most expensive stock among major luxury brands. The Toronto-based company aims to make a least half of its outerwear itself in a few years, up from about a third now, Chief Executive Officer Dani Reiss told Reuters in an interview at the company's Toronto headquarters. Source
  • Shareholder motions demand Imperial Oil transparency on water risk, lobbying

    Economic CTV News
    CALGARY - Shareholders of Imperial Oil Ltd. are being asked to support motions to force it to be more transparent about its water-related risks from pollution and climate change, as well as its lobbying activities and expenditures. Source