- Category: Economic
- Published Tuesday, December 29, 2015
- CTV News
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.
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.