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.



Advertisements

Latest Economic News

  • Unifor says it has left Canadian Labour Congress over dispute

    Economic CBC News
    ?Unifor, the largest private sector union in Canada, says it is splitting with the Canadian Labour Congress over disagreements about the rights of workers to choose which union should represent them. In a letter to the CLC, Unifor national president Jerry Dias and Quebec director Renaud Gagne say the congress has been less than supportive of its concern about American-based unions "trampling on the rights" of workers and their right to choose representation or express dissent. Source
  • Bread price-fixing documents won't be unsealed Thursday, Loblaw says

    Economic CTV News
    BRAMPTON, Ont. -- Loblaw says court documents regarding an alleged industry-wide bread price-fixing scheme won't be released tomorrow after an unidentified individual filed an application against releasing them. The information to obtain, which outlines why the Competition Bureau wanted search warrants in the case against at least seven companies, including Canada's three major grocers, has been sealed for 30 days and was scheduled to be released Thursday morning. Source
  • Home Capital vows to defend itself against short seller's $4M lawsuit

    Economic CTV News
    TORONTO -- Home Capital Group (TSX:HCG) says it vows to defend itself against misrepresentation claims in a $4-million lawsuit filed by a short seller against the alternative lender and three of its former executives. The company issued a response after California-based short seller Marc Cohodes on Monday filed a statement of claim with the Ontario Superior Court of Justice, alleging that the company's misrepresentations in its financial reporting cost him millions when he closed his position…
  • Home Capital vows to defend itself against short seller's lawsuit

    Economic CBC News
    Home Capital Group days it vows to defend itself against misrepresentation claims in a $4-million lawsuit filed by a short seller against the alternative lender and three of its former executives. The company issued a response after California-based short seller Marc Cohodes on Monday filed a statement of claim with the Ontario Superior Court of Justice, alleging that the company's misrepresentations in its financial reporting cost him millions when he closed his position early. Source
  • Canada's new distillery district? Nova Scotia sees explosion in craft spirits

    Economic CTV News
    HALIFAX -- Nova Scotia has kindled an explosion of spirit makers -- there are now 16 in Canada's second-smallest province -- through attractive craft-distillery policies and collaborations with local farmers. The Nova Scotia Liquor Corporation says 12 of those distilleries have popped up in the last five years, serving rum, gin, vodka and other spirits. Source
  • Loblaw, CRA face off in court in dispute that could cost grocery giant $404M

    Economic CTV News
    TORONTO -- Loblaw Companies Ltd. and the Canada Revenue Agency faced off in a Toronto court Wednesday in a $404-million dispute involving allegations that the grocery giant's Barbadian banking subsidiary was misused for tax avoidance. Source
  • Fed survey finds solid U.S. growth and rising wages

    Economic CTV News
    WASHINGTON -- The Federal Reserve reported Wednesday that the economy was growing at a moderate pace at the start of the year, with the majority of business contacts optimistic about prospects for 2018. In its latest survey of business conditions nationwide, the Fed said that wages were rising at a modest pace. Source
  • Bombardier won't confirm pending order in Iran for 10 regional jets

    Economic CTV News
    MONTREAL -- Bombardier Inc. will not confirm a published report in Iran that the Canadian planemaker is finalizing its first commercial aircraft order in the Middle Eastern country. The Quebec-based company has acknowledged in the past that it was exploring opportunities in Iran. Source
  • Royal Bank raises prime lending rate to 3.45% in wake of Bank of Canada decision

    Economic CTV News
    TORONTO -- The Royal Bank of Canada (TSX:RY) is raising its prime lending rate by a quarter of a percentage point in the wake of the Bank of Canada's decision to raise its key interest rate target. Source
  • Canadian banks raise prime lending rate to 3.45% in wake of Bank of Canada move

    Economic CTV News
    TORONTO -- Canada's biggest banks will hike their prime rate by a quarter of a percentage point on Thursday, putting financial pressure on homeowners with variable rate mortgages. The Royal Bank of Canada (TSX:RY) was first to announce its prime rate will rise to 3.45 per cent, shortly after the Bank of Canada raised its key short-term rate by a quarter-point to 1.25 per cent. Source