Although Valeant said last week it was cutting ties with the Philidor network of pharmacies, Citron is predicting it will be tainted by revelations that two of the largest pharmacy benefit providers in the USA had cut ties with Philidor.
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Valeant Pharmaceuticals worldwide Inc. shares gained after stock commentary site Citron Research said it won’t release new allegations against the drugmaker, whose shares have plummeted amid scrutiny of its business practices.
“For those of you expecting a “kill shot”, you can stop reading here”, a new report from Citron Research, the California-based short selling firm led by Andrew Left, said. He said he plans to update his view of the company, including with comments about the company’s “corporate culture”.
The company tweeted Friday that it would update a previously issued report on Valeant with information “dirtier than anyone has reported”. In addition, his lawyers also asked him how sure he was about what he had in mind to publish and asked it “on a scale of one to 10”.
As for Valeant, the company defended its accounting in an October 26 investor call while saying that it was established a board committee to look at the allegations surrounding its relationship with specialty pharmacy, Philidor Rx Services LLC. It also said that the company was confident about their “compliance with applicable accounting rules, regulations and laws”.
Nachman, however, said he continued to believe that Valeant’s strong fundamentals could justify a much higher valuation in the longer term.
Valeant’s share price was last up $7.23, or 7.7%, at $101 per share. He predicted the stock will rise to $448 by 2019, more than 70 percent above its all-time high on August 5.
“Mr. Left and Citron have already made one set of false claims about Valeant’s business in an intent to profit by driving down our stock”, said Laurie Little, a company spokeswoman.
Valeant added, “We will continue to focus on running our business in an honest and transparent manner and meeting our commitment to the patients who depend on our products and the doctors who recommend them”.
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In an interview Friday with Bloomberg News, Left mocked Ackman’s assertion that he was unaware of Valeant’s full relationship with Philidor, as well as Ackman’s contention that Valeant would overcome its current problems.
