The company has been at the forefront of an intensifying debate over price increases for older drugs in the US.
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Asked about that, Citron founder Andrew Left said: “I believe their disclosures are false and misleading with an attempt to manipulate the market-we have that in common”.
One of the Valeant’s investors, Bill Ackman defended the company at a summit earlier this month, saying drug firms spend their earnings in acquisitions and research, pleasing shareholders and developing more innovative products. The slump from that high point translates into a paper loss of as much as $4.9 billion for Ruane, Cunniff & Goldfarb, which runs the $8.1 billion Sequoia Fund and was the biggest investor in the stock as of June 30.
Valeant owns an option to acquire Philidor, the company said.
Valeant’s stock has come under pressure in recent weeks.
Shares of Valeant (VRX-CA) continued a four-day plummet on Thursday, falling 11 percent after opening bell.
“Look at what the market is telling you”. Allergan was eventually bought by Actavis PLC.
Shares in United States drug company Valeant Pharmaceuticals (NYSE:VRX) (TSX: VRX) took another tumble on Thursday after a short-selling firm alleged that it used speciality pharmacies to boost its revenues.
Citron Research said Valeant is using a specialty pharmacy called Philidor RX Services to store inventory and record those transactions as sales. “While we have been unable to share our analysis with or speak with Valeant, our own diligence suggests that this is not accurate”, she wrote to clients, recommending they use the shares’ current weakness as a buying opportunity. Vetr lowered shares of Valeant Pharmaceuticals Intl from a “strong-buy” rating to a “buy” rating and set a $279.50 price target on the stock.in a report on Monday, August 17th.
“The timing of our revenue recognition by selling through the Philidor pharmacy network is actually delayed when compared to selling through the traditional wholesaler channel”, said the statement. “Valeant… properly accounts for sales to, and inventory at, Philidor and Philidor’s network pharmacies”. “We are confident in our full compliance with all applicable accounting rules, regulations and laws”.
Valeant Pharmaceuticals global, Inc.is a specialty pharmaceutical and medical device company.
The company also disclosed new information about its dealings with the two pharmacies, which distribute specialty drugs to patients. In late September, Democrats on the House Oversight and Government Reform Committee sent a letter to the committee’s chairman, Jason Chaffetz (R-Utah), asking him to subpoena the pharmaceutical company for documents related to price increases of acquired drugs. The company has a 50-day moving average price of $196.51 and a 200 day moving average price of $221.41. It will also post a slide presentation.
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Valeant has acknowledged a relationship with both pharmacies. Nonetheless, the rebuttal has done nothing to stem the stock’s bleeding, as the once-red hot stock is now down by 32% year-to-date. But Paulson added 6.9 million of his 9 million shares in the second quarter as Valeant was nearing its peak.
