He said, “We are committed to doing everything we can to provide important medicines to the patients and doctors who depend on them, and will continue to explore relationships with the full range of pharmacies to ensure patients have access to the drugs they need”.
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“We have lost confidence in Philidor’s ability to continue to operate in a manner that is acceptable to Valeant and the patients and doctors we serve”, J. Michael Pearson, Valeant’s chairman and CEO, said in a press release. The company announced today that they have entered into a definitive agreement under which KeyCorp will acquire First Niagara in a cash and stock transaction for total consideration valued at approximately $4.1 billion. “In the meantime we think the business will perform very well – the point here is life will go on for Valeant”, Ackman said.
The news sent Valeant shares plummeting and raised new questions about the Canadian drugmaker’s arrangements with Philidor RX Services.
Hedge fund mogul William Ackman told his investors on Friday that he was confident in his bet on Valeant Pharmaceuticals, but faulted the company for a weak response to a short-seller’s allegations it is improperly inflating revenues.
Last week, short-selling research firm Citron Research shocked investors by coming out with a scathing report on Valeant Pharmaceuticals Intl Inc.
In a bid to boost the company’s image, former USA deputy attorney general Mark Filip was hired to advise Valeant’s board. The highest price that this stock has reached in the most recent 52-week period was $18.79, whereas its last (most recent) closing price is $7.63.
Shortly after this news, two other major customers of Valeant’s products, namely pharmacy-benefit managers Express Scripts Holding Company (ESRX – Analyst Report) and UnitedHealth Group Incorporated (UNH – Analyst Report), also terminated their contracts with Philidor.
CVS Health, the second-largest pharmacy benefit manager, also said it is continuing to investigate other pharmacies to uncover inappropriate billing and dispensing activities.
During a conference call on Friday, Ackman said Citron Research’s criticism of Valeant is “verifiably false”.
We believe reports of wrongdoing at Philidor weakens Valeant management’s credibility, further harms the company’s already tarnished reputation, and that these developments exacerbate potential legal, regulatory, and reputational headwinds for the company.
Valeant disclosed this week that it had paid $100 million for an option to buy the business.
Stock markets have staged a rally in October after sharp declines in August and September that were fueled by fears over the impact of China’s slowing economy. An outside spokesman for Ackman didn’t immediately respond to a request for comment about the latest accusations and Valeant’s proposed remedy.
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He expects Valeant’s share price to be worth $448 in three years.
