Valeant’s relationship with Philidor, a specialty pharmacy that distributed Valeant drugs and collected money from insurance companies, is part of the reason why its share price collapsed by over 50% over the last month.
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CEOs and other executives are often permitted to pledge shares they own as collateral for loans.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX)(TSX:VRX), now having been beat up to the point of losing 68 percent of its value since a high of $257 a share in July this year, is a screaming buy, in my opinion.
Novavax, Inc. (NVAX) of the Healthcare is down -9.62% this morning at $7.23 and 1870381 shares. Goldman Sachs required repayment of the loans and sold the shares in order to be able to repay them in full, the company said.
Commenting last Friday on the Goldman Sachs margin call, Pearson said: “Since joining Valeant, I have not sold any shares provided to me as compensation, and it was not my desire that shares be sold now”.
Paulson also has a 2.64 pct stake in Valeant.
Shares of Valeant Pharmaceuticals global, Inc.
“In the case of Philidor, Valeant consolidates their financials and seems to have a controlling financial interest, while other companies say their affiliated specialty pharmacies are ‘fully independent.’ Valeant’s structure may not be illegal, but we find it aggressive and questionable”, said one analyst at BMO.
Pearson has come under increased pressure in recent days over his handling of Valeant’s business practices, and could face more criticism over the loan behind the Goldman sale. Year-to-Date the stock performance stands at -31.62%.The company shares have dropped -24.80% from its 1 Year high price. In July 2014, the Company acquired PreCision Dermatology, Inc. In a four-hour-long defense of Valeant on October 30, he said the company’s PR folks failed to aggressively counter allegations coming from the short sellers.
Separately, Goldman lent Mr. Pearson $4 million to buy a Spring Lake, N.J., beach home in 2013, property records show.
Valeant’s second-largest shareholder expects the embattled drugmaker will soon address concerns that spurred an investor panic and dramatic shareholder selloff. In the absence of any more credible negative reports, it is likely fund managers who held on to Valeant through the storm, as well as those who sold, will now be eager to build or rebuild positions in the company that, until July, was the best performing drug maker trading on the NYSE.
Valeant Pharmaceuticals global, Inc. has a float short of 3.15% and a short ratio of 1.06.
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Michael Rapoport contributed to this article.
