Once a favorite on Wall Street, the company has seen its stock price plummet after weeks of questions about its business model, which involves purchasing other drug companies and raising the prices of the drugs they sell.
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Even before Citron’s report, critics accused Valeant of acquiring drug developers with the intent of hiking prices and cutting spending on research.
Meanwhile, Valeant announced today that it has cut ties with Philidor and that the mail-order pharmacy would shut down operations as soon as possible.
“We know the allegations have also led them to question Valeant and our integrity, and for that I take complete responsibility”. Philidor would also not confirm Valeant’s assertion that it will cease operations. Revenue for the drug totaled $3.65 billion in the third quarter, accounting for most of AbbVie’s revenue.
Valeant this week said that it was forming special board committee to examine issues surrounding Philidor, including why the company was denied a permit previous year to operate in California.
Ackman defended the use of specialty pharmacies, but said Valeant’s underinvestment in public relations and government outreach was a “meaningful mistake”. Late Thursday, both CVS Health (CVS) and Express Scripts (ESRX) said they were axing Philidor from their pharmacy networks after reviews of its practices.
The retailer, which provides furniture and electronics on a rent-to-own basis, said on Friday that it expects earnings of $2.02 to $2.22 a share this year, excluding a few items.
Valeant Pharmaceuticals suffered more losses Friday as controversy around its drug prices and sales practices climbed. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the Company’s most recent annual or quarterly report and detailed from time to time in Valeant’s other filings with the Securities and Exchange Commission and the Canadian Securities Administrators, which factors are incorporated herein by reference. Apparently, despite all the arguments Valeant is now making in its own defense, the unethical participation of Philidor in its business is rather clear. The decision came after it was reported Philidor altered doctors’ prescriptions to wring more reimbursements from USA health insurers.
Valeant said that the list prices for its branded drugs in the Unites States increased 36% past year. The announcement was made after audits revealed that the pharmacy working as per the terms of its agreement.
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TAKING OFF: Online travel company Expedia rose $11.39, or 9 percent, to $138.45 after it said savings from its acquisition of Orbitz could be greater than it initially expected. Ackman did not immediately address the altered prescriptions accusation. Morningstar Premium Members gain exclusive access to our full Valeant report, including fair value estimates, consider buying/selling prices, bull and bear breakdowns, and risk analyses.
