“Citron’s false and misleading statements about Valeant appear to be an attempt to manipulate the market in an effort to drive down Valeant’s stock price”, spokeswoman Laurie Little said in an emailed statement. “All sales to Philidor and Philidor network pharmacies are accounted for as intercompany sales and are eliminated in consolidation”, Valeant said.
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L’Autorité des marchés financiers (AMF) will investigate Valeant after the publication of a controversial report raising questions about the practices of the pharmaceutical giant.
Hedge fund manager John Paulson’s firm, Paulson & Co., owned 9 million Valeant shares as of June 30, translating into a decline from the peak of $1.3 billion.
Much of Citron’s report focuses on Valeant’s mysterious relationship with Philidor, a specialty pharmacy that distributes and books prescription drugs for big drug companies. The stock has a market cap of $36.83 billion and a price-to-earnings ratio of 44.57.
If his analysis does not adhere to the comparison with Enron, Arfaei wrote in a note that he cannot completely refute allegations of Citron Research with respect to “phantom sales”.
Valeant Pharmaceuticals worldwide, Inc.is a specialty pharmaceutical and medical device business.
“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 and we categorically deny the allegations”.
Valeant has previously raised ire for making strings of pharmaceutical acquisitions and rapidly increasing drug prices as much as a hundred percent. Those drugs are often distributed by specialty pharmacies.
A spokesperson for Valeant refused to comment on the story. The company said that sales are recorded only when drugs are sent to patients. Horizon Pharma Plc and Endo worldwide Plc., two other specialty pharmaceutical companies, said they don’t have ownership interests in the pharmacies they work with.
RBC Capital restated their outperform rating on shares of Valeant Pharmaceuticals Intl (TSE:VRX) in a research report report published on Tuesday morning, StockTargetPrices.com reports.
In addition, Valeant Chief Executive Michael Pearson is also joining the conference as well as its current and former chief financial officers. More over, its business strategy is to acquire neglected old drugs that are sold at a cheap price, and raise their prices 10-fold, 100-fold.
This new Citron Research report comes on the heels of an October 2, 2015, Citron Research report titled “Citron Research Exposes the Information that Congress Will Find if it Subpoenas Valeant”.
Veritas analyst Dimitry Khmelnitsky sees Valeant at risk of losing its “secret sauce” that made it a darling of many investors due to the pullback in its share price.
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Back in August, Goldman Sachs noted that almost one-quarter of Valeant’s market capitalization was owned by hedge funds at 2015′s halfway mark. The stock was bought at an average price of C$193.00 per share, with a total value of C$193,000.00.
