“Despite Philidor’s best efforts to communicate this, Philidor’s principal client, Valeant, has made a decision to end its relationship with Philidor”, the company said in a statement.
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The partnership saw Philidor aggressively market Valeant’s more expensive drugs over cheaper generics preferred by insurers, which caught the attention of United States lawmakers and investigators now looking into its pricing.
“I realized starting on Friday the Valeant story is taking a life of its own and beyond, he said”.
After the stock plunge, Valeant “categorically” denied the report and said its “false and misleading statements about Valeant appear to be an attempt to manipulate the market” to drive down the stock.
In his October report, he likened Valeant to energy giant Enron Corp, which collapsed after an accounting scandal, and focused on information that Valeant had never disclosed to investors about its use of Philidor and other related pharmacies.
“We remain steadfast that Philidor has adhered not only to all applicable laws but to the highest standards of ethical business practice”, the Philidor statement said. The latter is also embroiled in litigation with Valeant over non-payments for drug shipments.
Shares of Valeant Pharmaceuticals are still lower by more than 45 percent over the past month, as investors and traders continue reacting to ongoing headline concerns regarding allegations of wrongdoings.
In a bid to boost the company’s image, former USA deputy attorney general Mark Filip was hired to advise Valeant’s board.
Left didn’t publish any information that wasn’t already in the public sphere, but his report was peppered with inflammatory innuendos, asking whether Valeant was the “Pharmaceutical Enron” and saying Citron has a “smoking gun” showing it “appears” Valeant has created an entire network of “phantom pharmacies”.
But, he added, it would survive these recent setbacks.
In a letter to healthcare professionals seen by Reuters, Chief Executive Officer Michael Pearson said that Valeant would pay for the cost of its products through November 8 and make sure patients could fill their prescriptions with no out-of-pocket expenses, wherever possible. “While this has been a very damaging reputational moment… we think that Valeant’s business is very robust”.
“We expect more negative press”, said Ackman”.
“Pershing Square doubled down last week on its investment in the company, even as the shares kept tumbling”.
Ackman and Left are on opposite sides of a debate over Valeant’s transparency, with Left’s Citron Research alleging accounting fraud at the Canadian company.
Valeant had become a Wall Street favorite and its shares hit an all-time high as recently as August, but it has been hammered relentlessly since coming under a national spotlight.
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In an interview with Bloomberg, the respected value investor and veteran business partner of Warren Buffett said Valeant’s strategy isn’t sustainable.
