On the heels of CEO's return, Valeant under new investigation by the SEC
- Valeant is under a new investigation by the Securities and Exchange Commission, which Bloomberg first reported Monday afternoon. Valeant's stock plunged after news of the investigation broke.
- The SEC probe is unrelated to an existing investigation of Valeant's wholly owned subsidiary Salix Pharmaceuticals, according to Bloomberg.
- The company on Sunday announced the return of its CEO, Michael Pearson, from medical leave and postponed a planned business update it had scheduled for Monday morning.
Michael Pearson has had a rough first day back in the office. A day after announcing the return of Pearson from medical leave, Valeant's problems deepened further with news of a previously undisclosed SEC investigation.
In a statement, Valeant confirmed it had several investigations ongoing, but did not distinguish between the existing Salix investigation and reports of a new one. The company is also under investigation by the US Attorney's Offices for Massachusetts and the Southern District of New York, as well as by Congress.
"With respect to the SEC investigation the Company confirmed that it had received a subpoena from the SEC in the fourth quarter of 2015, and in the normal course, would have included this disclosure in its 2015 10-K," Valeant said. Its 10-K has been delayed as its internal ad hoc committee continues its review of Valeant's relationship with Philidor.
Valeant had also delayed its planned Monday morning update on its fourth quarter earnings and 2016 guidance, citing Pearson's return as a reason.
Pearson has several other fires to put out in his return. The company has continued to endure criticism of its pricing strategies, most recently testifying in front of the House Oversight Committee on previous sharp increases for its drugs. And the accounting scandal surrounding its past relationship with the defunct specialty pharmacy Philidor continues to plague the company.
CVS also recently announced it would place restrictions on Valeant's toe fungus med Jublia, which costs approximately $1,000 a bottle.
In Sunday's announcement of Pearson's return, Chairman of the Board Robert Ingram noted Valeant would work to expand the senior team around Pearson. "Given the size and breadth of our company, succession planning and building out our senior team to provide additional resources and support for Mike are high priorities for the Board," he said.
Valeant stock closed at $65.80, down 18.4% on the day.
This post has been updated to reflect a statement from Valeant and include quotes from Sunday's statement.
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