March 1, 2016
By Alex Keown, BioSpace.com Breaking News Staff
LAVAL, Quebec – Hours after Valeant Pharmaceuticals Chief Executive Officer J. Michael Pearson re-assumed his top spot after a bout with pneumonia that left him hospitalized, the company scheduled and then cancelled an earnings call with sell-side analysts, Bloomberg reported yesterday afternoon.
Valeant said it cancelled the call after members of the media began expressing interest in participating in the calls, Bloomberg reported, citing unnamed people “familiar with the situation.” The cancelled call came as company stock slid another 18 percent on Monday, tarnishing what some may have hoped was a positive sign for the company as Pearson returned. Valeant had already announced a delay in an earnings call with investors due to recently discovered bookkeeping issues, which did not sit well with investors and added to the . Valeant initially planned on releasing its latest earnings report on Feb. 29, but said they will delay releasing the earnings and its 2016 financial outlook until the “near term.”
Valeant has been reeling from a number of scandals that have caused some of the company investors to be spooked. Valeant is currently trading at $65.78 per share as of the time of this writing. In August, Valeant was trading at $262.52 per share, which shows how far the stock has fallen in the wake of those scandals, which includes questions over company earnings statements, its aggressive pricing policies for newly acquired drugs, its relationship with a specialty pharmacy company and more.
On Sunday following the company announcement that Pearson would be returning to his position atop Valeant, he said he faced some challenges in setting the appropriate tone for the company moving forward.
“My immediate priority will be to build stronger relationships with important constituents, such as managed care and other channel partners, regulators and government representatives, while improving Valeant’s reporting procedures, internal controls and transparency,” Pearson said in a statement.
Pearson has his work cut out for him. Most recently, the company saw a loss of $6 billion in market value due to the planned restatement of earnings following an internal review. In a statement issued Feb. 22, Valeant said an ad hoc committee delving into the company’s involvement with Philidor that provided a number of the company’s prescription medications. According to the statement, Valeant said it believes approximately $58 million of net revenues reported in the second half of 2014 “should not have been recognized upon delivery of product to Philidor.” Correcting the misstatements is “expected to reduce reported 2014 GAAP EPS by approximately $0.10 and increase 2015 GAAP EPS by approximately $0.09,” Valeant said.
During Pearson’s medical leave, interim CEO Howard Schiller, the company’s former chief financial officer, appeared before a U.S. congressional committee to answer questions about the company’s pricing practices, particularly surrounding a price increase of two recently-acquired cardiac drugs, Nitropress and Isuprel, which the company gained after acquiring Salix Pharmaceuticals, Ltd. Valeant increased the prices for those drugs by 212 percent and 525 percent, respectively. The committee released Valeant’s emails and memos that showed Valeant anticipated that both drugs would eventually face competition from generic manufacturers, but wanted to ensure the company could benefit from its “temporary monopoly” by “increasing prices dramatically to extremely high levels very quickly.” In addition to the issues with Philidor, Pearson will have to help Valeant restore its image and address any fallout from the pricing practices—fallout which is sure to continue as the 2016 U.S. presidential election heats up.
