Valeant Pharmaceuticals ousts CEO Mike Pearson, announces search for new leader
Pearson was informed he is no longer in company's long-term plans, will continue to serve until replacement is appointed, Valeant says.
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Valeant Pharmaceuticals International is now searching for a new chief executive officer, having told current CEO Mike Pearson over the weekend that he is no longer in the company's long-term plans. Pearson will continue to serve as CEO and a director until his replacement is appointed.
Pearson had been at the helm of Valeant for the past eight years. In a statement issued Monday, he said, "While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company," adding that he would help to ensure a smooth transition.
Published reports say the Canadian company's stock took a hit this year, plummeting 73 percent as the United States investigates its business and accounting practices. Last week, stock dropped 51 percent in one day when the company issued a weaker-than-expected revenue forecast for the year, and said that a delay in filing its annual report could pose a debt default risk.
[Also: Senate committee to scrutinize drug prices set by Valeant, Turing, Retrophin and Rodelis]
The U.S. Securities and Exchange Commission is investigating the relationship between Valeant and Philidor RX Services; reports allege that Valeant and other pharmaceutical companies were using a network of specialty pharmacies to sustain sales of their high-priced drugs, and that they prevented patients and insurers from switching to cheaper generic drugs.
Valeant recently formed an ad hoc committee to review allegations regarding its relationship with Philidor. In a statement, the company said it "determined that approximately $58 million in net revenue relating to sales to Philidor in the second half of 2014 should not have been recognized upon delivery of product to Philidor."
The company said its financial statements for the quarters ending Dec. 31, 2014 and March 31, 2015 "should no longer be relied upon due to the misstatements" described in its 8-K form.
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Its revised financial statements will be included in the annual report it intends to file with the Securities and Exchange Commission and the Canadian Securities Regulators by April 29, the company said.
Valeant also announced on Monday that investor Bill Ackman is joining its board. The board asked former chief financial officer Howard Schiller to step aside to make room for Ackman, but Schiller declined. Katharine Stevenson volunteered to resign instead to create the necessary vacancy.
Schiller issued his own statement, saying, "Contrary to the statement in the 8-K and press release, at no time did I engage in any improper conduct that relates to any restatement of revenue the company is considering. In addition, at no time did I ever provide any incorrect information to the Audit and Risk Committee or the company's outside auditors regarding this accounting issue."
Twitter: @JELagasse
