Valeant facing new US investigation
Valeant is under a new investigation by the US business regulator the Securities and Exchange Commission (SEC), it has emerged.
Bloomberg first reported the news on Monday afternoon, deepening the sense of crisis at the company, as it is already being probed over its now-terminated relations with pharmacy chain Philidor.
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, for its use of sharp price rises on its drugs, one of the most controversial practices in the sector today.
All this came just one day after Valeant's CEO Michal Pearson returned to his post after recovering from a case of pneumonia which required his hospitalisation.
Finally, the company appeared less that completely honest in confirming the news of the SEC probe, saying it had known about the investigation and had planned to disclose it in due course.
The combined weight of these revelations saw Valeant's stock tumble yesterday, falling a full 18.4% by the close of trading.
The Canada-headquartered firm released no details of the new SEC probe, except to confirm it is unrelated to the Philidor inquiry.
The company is also facing a backlash against its prices. Pharmacy benefits manager CVS recently announced it would place restrictions on Valeant's toe infection treatment Jublia, which costs around $1,000 a bottle.
Major questions also remain in regard to how Valeant will regain sales of dermatological products that Philidor sold. The firm has struck a new distribution deal with Walgreens Boots Alliance, but investors want more details of how it will work.
Moody's Investors Service has placed the ratings of Valeant under review for downgrade, reflecting concerns that the firm's operating performance is likely to be weaker than its expectations.