Valeant says CEO subpoenaed by Senate after no-show
Already beleagured by accounting woes and the possibility of default, the search for a new CEO, and a share price that has slumped, further problems emerged for Valeant over the weekend.
Outgoing CEO Michael Pearson has now been subpoened after failing to appear for a Senate deposition hearing in relation to allegations of drug price gouging.
Valeant says Pearson has been subpoenaed by the Senate Committee on Aging after he failed to show up at a hearing on Friday.
Pearson is already due to step down as the company faces a crisis over accounting issues relating medicines sold to Philidore, which distributed some of Valeant's drugs.
Canada's Valeant said in a statement that Pearson is now set to appear before the committee on 27 April after it asked him to co-operate.
"The board understands that Mr Pearson is in dialogue with the Senate Committee on Aging regarding his deposition and that those discussions are ongoing," Valeant said.
Senators Susan Collins (Republican) and Claire McCaskill (Democrat), who lead the committee, in November announced a bipartisan Senate investigation into drug pricing, requesting information from Valeant, Turing Pharmaceuticals, Retrophin and Rodelis Therapeutics because of "recent and significant spikes in price".
The accounting issues, which involve drugs received by Philidore being accounted for in 2014, instead of 2015, have meant the firm must restate accounts in both years and has delayed publication of its annual report.
This technically places Valeant at risk of default under terms of certain loans and the firm last week offered money to lenders to win them over.
Valeant famously tried and failed to engineer a hostile takeover of Allergan in 2014. But Allergan's CEO, Brent Saunders, has sought to distance himself from suggestions that he may be interested in buying Bausch + Lomb, the ophthalmology firm now owned by Valeant, or even Valeant itself.
He told investors in a briefing following the collapse of Allergan's merger with Pfizer last week: "Valeant maybe for sale or maybe it isn't I don't know. But we only buy growth assets, so you had have to understand the growth profile to see it would even make our screen or be interesting to us."
Saunders added that Bausch + Lomb – where he was CEO for three years until the Valeant merger in 2013 – had a "great team" and would be "interesting at the right price", although he noted the Valeant unit is not for sale.