Less than a week after Valeant Pharmaceuticals' stocks plummeted by half, the company announced its CEO Michael Pearson will be leaving, and billionaire investor William A. Ackman will join its board of directors effective immediately. Valeant also provided an update on certain accounting and financial reporting matters. Pearson will continue to serve as CEO and a director until his replacement is named.
Ackman is CEO of Pershing Square Capital Management, whose firm has a 9 percent stake in Valeant. He will join Pershing's vice chairman, Stephen Fraidin, already on the board. As the size of Valeant's board currently is fixed at 14 directors, Katharine B. Stevenson voluntarily resigned to create a vacancy for Ackman.
"I am looking forward to working with the board to identify new leadership for Valeant," Ackman said. "The company's large scale and dominant franchises in eye care, dermatology, GI and other therapeutic areas coupled with its extraordinarily low valuation present a spectacular opportunity for a world-class health care executive."
In addition, Robert Ingram, chairman of the board and chair of the Ad Hoc Committee established to review allegations regarding the company's relationship with Philidor Rx Services and related matters, said its five-month investigation into Valeant's dealings with Philidor found significant accounting problems dating back to December 2014.
The company is in the process of restating the affected financial statements and new statements will be included in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2015, which the company intends to file with the Securities and Exchange Commission and the Canadian Securities Regulators on or before April 29, 2016.
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