Valeant Pharmaceuticals International Inc on Friday issued last year’s financial report that met an important deadline for creditors, revealing new details on a range of financial and legal issues and it also announced changes to its board.
Shares in Valeant closed at US$33.36 in New York trading on Friday and are well down from their all time high of US$263.70 in August last year.
The company has been facing scrutiny from the US Congress, prosecutors and regulators over its drug pricing, business practices and accounting practices.
Valeant’s relationship with Philidor RX Services, which has been distributing its drugs, was terminated last year, hurting Valeant sales.
The publication of the report satisfies demands from Valeant’s creditors, but also shows the difficult road ahead for the drugmaker, Wall Street analysts and investors said.
“We think investors should sell on this catalyst since the business is quite weak and faces a number of headwinds,” Mizuho Securities analyst Irina Koffler said in a research note.
The annual report does not answer some more basic questions about what strategy Valeant would adopt, said David Neuhauser, managing director of Livermore Partners, which is shorting Valeant.
“They continue to dig out of a very troubled situation that will take time,” Neuhauser said.
In the report, Valeant restated last year’s financial loss and 2014 earnings as it had forecast.
The report also revealed new details about the poor sales of its Addyi sexual dysfunction drug, financial details about its Xifaxin gastroenterology treatment and also disclosed possible inventory issues on its pharmaceuticals in Poland and Russia.
The company also revealed it is being investigated by the US Department of Justice in North Carolina. The regulators have requested material relating to the production, marketing, distribution, sale and pricing of three of its life-saving drugs, Valeant said.
Massachussetts and New York are also investigating similar issues.
In a separate statement, Valeant said that seven board members would not be standing for re-election at its June 14 shareholder meeting, including Howard Schiller, the company’s former chief financial officer and G. Mason Morfit, who represents ValueAct. Robert Ingram will remain, along with ValueAct representative Robert Hale.
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