Valeant Pharmaceuticals International Inc. (NYSE:VRX) on Monday announced a series of management changes, including that Chief Executive Officer Mike Pearson will stop down and activist investor Bill Ackman is joining the board.
The move comes after the company stock dropped a culminated 61 percent last week on its lower-than-expected 2016 guidance. The stock had dropped 73 percent this year as the investigation of its business.
The drugmaker said that Pearson would remain as CEO until a successor is found. Bill Ackman, the activist investor who is running the Hedge fund Pershing Square Capital Management LP, will join the board. In addition, Former Chief Financial Officer Howard Schiller has been asked to tender his resignation, accusing him of “improper conduct”. Because of the “improper conduct” in the conference call last week, the company plans to restate some of its earnings.
“The improper conduct of the company’s former chief financial officer and former corporate controller, which resulted in the provision of incorrect information to the committee and the company’s auditors, contributed to the misstatement of results,” Valeant said in the statement
Pearson just came back from sick to prepare for the fourth-earning report. But the result was disappointed. The stock dropped more than 51 percent in one day after the report was released.
“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, and I am committed to doing everything I can to ensure a smooth transition to new leadership,” Pearson said in a statement.
Ackman’s hedge fund is one of Valeant’s biggest investors. “I am looking forward to working with the board to identify new leadership for Valeant,” Ackman said
Valeant shares jump as much as 6.75 percent in 11:43 a.m. in New York.