Valeant Pharmaceuticals Intl Inc. (NYSE: VRX) named interim CEO Howard B. Schiller while Michael Pearson, the company’s CEO, remains hospitalized. The company also named Robert Ingram, Valeant’s lead independent director, as interim chairman of the board during Mr. Pearson’s medical leave.
“Our thoughts are with Mike and his family,” Mr. Ingram said on Monday. “I am confident that with the vast industry and business knowledge from the management team and the board of directors, we will manage through this period.”
The board of Valeant believes an interim leader is required due to Mr. Pearson’s unstable health condition. There is no sure statement suggesting the replacement would be permanent, but Mr. Pearson’s health condition suggests otherwise.
Valeant has suffered since September 2015 after Hillary Clinton announced to restrict the increase of drug price. Soon later, a short-selling firm, Citron, published a report questioning the company claiming the company was a “Pharmaceutical Enron”.
The report accused the relationship between the drug producer and a specialty pharmacy named Philidor. It announced that Philidor changed the physicians’ scripts in order to wring out maximum reimbursements from healthcare managers for Valeant’s drugs. This report increased investors’ concerns about Valeant’s business ethics and practices.
Moreover, the company faced antitrust concerns as it was trying to maintain a monopolistic control over certain therapeutic markets. In addition, investors and shareholders stated their concerns regarding Valeant’s over $30 billion debt burden.
Valeant’s stock has suffered badly over the last few months after these accusations and concerns. Mr. Pearson and activist investor Bill Ackman took a series of conference calls to somewhat restore investor confidence in the company.
However, the stock had only just started rebound when Mr. Pearson had been admitted to the hospital and would be on a medical leave announced by the end of December. The news dealt yet another blow to the company’s stock. The executive was admitted to a New Jersey hospital on Dec. 24 and later shifted to another hospital for intensive care.
With Mr. Pearson’s hospitalization, the company’s future seems uncertain at best. Mr. Ackman, who has always supported and defended Valeant’s position, also lowered his stake in the company to 8.5% from 9.9%, which is the maximum stake a hedge fund can have in a company.