Valeant Pharmaceuticals (VRX) on Friday filed its long-overdue U.S. financial report for 2015, plus restated results for several quarters, resolving its default on some of its $30 billion in debt and averting other problems. The badly tarnished Canadian drugmaker also announced a slate of mostly new nominees for elections to its board in June.
The moves reassured nervous investors somewhat, nudging up Valeant's much-depressed share price, because further delay could have led some debt holders to demand painful concessions, particularly debt repayment far ahead of schedule.
Preventing that was crucial, but for the beleaguered company it basically amounts to successfully knocking out one mole in a months-long Whack a Mole game with no end in sight.
Valeant is dealing with three federal probes into its accounting and business practices, a huge stock-price plunge and insurers demanding bigger discounts from its inflated drug list prices. Just Wednesday, several current and former Valeant officials were grilled by Congress over Valeant's strategy of buying up older medicines with limited competition and then jacking up their prices many times above prior levels. That has drawn harsh criticism and promises to rein in pharmaceutical companies from both Democratic and Republican presidential candidates.
Activist investor Bill Ackman and his Pershing Square Capital Management, one of Valeant's largest shareholders, are attempting a turnaround. The fund recently took over two positions on Valeant's board of directors, which is replacing J. Michael Pearson, the CEO behind Valeant's run of serial acquisitions and staggering drug price hikes.
On Friday, the company announced a slate of 11 nominees to Valeant's board, including current member Ackman and incoming CEO Joseph C. Papa, the chairman and CEO of Perrigo Co., another drugmaker. The elections are set for an annual meeting on June 14.
Valeant's financial report filings with the U.S. Securities and Exchange Commission confirm that the Canadian drugmaker was aggressive not just in hiking prices of older medicines, but also in stating revenue prematurely. It didn't reveal any major new inaccuracies in Valeant's accounting, but gave a bit of detail on financial misstatements involving two of Valeant's key brand-name drugs.
In early trading Friday, Valeant shares fell 3 cents to $35.22. That's down about 90 percent from Valeant's share price peak last August.