SEC Investigates Valeant Again
Canada-based, US-managed drug firm Valeant Pharmaceuticals has confirmed it is under another investigation by the Securities and Exchange Commission (SEC), the latest in a string of inquiries into its business affairs.
The SEC issued a subpoena in the fourth quarter of 2015, requesting information about Valeant’s previous relationship with pharmacy chain Philidor. Valeant terminated its ties with the group last October after it was accused of using it to falsify sales and boost prices.
News of the SEC probe capped an eventful 24 hours in which Valeant cancelled its 2016 financial guidance, delayed its fourth-quarter earnings report, announced that CEO Michael Pearson would return to work after a two-month medical leave, said it would take the chairman’s role away from Pearson, and indicated that one of its key drugs was under threat from a competitor.
The SEC is also separately investigating whether Salix Pharmaceuticals, which Valeant acquired last year, misled investors about its inventory levels in 2014.
Other investigations are continuing, by the US Attorney’s offices for Massachusetts and the Southern District of New York, as well as the US Congress, over Valeant’s drug pricing strategy.
The mounting scandals have pushed the company’s shares down and bond-rating company Moody’s has put Valeant’s credit rating on review for a possible downgrade.
In addition, Valeant has been hit by the news that rival firm Allergan has asked the Food and Drug Administration (FDA) for permission to sell a generic version of Xifaxan, its irritable bowel disease treatment. The drug had nearly $1 billion in sales last year.