In response to media inquiries, Valeant confirmed that it has several ongoing investigations, including investigations by the US Attorney’s Offices for Massachusetts and the Southern District of New York, the SEC, and Congress. With respect to the SEC investigation the Company confirmed that it received a subpoena from the SEC in the fourth quarter of 2015 and, in the normal course, would have included this disclosure in its 2015 10-K. We do not have further detail to provide at this time.
Valeant – No analysts responses yet but Valeant stock plunged 20% or so and his hitting many hedge funds hard. Here is what analysts were saying before the news.
We see Valeant’s decision to withdraw in 2016 guidance as disappointing given this was affirmed only recently, on 1/13. While we had expected updated guidance, we struggle to fully understand the rationale for removing guidance altogether. We hope to speak to management later today, to better understand the drivers for this decision
When investors are looking for a hedge fund to invest their money with, they usually look at returns. Of course, the larger the positive return, the better, but what about during major market selloffs? It may be easy to discount a hedge fund's negative return when everyone else lost a lot of money. However, hedge Read More
Mixed. The return of Mike Pearson as CEO is positive, in our view. We believe that few other executives would be as qualified, and incentivized, in turning VRX around. We also see the separation of the Chairman and CEO roles as a step in the right direction in alleviating some of the corporate governance concerns. According to the press release, Mr.Pearson’s immediate priorities will be to build stronger relationships with important constituents such as payers, improve Valeant’s reporting procedures and transparency (very important from our perspective), retain talent, andlower leverage. We view all of these as positive and look forward to their execution, but this will take some time.
Valeant has announced the return of Mike Pearson as CEO, effective immediately. As a result, the company has cancelled this morning’s conference call to discuss preliminary Q4 results. Further, the company has withdrawn its 2016 financial guidance, provided just back in December, which is likely to add to investors’ angst, in our view. Nonetheless, we believe that the return of Mr. Pearson is positive, particularly now that the company has split the roles of CEO and Chairman – an incremental step to improving corporate governance (Robert Ingram will take the lead Board position). Although we see a plethora of near-term risks for Valeant, our fundamental analysis suggests that the company’s valuation (either as a whole or sum-of-the-parts) is higher than where the stock is currently trading.