Valeant Pharmaceuticals: SEC Subpoena, Arizona Targets Company and Jorn Resigns by TheSkeptic
If this week wasn’t bad enough for Valeant, Deb Jorn, the Executive Vice President and Company Group Chairman resigned today from the company. Ms. Jorn was responsible for all major US product launches as well as the Dermatology and GI therapeutic areas. These two areas were Valeant’s most important, representing HALF of Valeant’s forecasted 2016 US revenues. Moreover, Ms. Jorn was also responsible for the huge push of Dermatology products through the captive pharmacy channel they’d established with Philidor and it’s subsidiaries.
Philidor is basically in a world of shit, which could be why Ms. Jorn resigned. We know from an action taken by the California Board of Pharmacy that Philidor, valeant pharmaceuticalss captive specialty pharmacy, was denied a license to operate in the state of California. This led Philidor to attempt to purchase R & O pharmacy through a series of shadow transactions, which could allow Philidor to operate in California, or at least that was the plan. Those well versed in the story are aware that this deal completely fell apart after Russel Reitz, the owner and pharmacist operating R & O Pharmacy accused Valeant, Philidor and others of committing fraud in Federal court. We also know from other court records that Philidor, through R&O, pushed thousands of prescriptions for Valeant products out to over 30 separate states.
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Leading into Jorn’s resignation, this past Monday Valeant’s situation became even more tenuous when it disclosed it had been subpoenaed by the SEC. In yet another laughably ridiculous PR effort, this past Tuesday Valeant is attempting (through private calls with sell side analysts) to spin this SEC investigation by claiming that this is somehow related to Citron Research’s report on the company. The guts of this claim is completely incredible in that Valeant was SUBPOENAED. It very well may be that it was started because they complained about Citron, but you don’t subpoena Valeant for information they would willingly provide about a short seller. It’s amateurish drivel that got pushed out to the market through what could be Reg FD violations.
Worse still for Valeant adn Ms. Jorn, the concerns surrounding Philidor persist like toenail fungus or IBS. Sources have confirmed that the State of Arizona is targeting Valeant and its affiliates. In what I consider to be a model of transparency, you can actually watch the full Arizona Board of Pharmacy Meetings via Arizona’s open meeting process. Additionally you can review the full agenda for each meeting at the Board’s event portal.