Resources

Thomson Reuters Tax & Accounting News

Featuring content from Checkpoint

Back to Thomson Reuters Tax & Accounting News

Subscribe below to the Checkpoint Daily Newsstand Email Newsletter

Valeant reiterates key executive resigned, was not asked to go

(Reuters) – Valeant Pharmaceuticals International Inc, responding to investors’ queries, said on Thursday that Executive Vice President Deb Jorn had not been asked to leave, reiterating that she had resigned for personal reasons.

Jorn oversaw the Canadian drugmaker’s U.S. dermatology business, which had ties with Philidor Rx Services, a specialty pharmacy that came under fire for using aggressive tactics to increase insurer reimbursement, mostly for dermatology drugs.

Valeant in October severed its ties with Philidor, which has since shut shop. The company’s relationship with Philidor is the focus of an investigation by the U.S. Securities and Exchange Commission, Reuters reported.

A Valeant board committee is also investigating the company’s ties with Philidor, and the drugmaker on Thursday said Jorn’s departure “is not the result of an action taken by the Ad Hoc Committee of the Board of Directors”.

“This unexpected change is yet another setback and comes at an especially inopportune time, as Valeant is dealing with a number of issues on several fronts,” said Wells Fargo analyst David Maris, who has an “underperform” rating on the stock.

Valeant’s woes began last year when it attracted staunch criticism for its pricing strategy and accounting practices.

The company on Sunday said it would delay releasing its fourth-quarter results and withdrew its financial forecast for the year, adding to investors’ uncertainty. CEO Michael Pearson returned from medical leave on the same day.

Late on Wednesday Valeant announced the resignation of Jorn, who was in charge of the company’s U.S. dermatology and gastrointestinal businesses.

It named Eric Abramson, vice-president of dermatology and immunology marketing, general manager of the dermatology business and Ari Kellen, executive vice-president and company group chairman, as head of the gastrointestinal business.

The two divisions accounted for roughly a third of the company’s third-quarter revenue of about $2.8 billion, Wells Fargo’s Maris estimated.

Laval, Quebec-based Valeant’s shares were down about 3 percent at $65.47 in afternoon trading on Thursday on the New York Stock Exchange.

They have plummeted from a high of $263.81 in early August to a more than three year-low of $59.87 on Tuesday, a day after Valeant said it was being investigated by the SEC. (Reporting by Natalie Grover and Ankur Banerjee in Bengaluru; Editing by Anil D’Silva and Savio D’Souza)