Japan's Kaken Drops After Valeant Comes Under Short-Seller Fire

Japanese drugmaker Kaken Pharmaceutical Co. dropped as much as 13 percent in Tokyo today after partner Valeant Pharmaceuticals International Inc. was accused of recording fake sales in a report by a U.S. short seller.

Kaken traded 12 percent lower at 7,490 yen at 10:38 a.m. in Tokyo today, headed for the lowest close since April 6. Kaken’s ties with Valeant as licensor for the antifungal efinaconazole is impacting its shares, and uncertainty remains on the sales effect for Kaken, SMBC Friend Research Center analyst Satoshi Takaoki said via phone.

Valeant plunged as much as 40 percent on Wednesday in New York trading after Citron Research published a report that said Valeant was faking sales through “phantom accounts” at a specialty pharmacy. Valeant issued a statement denying the allegations, saying the “false and misleading statements” were an attempt to drive down Valeant’s value.

Kaken has provided Valeant with the license for manufacturing and sales of efinaconazole in Europe, U.S and some parts of Asia. The Japanese company declined to comment on Valeant.

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