Valeant at 3-Year Low as More Questions Raised About Drugmakerby
Stock drops for second day after SEC probe disclosed Monday
CEO Pearson faces increased concerns over company future
Valeant Pharmaceuticals International Inc. dropped to a three-year low, extending its slump to 24 percent in two days after more analysts downgraded the stock and regulators in Quebec, where the embattled drugmaker is based, raised concerns about the business.
Questions over Valeant’s future have been mounting in the past 48 hours after the company surprised investors Sunday night by withdrawing its financial forecasts, delaying its fourth-quarter results and announcing the return of Chief Executive Officer Mike Pearson after a two-month medical leave. The company, which has been under scrutiny for months over its drug pricing and distribution practices, disclosed a new U.S. Securities and Exchange Commission probe on Monday afternoon, sending the shares even lower.
Adding to its woes on Tuesday, Hillary Clinton’s campaign announced plans for ads targeting Valeant for what she calls “predatory pricing.” And Quebec’s Autorité des marchés financiers said it continues to “closely analyse the situation.” The regulator wouldn’t deny or confirm whether it’s investigating the drugmaker.
The shares dropped 4.3 percent to $62.97 at 11:03 a.m. Tuesday in New York after falling to $61.40, the lowest intraday level since January 2013. RBC lowered its rating to sector perform from outperform Tuesday, slashing its price target to $85 from $194, while Jefferies lowered its price target. They joined analysts who raised questions about Valeant on Monday after the company withdrew its guidance, including Deutsche Bank, which suspended its rating and estimates.