A spokeswoman for Valeant Pharmaceuticals International confirmed on Friday that the CEO of Valeant Pharmaceuticals International has been hospitalized with severe pneumonia.
Laurie W. Little, the spokeswoman, declined to give any further details. She, however, added that respecting the privacy of Mr. Pearson and his family an update on his condition would be issued by the family only when it is appropriate. In an e-mail, she stated further that the company and its employees wished Mr. Pearson a speedy recovery and looked forward to his returning to work when he felt better.
The 56-year-old CEO, Mr. Pearson, 56 has been struggling for some time to reassure investors on the future of Valeant as the company's distribution and pricing policies came under fire. The attention of the Congress has also been attracted to the strategy of Valeant acquiring old drugs and increasing their prices sharply, often times by several hundred percents. The company is also facing scrutiny for the secret relationship it has with Philidor RX services, which Is a mail-order pharmacy dispensing some of the expensive dermatology drugs produced by Valeant. Philidor also takes care of obtaining reimbursement from the insurance companies. However, in October, last Valeant severed its relationship with Philidor RX after the company's practices came to be questioned.
The company's shares also suffered from concerns mounting over its business model. The shares shed over 50% of its value since August 2015. Mr. Pearson has been the chief architect of the company's business model, and any lengthy incapacitation would potentially turn out to be a cause of worry for investors.
Although Pearson enjoys the support of the board, some skeptics are wondering whether the time has arrived for a change in management considering the problems the company has been facing in recent times.
Mr. Pearson, a former consultant from McKinsey & Co., was appointed CEO of Valeant in 2008, and he steered the company through a phase of rapid growth and meteoric rise in the price of the company's stocks.
Mr. Pearson focused on growth through acquisition of other smaller companies rather than research for new drugs which he shunned as risky. While he added many drugs from the company's that he acquired, most of the workers from the companies he acquired were dismissed.
Valeant currently has over $ 30 billion in debt and according to Pearson the company will use much of its cash to pay off its debts. Meantime, the shares of Valeant closed at $ 114.11 on Thursday after recovering from 52 week low of less than $ 70 in November last. Yet the current price is well below its peak of $ 260 achieved in August last.
No comments:
Post a Comment