William Ackman’s Pershing Square Capital Management LP trimmed its stake in Valeant Pharmaceuticals International Inc. to 8.5%, a move the hedge fund said was related to year-end tax planning.
Mr. Ackman has vigorously defended his multibillion-dollar investment in the Canadian pharmaceuticals company, which has faced a series of questions about its drug pricing, business practices, and accounting and disclosures. Valeant has defended its accounting, saying it has found no evidence of illegality.
Pershing Square’s disclosure on Thursday came about a month after the fund reported it had boosted its Valeant stake to 9.9%, having taken advantage of the beaten-down market for the stock to build up its position.
Pershing Square said it sold Valeant shares to generate a tax loss for investors in two of its funds. Selling shares and locking in a loss would allow investors to offset trading profits elsewhere in their portfolios and lower their 2015 taxes.
A representative from Valeant wasn’t immediately available for comment.
The shares were sold between Dec. 24 and Thursday at prices ranging from $ 100.95 to $ 114.94.
Pershing Square first disclosed a 5.7% stake in Valeant in March, and the bet showed early gains. The shares, purchased at an average of $ 196, hit a high of $ 262.52 in August. But they dipped below $ 70 on the New York Stock Exchange in November, and despite climbing back are still off 61% from their high.
Valeant drew attention in Washington after The Wall Street Journal reported in April that the company raised the prices of two cardiac-care drugs by 525% and 212%, after acquiring the rights to the medicines in February. Chief Executive J. Michael Pearson told Sen. Claire McCaskill (D., Mo.) in October that sometimes older drugs are ” dramatically underpriced relative to their clinical value.” Valeant also has said it aims to do fewer deals designed to take advantage of underpricing, and that its revenue growth is driven as much by sales volume as price increases.
The company faced further scrutiny on Wall Street and in the health-care industry over its close ties to a mail-order pharmacy that helped get into patients’ hands Valeant’s often higher-price drugs, rather than lower-cost alternatives preferred by insurers. Valeant has since terminated the relationship and formed a board committee to look at its ties.
The turmoil deepened last week when Valeant disclosed that Mr. Pearson had been hospitalized with severe pneumonia. He is on medical leave, and the company has created a three-man office of the chief executive to temporarily lead it.
Valeant specializes in dermatology, eye health and neurology medications. It has grown largely through acquiring other drugs and drug companies and raising drug prices, as opposed to the traditional pharmaceutical-industry growth method of discovering new drugs through research and development.
The company posted revenue of $ 8.25 billion in 2014.
Write to Lauren Pollock at lauren.pollock@wsj.com
(END) Dow Jones Newswires 12-31-151725ET Copyright (c) 2015 Dow Jones & Company, Inc.
No comments:
Post a Comment