Despite massive fraud allegations, Valeant Pharmaceuticals International Inc. stayed resilient and reassured investors that the company will refute the accusations. As reported, Citron Research accused Valeant for using specialty pharmacies to increase their profits.
Due to Citron's allegations on Wednesday, Valeant Pharmaceuticals' shares declined more than 25 percent of their value, even though the company has denied the claims. On Thursday, the Canada-based drug manufacturer promised investors to refute Citron's allegations in detail through a conference call on Monday, which will be participated by at least 10 of the company's executives and board members.
In addition, Valeant Chief Executive Michael Pearson is also joining the conference as well as its current and former chief financial officers. Also participating is Robert Hale, a board member representing top shareholder ValueAct Capital.
"We look forward to our call on Monday where we will address and refute recent allegations," Pearson said, as per Reuters.
Over the years, Valeant Pharmaceuticals has been under scrutiny for extreme drug price hikes it has acquired, which included several probes carried out by New York and Massachusetts federal prosecutors. And with Citron's accusations, it sparked more added pressure and ignited some doubts on the company. The Quebec Securities Regulation is also keenly observing the developments regarding its pharmacy ties.
Valeant Pharmaceuticals' reputation was built by rapidly acquiring drugmakers and boosting sales of their medicines through steep price increases. The company also emphasized the growing amount of its revenue comes through its specialty pharmacy partners. However, Citron alleged that the pharmacies allow Valeant to create ghost accounts that boost its revenue.
Aside from Citron, Pharmaceutical Research and Manufacturers of America has also criticized Valeant, according to Bloomberg Business.
"Valeant Pharmaceutical's strategy is more reflective of a hedge fund than an innovative biopharmaceutical company," drug industry's Washington lobbying group said in a statement. "This strategy is much different than the vast majority of innovative biopharmaceutical companies that invest a significant share of their revenues into developing new treatments and cures."
Valeant, however, acknowledged that the company acquired a different model that much of the rest of the industry.
"We believe innovation should not be judged by how much you spend, but by the new products that a company is able to bring to market, and our goal has been to bring multiple, high-quality, innovative products to the market year after year," Valeant spokeswoman Laurie Little said.
Meanwhile, Valeant has called Citron's allegations as "erroneous," saying it contains "false and misleading statements" that appear intended to "manipulate the market" and cut down its stock price, CNN Money reported.
"We categorically deny the allegations," Valeant said in a statement. "We are confident in our full compliance with all applicable accounting rules, regulations and laws."
