CEO vows drugmaker will not go bankrupt

by Paul Lucas21 Mar 2016
Valeant Pharmaceuticals will not go bankrupt.

Those were the words of embattled CEO Mike Pearson as he attempted to reassure employees in a memo last week after the company’s shares plunged by a dramatic 51 per cent.

The company issued weak financial results for the fourth quarter, prompting Pearson to apologize for its missteps shortly after he returned from medical leave.

When concerns were raised that the company was heading into bankruptcy, Pearson stated “I can assure you we are not,” according to an email cited by Bloomberg. In addition he commented that the company is working hard to extend its loan agreements.

The company, based in Laval, Quebec, is said to be expecting lower growth for many aspects of its business with pressures from major insurers and pharmacy benefit managers.

“Restoring the public’s confidence will take time and I want to apologize directly to each of you for the distractions this intense scrutiny is causing you,” he said in the memo. “Please know that I am working as hard as I can to turn things around, and I believe we will.”

The company’s difficulties come after Valeant gained a reputation for aggressive price hikes on its drugs. According to a survey by Bloomberg News, 13 Valeant drugs have had their prices doubled since the end of 2014. This is more than any other firm. Now it is moving towards a distribution model having ended its agreement with Philidor RX, a mail-order pharmacy.