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Valeant's ex-CEO and CFO 'could face criminal charges'

Sources suggest probe may relate to the company’s former relationship with Philidor Rx Services
Valeant

The saga continues at Canadian drugmaker Valeant, with reports emerging that former CEO Michael Pearson and CFO Howard Schiller are under criminal investigation for accounting fraud.

A Bloomberg report quotes unnamed sources as suggesting that the probe may relate to Valeant's former relationship with specialty pharmacy chain Philidor Rx Services - which was terminated last year - and says formal charges could follow "within weeks".

An investigative report published in 2015 alleged that Valeant had been using specialty pharmacies to artificially inflate its revenues and deceive auditors, and earlier this year Valeant restated its results for 2014 and 2015, admitting that it recorded $58m in revenue from Philidor earlier than it should have.

The investigation could extend beyond Pearson and Schiller, who stepped in as acting CEO of the company when Pearson took protracted sick leave, according to the sources.

Valeant is already under scrutiny by the Securities & Exchanges Commission (SEC) in the US as well as US Attorney's Offices in New York and Massachusetts, but was understandably tight-lipped about the latest allegations.

"We have been fully cooperating with the authorities throughout the investigation, and we are in frequent contact and continue to cooperate with the US Attorney's Office for the Southern District of New York," said the company.

"We do not comment on rumours about investigations, and cannot comment on or speculate about the possible course of any ongoing investigation."

Valeant has found it hard to stay out of the spotlight in recent months, and was also drawn into the pharma pricing scandal, forced to defend itself against criticism over price increases for older medicines.

Shares in the company fell once again on the latest newsflow, and the stock is trading around 90% below its highest level in 2015.

Article by
Phil Taylor

1st November 2016

From: Sales

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