The CEO of Valeant (a well renowned Canadian pharmaceutical company) is stepping down. Michael Pearson, the Chief Executive of Valeant has resigned on Monday after allegations of improper misconduct came to light.
After more than two months of sick leave with pneumonia, Pearson shocked his consumers with the announcement of his resignation on Monday. Rumor has it that Valeant lost 90 percent of its value. The drug company went from being worth $100 billion from just last summer to only $11 billion now. From 346 dollars a share to 35 dollars a share today.
Valeant previously known as the “the most valuable company in Canada” is notorious for producing an assortment of generic drugs and medical supplies. The once “valuable” company is currently facing allegations of chiseling customers on drug prices. An allegation in which the company continues to deny. Pearson reportedly developed the strategy in question whereby Valeant buys companies and allegedly increasing the price of undervalued drugs.
In spite of that, this price chiseling has been questioned by Presidential runner ups Hillary Clinton and Bernie Sanders. Valeant was reportedly called before Congress for an explanation and an investigation was opened to the drug company by two state general attorneys.
“While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership,” Pearson said in a statement. Pearson also reports continuing to assist where he can until a successor is found.
The directors refuse to accept the blame. It was just a month ago when Valeant announced it had to re-transcribe its financial results for 2014 and 2015. This was shortly after disclosing that approximately $58 million US dollars of sales were recognized at the wrong time. Of course, then the drug corporation shifted some of the blame on to members of its board of directors, particularly Howard Schiller, its former chief financial officer, who sat in for Pearson during his sick leave.
“In addition, as part of this assessment of internal control over financial reporting, the company has determined that the tone at the top of the organization and the performance-based environment at the company, where challenging targets were set and achieving those targets was a key performance expectation, may have been contributing factors resulting in the company’s improper revenue recognition,” Valeant said.
Notwithstanding such accusations, Schiller, denied the allegation and claimed that the “misstated,” sales numbers were a result of a “careful and reasoned accounting decision.”
“As a result of the fact that I did not engage in any improper conduct regarding this proposed restatement, I have respectfully declined the request from the company’s board to resign from the board,” Schiller said.