Bill Ackman supports Valeant CEO Michael Pearson

“You are one of the most shareholder-oriented CEOs I know”, Ackman wrote to Pearson in an email seen by Reuters. This is indeed a judgment call, and I respect the board’s decision in this regard.

Valeant Pharmaceuticals worldwide is facing another challenge as the company’s shares plummeted again for as much as 20 percent per share. “The prospect of not having Mr. Pearson at the helm is probably further eroding investor confidence, which probably explains today’s weakness”. “Mike remains focused on running the business and has been meeting with physicians, partners and other stakeholders”, Laurie Little said.

Shares of Valeant (TSX:VRX) tumbled to a low of $96.64 on the Toronto Stock Exchange in intraday trading Thursday, the lowest level since the summer of 2013, before recovering to $103.37 at the close, down $17.83 or nearly 15 per cent on the TSX but still well below its 52-week high of $347.84.

Shares of Gilead Sciences Inc. That was followed by a damning report from short selling firm Citron Research, alleging that Valeant was using Philidor to falsify revenue. Valeant has since cut off ties with the firm and said it was investigating its practices. Valeant had been under scrutiny for months, and in retrospect we should have been more acutely attuned to the importance of the inquiry into the price increases on certain Valeant’s drugs by Senator Sanders and Representative Cummings that surfaced in August. “We no longer own Valeant in our client portfolios or mutual funds”. A lot of people are “looking to step in, but they’re not sure that there’s not another bad story coming out and that’s what’s holding them back”, he said.

In mid-September, the U.S. Department of Justice (DoJ) and the U.S. Attorney’s Office for the Eastern District of Pennsylvania said in a letter to Valeant that they are probing the company’s reporting of prices in connection with the Medicaid Drug Rebate Program.

Anticipating analysts’ questions on whether Endo’s business model is too dependent on price hikes, De Silva said Thursday that price increases company-wide had not exceeded 5 percent.

This week, one of Valeant’s major shareholders, Weitz Investment Management, said on its website that as of the end of the third quarter, it had sold most of its position and by late October exited the rest. The standard deviation of the price stands at $49.25. Ackman chose to conduct a conference call to discuss Valeant, but the hedge fund’s CFO Nick Botta disagreed because he was concerned that “they will look like defending Valeant while they should be defending themselves”.

Within the last month, Endo shares have fallen 25 percent from a high of $69.02.

Valeant Pharmaceuticals Intl had its price target lowered by analysts at TD Securities from C$285.00 to C$260.00.

Even so, bond traders have not written off Valeant.

“There is a view that Valeant has a core group of businesses that should provide support relative to their existing debt obligations”, said Jon Duensing, deputy chief investment officer at Amundi Smith Breeden.