Valeant ex-CEO sells large stake in company

(VRX,VRX.TO) said the company’s former chief executive officer, Michael Pearson, remains a significant shareholder with more than 3.5 million shares.

Mutual fund Sequoia told investors (the letter can be read here) it no longer owned any shares of Valeant, the controversial pharma firm that has grown quickly in recent years through acquisitions and drug price hikes.

Laval, Quebec-based Valeant’s shares closed down 6.9 percent at $21.62 on Wednesday after influential short-seller Andrew Left said he was planning on taking a short position on the beleaguered company again. In the interview with TheStreet.com on Wednesday, Left was quoted saying that he thought the stock would be worth nothing. “This thing looks like The Walking Dead”, added Left, referencing the AMC series that depicts a zombie apocalypse.

At one time Valeant made up 30 per cent of Sequoia’s portfolio, but intense scrutiny of Valeant’s business practices as well as delays to its corporate accounts has ramped up pressure on Sequoia to cut its loses.

Valeant didn’t immediately respond to a request for comment. The fund’s investment had ranked second behind billionaire Bill Ackman, via his Pershing Square Capital Management hedge fund. The company exchanged total volume of 66.54 million shares throughout course of last trade however it holds an average trading capacity of 30.4 million shares.

Emphasizing disappointment over the results, Sequoia officially confirmed completion of a previously announced leadership change. Longtime CEO and co-manager Robert Goldfarb retired at the end of March, the fund said.

Ruane, Cunniff & Goldfarb was sued earlier this year by shareholders, who claimed it recklessly took a huge stake in Valeant, causing more than $2 billion in losses.

Sequoia Fund also exited several other positions over this past quarter, selling holdings in Allergan, Idexx Laboratories, and Cabela’s. The Company is engaged in developing, manufacturing, and marketing a range of branded, generic and branded generic pharmaceuticals, over-the-counter (OTC) products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices), which are marketed directly or indirectly in over 100 countries.

Sequoia reopened to new direct investors in April.