Valeant says Philidor pharmacy shutting down as it cuts ties
Valeant Pharmaceuticals International Inc (VRX.N)(VRX.TO), seeking to allay investor concerns about its business practices, said Friday it is cutting ties with a specialty pharmacy called Philidor Rx Services accused of helping it inflate revenue.
‘LOST CONFIDENCE IN PHILIDOR’
Valeant first disclosed less than two weeks ago that it was using a pharmacy called Philidor, which works with a network of pharmacies including one called R&O Pharmacy that is also involved in lawsuits with Valeant over nonpayment and other issues.
“We have lost confidence in Philidor’s ability to continue to operate in a manner that is acceptable to Valeant,” Valeant Chief Executive Michael Pearson said in a statement. “Operating honestly and ethically is our first priority, and you have my absolute commitment that we will make it right.”
Valeant said that former U.S. Deputy Attorney General Mark Filip had been appointed to advise a committee that it formed earlier this week to look into the allegations related to the company’s association with Philidor. Filip works for Kirkland & Ellis.
Philidor accounted for 6.8 percent of Valeant’s total revenue in the third quarter and 5.9 percent so far this year. The drugmaker said it intended to develop a plan to ensure minimal disruption to patients’ access to drugs.
Valeant shares have lost more than half their value since September as the company has come under attack on several fronts. U.S. prosecutors are also investigating the company over drug pricing, a hot issue in the U.S. presidential campaign.
Valeant was until recently one of the most popular healthcare stocks among investors, with its model of rapid acquisition-driven growth. Its abrupt slide from market darling to a company under fire has weighed heavily on ValueAct Partners and Pershing Square, two well known U.S. activist funds.
(Additional reporting by Ben Hirschler in London and Shivam Srivastava in Bengaluru; Editing by David Goodman and Nick Zieminski)