J. Michael Pearson, CEO of Valeant.
Photograph by Kevin Van Paassen — Bloomberg via Getty Images

He's determined not to become "the pharmaceutical Enron."

By Jen Wieczner
March 18, 2016

Employees of Valeant Pharmaceuticals vrx are worried the drug company could go bankrupt after losing more than half of its market value on Tuesday following a distressing earnings report.

“I can assure you we are not,” Valeant CEO Mike Pearson told staff Wednesday in an internal memo obtained by Bloomberg, addressing fears about an impending bankruptcy.

The company had said during its its fourth-quarter earnings call that it expected to default on its loan agreements because it had delayed its annual report beyond the creditors’ deadlines. The price of certain Valeant bonds also fell 13% to 76 cents on the dollar, the Wall Street Journal reported—a sign that investors are losing faith in the drugmaker’s ability to pay back its debt.

Valeant’s stock price fell another 7% on Friday morning, and the shares are down more than 60% for the week.

“I want to apologize directly to each of you for the distractions this intense scrutiny is causing you,” Pearson wrote in the email to Valeant employees. Valeant did not respond to a request for comment.

Pearson’s apology echoed previous comments he has made since Valeant became mired in controversy last fall, first over its drug price increases and then over its its accounting practices relating to specialty pharmacy Philidor, which drew accusations that Valeant was “the pharmaceutical Enron.”

“Right now it’s a bit of a tough company to work for,” Pearson acknowledged on the earnings call. Last year, the company also began offering retention bonuses to employees who stayed with the company, amounting to $100,000 per person. During Valeant’s investor day in December, Pearson justified the bonuses by comparing working at the company to working in “an emerging market or a dangerous place,” situations where firms typically offer additional compensation.

“So it’s tough—to go home to your wife, kids, neighbors,” Pearson said at the time, describing his employees’ predicament. “There’s an extra price.”

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