Billionaire investor Bill Ackman, whose hedge fund is one of the biggest investors in drug company Valeant, has been asked to supply information to U.S. legislators probing price hikes in the pharmaceutical industry.
Ackman told investors in his Pershing Square Capital Management on Thursday that the firm received a request on Friday from the U.S. Senate Special Committee on Aging as part of an investigation into pricing of off-patent drugs.
“As you would expect, we will fully cooperate with the committee’s requests,” Ackman wrote in the letter seen by Reuters.
The letter did not say the request was directly related to Valeant, but the Canadian company has sparked outrage among U.S. lawmakers and the public for dramatic price hikes on older drugs.
Ackman‘s letter also gave no details on what information the committee was seeking and why they asked the $12 billion hedge fund to supply it. A Pershing Square spokesman declined to comment beyond the contents of the letter.
Spokespeople for the U.S. Senate committee did not immediately respond to requests for information and Valeant declined to comment.
It was not immediately clear whether the committee has also reached out to other large Valeant shareholders, including Jeffrey Ubben’s hedge fund ValueAct Capital, which currently has two seats on the board of directors.
In February, Valeant’s interim chief executive officer testified before Congress, acknowledging that the company’s decision to raise the price for two heart medications, Isuprel and Nitropress, was too aggressive.
Ackman formally joined Valeant’s board on Monday and appeared to be taking full control of overhauling the company by promising to file a delayed annual report by the end of next month and finding a new chief executive.
Ackman‘s Pershing Square owns a 9 percent stake in Valeant (vrx) and has lost billions, on paper, as the company’s stock price tumbled some 85 percent in the last year amid questions about its pricing strategy plus its business and accounting practices.
Pershing Square began amassing its stake in Valeant at the start of 2015 and had largely stayed in the background as its investment began yielding strong returns through the summer. By August, however, Valeant’s fortunes had turned as it came under attack from politicians, short sellers who bet the stock price would fall, and most importantly the public.
This week Valeant said Michael Pearson, its long-time chief executive officer and architect of its aggressive mergers and acquisitions strategy, will leave as soon as the board finds a replacement.
Ackman told investors he dispatched two staffers to Valeant’s Bridgewater, New Jersey headquarters immediately after a disastrous earnings call on March 15 where the company cut its forecasts and said it could be close to default.
The two Pershing Square employees were there to “verify management’s revenue, earnings and cash flow guidance for 2016 and build our own financial model for the company,” Ackmanwrote. He added: “We have been given access to information and to management necessary for us to conduct due diligence and assist the company.”
The letter was attached to the firm’s annual report which said there are no plans to abandon the strategy of making concentrated bets on a small number of companies even after last year’s poor performance.
So far this year, Ackman‘s Pershing Square Holdings fund has lost 25 percent, largely because of the drop in Valeant which is down nearly 70 percent this year.