It’s been a rocky ride for Valeant, but the pharmaceutical company is hoping the return of its CEO can make things a little smoother.
Valeant’s shares fell almost 9% in early trading Monday (VRX), after the company said on Sunday it withdrew its 2016 outlook and would delay reporting fourth-quarter earnings.
Valeant announced it was doing so because CEO Michael Pearson was returning from medical leave, effective immediately. An updated 2016 outlook and fourth-quarter earnings would be reported in the “near term,” the company said.
“I realize that recent events are disappointing to everyone and it is my responsibility to set the appropriate tone for the organization,” Pearson said in a statement Sunday. Former CFO Howard Schiller had taken over as interim CEO in Pearson’s absence. Schiller will reportedly step down as an executive but remain on Valeant’s board.
Pearson’s return is likely to be divisive, with some analysts questioning his company’s corporate governance in light of its relationship with Philidor, while other analysts have written that Pearson’s return could calm investors. The CEO however has been considered the competent and driving force behind Valeant’s growth, the New York Times reported.
The position of board chairman also won’t return to Pearson. That role will be filled by Robert Ingram, who had been interim chairman during Pearson’s absence.
The company faced heavy criticism from both the public and government officials last year for its alleged price gouging and accounting fraud practices. Pearson, who led the company through the brunt of the scandals, took medical leave in late December, announcing that he’d contracted severe pneumonia.
Valeant, once a hedge fund darling, is currently under investigation by federal prosecutors for its drug pricing practices.
Its shares have lost nearly 70% of their value since their August high.
