Pershing Square on Valeant Board
CBJ — Valeant Pharmaceuticals has added a representative from shareholder Pershing Square Capital Management to its board of directors as well as two other new directors.
Pershing Square, run by activist investor Bill Ackman, bought a stake in Valeant last year when the drugmaker’s shares were on the rise. Since then, they have plummeted 68%.
Last fall, the company became the target of two U.S. state investigations into its drug pricing practices, and its relationship with Philidor RX Services, a pharmacy selling its dermatology products, came under scrutiny and was dissolved.
During the last two weeks, the company delayed its annual financial filing with regulators, postponed a preliminary earnings announcement, and said it would restate financials. Chief Executive Officer Michael Pearson returned from a two-month medical leave and a top dermatology executive left. It also disclosed an investigation by the U.S. Securities and Exchange Commission.
Stephen Fraidin, a veteran Wall Street lawyer who is vice chairman at Pershing Square, joined the board. He previously worked at the Kirkland & Ellis law firm before joining Pershing last year.
Fred Eshelman, a drug executive who founded Furiex Pharmaceuticals Inc, and Thomas Ross, an academic who is a fellow at Duke University and president emeritus of the University of North Carolina, also joined the board.
Anders Lonner, former CEO of Swedish specialty drug company Meda AB, stepped down from the board, Valeant said. The board now has 14 members.
Wells Fargo analyst David Maris, who has an “underperform” rating on the stock, said in a research note that Pershing Square had proposed Eshelman for the board at Allergan during its and Valeant’s failed hostile bid for the company.
Maris said investors will likely have reservations about Ross as well, given his ties to Duke University, to which CEO Pearson has donated $45-million.
Valeant plans to report preliminary fourth-quarter earnings and hold a conference call on March 15.