|
 Interviews with fund managers invested in the company suggest that
while Valeant CEO Michael Pearson still enjoys solid support from
some key investors, the backing may be waning, with other investors
saying they think new leadership is needed to stabilize the company.
Still, shareholders worry that if Pearson leaves, the stock will
fall further, having already lost more than half of its value since
coming under siege this fall. Scrutiny over pricing policies from
U.S. politicians, federal investigations into its operations and a
short-seller note aimed at its accounting practices have sent shares
into a tailspin.
"I think the jury is still out as far as the big investors and his
future goes," said one shareholder, who like others interviewed for
this story, requested anonymity. "There are people who would like to
see a fresh start."
Investor criticism of the former McKinsey consultant, who
transformed Valeant from a small drug company into a behemoth
through acquisitions, included questioning of both his overall
leadership and his handling of the present crisis, especially with
regard to investor relations.
In an email to Pearson reported by the Wall Street Journal on
Thursday, hedge fund billionaire Bill Ackman, Valeant’s third
largest shareholder, expressed support for Pearson, even while
questioning some aspects of his handling of the crisis.
"While I have strong views on Valeant's communication strategy and
would have taken a different approach," Ackman wrote, "you and the
board should not interpret this as a negative reflection on my view
of you as the CEO of the company."
Another large Valeant shareholder told Reuters that Pearson should
stay, and that the stock plunge has been exaggerated, given that the
accounting questions have been raised about only a small number of
Valeant drugs, which together are responsible for about 10 percent
of the company's revenue. Valeant has denied accusations of
accounting discrepancies.
[to top of second column] |
But the investor acknowledged that Pearson's future is far from
clear.
"I think the company is more valuable with Mike (Pearson) as CEO,"
the investor said. "There are those who don't."
Several funds in the past few weeks have disclosed that they sold
off their shares of Valeant, including respected value investor
Wally Weitz and hedge fund Jana Partners, though none expressed a
loss of confidence in Pearson.
As for large institutional investors invested in the stock, the
lingering concern is whether Pearson can get his arms around the
damage and contain it.
One shareholder said that Pearson should have spent more money
building up the investor relations arm of the company, which could
have helped him better manage the "just-in-case scenario that just
hit him."
A spokeswoman for Valeant said Friday that Pearson had the "full
confidence" of the board of directors.
(Editing by Sue Horton and Mary Milliken)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
