Monday the chief executive of Valeant resigned after the embattled Canadian drugmaker admitted that “improper conduct” by senior management caused the company to misstate its financial results. Michael Pearson, who had returned to the helm last week after more than two months’ sick leave with pneumonia, said he regretted the controversies the company has caused and will leave as soon as a successor is found.
The company has also appointed the activist hedge fund investor William Ackman to its board.
Valeant was a stock market darling under Pearson, who developed a strategy of buying up companies and dramatically increasing the price of undervalued drugs.
However, such a “price gouging” strategy has been attacked by both Hillary Clinton and Bernie Sanders, and Valeant was called before Congress to explain. Two state attorney generals have opened investigations into the company’s drug pricing.
“While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership,” Pearson said in a statement.
When Pearson was on leave, Howard Schiller, former chief financial officer and a board member, took over as interim CEO. On Monday the company said Schiller had been asked to leave the board but had refused.
Ackman, who has lost billions of dollars since buying in early last year, said he would be more closely involved.
Last week the company announced it would not hit 2016 earnings targets and would need to seek waivers from lenders because of the delay in its annual report. Shares fell sharply, causing Ackman more than $700m in losses in one day.
Shares rose 14% to $30.70 on Monday, following news of Pearson’s exit.