Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals has been on a bit of a roller coaster ride in the market as of late, and unfortunately, the roller coaster is currently pointing downward. After confirmation that J. Michael Pearson, the CEO and Chairman of the board at VRX is currently on medical leave, the stock plummeted in early trading today. Below, we’ll talk about the issues Pearson is currently facing, how the market reacted to the news, other pieces of news we’ve seen from VRX as of late and what we can expect to see from the stock moving forward.
VRX CEO On Medical Leave
Early this morning, Valeant Pharmaceuticals announced that J. Michael Pearson, the company’s CEO and Chairman is currently out on a medical leave of absence. Unfortunately, Pearson has been hospitalized for a severe case of pneumonia. As a result of his absence, VRX has created a new office, known as the Office of the Chief Executive Officer. In this office, members including Executive Vice Presidents Robert Chai-Onn, Dr. Ari Kellen, and Robert Rosiello will take on the role collectively as the company’s CEO. The company has also created a committee that is charged with overseeing the Office of the CEO to ensure proper operations. In a statement, Robert Ingram had the following words to offer…
“Our thoughts are with Mike and his family… out of respect, we will be honoring his family’s request for privacy and will not be commenting further on his condition at this time… In the meantime, the Board of Directors has full confidence in Rob, Ari and Rob to preserve continuity of the Valeant operations and protect the long-term strength of the company while Mike is out. The Committee will be working closely with the entire management team to ensure that the company continues to operate normally while Mike focuses on his health. I am confident that with the vast industry and business knowledge from the management team and the Board of Directors, we will manage through this period.”
How The Market Reacted To The News
Unfortunately, any time we hear negative news with regard to a publicly traded company, we can expect to see a negative reaction in the market. That’s exactly what we’re seeing from VRX today. Currently (1:58), VRX is trading at $103.30 per share after a loss of 9.50% so far today.
What We Can Expect To See From VRX Moving Forward
At this point, movement on VRX is a bit of a toss up. Recently, the company has come under fire as a result of its relationship with Philador. Some even went as far as calling the company the pharmaceutical version of Enron. As a result, the stock plummeted. However, recently, we’ve seen relatively good news out of the company. Most notably, Valeant recently entered into a deal with Walgreens that is all but guaranteed to lead to higher sales volume of both its prescription and over the counter drugs. While we are likely to see short term down trends as the result of the CEO leave of absence, I do believe that positive news surrounding the stock is coming soon. The reality is that the deal with Walgreens is likely to breath new life into this company. However, only time will tell how long that life will take to be seen in the value of the stock.
What Do You Think?
Where do you think VRX is headed and why? Let us know your opinion in the comments below!