Valeant Files Overdue Annual Report
April 29 2016 - 8:30AM
Dow Jones News
Valeant Pharmaceuticals International Inc. filed its overdue
annual report on Friday morning, likely resolving the looming
danger of debt default for the Canadian company.
The filing, known as a 10-K, had been delayed as Valeant sorted
out its financials after an internal investigation found an error
that was likely to result in an earnings restatement.
Valeant had said it aimed to file the report by April 29 to
avoid being considered in default by its lenders, though it had cut
a deal with holders of its bank loans to give the company until
late May to file the report.
Valeant had received notices of default on some of its senior
notes in April because it hadn't filed the report on time, though
they had been waived. On Friday, Valeant said the defaults were
"cured in all respects" by the report's filing.
The audited financial statements released Friday restate results
for the year ended Dec. 31, 2014, the three months ended Dec. 31,
2014, the three months ended March 31, 2015, the six months ended
June 30, 2015, and the nine months ended Sep. 30, 2015.
Valeant has said the internal investigation of its relationship
with mail-order pharmacy Philidor Rx Services LLC is finished and
didn't reveal any financial problems requiring restatement beyond a
previously disclosed misbooking of $58 million in revenue. It
backed that number on Friday and said net income for the 2014
fiscal year was dented by about $33 million, and earnings by 9
cents a share.
The company said it also identified misstatements in the first
quarter of 2015, consisting primarily of the reversing effect on
earnings of the 2014 misstatements, which reduce revenue by about
$21 million, increase net income by about $24 million and increase
earnings by about 7 cents a share. The company had previously
reported first-quarter earnings of $74 million, or 21 cents a
share, on revenue of $2.19 billion.
Meanwhile, Valeant is also expected to announce sweeping board
changes as the company, under fire from lawmakers and investors,
looks to change the tone among its top brass.
The Wall Street Journal had reported details of the board
turnover on Wednesday, citing people familiar with the matter.
William Ackman, a Valeant director and major shareholder, had
signaled change was coming during his testimony at a Senate
Committee hearing on Wednesday during which he, outgoing CEO
Michael Pearson and director Howard Schiller faced tough
questioning over Valeant's widespread drug price increases.
"A lot of the board is going to turn over," Mr. Ackman told the
committee. He also promised swift changes to the expensive price
tags on many Valeant drugs.
The board reshuffling follows the addition of four new
directors, including Mr. Ackman, earlier this year.
Mr. Pearson is set to depart the company soon, to be replaced as
chief executive by Joseph Papa, whom Valeant lured away from
Perrigo Co. Mr. Papa is expected to start work for Valeant on
Monday.
Valeant has also disclosed that it is under investigation by
multiple regulators, including the Securities and Exchange
Commission and the Justice Department, over its drug pricing and
other issues.
Write to Michael Rapoport at Michael.Rapoport@wsj.com, Jacquie
McNish at Jacquie.McNish@wsj.com and Nathan Becker at
nathan.becker@wsj.com
(END) Dow Jones Newswires
April 29, 2016 08:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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