Formerly known as Valeant, Bausch Health Companies has dropped its old moniker and changed strategies in a years-long turnaround effort. Now, it’s moving past another part of Valeant history through a $1.2 billion class action settlement agreement.
The drugmaker on Monday agreed to settle a class-action lawsuit brought by investors who argued shares they bought from 2013 to 2015 were artificially inflated. Once details about Valeant’s business practices—including its relationship with specialty pharmacy Philidor—went public, the company’s share price plummeted, they argued in the lawsuit.
The agreement allows Bausch to “close the door on one of the more meaningful and unpredictable liabilities associated with the legacy Valeant era," CEO Joseph Papa said in a statement.
Papa joined Bausch in 2016, and the drugmaker dropped its former name in 2018. As part of the turnaround, Bausch has pledged to limit price hikes. Valeant had been known for aggressive price hikes, and it faced congressional scrutiny over that issue and other business practices.
Bausch admits no liability or wrongdoing under the agreement. The drugmaker maintains its ability to invest in itself is unaffected through the deal, and it’ll start making payments in the middle of January.
To fund the settlement agreement, which must be approved by a court, Bausch said it could use a combo of options including cash on hand and an existing credit line.
The settlement amount eclipses other recent agreements to resolve investor lawsuits reached by drugmakers. Sanofi recently agreed to pay $315 over allegations it delayed development of multiple sclerosis med Lemtrada in order to minimize payments to Genzyme shareholders, for one. And earlier this year, Akorn inked a $74 million deal to resolve allegations it made misleading statements that caused investors to lose money.
Last year, CAR-T drugmaker Juno struck a $24 million settlement with investors after they sued the company for not disclosing trial deaths in a timely manner.