Recently departed Valeant skipper J. Michael Pearson has already sold off hundreds of thousands of shares this summer, and he’s exercised and sold options representing millions more. But it’s not because he’s lost faith in his former company making a comeback, the Canadian drugmaker insists.
Pearson, who Valeant in April replaced with new CEO Joseph Papa, unloaded 411,000 shares of common stock in June and July, the company said in a Thursday statement. He’s also exercised and sold options on 4.4 million shares that are set to expire within the next year.
But according to struggling pharma, Pearson made the moves solely to satisfy tax obligations and increase liquidity. He’s still hanging onto more than 3.5 million shares--1 million of which he’s required to keep until two years after his exit date.
“While I trimmed my ownership position for personal reasons, I plan on holding my remaining shares until the company recovers and returns to being traded on fundamentals,” Pearson said in a statement, adding that “I continue to believe in Valeant, Joe and the rest of the management team.”
Valeant’s shares have been dogged over the past year by political pricing pressure, channel-stuffing allegations, debt default worries, underperforming sales and host of other hurdles. And while Pearson may be holding out hope for a turnaround, some investors have already decided they’ve had enough. Earlier this week, Ruane, Cunniff & Goldfarb--manager of Sequoia Fund and once Valeant’s biggest investor--said it exited its Valeant stake last month after sustaining hefty losses.
Others aren’t sure Papa--whose history at previous employer Perrigo includes sizable price hikes and serial M&A, both trademarks of Valeant’s own past--will be able to break course. But the new helmsman has promised to explore asset sales that’ll pay down debt and reduce the complexity of the company’s business, and he’s convinced he’s got Valeant on the right track.
“I’m confident that we are taking the right steps to stabilize the company and deliver stakeholder value to patients, prescribers and shareholders,” he said in a statement, noting that “I continue to believe that we will succeed in realizing this company's exceptional potential and remain confident that our future will be bright."
- here's the release
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