Valeant reveals yet another probe of its Philidor relationship

Valeant

Throw another investigation on the pile. Embattled drugmaker Valeant now says it’s been slapped with an investigative subpoena over its link to now-dead specialty pharmacy Philidor.

The subpoena, which the Canadian pharma says it received in September, comes from the California Department of Insurance, Valeant said in its 10-Q Wednesday. And it seeks documents concerning the company’s relationship with Philidor and certain California-based pharmacies and the marketing and distribution of Valeant products within the state, among other materials.

Valeant is cooperating with the investigation, it said in the filing.

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The probe is just the latest in a long line for Valeant, which is also under the lens for an infamous price-hike strategy that last year landed it in hot water with Congress.  

But it’s the Philidor saga--which began last October when a short-seller accused Valeant of using the pharmacy to inflate its top line--that’s been making the biggest waves recently.

Earlier this month, Bloomberg reported that U.S. prosecutors were building a fraud case against the Quebec-based company, as well as former CEO J. Michael Pearson and CFO and interim CEO Howard Schiller. Former Phlidor executives could also be charged, the news service’s sources said.

Meanwhile, Valeant has also suffered through a dismal financial year, with sales of many of its key products underperforming. Earlier this week, it lowered its full-year guidance--which had already taken a beating in March--and laid out projections that implied a Q4 adjusted EPS well below consensus expectations.

The bright side, though? Buyers reportedly see enough value in some of Valeant’s assets to keep them interested, and sales of those assets could help the company pay down the mountain of debt it racked up under M&A machine Pearson’s guidance. Takeda, for one, is reportedly interested in snapping up Valeant’s Salix business for somewhere in the $10 billion range.  

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