oh, boy this stock will never trade over 50.00 Congress just got a bunch of documents Valeant was withholding, and there's a memo about them circulating on Capitol Hill
It has been a trying day for Valeant Pharmaceuticals.
First the US Senate released the names of everyone who will be answering for the company at a hearing on Wednesday, including CEO Michael Pearson, former interim CEO Howard Schiller, and board member and hedge fund billionaire Bill Ackman.
And that could be all, but it's not.
There's movement on the US House of Representatives' action against the company as well. The House Committee on Oversight and Government Reform, which is also investigating Valeant, sent around a memo to members describing a bunch of documents it just got from the company. The memo was obtained by Business Insider.
Earlier this month Democratic Rep. Elijah Cummings of Maryland accused the company of a "pattern of obstruction" after it failed to deliver numerous documents he requested regarding its controversial relationship with Philidor, its defunct in-house pharmacy.
Valeant was forced to shutter Philidor in January after the revelation of its existence in October, combined with government scrutiny and accusations of malfeasance from a short seller, sent Valeant's stock careening down almost 70%.
Now the House has some (though not all) of the documents Valeant left out, and frankly, it's unclear why the company left them out in the first place. The company had said the documents contained attorney-client privilege, but as a journalist I probably have some of them in my inbox.
Wall Street research reports describing Valeant's business model certainly do not qualify as privileged, but they made up the bulk of what Congress just got.
Here's a sampling:
- There's a report from TD Securities saying the government foots the bill for 15% of Valeant's revenue.
- There are reports from BMO Capital Markets and Canaccord Genuity describing Valeant's practice of buying drugs and jacking up their prices by sometimes triple-digit percentages and how common that is in the drug industry.
- There's a report from Barclays describing how Valeant's patient-assistance programs actually make drug costs higher.
The House memo said Valeant continued to withhold communications between its executives, including its legal counsel. It also said there continued to be a bipartisan effort to get Valeant to produce those documents.
The company's executives appear before the US Senate on Wednesday at 3:30 p.m. ET.