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Valeant ditches Philidor

Friday, October 30, 2015 - 01:12

The Canadian drug maker's move comes a day after three big drug benefit managers severed their ties with the embattled mail order pharmacy. Fred Katayama reports.

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More fallout for Valeant. Valeant Pharmaceuticals is cutting ties with the mail order pharmacy, Philidor Rx, the subject of criticism by short seller Citron Research. The embattled Canadian drug maker said it has "lost confidence" in Philidor's ability to operate in an acceptable manner. Valeant had a board committee look into Citron's allegations that it had used Philidor to create "phantom sales" of its drugs. Philidor makes up nearly 7 percent of Valeant's revenue. Valeant says Philidor will shut down operations as soon as possible. Valeant's move comes one day after pharmacy benefit managers CVS Health, Express Scripts, and OptumRx said they will stop using Philidor. The acquisition-hungry stock market darling that attracted star activist investors such as Bill Ackman and Jeffrey Ubben has become a dog. Valeant's latest nightmare began nine days ago when short seller Citron accused the company of fraud. Its stock has fallen 24 percent since then, and it fell further in early trading Friday. It has lost more than half of its value since early August. Also pressuring the stock: attacks by Democratic politicians over their skyrocketing prices for some key drugs.

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Valeant ditches Philidor

Friday, October 30, 2015 - 01:12