Valeant, the besieged Canadian drugmaker, disclosed several new investigations into its accounting practices in a long-delayed annual report filed with the US securities regulator on Friday morning, just in time for a deadline to stave off a $30bn default.
The filing of the report, known as a 10-K, was delayed by an accounting scandal at a pharmacy chain controlled by Valeant, which led the company to report incorrect revenues in two separate quarters.
Lodging the report with the Securities and Exchange Commission was seen by investors as an important milestone for the company as it tries to rebuild following a series of crises that have wiped more than $70bn from its market value. If it had missed Friday’s deadline, a default on some of its debts would have been triggered.
Valeant’s supporters had hoped that the publication of its audited annual accounts would act as a spur for its battered shares, but the report was littered with warnings about a myriad of legal probes into the company and the uphill struggle it faces to repair things.
Shares in the group, which are down almost 90 per cent since peaking in August last year, fell a further 6 per cent in early New York trading, giving it a market capitalisation of $11bn.
The company disclosed that several authorities had opened fresh inquiries into its accounting practices, including officials in the states of North Carolina and New Jersey. The company had already revealed it was the subject of a number of probes, including one by the SEC.
Valeant also unveiled sweeping changes to its board of directors. Only two of its long-serving directors, Robert Ingram and Robert Power, will keep their seats, after the company nominated a slate of replacements with more experience in pharmaceuticals.
They will join Joseph Papa who is leaving Irish drugmaker Perrigo to become Valeant’s chairman and chief executive. Michael Pearson, currently CEO, is leaving the company next week.
Mr Pearson, who joined as CEO in 2008, built Valeant from a small US drugmaker into a major force in global pharmaceuticals with a market value of $90bn, only to preside over a catastrophic collapse in its value prompted by a series of scandals and crises.
Bill Ackman, the hedge fund tycoon who is a director of Valeant and one of its largest shareholders, pushed for the boardroom shake-up, which he hopes will bring a period of stability to the company.
Earlier this week, Mr Ackman apologised for not doing sufficient due diligence before taking a 9 per cent stake in Valeant.
Valeant’s executive were handed large pay packages for 2015 despite the company’s plummeting value. Mr Pearson received $143.1m, according to securities filings, while chief financial officer Robert Rosiello made roughly $60m.