Valeant vows to refute 'phantom sales' allegations
By Euan Rocha and Ransdell Pierson
TORONTO/NEW YORK (Reuters) - Valeant Pharmaceuticals International Inc (VRX.TO: Quote) moved to reassure investors on Thursday after being accused of using specialty pharmacies to inflate revenue, and said it would refute them in detail on a conference call with investors.
Valeant shares have lost more than 25 percent of their value since influential short-seller Citron Research made the allegations on Wednesday. The company had already issued statements denying the claims.
Valeant said at least 10 of its executives and board members would participate in a call on Monday, including Chief Executive Michael Pearson, its current and former chief financial officers, and board member Robert Hale, who represents key shareholder ValueAct Capital.
"We look forward to our call on Monday where we will address and refute recent allegations," Pearson said.
Citron's allegations have heaped pressure on Valeant, which is already under scrutiny for extreme price hikes on drugs that it has acquired over the years, including investigations launched by federal prosecutors in New York and Massachusetts.
Valeant has built a reputation for rapidly acquiring drugmakers and scaling up sales of their medicines, in some cases through steep price increases.
The company has said a growing amount of its revenue comes through its specialty pharmacy partners, which will fill patient prescriptions even before they have secured reimbursement from their health insurers. Citron alleged that the pharmacies allow Valeant to create phantom accounts that boost its revenue.
Valeant maintains it only books revenue once a drug is received by a patient. Continued...