Valeant gives Pershing Square 1 board seat, adds 2 other directors

Wed Mar 9, 2016 6:56pm EST
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(Reuters) - Embattled Valeant Pharmaceuticals International Inc (VRX.N: Quote) (VRX.TO: Quote) said on Wednesday it has added a representative from shareholder Pershing Square Capital Management to its board of directors as well as two other new directors.

Pershing Square, run by activist investor Bill Ackman, bought a stake in Valeant last year when the drugmaker's shares were on the rise. They have fallen 68 percent since.

Valeant said later on Wednesday it had jointly ended litigation with R&O Pharmacy with both sides asking the court to dismiss case. R&O was not immediately available for comment on the settlement.

While Valeant did not disclose the terms of the settlement, it said the resolution included a payment by R&O to Valeant. [nPn3vWq4v]

R&O sued Valeant in federal court in California on Oct. 6, after receiving a demand letter from Valeant for more than $69 million, money that R&O said it did not owe. [nL1N12P0OC]

Valeant later countersued R&O, according to the Wall Street Journal.

Last fall, the company became the target of two U.S. state investigations into its drug pricing practices, and its relationship with Philidor RX Services, a pharmacy selling its dermatology products, came under scrutiny and was dissolved. [nL3N12U450]

During the last two weeks, the company delayed its annual financial filing with regulators, postponed a preliminary earnings announcement, and said it would restate financials. Chief Executive Officer Michael Pearson returned from a two-month medical leave and a top dermatology executive left. It also disclosed an investigation by the U.S. Securities and Exchange Commission.

Stephen Fraidin, a veteran Wall Street lawyer who is vice chairman at Pershing Square, joined the board, Valeant said. He previously worked at the Kirkland & Ellis law firm before joining Pershing last year.   Continued...

The headquarters of Valeant Pharmaceuticals International Inc., seen in Laval, Quebec November 9 2015.   REUTERS/Christinne Muschi