Quebec regulator says claims against Valeant worrying; shares extend fall

Thu Oct 22, 2015 11:45am EDT
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By Euan Rocha

TORONTO Oct 22 (Reuters) - The securities regulator in Quebec, where Valeant Pharmaceuticals International is headquartered, said on Thursday that recent allegations against the drugmaker are "worrying," even as Valeant shares slid further amid growing investor concern about the company's prospects.

On Wednesday, Citron Research, an influential short-selling firm, accused Valeant in a report of using specialty pharmacies to inflate its revenue. The claims sent Valeant shares into a tailspin and cut its market capitalization by some $9.6 billion on Wednesday.

Valeant has categorically denied the allegations made in the Citron report.

Shares in Valeant, which is already being scrutinized and probed in the United States for aggressive drug pricing, fell a further 17 percent to $97.95 in morning trading in New York on Thursday.

The Autorité Des Marchés Financiers (AMF), which regulates Quebec-based companies, said it does not have an active probe into the drugmaker or the short seller at this point.

The regulator is "watching very seriously the evolution of the situation," said Sylvain Théberge a spokesman for the AMF in an email, adding that the AMF is in communication with the U.S. Securities and Exchange Commission about the matter.

Théberge declined to comment on the allegations made against Valeant and also declined to comment on the details of the AMF's communications with the SEC.

The company is largely run out of the United States, but it is headquartered in Laval, a suburb of Montreal in Quebec. The company is also incorporated in the western Canadian province of British Columbia.   Continued...