UPDATE 4-Valeant names interim CEO; timing of Pearson's return unknown

Wed Jan 6, 2016 4:02pm EST
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(Adds details from sources on decision)

By Caroline Humer

Jan 6 (Reuters) - Valeant Pharmaceuticals International Inc on Wednesday named board member and former Chief Financial Officer Howard Schiller as interim chief executive to replace Michael Pearson, who has been hospitalized with severe pneumonia since late December.

"As the timing of (Pearson's) expected return is uncertain, he will be on a medical leave of absence until further notice," Valeant said in a statement.

Investors appeared to like the board's decision to have Schiller, Pearson's long-time lieutenant, run the company for now.

During most of the years Pearson led the Laval, Quebec-based company, Schiller worked alongside him. The two employed a rapid growth strategy based on a constant stream of acquisitions and drug price increases.

One large investor who knows Schiller said he has top financial credentials coupled with a more personable manner than Pearson, something that could play well with regulators, lawmakers and investors as the embattled company seeks to repair its tattered image.

Last year Valeant's surging growth stalled amid questions about its pricing and accounting practices, sending its share price tumbling 73 percent from its $263 record in August.

"Schiller's return shows that Valeant has no intention of changing the borrow, buy, and boost prices strategy he helped devise," said Erik Gordon, a professor at the University of Michigan's Ross School of Business.   Continued...