Valeant stock falls on report of criminal probe
Aug 11 (Reuters) - Valeant Pharmaceuticals International Inc's U.S.-listed stock fell about 10 percent in premarket trading on Thursday after the Wall Street Journal reported that prosecutors had opened a criminal investigation into the Canadian drugmaker.
Lawyers at the U.S. Attorney's Manhattan office are probing whether Valeant obscured from insurers its relationship with a specialty pharmacy that helped inflate its drug sales, the Journal reported on Wednesday, citing sources.
The investigation could lead to criminal charges against former Philidor executives and Valeant as a company, the report added.
After the article was published, Valeant issued a statement, saying it had disclosed the investigation by the U.S. Attorney's Office in October and continued to cooperate with it.
"It is not possible for us to know how this investigation will turn or if charges will be pursued," Wells Fargo analyst David Maris said in a client note.
"We believe that with Valeant having such high debt, the impact of financial or commercial penalties is high."
The company has about $30 billion in long-term debt.
Mizuho Securities analyst Irina Koffler wrote that Valeant's credit may now be perceived as riskier.
"Valeant (may need) to pay in excess of the 50-100 bps in fees and/or interest expense hypothesized by our bond desk for its covenant amendments," she said. Continued...