(Reuters) - U.S. prosecutors are focusing on Valeant Pharmaceuticals International Inc’s (VRX.TO) former chief executive and chief financial officer as they build a fraud case against the drugmaker, Bloomberg reported.
The case against Valeant could yield charges within weeks, the report said, citing people familiar with the matter. (bloom.bg/2fnXLYp)
U.S. authorities are looking into potential accounting fraud charges related to Valeant’s hidden ties to Philidor Rx Services LLC, a specialty pharmacy company that the company secretly controlled, Bloomberg reported.
Prosecutors are examining the actions of Michael Pearson, Valeant’s former CEO, and Howard Schiller, the ex-CFO who led the company on an interim basis when Pearson went on medical leave, the report said.
Valeant’s U.S.-listed shares (VRX.N) closed down 12.4 percent at $17.82. The company could not be immediately reached for comment. A spokesman for Manhattan U.S. Attorney Preet Bharara declined to comment.
The Wall Street Journal had reported in August that U.S. prosecutors had opened a criminal investigation into Valeant over whether it hid from insurers its relationship with Philidor that helped boost its drug sales.
Valeant has seen its market value fall by some 90 percent in the last year as its drug pricing and other business practices prompted investigations by multiple U.S. government agencies and by Congress.
The drugmaker has taken a series of steps to restore investor trust, including cutting off ties with Philidor last October, conducting an internal review of that relationship, overhauling its board of directors and appointing new leaders to run its main businesses.
Earlier this year Laval, Quebec-based Valeant replaced Pearson with Perrigo Co Plc’s (PRGO.N) CEO, Joseph Papa. Pearson led Valeant since 2008 and drove its growth through serial acquisitions.
Reporting by Ankur Banerjee in Bengaluru; Editing by Savio D'Souza