BOSTON (Reuters) - U.S. legislators investigating price hikes in the pharmaceutical industry have asked William Ackman’s hedge fund for information on Valeant Pharmaceuticals International Inc VRX.TO, according to a person familiar with the matter.
Ackman’s $12 billion Pershing Square Capital Management owns a 9 percent stake in Valeant and is the Canadian drug company’s third largest investor.
On Thursday, Ackman told his investors that Pershing Square received a request for information a week ago from the U.S. Senate Special Committee on Aging. Ackman said his fund was cooperating with the probe, but he did not give details on what was being sought by lawmakers in his letter to clients.
“The request is directly related to Valeant,” the person familiar with the matter told Reuters on Friday.
Valeant has sparked public outrage and been criticized by U.S. lawmakers for dramatically hiking the price of older drugs. The Canadian company has disclosed several investigations, including the one from Congress and probes by the Securities and Exchange Commission and U.S. Attorney’s offices in Massachusetts and New York.
Pershing Square has lost billion of dollars, on paper, as Valeant’s stock price tumbled some 85 percent in the last year amid questions about its pricing strategy plus its business and accounting practices.
Ackman formally joined Valeant’s board on Monday.
Reporting by Svea Herbst-Bayliss; Editing by Tiffany Wu