Valeant Pharmaceuticals (NYSE:VRX)
On Monday March 21, 2016 shares of Valeant were halted pre-market before a major company announcement. The news that eventually came out was that the CEO of the company, Michael J. Pearson, would be resigning from the company. This is definitely bad news as it is never a good thing when a CEO resigns from a company. This is especially true considering all the problems the company had been having before this announcement. The only good news to come out of this is that the CEO will remain until a replacement can be found.
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At least the company kind of softened the blow of the CEO exiting by announcing a new board members. It was announced that Bill Ackman of Pershing Square Capital would join the board of directors of Valeant. Valeant has really been in a tailspin lately, having to deal with many types of problems that have left the share price fighting for its life. such problems Valeant has had to deal with are:
- Late SEC filings for earnings
- SEC investigation for drug pricing of products
- Drug pricing pressure from congress
- Philidors shady marketing practices
- A massive $31 billion of debt
The late filing of financials have really put a strain on the company’s stock. Valeant now anticipates that it won’t be able to file the financials until April 29. The company also had stated that 2014 revenue of Philidor products should not have been recognized in previous financial reports. This is because Philidor was recognizing revenue when the products were shipped, and not when they were actually sold. This led to faulty reporting behavior that has really put a hamper on shareholder trust. Ackman has been losing a lot of money in Valeant, which is probably why he chose to step in and probably save the company. After all, he owns approximately 9% of Valeant.
Portola Pharmaceuticals (NASDAQ:PTLA)
On Thursday March 24, 2016 shares of Portola Pharmaceuticals fell by 30% after the company announced that one of its oral anticoagulant drug betrixaban failed in a phase 3 study. The phase 3 study, which failed to produce statistically significant results, was known as the APEX study. Betrixaban was being compared with Sanofi (NYSE:SNY) drug Lovenox — also known as enoxaparin. Lovenox is typically standard of care for these patients that are high risk for blood clots.
The company drug betrixaban failed to produce good results in high-risk patients, but it did perform in two other metrics of patients with blood clots. These two other metrics were the overall patient population, and patients older than 75 with elevated D-dimer. Despite Portola’s drug showing some efficacy, shares still collapsed by 30% as investors were still not feeling it.
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The good news to come out of this trial is that both drugs have similar risks. That’s because both drugs showed no bleeding difference when it came to safety of the compounds. Despite these results failing in the trial, the company announced that it will publish the results in a medical journal. It will also present the results at the International Society on Thrombosis and Haemostasis congress. This presentation is expected to be held on May 27 of this year.
[Image Courtesy of Pixabay]