Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals is having a strong day in the market today. This is much needed news, as the stock took a dive yesterday after news of a criminal investigation surfaced. Today, we’ll talk about the investigation, what we’re seeing from the stock during the current trading session, and what we can expect to see from VRX moving forward.
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VRX Under Criminal Investigation?
As mentioned above, Valeant Pharmaceuticals took a dive in the market yesterday after it was announced that the company is under a criminal investigation. According to the announcement, federal prosecutors are looking into the company to find out whether or not it defrauded investors by hiding its relationship with a mail-order pharmacy.
The idea behind these charges is relatively simple. We’ve all heard about the VRX and Philidor scandal. The close relationship between these two companies led to misleading statements and financial data being offered to investors. Investigators believe that there are criminal charges to be filed as a result.
In a statement, VRX explained that it is currently cooperating and will continue to cooperate with the investigation. Here’s what a spokeswoman from the company said when asked about cooperation:
“Valeant has been cooperating and continues to cooperate with the ongoing Southern District of New York Investigation…”
What Happens If Crimes Were Committed?
It is said that this is the most serious investigation that Valeant Pharmaceuticals has faced in connection with the Philidor scandal. However, if criminal charges are brought, exactly who will they be brought against? Of course, the company will likely be charged, but you can’t put a company in prison.
Nonetheless, there are plenty of people in this case that will likely be involved in the criminal punishment. In fact, previous executives that have left the company since the appointment of John Sedor will likely be the first to serve time. This includes the company’s previous CEO, COO, and CFO, all of whom have been relieved from their duties at VRX.
What We’re Seeing From The Stock Today
While VRX did take a bit of a dive yesterday as the news of the criminal investigation surfaced, we’re seeing a strong recovery in the market today. Currently (12:28), the stock is trading at $25.17 per share after a gain of $0.68 per share (2.78%) thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from VRX. First and foremost, there’s no denying the fact that the Philidor scandal was a horrible thing. However, that’s behind us. While executives that are no longer at the company will likely face punishment for their actions, the company as a whole will likely not be affected much by the ongoing investigation.
With that said, since the scandal, we’ve seen a ton of incredibly positive news surrounding Valeant Pharmaceuticals. At the end of the day, the company has undergone a restructuring process, improved its relationship with Walgreens, and continues to move forward with a long list of products and prospective products. All in all, we’re finally getting back to business as usual for VRX, and I’m expecting to see gains in the long run as a result.
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What Do You Think?
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