Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals has been struggling for quite some time, and for an incredibly good reason. The company has had several accounting errors and had an iffy-at-best relationship with an underground pharmacy known as Philidor. Soon, Citron started to call VRX the Enron of the biotechnology industry as it brought to light the issues with the company. Investors held onto the statements and VRX started to fall dramatically. When this all started, the stock was trading at over $100 per share. Now it sits around $30 per share. Nonetheless, Valeant recently closed over 7% higher as the result of a big announcement. Can it go higher? Today, we’ll talk about the announcement that was made, what we’re seeing from Valeant Pharmaceuticals in the market today, and what we can expect to see moving forward. So, let’s get right to it…
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VRX Releases Information That Excites Investors
In any case, the CEO of the company is the leader, and therefore, the person to blame when something goes wrong. So, when we see something bad happen with regard to a publicly-traded company, it’s common practice that the CEO may step down. That’s exactly what we’re seeing from VRX. On Monday, it was announced that the company would be hunting for a new CEO as the current CEO will soon be stepping down. He will continue to hold his position at Valeant until a new CEO is found. On top of the CEO change, VRX made changes to its board of directors and offered an update with regard to accounting and financial reporting issues. Yesterday, the company came out and accused the former CFO of VRX of “improper conduct” that led to the misstatements in financial results. In fact, in a press release on Monday, Valeant had the following to say about its former CFO:
“The improper conduct of the company’s former Chief Financial Officer and former Corporate Controller, which resulted in the provision of incorrect information to the Committee and the company’s auditors, contributed to the misstatement of results. In addition, as part of this assessment of internal control over financial reporting, the company has determined that the tone at the top of the organization and the performance-based environment at the company, where challenging targets were set and achieving those targets was a key performance expectation, may have been contributing factors resulting in the company’s improper revenue recognition.”
What We’re Seeing From VRX Today
While we are still well in the beginning of the day, things are looking to be shaping up to be a great Wednesday for Valeant Pharmaceuticals. Currently (9:42), the stock is trading at $32.70 per share after a gain of $0.79 per share or 2.48% thus far today.
What We Can Expect To See Moving Forward
When it comes to VRX, it is my belief that the struggles are over for the most part. The reality is that VRX made some very big mistakes, and ultimately, the company is paying for those mistakes. However, since the issues have come to light, Valeant has made changes with regard to management, has re-established realistic accounting figures, and has even signed a contract with Walgreens for the sale of their treatments. All in all, things seem to be heading back in the right direction and I’m expecting to see gains in the long run as a result.
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What Do You Think?
Where do you think VRX is headed and why? Let us know your opinion in the comments below!
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