Valeant Pharmaceuticals Intl Inc (NYSE:VRX) announced that its Audit and Risk Committee and the full Board of Directors have reviewed the company’s accounting for its Philidor arrangement and have confirmed the appropriateness of the company’s related revenue recognition and accounting treatment.
Based on its review conducted to date, Valeant also believes that the company is in compliance with applicable law. In light of the recent allegations made regarding Philidor, however, the Board of Directors has decided to establish an ad hoc committee of the board to review allegations related to the company’s business relationship with Philidor and related matters. The committee will be chaired by Robert Ingram, the company’s lead outside director. Other members will include Norma Provencio, chairman of the audit and risk committee; Colleen Goggins; and Mason Morfit, who has been appointed to the Board as an independent director.
“As we have said previously, our accounting with respect to the Company’s Philidor arrangements is fully compliant with the law,” J. Michael Pearson, Chairman of the Board and Chief Executive Officer of Valeant said. “However, other issues have been raised publicly about Philidor’s business practices, and it is appropriate that they be fully reviewed. This decision to create an ad hoc committee of the board, which I fully support, will help free management to focus on continuing to serve doctors and patients and run our business.”
“We operate our business based on the highest standard of ethics, and we are committed to transparency. These values are at the core of our business model, and if we find violations we will take appropriate action,” Pearson said.
“The board has complete confidence in Mike Pearson’s performance as CEO and has fully supported the company’s specialty pharmacy strategy. Mike operates with the highest degree of ethics, and we believe it is important that he and the management team be allowed to focus their efforts on continuing to serve patients and doctors and create long term value for our thousands of individual and institutional shareholders,” Ingram said. (Original Source)
Shares of Valeant Pharmaceuticals are down 5.05% to $110 in pre-market trading. VRX has a 1-year high of $263.81 and a 1-year low of $88.50. The stock’s 50-day moving average is $187.83 and its 200-day moving average is $220.29.
On the ratings front, Valeant has been the subject of a number of recent research reports. In a report issued on October 23, Mizuho analyst Irina Rivkind Koffler reiterated a Hold rating on VRX, with a price target of $155, which represents a potential upside of 33.4% from where the stock is currently trading. Separately, on October 22, BMO’s Alex Arfaei downgraded the stock to Hold and has a price target of $141.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Irina Rivkind Koffler and Alex Arfaei have a total average return of 41.0% and 5.2% respectively. Koffler has a success rate of 65.9% and is ranked #3 out of 3801 analysts, while Arfaei has a success rate of 66.1% and is ranked #928.
Overall, one research analyst has rated the stock with a Sell rating, 5 research analysts have assigned a Hold rating and 9 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $246.40 which is 112.1% above where the stock closed last Friday.
Valeant Pharmaceuticals International Inc is a specialty pharmaceutical and medical device company that develops, manufactures, and markets a range of generic and branded generic pharmaceuticals, over-the-counter products and medical devices.