Valeant Pharmaceuticals Intl Inc (NYSE:VRX) announced that it has initiated a search for a new CEO as Mike Pearson is stepping down from the position. Mr. Pearson will remain as CEO until a successor is named.

Furthermore, the pharmaceutical company appointed activist investor Bill Ackman to its board of directors, and provided an update on certain accounting and financial reporting matters.

Robert Ingram, chairman of the board, stated, “While the past few months have been difficult, Valeant has a collection of leading brands, valuable franchises and great people, and I am confident that the company will be able to rebuild its reputation and thrive under new leadership.”

Mr. Ingram continued, “We thank Mike for his dedicated service to Valeant and for agreeing to stay on until we conclude our search. As a colleague and a friend he will be missed, and we wish him the best for the future.”

“It’s been a privilege to lead Valeant for the past eight years,” said Mr.  Pearson. “While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership.”

Regarding Mr. Ackman, his firm Pershing Square Capital Management, L.P. owns a 9.0% stake in Valeant, and he is to join the board immediately. Mr. Ackman will be joining Pershing Square’s Vice Chairman, Stephen Fraidin, who is also on the Valeant board.

Valeant’s board currently is fixed at 14 directors, which is the maximum number of members allowed. Katharine B. Stevenson voluntarily resigned from the Board to create a vacancy to permit Mr. Ackman’s appointment. The Board requested that the company’s former CFO, Howard Schiller, tender his resignation as a director, but Mr. Schiller has not done so.

Update on the Company’s Finances

Valeant Pharmaceuticals established an “Ad Hoc Committee” to review allegations regarding the company’s relationship with the Internet-based Philidor Rx Services and pricing issues. Back in February, the committee determined that approximately $58 million in net revenue relating to sales to Philidor in the second half of 2014 should not have been recognized upon delivery of product to Philidor.

The company is in the process of restating the affected financial statements; they will be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2015, which the company intends to file with the SEC and the Canadian Securities Regulators on or before April 29, 2016.

Mr. Ingram, who was the chair of this Ad Hoc Committee, stated, “Over the past five months, the Ad Hoc Committee has worked closely with our independent advisors to conduct a comprehensive review of Philidor and related matters.”

He continued, “While the Ad Hoc Committee is still reviewing certain accounting related items, and has identified certain concerns related to those items with respect to the tone of the organization, it has not identified any additional items affecting the financial statements to date.”

According to the company’s Form 8-K filed today, Valeant Pharmaceuticals has identified misstatements to date that would reduce previously reported fiscal year 2014 revenue by approximately $58 million, net income attributable to Valeant by approximately $33 million, and basic and diluted earnings per share by $.09.

Final Thoughts

Last week, Valeant stock dropped below $30 per share for the first time in over a year. Investor reactions were mixed to this news, as some viewed the stock price drop as more bad things to come, while other saw it as a great opportunity to purchase VRX stock on the low.

As I suggested before in my investor reaction article, if you are someone who prefers to purchase stock on the low and a contrarian, this is your time to shine because VRX stock is essentially at its 52-week-low.