Valeant says chief executive Michael Pearson to step down

Embattled pharmaceutical company Valeant said its chief executive Michael Pearson will step down as it added Bill Ackman, one of its largest investors, to its board.

The exit of Mr Pearson, who has led Valeant since 2010, comes just days after he returned to work after a two-month absence for pneumonia. Mr Pearson said in a statement on Monday that “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.”

Until August, when its shares touched a record high, Valeant had been one of the pharmaceutical industry’s hottest stocks, winning the backing of high-profile investors such as Mr Ackman and seeking to pursue large takeovers including the ultimately unsuccessful pursuit of Botox maker Allergan.

The last few months, however, have opened Valeant up to fierce scrutiny over its accounting practices and its business model. Valeant said today that its financial statements for the fiscal year 2014 and the first quarter of 2015 “should no longer be relied upon because of misstatements.”

As a result of the misstatements, revenues for fiscal 2014 should be about $58 million lower and net profits reduced by $33 milliom, said Valeant, adding that it has started a search for a successor to Mr Pearson.

Shares in Valeant, which have collapsed 90 per cent since touching a high last August, were suspended in pre-market trading.

Copyright Financial Times Limited