Home Business Valeant Pharmaceuticals Plunges 51% on Weak Forecast!

Valeant Pharmaceuticals Plunges 51% on Weak Forecast!

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Valeant Pharmaceutical International Inc. suffered a very drastic loss this weak when its stock shares plunged by 51%. This plunge comes as more of a shock to the public as it contradicts the forecast Valeant gave back in December 2015. Hence, Valeant pharmaceuticals is currently under risk of breaching some of its debt agreements as it may not be able to finish its annual reports in time.

During a call with a financial analyst, Valeant’s CEO Mike Pearson was asked why he believes he remains the right man to lead the drug-maker. He did not help his case when Pearson “corrected” an issue addressed in the press release only hours before, saying that one measure of the earnings is in fact lower than previously stated by Valeant.¬†On Tuesday, Valeant gave a new sales and earnings forecast for 2016, quite different and much lower from the forecast they had previously stated in December 2015.

Valeant’s shares have declined by a massive 51% leaving their share at $ 33.51, which is the lowest it has been since January 2011. This means their stock has lost 87% of its value since its peak in August 2015. Not only is the pharmaceutical struggling from public criticism about its drug prices, but its also being investigated by regulators and the Congress.

However, despite the slide in Valeant’s stocks since the CEO cane back from his medical leave 2 months ago, top shareholder Pershing Square remains steadfastly supportive of Pearson and his position as CEO. Still, at this point it is quite vital for Valeant to regain its credibility in the market; Pearson announced that they have to overwork themselves to meet or exceed the expectations.

In the meantime, Laval-Quebec branch of Valeant is under risk of violating the debt agreements and becoming at the mercy of its creditors, since it is proving near impossible of it to meet its deadline on March 30. This means they will soon begin asking their lenders to amend the credit agreement.

Moreover, Pearson has stated that no major assets will be sold from Valeant; however, they would be investing in much smaller business for the meantime, in order to pay off their debt of $ 30 billion.

Saria Joseph Beainy

Saria Joseph Beainy

Civil Engineer, Tolkienite, science wiz, and animal-hugger. She is a self-proclaimed chocolate addict and thinks everything goes with wine.

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