J. Michael Pearson returns, but Valeant hits SEC trouble
Valeant Pharmaceuticals International has announced that J. Michael Pearson returned as Valeant's chief executive officer following his recovery from severe pneumonia and other complications, effective immediately. Howard B. Schiller, Valeant's interim chief executive officer, will transition out of his current duties but will continue as a member of Valeant's Board of Directors. Robert A. Ingram has been appointed chairman of the Board as the company has separated the roles of chairman and chief executive officer.
“We are delighted that Mike is back as his vision and execution have been central to Valeant's success over the past eight years, but his illness serves as a reminder of the importance of succession planning," said Ingram. "Given the size and breadth of our company, succession planning and building out our senior team to provide additional resources and support for Mike are high priorities for the Board. Our hope is that the Ad Hoc Committee will be able to conclude its efforts soon with regards to financial reporting and internal control matters, so we can all focus on building the best company we can."
"I want to express my sincere gratitude to Howard for his willingness to step in and lead the company through a challenging period," stated J. Michael Pearson. "I realize that recent events are disappointing to everyone and it is my responsibility to set the appropriate tone for the organization. My immediate priority will be to build stronger relationships with important constituents, such as managed care and other channel partners, regulators and government representatives, while improving Valeant's reporting procedures, internal controls and transparency. I will focus on the retention and enhancement of our management teams and employee groups around the world and ensure that we maintain a culture that adheres to the highest ethical standards. Finally, we expect to deliver strong operating performance going forward by working closely with physicians to better serve patients, and we remain committed to reducing our leverage."
Given the timing of Pearson's return, the company will be rescheduling its previously announced call to discuss preliminary fourth quarter 2015 results, deliver a business review, and provide updated guidance for 2016. In the interim, the Company is withdrawing its prior financial guidance. The company expects to provide preliminary financial information for the fourth quarter of 2015, and 2016 guidance, in the near term. As previously announced, the company will delay filing its 2015 10-K pending completion of the review of certain accounting matters by the Ad Hoc Committee, with the assistance of its independent advisors, and the company's ongoing assessment of the impact on financial reporting and internal controls. The Ad Hoc Committee is continuing its review of the circumstances relating to those accounting matters and appropriate actions to be taken.
In addition, Valeant confirmed that it has several ongoing investigations, including investigations by the U.S. Attorney’s Offices for Massachusetts and the Southern District of New York, the SEC and Congress. With respect to the SEC investigation, the company confirmed that it received a subpoena from the SEC in the fourth quarter of 2015 and, in the normal course, would have included this disclosure in its 2015 10-K.