Valeant must untangle web of allegations on Monday call
http://www.marketwatch.com/story/valeant-must-untangle-web-of-allegations-on-monday-call-2015-10-23?siteid=YAHOOB
Valeant Pharmaceuticals International, Inc. will hold a press conference Monday morning to respond to allegations lobbed at the company regarding its relationship with specialty pharmacies and its accounting practices.
Citron Research, John Hempton, ProPublica and The Wall Street Journal have said there is a tangled web of organizational ties between Valeant and specialty pharmacy network company Philidor RX, Philidor network member R&O Pharmacy, and other specialty pharmacies that may or may not be legally and financially related to Philidor and/or Valeant.
Valeant shares fell as much as 40% at their worst level on Wednesday after Citron, a short selling firm, issued a scathing report, alleging that Valeant was shipping product to R&O and then falsely claiming the revenue.
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Citron’s report, which called Valeant a
“pharmaceutical Enron,” cited a report that was published on Monday by the Southern Investigative Reporting Foundation, SIRF, that revealed the previously undisclosed relationships with specialty pharmacies....Valeant responded to Citron with a statement that said all sales to Philidor and its network pharmacies are “accounted for as intercompany sales and are eliminated in consolidation.” That would imply financial ownership of Philidor and an organizational connection with a distribution channel that had not been, until Monday, ever mentioned in Valeant’s financial statements or filings with the Canadian or U.S. securities regulators....Valeant had already responded to SIRF’s findings on its earnings call on Monday by saying that it has a “contractual relationship” with Philidor to fill prescriptions on its behalf, that it recently bought an option to buy the pharmacy, and that it also consolidates Philidor’s results with its own based on a variable interest entity (VIE) relationship... MORE
WELL, NOW WE KNOW WHERE THE CROOKS ON WALL STREET WENT
