A Look Back At Valeant's Tumultuous 2016

Valeant Pharmaceuticals Intl Inc VRX has seen its shares nose-dive since August last year when questions were raised regarding the aggressive pricing of its two heart drugs. Amid the struggles that have lasted for over a year now, the company announced earlier last week that three of its executives are departing.

Exodus En Masse

Among the executives who are deserting what could be a sinking ship are Anne Whitaker, executive vice president and company group chairman; Rob Rosiello, who served as chief financial officer from July 2015 until August 2016; and Dr. Ari Kellen, executive vice president and company group chairman. Simultaneously, the company announced the appointment of William Humphries as executive vice president, dermatology, effective January 2, 2017.

On A Free Fall Since August 2015

Valeant stock is a pale shadow of its old self. From above $262 in early August, the company has seen its stock hurtle down precipitously to less than $14 currently, which is about 5 percent of its value during its heydays.

What has led to Valeant's fall from grace? Benzinga looked at the timeline of the dark days that have befallen the company.

• In September 2015, Democratic leaders cried foul over drug pricing by pharma companies after a New York Times report highlighted aggressive pricing (+ 5555 percent hike) of an AIDS drug by Turing Pharma.
• In October 2015, a Deutsche Bank report identified Valeant to be among the drug companies, which had priced their drugs exorbitantly. Valeant found an able ally in hedge fund manager Bill Ackman, who has long imposed faith in the company. He was quick to defend the company by suggesting that the intensive R&D efforts of the company vindicated its pricing. Subsequently, the company was issued a federal subpoena over its pricing. It was amid all the pricing squabbles that the Philidor storm hit the company.
• The same month, short-seller Andrew Left revealed details about Philidor and its network of phantom captive pharmacies. Left accused the company of indulging in accounting fraud of enormous proportion, comparing it with the now-defunct Enron. Despite efforts by the company and Ackman to appease shareholders through a call, the stock never budged and continued to head southward.
• In December 2015, Valeant reported disappointing fourth-quarter results, blaming it on the severance of ties with Philidor. The company's then CEO Michael Pearson went on a medical leave of absence, leaving his responsibilities with a group of company executives.
• Then came the Hillary Clinton bombshell in January 2016, when she decried the company in a blog post over its aggressive price hikes for its migraine drug.
• In February 2016, the company announced it would restate its financial results, citing issues with revenue recognition on some sales of Philidor. The same month, the company came under the SEC scrutiny. Although Pearson resumed office, the company withdrew its 2016 financial guidance.
• In March, Ackman stepped in to defend the company in a CNBC interview. The company also delayed its quarterly results. Ackman now found the going tough and had to confide that a change of guard at Valeant may be warranted. The company had to cut its 2016 revenue guidance and opened up the possibility of debt default. The board ousted Pearson and appointed Joseph Papa to the position of CEO and chairman.
• After a long wait, the company released its annual report towards the end of April, wherein it stated that it had identified some misstatements, which would reduce the reported revenues for some previous periods. This helped the company avoid defaulting on its $31 billion debt.
• The company cut its guidance again in June, citing below-par performances of some of its franchises.
• In July, it was revealed that former CEO Pearson sold more shares than originally thought. Meanwhile, Sequoia Capital, one of its initial institutional investors, said it has completely come out of Valeant. Citron Research's Left pounded the stock left and right by his comments that the stock could drop down to zero.
• In November, former Valeant executive Gary Turner and former CEO of Phildor Andrew Davenport were arrested by the FBI for orchestrating a fraudulent purchase option agreement.
• Another negative development to cap another tumultuous year for the company is the decision by Ackman to cut his stake in Valeant, in which he initiated a position in early 2015 and expanded it by another 5 million in the first quarter of 2016. Ackman's Pershing Square said in a filing on December 12 that it sold 3.36 million shares of Valeant at $14.85 per share.

It looks like there is no place to hide for the beleaguered company, which might be biding its time before easing it way out of its existence as a publicly traded company. Or, is there going to be a twist in Valeant's harrowing tale?