Three Execs Flee Major Pharma Company The Day Before Earnings Report

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Robert Donachie Capitol Hill and Health Care Reporter

Valeant Pharmaceuticals announced Monday that three executives are leaving the company three days before earnings reports are released.

These executives were integral players in Valeant: Pavel Mirovsky, Head of European Business, Laurie Little, Head of Media Relations, and Robert Chai-Onn, General Council to Valeant, according to a company statement Monday.

Investors behind the Botox maker Allergan is suing Valeant over hedge fund owner Bill Ackman’s attempts to purchase the company in 2014.


Valeant, in 2010, was a fledging company with some $2.5 billion in total assets. To put that in perspective, Pfizer that same year had sales totaling $67.8 billion and Johnson&Johnson had $61.6 billion in sales. Valeant purchased Biovail that year to get its Canadian tax address and began picking up companies. This led Valeant to reach a top market cap of almost $90 billion, reports Bloomberg.


Allergan, formerly known as Actavis, formerly known as Watson, also has an interesting story following its meteoric rise from the dregs of the pharmaceutical market. Watson was worth just $5 billion in 2010. Following some missteps in the marketplace, Watson purchased Forrest Laboratories and its CEO Brent Saunders for $25 billion in 2014. It was Saunders who acquired Allergan out from under Valeant for some $70.5 billion, which led to Allergan peaking at $133 billion in the summer of 2015, according to Bloomberg.

The Case

The litigation centers around insider trading involved the failed attempt at Valeant and Ackman’s offer for Allergan. Valeant did not attempt to purchase the company outright, but instead paired up with Ackman who then purchased a very large stake in Allergan.

Ackman then said he would vote his shares in the company in favor of the proposed sale to Valeant, reports Business Insider.

Ackman didn’t stop there.  He reportedly wrote “nasty letters” detailing Allergan’s “incredibly inappropriate behavior as it sought to fend off the takeover,” according to Business Insider. Although the attempted merger failed, both Ackman and Valeant profited in the billions from the company’s eventual sale.

Shareholders in Allergan are suing Ackman and Valeant regarding their evasion of SEC Rule 14 e-3. The rule states that if “Company A is planning to take over Company B, anyone with knowledge of the takeover can’t trade shares” in B once A has begun its acquisition attempts.”

Both Ackman and Valeant deny this claim saying they never actually intended to make an offer.

The former General Counsel, Robert Chai-Onn, released a statement saying that the parties “acknowledge that no steps have been taken towards a tender or exchange offer for securities of Allergan.”

Those pursuing the case are arguing that even if “no steps” are taken, that “doesn’t make it true,” reports Business Insider.

So far, Judge David Carter, United States District Court for the Central District of California, has agreed with the plaintiffs and blocked all attempts by Valeant and Ackman to stop the case before litigation ensues.

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