Under fire drug company Valeant Pharmaceuticals tried to halt its plummeting share price yesterday by hitting back at a damning note that questioned the medical firm’s relationship with specialty mail-order pharmacies .
Valeant shares plunged as much as 30 per cent to $88.58 yesterday after Citron Research accused the company of fraud, saying it used its relationship with specialty pharmacies to inflate revenue.
Citron alleged that Valeant was using specialty pharmacies to create “phantom sales” of its products or pushing more product through distribution channels than sales would warrant, and to avoid scrutiny from auditors.
“Citron believes the whole thing is a fraud to create invoices to deceive the auditors and book revenue,” the note said.
Valeant shares were halted yesterday afternoon and the company issued a statement attempting to clarify its position and called the report “errorneous”.
Valeant said there was “no sales benefit from any inventory held at these specialty pharmacies”.