Shares in pharma firm Valeant have dropped by over 18 per cent in after hours trading after a Securities and Exchange Commission (SEC) investigation into the company was revealed.
The SEC probe is separate from an existing investigation into a company purchased by Valeant last year, Salix Pharmaceuticals, according to a Bloomberg report.
“Valeant confirms 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,” said a Valeant spokeswoman.
The SEC declined to comment.
The news comes on the same day that the pharmaceuticals group announced that chief executive Michael Pearson will be returning from medical leave to take up his post again. Pearson left on medical leave after being hospitalised due to a "severe case of pneumonia".
Meanwhile, Pershing Square, the hedge fund owned and run by Bill Ackman, made a 20.5 per cent loss in 2015, due largely to the decline in Valeant Pharmaceuticals' stock. Valeant is one of Pershing's largest holdings.