Valeant Pharmaceuticals files restated financial statements for 2015

Valeant Pharmaceuticals on Friday filed its long-overdue US financial report for 2015, plus restated results for several quarters, resolving its default on some of its $30 billion in debt and averting other problems.

“Under the terms of our senior note indentures, if we do not file the first-quarter 2016 form 10-Q by May 16, 2016, we will be in default”, the company said.

As previously disclosed, the Company identified misstatements that would reduce previously-reported fiscal year 2014 revenue by approximately $58 million, net income attributable to Valeant by approximately $33 million, and basic and diluted earnings per share by $0.09 (as compared to the previously-reported amounts of $8,264 million for revenue, $914 million for net income attributable to Valeant and $2.72 and $2.67 for basic and diluted earnings per share respectively). William Ackman, a Valeant director and major shareholder, had signaled change was coming during his testimony at a Senate Committee hearing on Wednesday during which he, outgoing CEO Michael Pearson and director Howard Schiller faced tough questioning over Valeant’s widespread drug price increases.

Valeant also separately outlined changes to its board of directors as the company, still under fire from lawmakers and investors, looks to change the tone among its top brass. Missing that deadline led some debt holders to declare Valeant in default and wring higher interest rates out of the company.

In all, Valeant said three new independent directors have been nominated to the board, in addition to incoming Chief Executive Joseph Papa, while seven current directors will stand for re-election.

Valeant on Friday revealed two new investigations.

Valeant is dealing with three federal probes into its accounting and business practices, a huge stock-price plunge and insurers demanding bigger discounts from its inflated drug list prices. The management change was part of a broader overhaul that included adding activist investor Bill Ackman to the board.

Valeant shares rose 3.5 percent to $36.49 in NY trading before the market opened. The restatement also reduces by about $5 million sales of Xifaxan, which fights bacterial infections in the intestines, due to estimated returns by wholesalers.

Valeant also disclosed in its filing it has received two probes by districts in MA and the Southern District of NY, which relate to its patient assistance program and its accounting treatment of sales to specialty pharmacies. The company had previously reported first-quarter earnings of $74 million, or 21 cents a share, on revenue of $2.19 billion. Valeant cut ties with Philidor last fall amid allegations that Philidor created a network of “phantom pharmacies” to steer pharmacy benefit managers toward Valeant’s more-expensive drugs instead of cheaper alternatives.