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Pharma giant Valeant is compared to Enron, stock craters

Myles Udland   

Pharma giant Valeant is compared to Enron, stock craters
Stock Market1 min read

Valeant is crashing.

On Wednesday, shares of the pharmaceutical giant were down as much as 27% after a brutal report from short-selling firm Citron Research asked, "Could this be the Pharmaceutical Enron."

Shares were briefly halted due to volatility following the report.

Citron's report follows what's been a rough week of news for Valeant, which got hammered after reporting earnings on Monday morning that were poorly-received by investors largely due to commentary from CEO Mike Pearson about the company's strategy shift.

Pearson told analysts on the call that the company would increase spending on research & development or potentially spin-off entities, a decided change from the company's strategy of acquiring smaller competitors and increase the price of their drugs.

On Monday, a separate report from the Southern Investigative Reporting Foundation took a look at Valeant's relationship with specialty pharmacy company Philidor.

As SIRF lays out, Valeant sued a company named R&O Pharmacy for $70 million, though these companies had never done business together.

Here's the brutal chart.

Screen Shot 2015 10 21 at 10.25.44 AM

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