Valeant's crumbling again

Valeant Pharmaceuticals CEO Michael Pearson has been called to testify before the Senate Committee on Aging on April 27th, that's the latest in a long spate of bad news for the company.

The stock is down around 7% on this news.

The Senate Committee on Aging's investigation into Valeant is a bipartisan effort helmed by Sens. Susan Collins (R-Maine) and Claire McCaskill (D-Missouri). They sent letters to Valeant and a few other drug companies announcing the investigation back in November.

This is on top of ongoing investigations into the company in the House of Representatives, SEC and state attorney's offices of Massachusetts and New York.

The Aging committee's investigation is set to include an examine a laundry list of the problems that have plagued Valeant since a short seller accused the company of malfeasance last October.

The committee is looking into:

• Substantial price increases on recently acquired off-patent drugs;
• Mergers and acquisitions within the pharmaceutical industry that have sometimes led to dramatic increases in off-patent drug prices;
• And the Food and Drug Administration's role in the drug-approval process for generic drugs, the agency's distribution protocols, and, if necessary, its off-label regulatory regime.

"Some of the recent actions we've seen in the pharmaceutical industry - with corporate acquisitions followed by dramatic increases in the prices of pre-existing drugs - have looked like little more than price gouging," McCaskill said in a statement last November.

"We need to get to the bottom of why we're seeing huge spikes in drug prices that seemingly have no relationship to research-and-development costs. I'm proud to help lead this bipartisan investigation so that we can find some answers the public wants and deserves."

This April hearing probably won't be as raucous as the last time a Valeant CEO flew the G-650 to Washington to answer pointed questions. That was back in February for the House of Representatives, and infamous former Turing CEO Martin Shkreli was also in the hot seat.

Another difference between now and then - there will definitely be a different CEO representing Valeant. Last time, the CEO was former CFO Howard Schiller. He was filling in for current CEO Michael Pearson while Pearson was on medical leave.

So this time around it will either be Pearson or whoever - as the company announced last Monday - steps in to replace him. The company is looking for a new chief now.

Another thing to keep in mind here is that this testimony is two days before the company's deadline for filing its annual report. If it doesn't, creditors can go ahead and call in part of Valeant's $30 billion debt load.

And here's your Monday Valeant chart, showing the stress: