Valeant Pharmaceuticals chief to step down, shares bounce

Shares in beleaguered drugs giant Valeant Pharmaceuticals were halted after the company announced its chief J.Michael Pearson would be stepping down after an internal committee found the company had misstated its financial statements for 2014 and the first three months of 2015.

Stock in the New York-listed was off by 4.48% to $25.77 before the trading halt was declared, giving the Canadian firm a market capitalisation of $11.95bn.

As of 13:33GMT shares in the company were rebounding 8.19% to $28.91 after they began trading again.

The company´s market capitalisation had been mauled since August 2015, when the first allegations surfaced that it had made mistakes linked to its policy for revenue recognition, with the shares trading far below their 52-week high of $263.81.

Activist investor Bill Ackman was also appointed to the board, the company said in a statement.

According to Bloomberg data the risk that Valeant might default on its debt obligations had risen sharply over recent weeks.

Quebec-based Valeant said it had identified financial misstatements that would cut previously disclosed revenues for fiscal year 2014 by about $58m and those for the first three months of 2015 by another $21m.

In remarks to Bloomberg TV, an analyst from Piper Jaffray described the shares as "uninvestable" although they were not worth 'zero'.

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