Valeant Pharmaceuticals hit by short-sellers

Allegations of fraud by a short-selling firm sent shares of Valeant Pharmaceuticals sharply lower.

In a report published on Wednesday Citron Research accused the US biotech outfit of setting up a subsidiary called Philador through which it was selling to itself, thus artificially boosting its revenues.

The analysts claimed $65bn-market cap Valeant was selling to a firm called R&O which was in turn owned by Philador.

As of 16:53 stock in Valeant was trading down by 25.56% to hit $109.24, putting it on a price-to-earnings multiple of 55.74 despite having fallen by nearly 60% since mid-August.