Context: Two months ago, in Neurogram, we wrote: <<This brings us to Valeant Pharmaceuticals. We despise Valeant, a company that routinely treats acquired companies like poachers who have machine-gunned an elephant in the veldt, stripping the tusks while leaving the carcass to rot in the tropical heat.>>
Since then, Valeant’s price-gouging (they say they don’t actually gouge, they raise the price astronomically, and then give discounts….right) left them swimming in the same cesspool as Turing Pharma, and now today, an activist short seller, Citron Research, issued a report that charges Valeant with operating two specialty pharmacies as a way of camouflaging their actual drug-sales activity flow. To which Bill Ackman, head of Pershing Capital, and formerly in league with Valeant in the attempt to bludgeon Allergan into accepting its hostile takeout bid, responded by buying around $200 million more of Valeant’s stock. Which, a cynic might suggest, is his attempt to shore up the value of Pershing’s already large-scale Valeant holding. But then again, Andrew Left of Citron, who has his own checkered past, admits to having a short position (someone bought two million put options), and thus has profited handsomely (on paper at least) from Valeant’s turmoil, and the dramatic price drop today in response to his own report.
To be fair–they’re all vipers. There isn’t a hero to be found in this motley but extremely overpaid crew. We do not know where the truth lies in the relationship between Valeant and its two specialty pharmacy progeny/prey, and we do not particularly care. It all adds up to more collateral damage to the reputation of the pharma industry, which does have its share of vipers, but nothing like this. This is a reality show from Hell: Lock the lot of them in an underground bunker, and let the cameras roll. We will not be watching.