The relationship between Valeant Pharmaceuticals and a small pharmacy is again in focus.
Investigative-journalism website ProPublica reported that specialty pharmacy Philidor Rx Services — which is connected to Valeant and at the center of allegations of financial impropriety — was denied permission to operate in California.
Months later, an employee of the specialty pharmacy purchased a stake in another California pharmacy, West Wilshire Pharmacy, amounting to about 10%, Charles Ornstein reports.
Investors are asking how Valeant is connected to a whole host of smaller companies right now.
Short-selling firm Citron has alleged that Valeant improperly benefited from its relationship with Philidor. Philidor subsequently said it has the option to buy R&O Pharmacy.
In a release Wednesday, Valeant said that Philidor is a legitimate distribution network. Valeant announced today that it would host a conference call Monday to address the allegations made by Citron.
BMO analysts asked in a note Wednesday: "We believe most VRX investors didn’t know about Philidor; what else is out there that we don't know?"
Valeant's stock fell around 7% to $110 Thursday. It opened the week Monday at around $170.
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