Valeant Pharmaceuticals (NYSE:VRX) has had an incredibly hard time in the market as of late, and for good reason. After the company's relationship with an underground pharmacy known as Philidor came to light in the media, many questions were raised. As a result, the company had to cease business with the pharmacy which just so happened to be its biggest customer. Soon sales fell and further questions came up about the stock. Nonetheless, VRX is up big in the market today after big changes were announced with regard to the management of the company. Here's what's happening...
Bill Ackman Will Be On The Board Of Directors
It was announced earlier this morning that Bill Ackman will be added to the board of directors at VRX. After all of the hardship the company has faced, they needed to bring on a high profile expert that would help the business grow. Now, I've followed Ackman for quite some time, and I have to say I'm not a huge fan of him as much as I know of him, on a personal level. However, when it comes to business, the guy is an absolute genius! So, taking that into account, it's overwhelmingly clear why investors are so happy that Ackman is being brought onto the board of directors.
J. Michael Pearson Will Be Stepping Down
J. Michael Pearson has served as the CEO of VRX for quite some time now. However, following the issues the company has faced as of late, he will be stepping down. While Valeant Pharmaceuticals searches for a successor to Pearson, he will maintain his role as CEO.
In a statement, Pearson had the following to say...
“It's been a privilege to lead Valeant for the past eight years... While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership.”
Robert Ingram, chairman of the board also had a bit to say about the transition to a new CEO. Here's what he had to say...
“While the past few months have been difficult, Valeant has a collection of leading brands, valuable franchises and great people, and I am confident that the company will be able to rebuild its reputation and thrive under new leadership. We thank Mike for his dedicated service to Valeant and for agreeing to stay on until we conclude our search. As a colleague and a friend he will be missed, and we wish him the best for the future.”
How The Market Reacted To The News
As investors, we know that any time there is positive news with regard to a publicly traded company, we can expect to see gains in the value of the company. While management changes aren't always positive news, the fact that Bill Ackman will be taking a seat on the board at VRX and that the company is looking for a new CEO is definitely positive news. As a result, we're seeing strong growth in the value of the stock today. Currently (10:45), VRX is trading at $30.40 per share after a gain of $3.42 per share or 12.68% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly positive view of what we can expect to see from VRX. The reality is that Valeant Pharmaceuticals has an incredible growth story; one that has required them to make it over hurdles in the past. Every time, they have done just fine. Now, with the new leadership coming on board, things are looking better than ever. Sure, VRX is in a rough patch at the moment, but the sun always shines after a rainy day.