By Svea Herbst-Bayliss
BOSTON (Reuters) - Billionaire activist investor William Ackman on Wednesday offered a more optimistic outlook for Valeant Pharmaceuticals (NYSE:VRX) Inc., saying the embattled drug maker's annual report will be filed soon and that its search for a new CEO is moving forward.
Valeant shares surged some 20 percent after Ackman's remarks, adding to a roughly 10 percent gain on Tuesday after an internal committee did not find additional problems requiring restatements of the Canadian company's financial results.
In a conference call with investors of his firm's Pershing Square (NYSE:SQ) Holdings fund, Ackman said Valeant is on track to deliver its delayed 10-K annual report by the end of April.
He said that financial filing would eliminate fears the company might default on its debt, possibly rekindling interest among investors. "This will be a significant milestone and make the stock investable again," he said.
Ackman also said progress is being made in the search to replace Valeant Chief Executive Officer Michael Pearson (LON:PSON), who was forced to step down after the stock fell about 50 percent on March 15 in the wake of disappointing fourth-quarter results and guidance as well as mistakes in presenting the numbers.
"We are cautiously optimistic that it is a matter of weeks not months to identify a new CEO," said Ackman, who joined Valeant's board last month.
The call on Wednesday was the first time Ackman and his team had walked investors through the portfolio since reporting that the Pershing Square Holdings fund dropped 25 percent in the first three months of the year, its worst-ever result.
While Ackman discussed other losing bets including Platform Specialty Products and Herbalife (NYSE:HLF), he spent the bulk of the call answering questions about Valeant.
While acknowledging mistakes, Ackman said he still liked Valeant's stock and told investors he can make back the bulk of the money that had been lost. "There is more upside for us in Valeant in the short term than in any other company in the portfolio," he said.