Valeant Chief Is Hospitalized With Pneumonia


J. Michael Pearson, the embattled chief executive of Valeant Pharmaceuticals International, has been admitted to the hospital for severe pneumonia, a spokeswoman for the company confirmed on Friday.

The spokeswoman, Laurie W. Little, declined to provide further details. She said that out of respect for the privacy of Mr. Pearson and his family, the company would update his condition only as appropriate. “We wish him a speedy recovery and look forward to him returning to work when he is feeling better,” Ms. Little said in an email.

Mr. Pearson, 56, has been struggling to reassure investors about the future of Valeant, as the company comes under fire for its drug pricing and distribution policies. Valeant’s strategy of acquiring old drugs and sharply raising their prices, often by several hundred percent, has attracted attention from Congress.

It also faces scrutiny for its secret relationship with Philidor Rx Services, a mail-order pharmacy that dispensed some of Valeant’s expensive dermatology drugs and took care of getting them reimbursed by insurance companies. Valeant severed its ties to Philidor in October, after questions were raised about the pharmacy’s practices.

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J. Michael Pearson is the chief executive of Valeant Pharmaceuticals International and is strongly associated with the company’s success.

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Hiroko Masuike/The New York Times

As concerns have mounted over the business model, the company’s shares have plummeted. The company’s stock has lost more than half its value since August.

A lengthy incapacitation would probably worry investors. Mr. Pearson is the architect of the company’s business model and has been strongly associated with the company’s success.

Some skeptics have wondered whether it was time for a management change given the company’s recent problems. But Mr. Pearson appears to have the support of the board.

A former consultant at McKinsey & Company, Mr. Pearson became Valeant’s chief executive in 2008 and oversaw a period of rapid growth and a meteoric rise in the company’s stock price.

Mr. Pearson largely shunned research aimed at discovering and developing new drugs, which he viewed as too risky. Instead, Valeant grew by acquiring other drug companies, keeping their products and dismissing most of their workers.

Federal prosecutors are looking into Valeant’s pricing, distribution and financial assistance programs for patients, according to the company’s regulatory filings. A committee of Valeant’s directors is investigating the relationship with Philidor.

Mr. Pearson has said that in the future, Valeant will not rely so much on huge price increases on old drugs. And he has said for the next year at least, the company will use its cash to pay down some of the more than $30 billion in debt it has accumulated from its numerous acquisitions. That means it is likely to do far fewer deals.

Valeant shares closed Thursday at $114.11. They have recovered from a 52-week low of just under $70 in November. But that is still well below a peak of above $260 in early August.



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