Valeant Pharmaceuticals (VRX), under fire amid accusations of accounting fraud, held an emergency conference call on Monday hoping to calm investors. Last week, short-selling research firm Citron said the company was the ‘pharmaceutical Enron.’ A report in the New York Times last week raised questions about the company’s use of specialty pharmacies. The scrutiny pushed the stock down about 40 percent and wiped out some $20 billion in market value over just five days. At issue is Valeant’s relationship with Philidor, a specialty pharmacy. Valeant paid $100 million last December for the option to purchase Philidor, but failed to disclose the transaction until its third quarter earnings call last week. The company says it didn’t have to reveal the relationship because Philidor was not considered material to Valeant’s business, and thus was exempt from reporting rules. The company says Philidor accounts for 5.9 percent of Valeant’s net revenue since the start of the year. Aside from Philidor, Valeant said it consolidates two other specialty pharmacies, including one in Indonesia and another in the United Arab Emirates.
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