An embattled pharmaceutical company in Canada has announced a new temporary leader while its CEO recovers from a serious illness.
According to CBC News, Quebec-based drug giant Valeant Pharmaceuticals has named Howard B. Schiller as its interim CEO for an indefinite amount of time, effective immediately.
J. Michael Pearson, chairman and CEO of Valeant, was admitted into the hospital last month due to a severe case of pneumonia. Schiller is a member of the company’s board of directors and served as its CFO from Dec. 2011 through June 2015.
Pearson’s leave of absence came at a time of unrest within the company, in which many were calling for Pearson to resign. Valeant’s stock has been slashed by more than half since it reached a record-high in August due to several high-profile controversies.
Among the more serious accusations levied against the company during Pearson’s tenure as CEO were a drug price-gouging scandal and a previously undisclosed relationship with Phillidor Rx Services, a U.S. mail-order pharmacy.
Valeant launched an internal review in fall of 2015 to determine any wrongdoing in its relationship with Phillidor. The review is being headed by lead independent director Robert Ingram, who is also the company’s interim chairman while Pearson recovers.
“We appreciate the expressions of support and concern for Mike’s health that we have received from Valeant’s investors, employees, business partners and other stakeholders,” Ingram said.
“While Mike’s illness was sudden and unexpected, our strong management team has stepped in to keep our businesses on track and thriving,” he added.
In 2014, America’s share of the worldwide pharmaceutical market was valued at an estimated $365 million. Back in 2012, the entire chemical output, including pharmaceuticals, was valued at almost $770 billion.
The longstanding success of the U.S. in pharmaceuticals is part of the reason why Valeant, a company based in Canada, began receiving international attention for its rapid growth.
However, according to Fool.com, Valeant’s fall from grace could be one for the record books when all is said and done.
On Feb. 4, 2008, the day that J. Michael Pearson was announced as CEO of Valeant Pharmaceuticals, the company had a market capitalization of $2.1 billion. At the stock’s highest price in August, that value had skyrocketed to $84.6 billion.
When Pearson’s leave of absence was announced, the company’s stock dropped a whopping 10.5%. Investor confidence in the company was already plummeting before Pearson fell ill, and Valeant’s stock lost three-quarters of its value from peak to trough in 2015.
Pearson was previously criticized for embarking on too many acquisitions and spending less money on research. Now, the company is $29.5 billion in debt, and many believe that Pearson may never return to his duties.