Ackman's hedge fund cuts Valeant stake citing tax purposes
NEW YORK: Bill Ackman, who has steadfastly defended his hedge fund’s investment Valeant Pharmaceuticals, has trimmed his stake in the beleaguered company, citing tax purposes.
Pershing Square Capital Management sold just over 5 million shares, lowering its stake to 8.5 percent from 9.9 percent.
The Canadian drug company has had a bruising year that continued into this week when CEO J. Michael Pearson took medical leave after he was hospitalized with “severe” pneumonia.
Shares tumbled 12 percent. The company is being targeted in Congress for its strategy of buying other pharmaceutical companies, slashing jobs and raising the price of the drugs that that company makes.
It cut ties with mail-order pharmacy Philidor in October after it was alleged that it was using strong-arm tactics to force benefits managers away from cheaper drugs in favor of pricier ones to which Valeant holds the rights.
Valeant has received multiple subpoenas from federal prosecutors seeking information about drug pricing and other policies and lawmakers want Pearson to testify before Congress.