The CEO of Valeant Pharmaceuticals is asking U.S. securities regulators to investigate Citron Research.
Valeant CEO Michael Pearson told analysts on a conference call Monday that the main reason for Valeant’s recent problems is that it’s the victim of false allegations by outsiders who want to manipulate the market to their own profit.
Read: Valeant rebuffs phantom pharmacy allegations
Pearson adds he has called on the Securities and Exchange Commission to investigate Citron Research, after the U.S. short seller compared Valeant to Enron, the U.S. energy firm that collapsed after widespread deception and fraud at the highest levels of management.
Citron Research could not be immediately reached for comment.
But, in a report last week, Citron alleged that Valeant has set up a network of phantom pharmacies to fool auditors. Pearson says these allegations are “completely untrue.”
The company’s stock has been on a slide since that report was released, resulting in billions of dollars of losses.
Pearson notes Valeant follows the law as well as accounting and disclosure rules, adding he would not hesitate to take action if he finds violations. And, Valeant’s board will conduct its own review of allegations into the drug maker’s business relationship with Philidor, a U.S. specialty pharma company.
Valeant lead director Robert Ingram, who has been on the company’s board for five years, says the directors have complete confidence in Pearson, the company’s accounting practices and the use of specialty pharmaceutical companies.
Read: The dilemma of expensive drugs
“With that said, there are other allegations that have been raised publicly with respect to Philidor and we as a board felt it was important to review those issues and any related ones that might arise,” says Ingram.
Pearson said during the conference call that Valeant had been “slow to answer some of the questions that investors and the media have raised.” But he insists that Valeant is primarily the victim “of false attacks and misleading statements by short-sellers looking to profit from harming our stock.”