Quebec's Financial Markets Authority (AMF) is concerned about the publication of a controversial report describing the business practices of pharmaceutical giant Valeant.
The company, established in Laval since 2010, is not yet the subject of an investigation the Quebec regulator said Thursday, but officials are looking into the allegations raised by Citron Research.
In a report released Wednesday Citron, which focuses on overvalued stocks and companies involved in potentially fraudulent practices, questions whether Valeant is not a "pharmaceutical Enron," referring to the fallen energy giant that collapsed in a scandal in the early 2000s.
Citron Research accuses Valeant of storing drugs in a network of affiliated pharmacies by using distribution company Philidor, and then presenting these transactions as sales.
The storm triggered by the report has forced the pharmaceutical giant to issue a statement refuting the allegations, calling them "erroneous."
This was not sufficient to limit the damage. On the TSX, Valeant's share price dropped by more than 14 percent on Thursday morning, following a dip of 22 percent on Wednesday.
