LAVAL -- Valeant Pharmaceuticals International says a block of its shares was sold Thursday by Goldman Sachs to repay US$100-million in loans to the drug company's chairman and chief executive, J. Michael Pearson.
The Quebec-based company says the loan had been permitted by Valeant's board of directors, which Pearson chairs, and previously disclosed to shareholders in regulatory documents filed for the 2014 and 2015 annual meetings.
Pearson says in a statement issued by the company that it wasn't his desire to sell the shares at this time.
The drug maker's shares have plunged in value recently as a result of intense scrutiny about its business practices, including big price increases for some of its products and its relationship with certain specialty pharmacy companies.
"Since joining Valeant, I have not sold any shares provided to me as compensation, and it was not my desire that shares be sold now," Pearson said in Friday's statement. "I have complete confidence in Valeant's ability to move forward and continue meeting our commitments to patients, doctors, and shareholders."
Pearson has become one of the focal points of controversy that's swirling around Valeant, which is Canada's largest publicly traded pharmaceutical company.
Under Pearson's leadership, Valeant has grown dramatically through a number of acquisitions -- including the Bausch and Lomb contact lens business and numerous drug companies. However, it was also unsuccessful in a high-profile attempt to buy Allergan Inc. -- the California-based company behind the Botox anti-wrinkle treatment.
Bill Ackman -- who heads the New York-based Pershing Square Capital investment group -- has made some public criticisms about Valeant's communications strategy for dealing with its recent controversies but said in a letter to Pearson on Thursday that "you and the board should not interpret this as a negative reflection on my view of you as the CEO of the company."
Pershing Square has become Valeant's second-largest shareholder since the two companies collaborated in the hostile takeover bid for Allergan.
Valeant says Goldman Sachs will have no outstanding loans to Pearson after the stock sale and debt repayment. It didn't provide details on how many shares were sold, the price or who bought them.
Its says that Pearson had been permitted by the board, to pledge about two million shares as collateral for loans totalling $100 million, which he used to make charitable contributions, meet certain tax obligations and to purchase additional shares. Valeant says the information was contained in a proxy statements filed in April 2014 and April 2015.
Valeant says that the stock pledged as collateral to Goldman Sachs represented about one-fifth of Pearson's holdings at the time. It also says Pearson has been compensated exclusively through cash and stock incentive awards tied to performance since January 2015.
Valeant shares fell about 14 per cent on Thursday to C$103.37 in Toronto and to US$78.77 in New York. At the beginning of 2015 they were worth about C$170 and peaked at nearly C$348 in August.
In early trading, the shares were up about five per cent from the previous close.
