Shares in Valeant close down over 19% following fraud allegation from Citron Research

22 October 2015

Shares in Canada's Valeant Pharmaceutical International (TSX: VRX) plunged to close down over 19% overnight Wednesday on the New York Stock Exchange following a report from investment newsletter Citron Research questioning the company’s relationship with specialty pharmacies.

Citron Research, the online investment newsletter has alleged that Valeant is using pharmacies related to Philidor, which the company has an option to purchase, to store inventory and record the transactions as sales in an effort to artificially inflate revenue.

The research report said the specialty company R&O Pharmacy recently made a filing in a California District Court regarding an improper payment of $69 million demanded by Valeant. As part of its quarterly earnings report, Valeant alleged that R&O was withholding significant amounts received from payers as a specialty pharmacy in the drugmaker's network.

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