Valeant shares fall in first trading since Pershing Square culled its holdings

MONTREAL – Valeant Pharmaceuticals shares slipped Monday in the first trading since one of its biggest investors revealed it had sold about US$520 million worth of shares in the final days of 2015.

Pershing Square Capital Management said it sold just over five million shares — about 15 per cent of its Valeant holdings — to generate a tax loss for 2015 as the New York-based firm faces the biggest loss in its history.

The private hedge fund led by Bill Ackman now owns 29.1 million shares or 8.5 per cent of Valeant’s stock, down from 34.1 million or 9.9 per cent, according to a U.S. regulatory filing after markets closed Thursday on the last trading day of 2015.

In Toronto, Valeant’s shares (TSX:VRX) initially dropped as much as 3.5 per cent after trading resumed on Monday but recovered in later trading and closed down $3.22 or 2.29 per cent at $137.34.

Valeant’s stock also faced pressure in the final days of 2015 after the company announced that CEO Michael Pearson has taken a medical leave of absence after being treated in hospital for pneumonia.

The company, headquartered in Laval, Que., has seen its stock price fall by more than half since record highs posted in August. Since then, it has come under scrutiny by U.S. authorities over its pricing practices and has been forced to revise its 2016 outlook after ending a drug distribution agreement with Philidor RX Services, a U.S. mail-order pharmacy.