In its latest financial report, Valeant has announced that it has incurred a $336.9m loss following low sales.
Shares of giant pharmaceuticals company Valeant fall 51% amidst forecast cutsShares of the pharmaceutical company dropped by 51% after the company failed to attain revenue expectations and cut its forecasts.
Valeant also cut its forecast for first quarter revenues down to $2.3-2.4bn from $2.8-3.1bn.
The report is preliminary and there is a possibility that Valeant could be forced to default if it does not file the audited report by Tuesday.
In the event that Valeant misses the second deadline set for April 29 when it is required to present its financial statements to US regulators, there is a chance that its bank creditors could demand to be paid.
Struggling with debt
At the start of February, the pharmaceutical giant said it would submit its yearly financial report at a delayed date as the board investigated the company’s accounting practices. Valeant also said it would reissue its 2014 and 2015 financial statements.
The Canadian drug company was struggling with debt amounting to $30bn as of September last year. Most of the debt was acquired from acquisition of various drugs.
The company is also under investigation by the Securities and Exchange Commission for its links with the pharmacy Philidor. The US Congress is also investigating the company for its drug pricing.
Valeant has severed its links with Philidor, which it faces accusation of using to increase drug prices by faking sales.
In a statement, chief executive Michael Pearson said, “Our 2016 goal is to balance our priorities including patients, physicians, payers, debt holders, employees and shareholders.”
In an effort to resolve the issues facing the embattled company, three new directors have been appointed to the board including Pershing Square, one of the company’s largest shareholders.
In a letter, Bill Ackman, the chief executive at Pershing Square asserted that a default would be highly unlikely and that instead, there was a higher possibility that the banks would issue a waiver.