Ackman Regrets Being Unable to Buy More Shares in Valeant Pharmaceuticals Intl Inc (VRX)

Bill Ackman on Valeant

Bill Ackman once again defended his firm’s investment and expressed strong support for Valeant Pharmaceuticals (NYSE:VRX) (TSE:VRX) during conference call on Monday.

The activist investor and hedge fund manager of Pershing Square Capital Management said Valeant is “largely a victim of fear and panic.”  Ackman also expressed his regret for not being able to increase further Pershing’s stake in the Canadian pharmaceuticals company.

Ackman said, “The biggest regret I have with Valeant is that we’re not in a position to buy more.”

Last month, Ackman’s firm bought additional two million shares of Valeant after Citron Research accused the pharmaceutical company of accounting fraud. Pershing Square currently owns 21 million shares of Valeant.

Last week, Ackman sent a letter to Valeant CEO Michael Pearson expressing confidence on his leadership of the pharmaceutical company.  The activist investor wrote, “We share the board’s confidence in you and your leadership.”

Ackman believes in Valeant’s volatility is temporary

Ackman also emphasized that he believes in the business model of Valeant. According to him, the stock will be volatile but it will not be permanent.

“This business model is one we believe in. We don’t think of that as a permanent phenomenon, we see it as temporary,” said Ackman.

The stock price of Valeant closed $85.36 per share, up by 4.39% today. The company still lost more than 40% of stock value year-to-date. Valeant’s highest trading price was $263.81 per share over the past 52 weeks.

According to Ackman, he did not sell his stake in Valeant when it reached its highest level three months ago because the stock price only reflects the drugs currently owned by the company, and does not include its future acquisitions.

Valeant to hold conference call to provide business update

Today, Valeant scheduled a conference call with investors to provide a business update tomorrow, November 10.  The management of the company will discuss its current plans and priorities including its transition from Philidor.

Ackman said the Valeant’s decision to hold a conference call is “very positive.” He added, “We think they mismanaged, certainly, the communication” when the management just issued statements denying the allegations of Citron Research calling its “erroneous report.”