The Globe and Mail reports in its Tuesday edition shares of Valeant Pharmaceuticals fell on Monday after U.S. legislators targeted the company's drug price increases. The Globe's Tim Suffelt writes congressional Democrats are pushing for subpoenas to force Valeant to turn over documents related to recent price increases. Valeant closed Monday at $221.81, down $43.20.
In the past week alone, $35-billion in Valeant market value has vanished. "The problem with momentum plays is once they lose momentum, they can fall to the Earth rather quickly," said David Baskin at Baskin Wealth Management.
"It's a roll-up story taking advantage of low interest rates. They buy tertiary companies and raise their drug prices," said Patrick Horan at Agilith Capital.
Valeant was the single largest stock on the S&P/TSX composite index in July, its market capitalization peaking soon after at almost $120-billion.
The stock's momentum almost single-handedly propped up the Canadian benchmark, driving two-thirds of the increase in value of the composite index over the two years up to mid-September. Democrats want Valeant to provide documents relating to price increases of 212 per cent and 525 per cent for two heart drugs.
© 2024 Canjex Publishing Ltd. All rights reserved.