MONTREAL -- Valeant Pharmaceuticals tried to reassure investors Thursday after its former CEO sold nearly US$100 million of equity in the troubled drug company.
The Quebec-based drugmaker said Michael Pearson remains a large shareholder with 3.5 million shares after he dumped US$96.8 million worth of stock.
The company said Pearson exercised and sold options representing about 4.4 million shares and sold about 411,000 shares of common stock in June and July to satisfy tax obligations. Those obligations came after Goldman Sachs forced Pearson last year to sell 1.3 million shares he pledged to secure loans from the banking and investment management firm.
"Mike's personal stock transactions are not a reflection of the ongoing viability of Valeant," chairman and CEO Joseph Papa said in a news release Thursday.
In the same statement, Pearson said he continues to have faith in the company and its management team.
"While I trimmed my ownership position for personal reasons, I plan on holding my remaining shares until the company recovers and returns to being traded on fundamentals," he said.
He is required to hold one million shares for two years following his termination in May.
Pearson's stock sale comes after Sequoia Fund, Valeant's (TSX:VRX) second-largest shareholder, got rid of its stake in the company.
The U.S. investor said Tuesday it sold its entire position in Valeant by mid-June after an 80 per cent decline in Valeant's share price "badly penalized" its results.
Vicki Bryan, an analyst with corporate bond research company Gimme Credit, said the stock sales by Pearson and Sequoia signal "zero confidence" in Valeant's prospects.
Valeant's shares partially recovered Thursday from a more than seven per cent drop in its share price Wednesday. Its stock gained 5.6 per cent to close at $29.69 on the Toronto Stock Exchange.
