Ackman incurs more than $3-bn loss with Valeant Pharmaceuticals stake sale

Billionaire investor William Ackman yesterday sold his entire stake in struggling Canadian drug company Valeant Pharmaceuticals International Inc incurring a loss of more than $3 billion.

The sale sent Valeant shares falling by nearly 10 per cent in Yesterday's after-hours trading. The Ontario-based company has lost 95 per cent of its market cap since mid-2015.

"We elected to sell our investment and realize a large tax loss which will enable us to dedicate more time to our other portfolio companies and new investment opportunities," Ackman said in a statement.

Ackman's investment firm Pershing Square Capital Management was one of Valeant's biggest investors when it purchased shares worth $3.2 billion in 2015 and secured a board seat.

Pershing Square had acquired Valeant shares at an average of around $190 a share in the summer of 2015, but the stock, which traded as high as $260 a share in mid 2015, closed at $12.11 on the New York Stock Exchange on Monday, and fell to $10.93 in after-hours trading.

This mighty fall in stock price would be hard to digest for Ackman, who had one time predicted that Valeant would be the next Berkshire Hathaway and its shares would soon hit $306.

Valeant, one of the most aggressive acquirers in the global pharmaceuticals industry, came under investigation in late 2015 for arbitrarily increasing prices of drugs post acquisitions.

The troubled Canadian drugmaker came under investigations by six US government agencies over price hike, its accounting practice, and alleged milking the US Medicaid system.

The Canadian Revenue Agency also scrutinised the company's books, while investors in Canada and the US have sued the company for insider trading and misrepresentation.

Valeant, which has a product portfolio of about 490 products, has made over 80 acquisitions since 2008 and spent around $36 billion since 2010 on purchasing companies, most of them privately owned.