J. Michael Pearson is not your typical drug executive. The head of Valeant Pharmaceuticals built his company into a moneymaking machine by acquiring other drug makers and products, not by investing in research and development. The approach contradicted longstanding industry doctrine, but it won high praise from investors. For years, the Canadian drug company’s stock went nowhere but up.
Not anymore. A slew of questions about its business practices has turned Valeant from a Wall Street darling into a Main Street poster child for questionable behavior. Federal prosecutors have issued subpoenas. Lawmakers are conducting investigations. Pharmacy benefit managers stopped doing business with a company that was important to Valeant’s operations. And now, many investors are bailing. The drug maker’s stock has lost more than 60 percent of its value since the beginning of August.