Shares in Valeant Pharmaceuticals International Inc (NYSE:VRX) edged higher on Monday after the troubled drug maker added hedge fund billionaire John Paulson to its board.
Valeant said Paulson – whose New York-based investment firm Paulson & Co is the firm’s largest shareholder – became a director of the board last Wednesday.
The prominent investor, made famous by his US$4bn bet on the collapse of the US housing market in 2007, has been invested in Valeant for a little while but has so far booked a US$2bn loss on the trade.
With Paulson now taking a seat at the table, it could act as a comfort for investors who saw long time backer Bill Ackman bail out in March.
“With his significant business and financial expertise, John will be a strong addition to the board,” said Valeant chief executive Joseph Papa.
“His experience will be especially valuable as we continue to execute on our transformational strategy to turn around Valeant.”
Strategy of sales
The strategy Papa refers to is offloading non-core assets to try and drum up some cash which Valeant needs to do in order to pay off its crippling debts.
The firm recently sold off its iNova business for US$930mln in order to pay down some of that debt, which is estimated to stand at US$28.5bn.
The share price, which is down more than 80% since it 2015 peaks, hasn’t been helped by various accounting and drug pricing scandals.
Shares edged almost 5% higher this morning though to US$13.30.