Valeant CEO to take medical leave after being hospitalized with pneumonia

A Valeant Pharmaceutical sign is pictured at its head office in Montreal on Monday, May 27, 2013. (Ryan Remiorz / THE CANADIAN PRESS)

LAVAL, Que. -- Embattled pharmaceutical firm Valeant International says its chief executive is taking a medical leave of absence.

The Quebec-based company previously revealed that Michael Pearson was hospitalized last week with what it described as a severe case of pneumonia.

Valeant (TSX:VRX) did not offer updates on Pearson's condition, but says his leave of absence takes effect immediately.

Valeant says Pearson's duties will be shared on an interim basis between General Council Robert Chai-Onn, Company Group Chairman Ari Kellen, and Chief Financial Officer Robert Rosiello.

Valeant has been facing a series of scandals that have slashed its stock price by more than half since record highs posted in August.

The company is facing a congressional investigation in the U.S. over its pricing practices and has been forced to revise its 2016 outlook after ending a drug distribution agreement with the controversial Philidor mail-order pharmacy.

Pearson himself had been facing criticism for Valeant's share price collapse and recently struck a defiant tone after calls for his dismissal surfaced.

"If the board wants to fire me they are welcome to fire me, but until they do we're going to get through this thing," Pearson told investors during a Dec. 16 webcast.

Valeant said the October split from specialty pharmaceutical partner Philidor Rx Services caused a big short-term disruption to its business that would reduce its expectations for the fourth quarter and 2015 as a whole.

But Pearson had also indicated that a new distribution agreement with major U.S. drug store chain Walgreens had set the company back on the road to recovery.

Pearson, 56, joined Valeant in 2008 after a 23-year career with the consulting firm McKinsey & Co., for which he served as head of its global pharmaceutical practice.

He used a string of acquisitions to turn a relatively small business that made generic drugs and chronic illness treatments into a major pharmaceutical company. Valeant, formerly based in California, combined with Wellbutrin XL maker Biovail in 2010 to form Laval, Quebec-based Valeant Pharmaceuticals International Inc. Its sales climbed from US$2.46 billion in 2011 to an expected US$10.4 billion to US$10.5 billion for this year.

Valeant shares closed at $157.68 on Thursday, the most recent day on which the Toronto Stock Exchange was open for trading.

That figure was well up from a 52-week low of $92.65 but well shy of a historic high of $347.84 in August.