Hedge-fund billionaire John Paulson has joined the board of Valeant Pharmaceuticals International Inc., a sign that the investor remains bullish on the drugmaker's prospects despite accruing steep losses on investments in the firm.
Mr. Paulson has been one of the largest shareholders in the company for several years, betting early that consolidation in the pharmaceutical industry would accelerate. But a series of scandals at Valeant over its accounting practices and drug pricing have battered the company's stock, causing the value of Mr. Paulson's stake to plunge 81% to $245 million at the end of last year from $1.3 billion in 2015.
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Mr. Paulson's hedge fund, Paulson & Co., had a 5.6% stake in Valeant as of Dec. 31. His addition leaves the board with 11 members.
Mr. Paulson has doubled down on his investment even as other large shareholders have bailed out. William Ackman's Pershing Square Capital Management LP sold its 8% stake in Valeant at a roughly $4 billion loss after Mr. Ackman determined the investment required too many resources for too little return.
Valeant, once a darling of Wall Street trading as high as $262 a share, is looking to bounce back from its crises. The company has been shedding assets to shore up its balance sheet and refocus on its core treatment areas and geographies. The shares rose 81 cents, or 6.4%, to $13.47 in New York on Monday, leaving it down 7.2% so far this year.
Filings show Valeant had $28.2 billion in long-term debt as of Dec. 31.
Mr. Paulson on Monday expressed support for Valeant's current leadership and turnaround plan.
The billionaire is widely known for his bearish bets against housing ahead of the financial crisis, but he has struggled in recent years with client defections and poor performance.
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(END) Dow Jones Newswires
June 20, 2017 02:47 ET (06:47 GMT)