Valeant Pharmaceuticals International Inc. said Monday it will replace J. Michael Pearson as chief executive officer and add activist investor Bill Ackman to its board of directors. Valeant's board also asked former chief financial officer Howard Schiller to resign from his director position, but Schiller declined to do so. Valeant said that $58 million in net revenue from sales to mail-order pharmacy Philidor in the second part of 2014 "should not have been recognized upon delivery of product to Philidor," the company said, meaning the company put out multiple incorrect financial statements overstating 2014 revenue by that amount, which also caused overstatement of early 2015 revenue by about $21 million. Valeant will put out new financial statements on or before April 29. Ackman will start the position immediately, while the pharmaceutical company began its search for a new CEO Monday, the company said. "It's been a privilege to lead Valeant for the past eight years," said J. Michael Pearson, chief executive officer. "While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership," Pearson said. Ackman's firm, Pershing Square Holdings Ltd., owns a 9% stake in the company. Trading of Valeant stock was halted at 8:15 a.m. for the news, with no scheduled resumption time listed.
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