April 11, 2016 / 1:06 PM / 3 years ago

Valeant asks CEO Pearson to cooperate with U.S. Senate committee

(Reuters) - Valeant Pharmaceuticals International Inc said on Monday it had asked outgoing Chief Executive Michael Pearson to cooperate with the U.S. Senate Committee on Aging after he failed to show up at a hearing on Friday.

Michael Pearson in Laval, Quebec May 19, 2015. REUTERS/Christinne Muschi

The committee has said it may start contempt proceedings against Pearson after he didn’t respond to a subpoena to appear for a deposition related to an investigation into drug pricing.

The committee hearing, scheduled for April 27, comes as the Canadian drugmaker faces a number of U.S. investigations into its aggressive pricing strategy as well as its accounting practices.

Valeant grew quickly under Pearson as it went on an acquisition spree, buying up other drugmakers and - in many cases - sharply hiking prices of their drugs.

But the company has lost favor with investors since late last year as its strategy came under scrutiny from regulators, the public and politicians.

“The board understands that Mr. Pearson is in dialogue with the Senate Committee on Aging regarding his deposition and that those discussions are ongoing,” Valeant said.

Pearson is due to step down as Valeant’s CEO as soon as a replacement is found - possibly in the next few weeks. Pearson returned to Valeant at the end of February after two months of medical leave while he was being treated for pneumonia.

The Senate committee is one of two congressional bodies looking into aggressive prescription drug pricing.

U.S. prosecutors in Massachusetts and Manhattan are probing Valeant’s pricing and distribution channels, while the Securities and Exchange Commission is investigating its accounting and disclosure issues.

The U.S. House Committee on Oversight and Government Reform held a long and contentious hearing on drug pricing in February.

Pearson did not testify because he was on medical leave. Valeant was represented by interim CEO Howard Schiller, whom the company has since accused of “improper conduct” that contributed to a misstatement of the company’s financial statements.

Schiller denies that he did anything wrong.

Valeant’s U.S. shares were up 2.3 percent at $34.36 in early trading. Up to Friday, the shares had fallen nearly 90 percent since hitting a record high of $263.81 in August.

Reporting by Ankur Banerjee in Bengaluru; Editing by Ted Kerr

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