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Why Valeant Pharmaceuticals Intl. Inc. Leaped the Wrong Direction

Having Pearson back in the CEO role is a good thing for Valeant; it removes a cloud of worry that the company could be led off track. However, the timing of his return -- right before the Q4 results were due to be released -- and the decision to postpone the earnings release and guidance didn't do much to calm skittish investors.

Now what:

The bigger issue is whether or not Valeant's drug pricing practices will get a clean bill of health from regulators. Congress has been closely examining Valeant's buy-and-hike strategy of purchasing specialty therapies and immediately increasing their price by large factors. There may be no immediate answer or solution to this question for Valeant or investors, but if you believe in Valeant's growth-by-acquisition model and the cash flow it's derived from it, then this recent hiccup, while unpleasant, may be nothing but a blip over the long run.

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The article Why Valeant Pharmaceuticals Intl. Inc. Leaped the Wrong Direction originally appeared on Fool.com.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool owns shares of and recommends Valeant Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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