Laval pharmaceutical company Bausch Health was shaken on the markets on Wednesday by allusions to a possible judicial restructuring.
Bausch Health shares fell 23% on Wednesday to close at $8.02 on the Toronto Stock Exchange. The slide was as much as 50% at one point.
The authorities even temporarily stopped trading in the stock in the morning.
Early this afternoon, management at the company formerly known as Valeant said it had seen a report citing anonymous sources published Wednesday by Reorg, a New York-based provider of credit data, analytics and intelligence.
The article contains unsubstantiated rumors that Bausch Health is considering bankruptcy or insolvency proceedings without specifying the nature of the proceedings, which is not the case, Katie Savastano, Bausch Health’s communications manager, said in an email.
“Reorg subsequently issued an update to its original article to clarify that the company has not been involved in discussions with its creditors regarding bankruptcy proceedings,” it said.
Katie Savastano adds that the company’s policy is not to provide further comment on speculation.
This comes as the company announced last week the appointment of a new CFO, Jean-Jacques Charhon. Management specified that he was to officially begin his mandate on August 19 and that the current interim CFO, John Barresi, would then resume his duties as senior vice-president, corporate controller.
Shares of Bausch+Lomb, the eye care business that was spun off by Bausch Health as an independent company two years ago, were also buffeted by the markets Wednesday, with shares down nearly 20% at one point during the day. Bausch+Lomb shares ended the session down 5% in Toronto.
The spin-off of Bausch+Lomb was to allow Bausch Health to focus on its gastroenterology, aesthetics and dermatology, neurology and international businesses.
Bausch Health also attempted in recent years to conduct an initial public offering (IPO) for its medical aesthetics business, grouped under the Solta name. However, management changed its mind and suspended that plan.
At the time it was called Valeant, the company was once considered the largest in the country in terms of market capitalization. Bausch Health’s market value today stands at $3 billion.
The company is due to release its quarterly financial performance for April, May and June next week.