The board of Laval, Quebec, Canada-based Valeant Pharmaceuticals has launched a search for a new CEO to replace J. Michael Pearson, who has served as CEO since 2008.
Here are seven things to know about the situation.
1. Mr. Pearson will not step down immediately. Mr. Pearson, who, according to The Wall Street Journal, was recently on medical leave for two months, will continue serving as CEO until a replacement is found.
"It's been a privilege to lead Valeant for the past eight years," Mr. Pearson said in a statement. "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."
2. Valeant is also experiencing changes to its board of directors. William Ackman, CEO of New York City-based Pershing Square Capital Management, has joined the board. To make room for Mr. Ackman on the 14-person board, Katharine Stevenson has voluntarily resigned.
3. Former CFO Howard Schiller remains on the board of directors after members asked him to resign. Although the board requested former CFO Howard Schiller resign his position on the board of directors, he "has not done so," according to a Valeant press release.
5. Valeant has been in hot water since last year. In late October 2015, Los Angeles-based Citron research published a report calling Valeant the Enron of healthcare and accusing it of documenting false revenue. The New York Times also published an article detailing Valeant's fall in stock shares. Of Citron's report, the Times said "Valeant appeared to be creating fake revenue through 'phantom sales' to affiliated entities." These claims led to numerous investigations into Valeant's finances, including one by the board of directors' ad hoc committee.
4. Mr. Schiller served as interim CEO while Mr. Pearson was on medical leave. In late December, Mr. Pearson was hospitalized due to severe pneumonia, according to The New York Times. While he was gone, Mr. Schiller filled the role of interim CEO. Mr. Pearson returned to his post Feb. 28.
6. Valeant has accused Mr. Schiller of assisting in the false revenue documentation. "The improper conduct of the company's former chief financial officer and former corporate controller, which resulted in the provision of incorrect information to the committee and the company's auditors, contributed to the misstatement of results," Valeant said in a press release.
7. Mr. Schiller denied such claims. "At no time did I engage in any improper conduct that relates to any restatement of revenue the company is considering," Mr. Schiller said in a statement, according to Bloomberg. "In addition, at no time did I ever provide any incorrect information to the audit and risk committee or the company's outsider auditors regarding this accounting issue."