Valeant's web keeps getting wider

The relationship between Valeant Pharmaceuticals and a small pharmacy is again in focus.

Investigative journalism website ProPublica reported that specialty pharmacy Philidor Rx Services – which is owned by Valeant and is at the center of allegations of financial impropriety – was denied permission to operate in the state of California.

Months later, an employee of the specialty pharmacy purchased a stake in another California pharmacy, West Wilshire Pharmacy, amounting to about 10%, Charles Ornstein reports.

Investors are asking how Valeant is connected to a whole host of smaller companies right now.

Short selling firm Citron has alleged that Valeant improperly benefited from its relationship with Philidor. Philidor subsequently said it has the option to buy R&O Pharmacy.

In a release Wednesday, Valeant said that Philidor is a legitimate distribution network. Valeant announced today it would host a conference call Monday to address the allegations made by Citron.

BMO analysts asked in a note Wednesday: “We believe most VRX investors didn’t know about Philidor; what else is out there that we don’t know?”

Valeant’s stock fell around 7% to $US110 on Thursday. It opened the week on Monday at around $US170.

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