Valeant shares sink anew on report it may restate earnings

Shares of Valeant Pharmaceuticals plunged anew after hours on Monday after the Wall Street Journalreported that the drugmakermayrestate earnings after an internal review.

"Valeant... likely needs to restate some of its previous financial results based on the findings of an internal investigation into its business," the Journal said on its website.

In regular NYSEtrading on Monday, Valeantshares were down$9.07to $75.92US on heavy volume of 28.6million shares. They dropped another eightper cent after-hours on the WSJ report.

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It's been a terrible few days for Montreal-basedValeant. Its market value has fallenby more than $6 billion US since last Thursday.

On the TSX, shares ofValeantwere down $12.84, or 11per cent, to close at $104.16on Monday.The shares had lost another $11.39 on Friday.

The two-day plunge followed a report Friday morning from Wells Fargo analyst David Maris, who initiated coverage on the company with an "underperform" rating.

"We believe the Valeant board and management have made decisions that may have put Valeant at significantbusinessand reputational risk," Maris wrote.

His damning report outlineswhat he sees as a number of risks to Valeant's earnings. He also has questions about itsliquidity.

Other analysts aren't nearly as pessimistic about Valeant stock. The majority of analysts who cover the stock have a "buy" recommendation with target prices well above current levels.

But the Wells Fargo report was enough to send many investors fleeing.

Extreme volatility is nothing new to Valeantstockholders. On the TSX, Valeantshares havea 52-week high of over $347. That was reached lastAugust. In July, it becamethe most valuable company on the Toronto Stock Exchange, surpassing RBC.

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But it wasn't long before that shares started steadily plunging. They were worthless than $100 byNovember following a number of negative developments.

The launch of a new drug price probe by the U.S. Senate forced Valeant execs to defend large price hikes in some of its drugs.CEO Michael Pearson has promisedminimal price increases on its products in 2016.

The stock price was also hit by allegations from a short-seller thatthe company's accounting practices don't add up. Valeant launchedan internal review last fall to determine whether there was any wrongdoing in its relationship with U.S. mail order firmPhilidor. It has sincesevered ties with Philidor.

Valeant has until next Mondayto report fourth-quarter results or seek an extension.

Valeant, worth $116 billion last July, is now worth about $40 billion.