Valeant asks CEO Michael Pearson to co-operate with U.S. Senate

Valeant Pharmaceuticals International Inc. said Monday it has asked outgoing chief executive officer Michael Pearson to co-operate with U.S. lawmakers seeking to depose him.

The move came after Pearson failed to show up to give testimony on Friday.

U.S. senators are conducting hearings into big hikes in some drug prices.

"The board has requested Mr. Pearson's cooperation in connection with a subpoena for deposition from the Senate committee on aging prior to the committee's scheduled April 27 hearing," Valeant said in a statement.

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"The board understands that Mr. Pearson is in dialogue with the Senate committee on aging regarding his deposition and that those discussions are ongoing," the company said.

Two members of the Senate committee said Friday they may take legal action against Pearson.

"It is our intent to initiate contempt proceedings against Mr. Pearson," senators Susan Collins and Claire McCaskill said in a statement.

A lawyer for Pearson said in a letter dated April 7 to Collins and McCaskill that Pearson shouldn't be expected to testify without knowing what topics and documents will be the focus of the committee's questions.

Laval, Quebec-based Valeant, which expanded quickly through acquisitions, has been under scrutiny lately. It currently faces three probes into its accounting and business practices.

Bill Ackman of Pershing Square Capital Management, a major Valeant shareholder, said last week that a replacement for Pearson, who has been CEO since September 2010, is weeks away from being hired.

Shares of Valeant were down more than three per cent at $42.30 in late morning trading on the TSX. The stock price has tumbled from its 52-week high above $346 that it hit in early August, right before Valeant's practice of buying rights to old drugs and jacking up the prices came under U.S. congressional scrutiny.