Valeant files overdue financials, averts debt default

Embattled Canadian drug maker Valeant Pharmaceuticals averted a debt default on Friday by finally filing overdue financial statements, while announcing sweeping changes to its board.

Its fiscal 2015 reporting had been delayed after an internal review uncovered an error that forced the drug maker to restate its earnings.

Amended filings to the Securities and Exchange Commission revealed mistakes going back three years.

The accounting errors included overstating revenues and earnings as shipments to mail-order pharmacy Philidor were wrongly recorded as sales before they had reached end customers.

In its original 2014 filings, for example, revenues were overstated by $58 million, while earnings in the first quarter of 2015 were underreported by $12 million.

Valeant also named three new board nominees for election at its annual general meeting on June 14, to join five current directors appointed in the last year, as well as new chair and chief executive Joseph Papa and two longtime members.

Papa was picked on Monday to replace outgoing CEO Michael Pearson who had steered the company into a heap of scrutiny and criticisms over its accounting and drug-pricing policies.

Valeant faces numerous government probes over accusations it gouged customers over the price of its prescription drugs.

Bondholders had also warned the company of a risk of default, and against further delays in the release of its financial results.