(Editor’s Note: This story has been edited to reflect price changes in VRX stock.)
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) began Wednesday with a move of 4%-plus, just as a large holder exited its entire position, but it’s since made a 180-degree turn.
Last night, the Wall Street Journal reported that Sequoia Fund had quietly sold off all of its VRX stock.
And it’s not like the mutual fund just relegated a small corner of its weighting to Valeant either … the group previously granted as much as 30% weighting to VRX. That overweighting led to losses of $1 billion-plus for the fund as VRX shed nearly 80% this year alone.
While Sequoia bought into a few new stocks — including Chipotle Mexican Grill, Inc. (NYSE:CMG), Wells Fargo & Co (NYSE:WFC) and CarMax, Inc (NYSE:KMX) — VRX stock investors bought into the discounted Valeant shares ahead of what could be a big next week … and then the sellers descended, dragging VRX stock in the red by 4%
Where’s Valeant Going?
Valeant has two drugs up for Food and Drug Administration review next week — Oral Relistor and Vesneo. The former drug is a treatment for opioid-induced constipation, while the latter is an eyedrop for patients with glaucoma or ocular hypertension.
It’s likely that Valeant will see both approved on (or sometime near) their PDUFA dates.
Further out, there’s Valeant’s FDA review of its brodalumab injection for treating moderate-to-severe plaque psoriasis, the global market for which has been steadily increasing.
But really, Valeant isn’t the same company it was when Sequoia devoted 30% of its weighting to VRX stock. It has since changed its management (bringing in activist investor Bill Ackman and replacing its CEO with Joseph Papa), terminated its agreement with Philidor and begun a relationship with Walgreens Boots Alliance Inc (NASDAQ:WBA), whose co-COO Alex Gourlay recently said it is “satisfied” with the agreement.
While the future looks interesting for Valeant, Sequoia made it more than clear it would rather send the most interesting stocks in the world in a rocket to Mars:
“You may be familiar with the apocryphal Chinese curse, ‘May you live in interesting times,’” said Sequoia. “Sequoia shareholders have lived through interesting times during the past year. We can assure you that our goal is to be much less interesting in the months and years ahead.”
And with Valeant shares up for the first half and then down for the second half, Valeant is certainly living up to its “interesting” designation.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
