The Pharmaceutical Market Took a Large Hit After Valeant Shares Fell

On Tuesday, shares for Valeant Pharmaceuticals International Inc. fell about 50% after the 2016 forecast was cut. Valeant experienced an unsuccessful fourth quarter, and shareholders worry they will not reach some of their debt agreements in time.

According to the Financial Post, since Valeant’s market peak in August 2015, the company’s shares have lost more than 85% of their value.

Although pharmaceutical sales are expected to reach $30 billion over the next two years, this will likely have an impact. Of the total revenue in the U.S. Pharmaceutical industry, just under 18% was spent on research and development.

Some companies are still doing their part to improve the market. Also on Tuesday, Amphastar Pharmaceuticals Inc, a company that focuses on developing, manufacturing, and selling injectable and inhalation products, increased their shares.

After the company announced they exceeded their quarterly earnings, according to The Vista Voice, Amphastar’s share price shot up 7.7%.

As a result, many research firms improved Amphastar’s rating and encouraged investors to remove their “hold” rating previously held by Amphastar to a “strong-buy” rating.

Even with a rising Amphastar, many are still taking steps to try and improve Valeant’s situation.

Bill Ackman, a billionaire investor and owner of Pershing Square Capital Management LP, said they will take on a much larger role at Valeant.

Pershing Square, based in New York, owns 9% of Valeant, according to a regulatory filing early this month.

Regarding Valeant, Ackman stated that investors have “lost total confidence in the company.”

Ackman added in a letter, “We are going to take a much more proactive role at the company to protect and maximize the value of our investment.”

All this comes after Valeant’s stock drop this week, where the company lost about $1 billion in a single day.

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