Bausch Health Companies Inc. says it will pay more than $1 billion to settle a lawsuit over a stock plunge that hit investors about four years ago.
The settlement allows the Quebec-based firm, previously known as Valeant Pharmaceuticals, to further emerge from the tide of litigation that has seen more than 160 cases settled or resolved since 2017.
Bausch Health says the US$1.21-billion agreement will resolve all claims against it in the so-called Valeant stock drop case, its largest securities class action, which was filed in a U.S. district court in October 2015.
READ MORE: US lawmakers blast Canadian pharma company Valeant for price-gouging tactics
A Canadian class action, among other legal claims, is ongoing.
Valeant Pharmaceuticals fell into the crosshairs of Congress after an extended acquisition spree of other companies, followed by triple-digit price hikes on critical heart drugs and other medicines.
Its spate of acquisitions and soaring revenue propelled its stock through the roof, but it ran up a staggering US$30 billion in debt — roughly three times its annual revenue at the time.
Moody’s Investors Service says the settlement will amount to about one year of Bausch Health’s free cash flow and impede reduction of its US$23.84-billion debt. However, its credit rating remains unaffected and the company is maintaining its financial forecast for the year.
READ MORE: Valeant Pharmaceuticals CEO J. Michael Pearson to step down
Bausch Health says it admits no wrongdoing as part of the settlement, which it aims to pay off using cash, credit and possibly capital markets.
Company shares fell 78 cents or 1.9 per cent to $40.11 in midday trading on the Toronto Stock Exchange Monday.
— With files from The Associated Press
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