Discovery Letter To Andy Davenport

Case 3:15-cv-07658-MAS-LHG Document 9-16 Filed 11/20/15 Page 1 of 65 PageID: 210
EXHIBIT N
Robbins Geller
Rudman & Dovud ~ ~~
Atlanta
Boca Raton
Chicago
Manhattan
Melville
Nashville
Philadelphia
San Diego
San Francisco
Washington, DC
Jack Reise
jreise@rgrdlaw.com
November 13, 2015

VIA OVERNIGHT DELIVERY
Andrew Davenport
Philidor I~ Services LLC
330 S. Warminster Rd #350
Hatboro,PA 19040
Re:
Potter v. Valeant Pharmaceuticals International,Inc.

No.3:15-cv-07658(D.N.J.)
Dear Mr. Davenport:

We represent Plaintiff Laura Potter in the above-referenced securities fraud action against
Valeant Pharmaceuticals International, Inc. ("Valeant"), J. Michael Pearson, Howard B. Schiller,
and Robert L. Rosiello (collectively, "Defendants"). A copy of the complaint in our action is
attached hereto.
Based on our investigation to date, as well as public comments made by Valeant and its
executives, we understand that Philidor Rx Services LLC ("Philidor") and its officers, directors,
owners, employees, and agents are in possession of numerous documents relevant to our claims
against Defendants. In light of the fact that Philidor is going out of business as soon as possible, but
no later than January 30, 2016 (as stated by Valeant CEO J. Michael Pearson on November 10,
2015), you are hereby notified that we intend to subpoena Philidor, and that Philidor, its officers,
directors, owners, employees, and agents must take all appropriate steps to preserve all potentially
relevant documents and information, including electronically stored information, in their possession
or control. Enclosed is a draft Schedule A identifying the documents and topics of information that
we will seek.
Should you have any questions, please do not hesitate to contact me.
Sincerely,: ~
:. '
y.
-~
...
~,.~~'~~JACK REISE
JR:ct
Enclosures
120 East Palmetto Park Road
Suite 500
Boca Raton, FL 33432
Tel 561 750 3000
Fax 561 750 3364
www.rgrdlaw.com
Q202 ~~115
Case 3:15-cv-07658-MAS-LHG
Case 3:15-cv-07658 Document
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COHN LIFLAND PEARLMAN

HERRMANN & KNOPF LLP
PETER S. PEARLMAN
Park 80 West-Plaza One
250 Pehle Avenue, Suite 401
Saddle Brook, NJ 07663
Telephone: 201/845-9600
201/845-9423 (fax)
psp@njlawfirm.com
ROBBINS GELLER RUDMAN &
DOWD LLP
ROBERT J. ROBBINS
120 East Palmetto Park Road
Suite 500
Telephone: 561/750-3000
561/750-3364 (fax)
rrobbins@rgrdlaw.com
Attorneys for Plaintiff
[Additional counsel appear on signature page.]
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
LAURA POTTER, Individually and on )
Behalf of All Others Similarly Situated, )
)
Plaintiff,
)
)
vs.
)
)
VALEANT PHARMACEUTICALS
INTERNATIONAL, INC., J. MICHAEL )
PEARSON, HOWARD B. SCHILLER, )
)
and ROBERT L. ROSIELLO,
)
Defendants.
)
)
No.
COMPLAINT FOR VIOLATIONS OF
FEDERAL SECURITIES LAWS
CLASS ACTION
DEMAND FOR JURY TRIAL
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Plaintiff Laura Potter (Plaintiff), who resides at 1112 West Avenue,

Richmond, Virginia 23220, by her undersigned attorneys, individually and on behalf
of all other persons similarly situated, alleges the following based upon personal
knowledge as to Plaintiff and Plaintiffs own acts, and information and belief as to all
other matters, based upon, inter alia, the investigation conducted by and through
Plaintiffs attorneys, which included, among other things, a review of Defendants
public documents, conference calls, announcements, and United States Securities and
Exchange Commission (SEC) filings; wire and press releases published by and
regarding Valeant Pharmaceuticals International, Inc. (Valeant or the Company);
analysts reports and advisories about the Company; and information readily
obtainable on the Internet. Plaintiff believes that substantial evidentiary support will
exist for the allegations set forth herein after a reasonable opportunity for discovery.
NATURE OF THE ACTION
1.
This is a federal securities class action on behalf of all persons who
purchased or otherwise acquired Valeant stock between February 23, 2015 and
October 20, 2015, inclusive (the Class Period), against Valeant and certain of its
officers and/or directors for violations of the Securities Exchange Act of 1934 (1934
Act). These claims are asserted against Valeant and certain of its officers and/or
directors who made materially false and misleading statements during the Class
Period in press releases, analyst conference calls, and SEC filings.
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2.
Valeant is a specialty pharmaceutical and medical device company that
develops, manufactures, and markets a range of branded, generic, and branded

generic pharmaceuticals, over-the-counter products, and medical devices, such as
contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics
devices. Valeant utilizes two operating and reportable segments: (a) Developed
Markets; and (b) Emerging Markets.
3.
The Company states that its strategy is to focus on core geographies
and therapeutic classes that offer attractive growth opportunities while maintaining
our lower selling, general and administrative cost model and decentralized operating
structure. It also states that a critical element of its strategy is business
development through acquisitions.
4.
In that regard, Valeant is a serial acquirer, using an advantageous tax
structure to make purchases and then slashing research and development costs to
boost profits. Within the past five years, Valeant completed more than $30 billon in
deals, including the purchase of Bausch & Lomb Inc. in 2013 and the purchase of
Salix Pharmaceuticals, Ltd. (Salix) in 2015.
5.
In large measure, the Companys tactics worked. Revenues skyrocketed
along with the Companys stock price, which climbed from $173.26 on February 20,
2015 just before the start of the Class Period to $262.52 on August 5, 2015, an
increase of more than 50%.
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6.
But questions surrounding the Companys business practices began
flooding the market in late September 2015. For example, on September 28, 2015,
the Company issued a press release announcing that it had distributed a letter to its
employees relating to recent changes in the price of Valeant stock to address concern
that Valeants business model and strategy is dependent upon large price increases
in our U.S. pharmaceutical business and [c]oncern around our exposure to U.S.
government drug price reimbursement.
That same day, it was reported by
Bloomberg that [a]ll Democratic members of House Oversight and Government

Reform [Committee] sent a letter to Chairman Jason Chaffetz urging him to subpoena
Valeant Pharmaceuticals documents related to massive price increases for two
drugs used to treat heart conditions, according to an e-mailed statement.
7.
In the September 28, 2015 Congressional Committee letter, U.S.
Representatives wrote, in part:

[I]n February, Valeant purchased the rights to sell Nitropress, which is
used to treat congestive heart failure and hypertensive episodes, and
Isuprel, which is used to treat heart block and abnormal heart rhythm.
The same day, Valeant increased the prices of these drugs to $805.61 and
$1,346.62, respectively (increases of 212% and 525%). When asked
about its price increases, a Valeant spokeswoman responded: Our duty
is to our shareholders and to maximize the value of the drugs.
8.
The letter also revealed that on July 31, 2015, staff members from the
House Oversight Committee had a joint call with representatives from Valeant, but
that they failed to adequately answer our questions about the basis for their
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skyrocketing prices. It also stated that on August 12, 2015, Ranking Member
Cummings sent the document request to Valeant and that on September 3, 2015,
Valeant rejected Ranking Member Cummings request in a dismissive two-page
letter that refused to provide any of the requested documents.
9.
After closing at $199.47 on September 25, 2015, the price of Valeant
stock dropped $32.97 per share, or more than 16%, to close at $166.50 per share on
September 28, 2015. The stock continued its decline on September 29, 2015, falling
an additional $8.42, or 5%, to close at $158.08 as media outlets reported that Valeant
was in [the] crosshairs of U.S. Congress for its practice of engaging in a business
strategy of buying old neglected drugs and turning them into high-price specialty
drugs.
10.
On October 5, 2015, as U.S. stocks saw broad increases, shares of
Valeant dropped again, falling by $18.86, or more than 10%, to close at $163.46 as a
result of, as Jim Cramer stated on CNBCs Mad Dash segment, a continued
overhang thanks to the U.S. Congress and its investigation into rising drug prices,
specifically Valeants drugs. On that day, The New York Times, in an article titled
A Drug Companys Price Tactics Pinch Insurers and Consumers, reported in depth
on Valeant, further detailing the skyrocketing costs of the Companys drugs,
including their impact on Medicare and patients. Among other things, the article
described how in 2015 alone, Valeant raised prices on its brand-name drugs an
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average of 66 percent. . . about five times as much as its closest industry peers. The
article stated that Valeant is known for buying companies and laying off their
employees to achieve savings and that it spends an amount equivalent to only 3
percent of its sales on research and development compared to [t]raditional big drug
companies [that] spend 15 to 20 percent of sales on research and development. The
article shed specific light on how Valeants egregious drug price increases were
negatively impacting hospitals:
Jeffrey M. Rosner, the senior director for pharmacy sourcing and
purchasing at the Cleveland Clinic, said that nine drugs with particularly
egregious price increases had cost the hospital an additional $11.2
million annually, an increase of about 10 percent in drug costs for
hospitalized patients. And Valeants products represented 80 percent of
that additional cost, he said.
The price of one Valeant drug, Mephyton, which helps blood clot better,
has been increased eight times since July 2014, he said, and now costs
about $58.76 a tablet, up from $9.37. The price of another, Edecrin, a
diuretic, has gone up nine times since May 2014 and is now at $4,600 a
vial, up from about $470. When his staff called to inquire, Valeant
refused to discuss pricing over the phone, Mr. Rosner said.
11.
The October 5, 2015 New York Times article also called into question
Valeants Chief Executive Officer (CEO) J. Michael Pearsons (Pearson)

September 28, 2015 letter to Company employees, which argued that increased prices
accounted for only a small and declining part of the Companys business, stating,
Valeant is well positioned for strong organic growth, even assuming little to no price
increases. But, as the October 5, 2015 article pointed out, the Companys second
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quarter 2015 financial results filed on Form 10-Q with the SEC stated that Valeants
growth in the United States and other developed markets was driven primarily by
price, not by increased volume.
12.
Then, after the market closed on October 14, 2015, Valeant issued a
press release revealing that it recently received subpoenas from both the U.S.
Attorneys Office for the District of Massachusetts and the U.S. Attorneys Office for
the Southern District of New York. The Company stated that most of the materials
requested by the subpoenas relate to documents with respect to our patient assistance
programs, and also include requests relating to financial support provided by the
company for patients, distribution of the companys products, information provided
to the Centers for Medicare and Medicaid Services, and pricing decisions.
13.
On October 15, 2015, the price of Valeant stock dropped by $8.42 per
share, or 4.75%, to close at $168.87 on unusually high trading volume of more than
10 million shares. That day, Bloomberg reported that U.S. Senator Claire McCaskill
wrote in an emailed statement that [i]t appears obvious to me that Valeant has been
anything but responsive or transparent it refused to take any action until served with
federal subpoenas, and is still refusing to provide answers to many of the questions
Ive asked.
14.
On October 19, 2015, the Company reported its third quarter 2015
financial results and hosted an earnings conference call. Although the Company
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raised its fourth quarter and full year 2015 revenue and earnings per share (EPS)
guidance, the price of Valeant stock crumbled an additional 7.7% that day as the
Company announced a shift to its business model and questions swirled regarding a
previously unknown connection between the Company and a specialty pharmacy
called Philidor Rx Services, LLC (Philidor).
15.
Specifically, the Company stated that it may spin-off its line of drugs for
which it had pushed through significant price increases that had drawn regulatory
scrutiny, and that the Company would focus less on acquisitions that depend on
buying old treatments and raising their prices. To that end, Pearson discussed
seriously considering spinning off or selling the Neuro and Other portfolio, which
is dependent on price and that internal R&D will become more of a focus.
16.
In a slide deck accompanying the earnings conference call, Valeant
included a list of anticipated Questions from Investors. One of the anticipated

questions despite the fact that Valeant had not previously discussed Philidor in its
SEC filings was How does Valeant work with specialty pharmacies and what is
Valeants relationship with Philidor. In the presentation, Valeant stated, in part:
We have viewed our relationship with Philidor and our other

specialty pharmacies as proprietary and as one of our competitive
advantages
Similar to many pharmaceutical companies in the U.S., an

increasing percentage of our revenue is coming from products
dispensed through multiple specialty pharmacies
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We find specialty pharmacies improve patients access to

medicines at an affordable price and help ensure physicians are
able to prescribe the medications they believe most appropriate for
their patients
In almost all cases, our inventory with specialty pharmacies and

the title for our medicines only transfer to the pharmacy when the
actual prescription is filled this significantly reduces our
distribution fees and product returns. Less than
5% of our U.S. channel inventory sits in the specialty pharmacy

channel
Philidor, one of our specialty pharmacy partners, provides

prescription services to patients across the country, and provides
administrative services for our copay cards and is a dispensary
that fills prescriptions. We have a contractual relationship with
Philidor and late last year we purchased an option to acquire
Philidor
Based on a VIE (variable interest entity) assessment in accordance

with ASC 810, we consolidate the financials of Philidor.
Inventory held at Philidor remains on Valeants books and is not
included in the specialty pharmacy channel inventory
For many of our dermatology products, many of our specialty

pharmacies, including Philidor, dispense Valeant medications
before adjudication of the reimbursement may be finalized.
Patients get their medicines more quickly and Valeant takes the
risk for non-reimbursement
We understand that Philidor:
Provides services under our programs for commercially

insured and cashpaying claims only. Any claim that would
be reimbursed in whole or in part by government insurance
is not eligible for our co-pay subsidy programs
Does not restrict prescriptions it fills to any particular

manufacturers (including Valeant)
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17.
Dispenses generic products as specified in patients

prescription or as requested by patient
During the October 19, 2015 call, Pearson admitted that the Company
had previously omitted disclosure of the nature of its relationship with specialty
pharmacies, stating:
The topic of specialty pharmacies has not been a focus of ours on past
calls because we believe this was a competitive advantage that we did
not want to disclose to our competitors.
18.
Pearson also stated that an increasing percentage of our revenue is
coming from products dispensed through multiple specialty pharmacies.

19.
The next question addressed on the slide deck involved R&O Pharmacy,
LLC (R&O) and was titled, Why did Valeants General Counsel send a letter
inquiring about the $69M owed to Valeant by R&O pharmacy? The Companys
slide deck stated that R&O is one of the specialty pharmacies in our network and
that Valeant shipped approximately $69 million at WAC to R&O, representing
approximately $25 million in net revenue to Valeant, and that R&O sold a
substantial amount of Valeant product but was improperly holding significant
amounts it received from payers. Pearson also said that inventory held by R&O
remains on Valeants financial statements.
20.
As the call continued, Pearson declined to discuss the subpoenas from
federal prosecutors, stating, [w]e will not be answering questions and providing
more information that was already covered in the press release on these matters.
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21.
Reporting on the newly disclosed relationship between Valeant and
certain specialty pharmacies, on October 19, 2015, The New York Times published an
article entitled, Drug Makers Sidestep Barriers on Pricing. The article discussed
how Valeant uses Philidor to keep the health system paying for high-priced drugs
and that Valeant uses Philidor to keep prices high for its dermatology products,
quoting a Florida dermatologist as stating that Valeants program is designed to
buffer physicians from insurers and complaints from their patients about high prices.
Discussing Philidor, the article stated, in part:
Philidor, based in Hatboro, Pa., reveals little about itself of its website. It
was denied a license in California in 2004 because, the state said, its
application had not truthfully identified its owners and financial officers.
Calls on Monday asking to speak to Philidor executives were not
returned.
Valeant had said little about Philidor until Monday, when J. Michael
Pearson, Valeants chief executive, revealed on his companys quarterly
earnings call that Valeant had purchased an option to acquire Philidor
late last year. He said that Valeant consolidated Philidors results in its
own financial reports.
*
Specialty pharmacies are most known for providing patients with

assistance with complex drugs, many of them requiring refrigeration and
injections, for diseases like cancer, multiple sclerosis and rare genetic
disorders. But the drugs dispensed through the specialty pharmacies
used by. . . Valeant are for common ailments like arthritis pain, acne, and
toenail fungus.
22.
Then, on October 21, 2015, Citron Research published a report entitled,
Valeant: Could this be the Pharmaceutical Enron? Among other things, the report
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questioned why Valeant a major big cap pharma, a darling of the hedge fund crowd,
a suitor of Allergan and an aggressive acquirer of pharmas like Salix, Bausch &
Lomb, etc., etc., would be secretly maneuvering to buy a little known pharmacy
with a dubious ownership structure and questioned [w]hy was this entity NEVER
disclosed in any prior company disclosure?
23.
Continuing, the Citron report charged that Valeant is using a network of
specialty mail-order pharmacies that Valeant actually controls to prop up sales of its
high-priced drugs and to keep patients and their insurance companies from switching
to less costly generics. In addition, the Citron report brought to light a recently
issued investigative report from Southern Investigative Reporting Foundation that
questioned the nature of Valeants relationship with specialty pharmacies. Citrons
report asserts that Philidor and another specialty pharmacy tied to Valeant, R&O, are
actually the same company with the same management. The Citron report included
images of documents from both the R&O and Philidor websites indicating that the
two companies were interrelated, including overlapping privacy notices, identical
toll-free numbers to reach their privacy officer, and a facsimile number from the
R&O website that linked to Philidor. The report continued:
And as if this isnt enough, it appears to Citron that Valeant/Philidor
have created an entire network of phantom captive pharmacies. . . the
same privacy notice appears on several other ghost ship putative
pharmacy websites.
http://westwilshirepharma.com/downloads/ww_npp.pdf
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http://saferxpharma.com/downloads/saferx_npp.pdf
http://orbitpharmacy.com/downloads/orbit_npp.pdf
Oh, and as by mere coincidence, these all have the same Privacy Officer
contact phone number: (855) 815-7688. And these domains were all
registered on the same day!
24.
Ultimately, the Citron report posited that Valeant was using a secretive
relationship with Philidor to store inventory and record those transactions as sales,
and that the Company uses phantom accounts to fool auditors and investors.
Summarizing the Citron report, Bloomberg reported that Valeant shares took a
beating, falling by more than 30 percent [intra-day], after a stock-commentary site
run by a short seller accused the company of an Enron-like strategy of recording fake
sales by using phony customers.
25.
Among other things, the Citron report also shed additional light on
issues between R&O and Valeant. Expanding on the mention of R&O during the
Companys October 19, 2015 earnings call, the Citron report described a lawsuit filed
in the United States District Court for the Central District of California in which
R&O sued Valeant and alleged it had gotten a letter from Valeants general counsel
on September 4, 2015 indicating that R&O owed Valeant more than $69 million.
R&O, however, stated it never received a previous invoice from Valeant for any
amount and that either Valeant and R&O are victims of a massive fraud perpetuated
by third parties or that Valeant is conspiring with other persons or entities to
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perpetuate a massive fraud against R&O and others. Commenting on the lawsuit,
Citron stated it was evidence that Valeant is creating invoices to deceive the auditors
and book revenue and that Valeant/Philidor have created an entire network of
phantom captive pharmacies to create fake sales of drugs or to avoid scrutiny from
auditors.
26.
The market reacted swiftly to the disclosures in the Citron report. On
October 21, 2015, trading in Valeant shares was halted on a circuit breaker because
of the rapid price decline after Citron published its report on its website. When
trading resumed, Valeant shares fell nearly 40%, at which point trading was again
suspended. After swooning down nearly $60 a share in intra-day trading, Valeant
shares closed down approximately 19%, or $28.42 per share, on highly abnormal
trading volume of more than 88 million shares, paring losses as the Company issued
a denial of the charges in the Citron report.1
27.
The following day, the price of Valeant shares dropped again after an
analyst who had advised buying the stock for more than two years downgraded the
shares, citing questions about Valeants close ties to specialty pharmacies that
After the market closed on October 21, 2015, Philidor issued a press release
disclosing that it did indeed have a contractual relationship with affiliated
pharmacies, including R&O, and stating that Philidor does not currently have a
direct equity ownership in R&O Pharmacy or the affiliated pharmacies, but does have
a contractual right to acquire the pharmacies now or in the future subject to regulatory
approval.
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distribute its drugs. BMO Capital Markets (BMO) stated it cannot defend the
specialty structure and downgraded the shares to market perform. Continuing,
BMOs report stated, Weve been strong, vocal Valeant bulls but that we find
Valeants arrangements with specialty pharmacy Philidor as not just aggressive, but
questionable.
JURISDICTION AND VENUE
28.
Jurisdiction is conferred by Section 27 of the 1934 Act, 15 U.S.C. 78aa.
The claims asserted herein arise under Sections 10(b) and 20(a) of the 1934 Act, 15
U.S.C. 78j(b) and 78t(a), and SEC Rule 10b-5, 17 C.F.R. 240.10b-5.
29.
Venue is proper in this District pursuant to Section 27 of the 1934 Act.
The violations of law complained of herein occurred in part in this District, including
the dissemination of materially false and misleading statements complained of herein
into this District. Valeants United States headquarters are located in this District at
400 Somerset Corporate Boulevard, Bridgewater, New Jersey 08807.
30.
In connection with the acts alleged in this Complaint, Defendants,
directly or indirectly, used the means and instrumentalities of interstate commerce,

including, but not limited to, the mails, interstate telephone communications, and the
facilities of the national securities markets. Valeant trades in an efficient market on
the New York Stock Exchange (NYSE).
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PARTIES
31.
Plaintiff Laura Potter purchased Valeant stock as described in the
attached certification and suffered damages as a result of the securities fraud alleged
herein.
32.
Defendant Valeant Pharmaceuticals International, Inc. is incorporated in
British Columbia, Canada and has its United States headquarters in this District.
Shares of Valeant stock trade on the NYSE under the ticker symbol VRX.
33.
Defendant J. Michael Pearson is and at all relevant times was CEO and
Chairman of Valeants board of directors.

34.
Defendant Howard B. Schiller (Schiller) was an Executive Vice
President and the Chief Financial Officer (CFO) of the Company until June 30,
2015, when he resigned those positions. Schiller is a member of the Companys
board of directors and a consultant to the Company.
35.
Defendant Robert L. Rosiello (Rosiello) has been the Companys CFO
since July 2015 and is also an Executive Vice President of the Company.
36.
Defendants Pearson, Schiller, and Rosiello (collectively, the Individual
Defendants), because of their positions with the Company, possessed the power and
authority to control the contents of Valeants quarterly reports, press releases, and
presentations to securities analysts, money and portfolio managers, and institutional
investors, i.e., the market. They were provided with copies of the Companys reports
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and press releases alleged herein to be misleading prior to or shortly after their
issuance and had the ability and opportunity to prevent their issuance or cause them
to be corrected. Because of their positions with the Company and their access to
material information available to them but not to the public, the Individual
Defendants knew that the adverse facts specified herein had not been disclosed to and
were being concealed from the public and that the positive representations being
made were then materially false and misleading. The Individual Defendants are
liable for the false statements pleaded herein.
FRAUDULENT SCHEME AND COURSE OF BUSINESS
37.
Defendants are liable for: (a) making false statements; or (b) failing to
disclose adverse facts known to them about Valeant. Defendants fraudulent scheme
and course of business that operated as a fraud or deceit on purchasers of Valeant
stock was a success, as it: (a) deceived the investing public regarding Valeants
prospects and business; (b) artificially inflated the price of Valeant common stock;
and (c) caused Plaintiff and other members of the Class, as defined below, to
purchase Valeant stock at inflated prices and suffer economic loss when the
revelations set forth herein reached the market.
CLASS ACTION ALLEGATIONS
38.
Plaintiff brings this action as a class action pursuant to Rule 23 of the
Federal Rules of Civil Procedure on behalf of all persons who purchased or otherwise
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acquired Valeant stock during the Class Period (the Class). Excluded from the
Class are Defendants and their families; the officers and directors of the Company, at
all relevant times; members of their immediate families and their legal
representatives, heirs, successors, or assigns; and any entity in which Defendants
have or had a controlling interest.
39.
The members of the Class are so numerous that joinder of all members is
impracticable. The disposition of their claims in a class action will provide

substantial benefits to the parties and the Court. Valeant trades on the NYSE and has
more than 341 million shares outstanding, owned by hundreds, if not thousands, of
persons.
40.
There is a well-defined community of interest in the questions of law
and fact involved in this case. Questions of law and fact common to the members of
the Class which predominate over questions which may affect individual Class
members include:
(a)
whether Defendants violated the 1934 Act;
(b)
whether Defendants omitted and/or misrepresented material
(c)
whether Defendants statements omitted material facts necessary
facts;
to make the statements made, in light of the circumstances under which they were
made, not misleading;
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(d)
whether Defendants knew or recklessly disregarded that their
statements were false and misleading;

(e)
whether the price of Valeant stock was artificially inflated; and
(f)
the extent of damages sustained by Class members and the
appropriate measure of damages.

41.
Plaintiffs claims are typical of those of the Class because Plaintiff and
the Class sustained damages from Defendants wrongful conduct.

42.
Plaintiff will adequately protect the interests of the Class and has
retained counsel who are experienced in class action securities litigation. Plaintiff
has no interests which conflict with those of the Class.
43.
A class action is superior to other available methods for the fair and
efficient adjudication of this controversy.

DEFENDANTS FALSE AND MISLEADING STATEMENTS AND
OMISSIONS ISSUED DURING THE CLASS PERIOD
44.
On February 22, 2015, the Company issued a press release reporting its
fourth quarter and full year 2014 financial results, and stated that full year 2015
guidance reflecting recent acquisitions, as well as expected business
outperformance would be updated on first quarter 2015 earnings call. The press
release quoted Pearson as stating:
Valeants relentless focus on building diversified, durable businesses
with strong organic growth platforms, coupled with disciplined
business development, is paying off for all of our stakeholders.
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Outstanding growth in the U.S., most notably dermatology, offset the

negative impact from foreign exchange. In addition, we continued to see
strong organic growth in several emerging markets such as China, the
Middle East and Russia. With our strong finish to the year, we are well
positioned for another year of outperformance in 2015.
45.
Also on February 22, 2015, the Company announced that it agreed to
buy Salix for $158 per share, or approximately $14.5 billion, to add gastrointestinal
drugs to Valeants line of products.
46.
On February 25, 2015, the Company filed with the SEC its annual report
on Form 10-K for the year ended December 31, 2014. The report was signed by
Pearson and Schiller, and contained Sarbanes-Oxley (SOX) certification signed by
each of them stating that the annual report did not contain any untrue statements or
omissions of material facts. The 2014 annual report repeated the financial results
found in the February 22, 2015 press release, and also stated, in part:
Our strategy is to focus our business on core geographies and
therapeutic classes that offer attractive growth opportunities while
maintaining our lower selling, general and administrative cost model
and decentralized operating structure. We have an established portfolio
of durable products with a focus in the eye health and dermatology
therapeutic areas. We believe these products have the potential for
strong operating margins and solid growth and are particularly attractive
for a number of reasons including:
They are largely cash pay, or are reimbursed through private

insurance, and, as a result, are less dependent on increasing government
reimbursement pressures than other products;
They tend to have established brand names and do not rely

primarily on patent or regulatory exclusivity;
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They tend to have the potential for line extensions and life-cycle
management programs; and
They tend to be smaller on an individual basis, and therefore

typically not the focus of larger pharmaceutical companies.
Another critical element of our strategy is business development. We
have completed numerous transactions over the past few years to expand
our portfolio offering and geographic footprint, including, among others,
the acquisitions of Bausch & Lomb Holdings Incorporated (B&L) and
Medicis Pharmaceutical Corporation (Medicis). We will continue to
pursue value-added business development opportunities as they arise.
The growth of our business is further augmented through our lower
risk, output-focused research and development model. This model
allows us to advance certain development programs to drive future
commercial growth, while minimizing our research and development
expense. This is achieved primarily by:
focusing on innovation through our internal research and

development, acquisitions, and in-licensing;
focusing on productivity through measures such as leveraging

industry overcapacity and outsourcing commodity services;
focusing on critical skills and capabilities needed to bring new

technologies to the market;
pursuing life-cycle management programs for currently marketed

products to increase such products value during their commercial lives;
and
acquiring dossiers and registrations for branded generic products,

which require limited manufacturing start-up and development activities.
47.
On March 16, 2015, the Company issued a press release announcing that
Valeant and Salix agreed on amended terms to the merger agreement, and that
Valeant increased the offer price to acquire all the outstanding common stock of
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Salix from $158.00 per share to $173.00 per share in cash, for a total value of
approximately $15.8 billion.
48.
On March 17, 2015, the Company issued a press release announcing that
it would issue 7,286,432 shares at a price of $199.00 per share in its $1.45 billion
offering of common shares in connection with the Salix acquisition.
49.
On March 18, 2015, the Company filed its Prospectus Supplement and
Registration Statement for its offering of $1.45 billion of common shares of Valeant
in connection with the tender offer for Salix in connection with the merger. The
Prospectus stated that shares would be offered at $199 per share for total proceeds of
$1,449,999,968. The Prospectus Supplement stated, in relevant part:
maintaining our low selling, general and administrative (SG&A)
cost structure and decentralized operating model to ensure decisions
are made close to the customer.
*
The growth of our business is further augmented through our lowerrisk, output-focused research and development model, which allows us
to advance certain development programs to drive future revenue
growth, while minimizing our research and development expense. This
is achieved primarily by:
sourcing innovation through our internal research and

development, as well as through acquisitions and in-licensing;
focusing on productivity in order to minimize costs through

measures such as leveraging industry overcapacity and
outsourcing commodity services;
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focusing on critical skills and capabilities needed to bring new

technologies to the market;
pursuing life-cycle management programs for currently marketed

products to increase such products value during their commercial
lives; and
acquiring dossiers and registrations for branded generic products,

which require limited manufacturing start-up and development
activities.
50.
Discussing the sale of inventory, the Prospectus Supplement stated, in
part:
Even after the inventory held by wholesalers has reached desired levels,
wholesalers will make estimates to determine end-user prescription
demand, and may not be completely effective in matching their
inventory levels to actual end-user prescription demand. In addition to
wholesalers, inventory is held at retail pharmacies and other nonwholesale locations over whose buying patterns we will have limited
influence. Adverse changes in economic conditions and other factors
may cause retail pharmacies to reduce their inventories of the combined
companys GI products, which would reduce their orders from
wholesalers and, consequently, the wholesalers orders from the
combined company, even if end-user prescription demand has not
changed. As a result, changes to inventory levels held by wholesalers
may cause the combined companys operating results to fluctuate
unexpectedly if the combined companys sales to wholesalers do not
match end-user prescription demand.
51.
On April 1, 2015, the Company issued a press release announcing the
consummation of its merger with Salix.

52.
On April 29, 2015, the Company issued a press release announcing its
financial results for the first quarter ended March 31, 2015, as well as increased
guidance for full year 2015. The press release stated, in relevant part:
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2015 First Quarter Results
Total Revenue $2.2 billion; an increase of 16% over the prior year
despite negative foreign exchange impact of $140 million
o
Excluding negative impact of foreign exchange and last

years divestiture of the aesthetics injectable business,
revenue increased 27% over the prior year
*
GAAP EPS $0.21; Cash EPS $2.36, an increase of 34% despite

negative foreign exchange impact of $0.12 over the prior year
o
Excluding negative impact of foreign exchange and last

years divestiture of the aesthetics injectable business,
Cash EPS increased 50% over the prior year
*
2015 Guidance
Increasing Total Revenue to $10.4 - $10.6 billion up from $9.2 $9.3 billion
Expect Salix Revenue of ~$1.0 billion in 2015
Reflects implementation of wholesaler inventory reduction

program; plan to reduce Salix wholesaler inventory levels
to approximately 1.5 months by year-end
Increasing Cash EPS to $10.90 - $11.20 per share up from $10.10

- $10.40
Expect Same Store Sales Organic Growth of >10% for the second
through fourth quarters of 2015
53.
The April 29, 2015 earnings press release quoted Pearson as stating, in
part:
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Our first quarter results demonstrate the strong performance of our

diversified business model as we exceeded our first quarter guidance
despite losing $140 million in revenue and $0.12 in Cash EPS to foreign
exchange headwinds. The Company delivered exceptional double digit
organic growth for the third quarter in a row, driven by the strength of
most of our business units around the world.
54.
Also on April 29, 2015, the Company issued a press release announcing
that Schiller would be stepping down as CFO upon appointment of a successor. On

June 11, 2015, the Company issued a press release announcing that Rosiello was
appointed Executive Vice President and would take over the role of CFO from
Schiller on July 1, 2015. On July 14, 2015, the Company announced it entered into a
separation agreement with Schiller, effective as of June 30, 2015, regarding his
positions as Executive Vice President and CFO of the Company. The press release
stated that Schiller would continue to serve as a member of the board of directors and
as a consultant to the Company.
55.
On April 30, 2015, the Company filed its quarterly report on Form 10-Q
with the SEC for the period ended June 30, 2015. The 10-Q was signed by Pearson
and Schiller and contained SOX certifications signed by each of them stating that the
report did not contain any untrue statements or omissions of material facts. The
Form 10-Q repeated the financial results announced in the April 29, 2015 press
release and made no mention of Philidor or any other specialty pharmacy affiliated
with the Company. The 10-Q also stated, in part:
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maintaining our lower selling, general and administrative cost model
and decentralized operating structure. Within our chosen therapeutic
classes and geographies, we primarily focus on durable products which
have the potential for strong operating margins and sustainable organic
growth. Further, we have completed numerous transactions over the past
few years to expand our portfolio offering and geographic footprint,
including, among others, the Salix Acquisition and the acquisition of
Bausch & Lomb Holdings Incorporated (B&L) in August 2013, and
we will continue to pursue value-added business development
opportunities as they arise. The growth of our business is further
augmented through our lower risk, output-focused research and
development model, which allows us to advance certain development
programs to drive future commercial growth, while minimizing our
research and development expense. We believe this strategy will allow
us to maximize both the growth rate and profitability of the Company
and to enhance shareholder value.
56.
On July 23, 2015, the Company issued a press release announcing its
second quarter 2015 financial results and increasing the Companys full year 2015
guidance. The press release reported, in relevant part:
2015 Second Quarter Results
Total Revenue $2.7 billion; an increase of 34% over the prior year
Excluding negative impact of foreign exchange ($173

million) and the contribution of Salix ($313 million),
revenue increased 27% over the prior year
GAAP EPS Loss of $0.15; Cash EPS $2.56
Excluding negative impact of foreign exchange ($0.13) and

the negative contribution of Salix ($0.04) , Cash EPS would
have been $2.73, a growth rate of 43%
*
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Full Year 2015 Guidance Update
Increasing 2015 Total Revenue to $10.7 - $11.1 billion up from

$10.4 - $10.6 billion
Salix revenue expected to be ~$1.2 billion
Increasing 2015 Cash EPS to $11.50 - $11.80 per share up from

$10.90 - $11.20 to reflect continued business outperformance and
approval of IBS-D indication for Xifaxan
Increasing Adjusted Cash Flow from Operations to greater than

$3.2 billion, up from greater than $3.1 billion
Expect Same Store Sales Organic Growth of >10% for second

half of 2015
57.
The July 23, 2015 press release also quoted Pearson as stating:
We once again exceeded our guidance and delivered our fourth

consecutive quarter of greater than 15% organic growth. Our strong
second quarter results were driven by outperformance in our U.S.
businesses, strong results in certain emerging markets and outstanding
starts to both the Salix and Dendreon acquisitions. In addition, we have
signed eight new transactions so far this year and have realized several
significant R&D milestones, including the approval of Xifaxan for IBSD and the NDA submissions for Vesneo and Relistor Oral. As a result,
we feel confident in raising our guidance for the remainder of 2015.
58.
On July 27, 2015, the Company filed its quarterly report on Form 10-Q
with the SEC for the period ended June 30, 2015. The 10-Q was signed by Pearson
and Rosiello and contained SOX certifications signed by each of them stating that the
report did not contain any untrue statements or omissions of material facts. The
Form 10-Q repeated the financial results announced in the July 23, 2015 press release
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and made no mention of Philidor or any other specialty pharmacy affiliated with the
Company. The 10-Q also stated, in part:
Our strategy is to focus our business on core geographies and therapeutic
classes that offer attractive growth opportunities while maintaining our
lower selling, general and administrative cost model and decentralized
operating structure. Within our chosen therapeutic classes and
geographies, we primarily focus on durable products which have the
potential for strong operating margins and sustainable organic growth.
Further, we have completed numerous transactions over the past few
years to expand our portfolio offering and geographic footprint,
including, among others, the Salix Acquisition and the acquisition of
Bausch & Lomb Holdings Incorporated (B&L) in August 2013 (the
B&L Acquisition), and we will continue to pursue value-added
business development opportunities as they arise. The growth of our
business is further augmented through our lower risk, output-focused
research and development model, which allows us to advance certain
development programs to drive future commercial growth, while
minimizing our research and development expense. We believe this
strategy will allow us to maximize both the growth rate and profitability
of the Company and to enhance shareholder value.
*
In connection with our acquisitions, we have implemented costrationalization and integration initiatives to capture operating synergies
and generate cost savings across the Company. These measures
included:
workforce reductions
organizational changes;
across
the
Company
and
other
closing of duplicative facilities and other site rationalization

actions company-wide, including research and development facilities,
sales offices and corporate facilities;
leveraging research and development spend; and/or
procurement savings.
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As is customary in the pharmaceutical industry, our gross product sales

are subject to a variety of deductions in arriving at reported net product
sales. Provisions for these deductions are recorded concurrently with the
recognition of gross product sales revenue and include cash discounts
and allowances, chargebacks, and distribution fees, which are paid to
direct customers, as well as rebates and returns, which can be paid to
both direct and indirect customers. Provision balances relating to
estimated amounts payable to direct customers are netted against
accounts receivable, and balances relating to indirect customers are
included in accrued liabilities. . . . Provisions as a percentage of gross
sales increased to 32% and 33% for the second quarter and first half of
2015, respectively, compared with 27% and 26% in the second quarter
and first half of 2014. The increase was driven by (i) higher provisions
for rebates, chargebacks, and returns, including managed care rebates
for Jublia and the co-pay assistance programs for launch products
including Jublia, Onexton, and Retin-A Micro Microsphere
0.08% (RAM 0.08%) and (ii) higher rebate percentages for sales to
the U.S. government (including Wellbutrin XL) partially offset by
(iii) lower provisions (mainly rebates) associated with products
acquired in the Salix Acquisition in the second quarter of 2015.
59.
On September 28, 2015, the Company filed a Form 8-K with the SEC
that attached a letter from the Company (signed by Pearson) to its employees
relating to recent changes in Valeants stock price.
60.
On October 5, 2015, the Company filed a Form 8-K with the SEC
purporting to correct inaccuracies about the Company that were being reported in the
media.
61.
On October 19, 2015, the Company issued a press release reporting its
third quarter 2015 financial results. The press release reports [t]otal [r]evenues of
$2.8 billion; an increase of 36% over the prior year despite negative foreign exchange
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impact of $172 million along with GAAP EPS $0.14; Cash EPS $2.74, an increase
of 30% over prior year despite the negative foreign exchange impact of $0.13 versus
the prior year. The press release also announced increased fourth quarter 2015
guidance, with total revenue increased to $3.25-$3.45 billion from $3.2-$3.4 billion
and EPS increased to $4.00-$4.20 from $3.98-$4.18. The Company also raised its
full year 2015 guidance, with total revenue increased to $11.0-$11.2 billion from
$10.7-$11.1 billion and EPS increased to $11.67-$11.87 from $11.50-$11.80. The
October 19, 2015 press release quoted Pearson as stating:
Today, we reported yet another consecutive quarter of strong financial
results that exceeded expectations. I am incredibly proud of the hard
work and effort put forth by Valeants employees around the world. I
would also like to thank all the doctors who prescribe our products and
the patients who use them. We will be discussing our outperformance on
our conference call later today, as well as addressing the most frequently
asked questions we have been hearing from our shareholders. With our
strong product portfolio and growth prospects, we feel very confident in
our future outlook and we are reaffirming our $7.5 billion EBITDA floor
for 2016.
62.
As set forth above, the Company hosted an earnings call on October 19,
2015 that, for the first time, shed light on the previously undisclosed and direct
relationship between Valeant and certain specialty pharmacies. Also on October 19,
2015, The New York Times published the above-mentioned articled entitled Drug
Makers Sidestep Barriers on Pricing.
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63.
On October 21, 2015, Citron published its scathing report asserting that
Valeant was akin to Enron part deux and that the Companys practices had the
distinct aroma of product being jammed into a channel.
64.
The true facts, which were known by Defendants but concealed from the
investing public during the Class Period, were as follows:

(a)
Defendants Class Period statements omitted disclosure of key
aspects of the Companys business, specifically the Companys relationship with a

network of specialty pharmacies utilized to boost sales of the Companys highpriced drugs;
(b)
Valeants undisclosed use of specialty pharmacies as set forth
herein left it subject to increased regulatory risks that investors were unable to
account for;
(c)
Without use of specialty pharmacies, Valeants financial
performance would have been negatively impacted;

(d)
Without use of specialty pharmacies, Valeants Class Period
financial guidance would have been negatively impacted; and

(e)
As a result of the foregoing, Defendants statements regarding
the Companys financial performance and expected earnings were false and
misleading and lacked a reasonable basis when made.
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65.
As a result of Defendants false statements and omissions, Valeant stock
traded at artificially inflated prices during the Class Period. After the above
revelations were revealed to the market, however, the price of Valeant stock declined
significantly as the artificial inflation was removed.
ADDITIONAL SCIENTER ALLEGATIONS
66.
As alleged herein, Defendants acted with scienter in that they knew that
the public documents and statements issued or disseminated in the name of the
Company were materially false and misleading, knew that such statements or
documents would be issued or disseminated to the investing public, and knowingly
and substantially participated or acquiesced in the issuance or dissemination of such
statements or documents as primary violations of the federal securities laws. As set
forth elsewhere herein in detail, Defendants, by virtue of their receipt of information
reflecting the true facts regarding Valeant, their control over and/or receipt and/or
modification of allegedly materially misleading misstatements, and/or their
associations with the Company, which made them privy to confidential proprietary
information concerning Valeant, participated in the fraudulent scheme alleged herein.
LOSS CAUSATION/ECONOMIC LOSS
67.
During the Class Period, as detailed herein, Defendants engaged in a
scheme to deceive the market and a course of conduct that artificially inflated the
price of Valeant stock and operated as a fraud or deceit on Class Period purchasers of
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Valeant stock by failing to disclose and misrepresenting the adverse facts detailed
herein. When Defendants prior misrepresentations and fraudulent conduct were
disclosed and became apparent to the market through a partial disclosure, the price of
Valeant stock fell precipitously as the prior artificial inflation came out. As a result
of their purchases of Valeant stock during the Class Period, Plaintiff and the other
Class members suffered economic loss, i.e., damages, under the federal securities
laws when the truth about Valeant was revealed through the several disclosures
specified herein, which removed the artificial inflation from the price of Valeant
common stock.
68.
By failing to disclose to investors the adverse facts detailed herein,
Defendants presented a misleading picture of Valeants business and prospects.

Defendants false and misleading statements had the intended effect and caused
Valeant stock to trade at artificially inflated levels throughout the Class Period.
69.
As a direct result of the disclosures identified herein, the price of
Valeant stock fell precipitously. This removed the artificial inflation from the price
of Valeant stock, causing real economic loss to investors who had purchased Valeant
stock at artificially inflated prices during the Class Period.
70.
The price declines were a direct result of the nature and extent of
Defendants fraud being revealed to investors and the market through several partial
disclosures. The timing and magnitude of the price declines in Valeant stock negate
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any inference that the losses suffered by Plaintiff and the other Class members were
caused by changed market conditions, macroeconomic or industry factors, or
Company-specific facts unrelated to Defendants fraudulent conduct. The economic
loss, i.e., damages, suffered by Plaintiff and the other Class members was a direct
result of Defendants fraudulent scheme to artificially inflate the price of Valeant
stock and the subsequent significant decline in the value of Valeant stock when
Defendants prior misrepresentations and other fraudulent conduct were revealed.
APPLICABILITY OF PRESUMPTION OF RELIANCE:
FRAUD ON THE MARKET DOCTRINE
71.
At all relevant times, the market for Valeant stock was an efficient
market for the following reasons, among others:

(a)
Valeant stock met the requirements for listing and was listed and
actively traded on the NYSE, a highly efficient and automated market;

(b)
As a regulated issuer, Valeant filed periodic public reports with
(c)
Valeant regularly communicated with public investors via
the SEC;
established market communication mechanisms, including regular disseminations

of press releases on the national circuits of major newswire services and other wideranging public disclosures, such as communications with the financial press and
other similar reporting services; and
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(d)
Valeant was followed by several securities analysts employed by
major brokerage firms who wrote reports which were distributed to the sales force
and certain customers of their respective brokerage firms. Each of these reports
was publicly available and entered the public marketplace.
72.
As a result of the foregoing, the market for Valeant stock promptly
digested current information regarding Valeant from all publicly available sources
and reflected such information in the price of the stock. Under these circumstances,
all purchasers of Valeant stock during the Class Period suffered similar injury
through their purchase of Valeant stock at artificially inflated price and a presumption
of reliance applies.
NO SAFE HARBOR
73.
The Safe Harbor warnings accompanying Valeants reportedly
forward-looking statements (FLS) issued during the Class Period were ineffective
to shield those statements from liability. To the extent that projected revenues and
earnings were included in the Companys financial reports prepared in accordance
with GAAP, including those filed with the SEC on Form 8-K, they are excluded from
the protection of the statutory Safe Harbor. See 15 U.S.C. 78u-5(b)(2)(A).
74.
Defendants are also liable for any false and misleading FLS pleaded
because, at the time each FLS was made, the speaker knew the FLS was false or
misleading and the FLS was authorized and/or approved by an executive officer of
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Valeant who knew that the FLS was false. In addition, the FLS were contradicted by
existing, undisclosed material facts that were required to be disclosed so that the FLS
would not be misleading. Finally, most of the purported Safe Harbor warnings
were themselves misleading because they warned of risks that had already
materialized or failed to provide meaningful disclosures of the relevant risks.
COUNT I
FOR VIOLATIONS OF SECTION 10(b) OF THE 1934 ACT AND RULE
10b-5 AGAINST ALL DEFENDANTS
75.
Plaintiff incorporates 1-74 by reference.
76.
During the Class Period, Defendants disseminated or approved the false
statements specified above, which they knew or deliberately disregarded were

misleading in that they contained misrepresentations and failed to disclose material
facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
77.
Defendants violated Section 10(b) of the 1934 Act and Rule 10b-5 in
that they:
(a)
employed devices, schemes, and artifices to defraud;
(b)
made untrue statements of material facts or omitted to state
material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; or
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(c)
engaged in acts, practices, and a course of business that operated
as a fraud or deceit upon Plaintiff and others similarly situated in connection with
their purchases of Valeant stock during the Class Period.
78.
In addition to the duties of full disclosure imposed on Defendants as a
result of their affirmative false and misleading statements to the public, Defendants
had a duty to promptly disseminate truthful information with respect to Valeants
operations and performance that would be material to investors in compliance with
the integrated disclosure provisions of the SEC, including with respect to the
Companys revenue and earnings trends, so that the market price of the Companys
stock would be based on truthful, complete, and accurate information.
SEC
Regulations S-X (17 C.F.R. 210.01, et seq.) and S-K (17 C.F.R. 229.10, et seq.).
79.
As a direct and proximate result of Defendants wrongful conduct,
Plaintiff and the Class have suffered damages in connection with their respective
purchases and sales of Valeant stock during the Class Period, because, in reliance on
the integrity of the market, they paid artificially inflated prices for Valeant stock and
experienced loses when the artificial inflation was released from Valeant stock as a
result of the partial revelations and stock price decline detailed herein. Plaintiff and
the Class would not have purchased Valeant stock at the prices they paid, or at all, if
they had been aware that the market prices had been artificially and falsely inflated
by Defendants misleading statements.
- 36 -
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80.
By virtue of the foregoing, Valeant and the Individual Defendants have
each violated Section 10b of the 1934 Act, and Rule 10b-5 promulgated thereunder.
COUNT II
FOR VIOLATIONS OF SECTION 20(a) OF THE 1934 ACT
AGAINST ALL DEFENDANTS
81.
Plaintiff incorporates 1-74 by reference.
82.
The Individual Defendants acted as controlling persons of Valeant
within the meaning of Section 20(a) of the 1934 Act. By reason of their controlling
positions with the Company, and their ownership of Valeant common stock, the
Individual Defendants had the power and authority to cause Valeant to engage in the
wrongful conduct complained of herein.
Valeant controlled the Individual
Defendants and all of its employees. By reason of such conduct, the Individual
Defendants are liable pursuant to Section 20(a) of the 1934 Act.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for judgment as follows:
A.
Declaring that this action is a proper class action, designating Plaintiff as
Lead Plaintiff, and certifying Plaintiff as a Class representative under Rule 23 of the
Federal Rules of Civil Procedure and Plaintiffs counsel as Lead Counsel;
B.
Awarding compensatory damages in favor of Plaintiff and the other Class
members against all Defendants, jointly and severally, for all damages sustained as a
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result of Defendants wrongdoing, in an amount to be proven at trial, including

interest thereon;
C.
Awarding Plaintiff and the Class their reasonable costs and expenses
incurred in this action, including counsel fees and expert fees; and
D.
Awarding such equitable, injunctive, or other relief as deemed
appropriate by the Court.

JURY DEMAND
83.
Plaintiff demands a trial by jury.
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DATED: October 22, 2015

PETER S. PEARLMAN
/s/ Peter S. Pearlman
PETER S. PEARLMAN
Telephone: 201/845-9600
201/845-9423 (fax)
psp@njlawfirm.com
DOWD LLP
ROBERT J. ROBBINS
120 East Palmetto Park Road, Suite 500
Telephone: 561/750-3000
561/750-3364 (fax)
JOHNSON & WEAVER, LLP
FRANK J. JOHNSON
600 West Broadway, Suite 1540
San Diego, CA 92101
Telephone: 619/230-0063
619/255-1856 (fax)
frankj@johnsonandweaver.com
- 39 -
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CERTIFICATION PURSUANT TO L. CIV. R. 11.2
I certify that to the best of my knowledge, the matter in controversy is not the subject of any
other action pending in any court, or of any pending arbitration or administrative proceeding.
I certify under penalty of perjury that the foregoing is true and correct. Executed on this
22nd day of October, 2004.

PETER S. PEARLMAN
CERTIFICATE OF NON-ARBITRABILITY PURSUANT

TO L.CIV.R. 201.1(d)(3)
I certify, pursuant to L.Civ.R. 201.1(d)(3), that the above-captioned matter is not arbitrable
because the damages recoverable exceed the sum of $150,000 exclusive of interest and costs and any
claim for punitive damages.
I certify under penalty of perjury that the foregoing is true and correct. Executed on this
22nd day of October, 2004.

PETER S. PEARLMAN
- 40 -
DocuSign Envelope ID: E091B456-5E41-4B4E-AE69-ADA89640AFB5
Document
1-19-16
FiledFiled
10/22/15
11/20/15
PagePage
1 of 44
3 PageID:
of 65 PageID:
42
253
CERTIFICATION OF PLAINTIFF PURSUANT

TO THE FEDERAL SECURITIES LAWS
I, Laura Potter, declare the following as to the claims asserted, or to be asserted, under the
federal securities laws:
1.
I have reviewed the complaint and authorize its filing.
2.
I did not acquire the securities that are the subject of this action at the direction of
plaintiffs counsel or in order to participate in any private action or any other litigation under the
federal securities laws.
3.
I am willing to serve as a representative party on behalf of the class, including
testifying at deposition or trial, if necessary.

4.
I made the following transactions during the Class Period in the securities that are
the subject of this action.
Date Acquired
Number of Shares
Acquired
Acquisition Price Per

Share
Date Sold
Number of Shares
Sold
Selling Price Per

Share
Acquisitions:
Sales:
5.
I will not accept any payment for serving as a representative party beyond my
pro-rata share of any recovery, except reasonable costs and expenses such as lost wages and
travel expenses directly related to the class representation, as ordered or approved by the Court
pursuant to law.
6.
I have not sought to serve or served as a representative party for a class in an
action under the federal securities laws within the past three years, except if detailed below:
DocuSign Envelope ID: E091B456-5E41-4B4E-AE69-ADA89640AFB5
Document
1-19-16
FiledFiled
10/22/15
11/20/15
PagePage
2 of 45
3 PageID:
of 65 PageID:
43
254
I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct.
Executed this 21st day of October 2015.
__________________________________________
Laura Potter
Document
1-19-16
FiledFiled
10/22/15
11/20/15
PagePage
3 of 46
3 PageID:
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255
Statement of Ownership
Date Acquired
Number of Shares
Acquired
Acquisition Price Per

Share
8-10-2015
500
253.50
Date Sold
Number of Shares
Sold
Selling Price Per

Share
Acquisitions:
Sales:
10-2-2015
70
178.8506
10-21-2015
21
108.50
10-21-2015
400
108.50
10-21-2015
106.135
10-21-2015
106.49
SCHEDULE A
Plaintiff hereby adopts the following uniform definitions and rules of
construction for these requests:
1.
Action refers to Potter v. Valeant Pharmaceuticals International, Inc.,
et al., Civil Action No. 3:15-cv-07658 (D.N.J.).

2.
Communication or communications means any exchange of
information, words, numbers, pictures, charts, studies, or graphs by any means of

transmission, sending, or receipt of information of any kind by or through any means,
including, but not limited to, personal delivery, speech, writings, documents, language
(machine, foreign, or otherwise) of any kind, computer electronics or ESI (as defined
below), sound, radio, or video signals, telecommunication, telephone, teletype,
facsimile, mail, telegram, microfilm, microfiche, photographic film of all types, or
other media of any kind. Communication also includes, but is not limited to, all
inquiries, discussions, conversations, correspondence, negotiations, agreements,
understandings, meetings, notices, requests, responses, demands, complaints, press,
publicity, or trade releases.
3.
Concerning means relating to, referring to, describing, evidencing, or
constituting.
4.
Correspondence means any letter, memorandum, note, e-mail,
facsimile, text message, instant message, Internet message board posting, BlackBerry
-1-
message, iMessage, or any other writing containing a communication from one person
to another.
5.
Defendants means Valeant Pharmaceuticals International, Inc., J.
Michael Pearson, Howard B. Schiller, and Robert L. Rosiello, their agents, attorneys,
advisors, accountants, and all other persons acting or purporting to act on their behalf.
6.
Document is defined to be synonymous in meaning and equal in scope
to the usage of the term in Rule 34(a) of the Federal Rules of Civil Procedure,
including, but not limited to, the original and all non-identical copies (whether such
non-identical copies differ from the original by reason of any notation made thereon
or otherwise) such as correspondence, memoranda, notes, diaries, statistics, letters,
minutes, contracts, reports, studies, checks, statements, receipts, returns, summaries,
pamphlets, books, prospectuses, certificates, drawings, plans, inter- and intra-office
communications or other notations, in any form, including notations made of
conversations, telephone calls, meetings, or other communications, bulletins, printed
matter (including newspapers, magazines, and other publications, articles, and
clippings therefrom), press releases, computer printouts, facsimiles, emails, invoices,
ledgers, and worksheets, as well as all other drafts, redlines (whether proposed,
accepted, or rejected), inserted comments, results of document comparisons,
alterations, modifications, changes, and amendments of any of the foregoing, graphic
or aural records or representations of any kind (including, but not limited to,
-2-
photographs, charts, graphs, microfiche, microfilm, videotape, and film and audio
recordings), mechanical or electrical records or representations of any kind (including,
but not limited to, tapes, cassettes, discs, and recordings), or electronic files or
transcriptions thereof.
Document includes the term electronically stored
information or ESI, as defined below.

7.
Electronically Stored Information or ESI is defined to include any
original and any non-identical copies (whether non-identical because of notes made on
copies or attached comments, annotations, marks, transmissions, notations, or
highlighting of any kind) of information stored in electronic format, including
computer files, magnetic, digital, or other programs, programming notes, or
instructions, activity listings of electronic mail receipts or transmittals, output
resulting from the use of any software program, including word processing
documents, accounting files, payroll data, spreadsheets, database files, charts, graphs,
and outlines, electronic mail or email, operating systems, source code of all types,
programming languages, peripheral devices, external drives, PDF files, PST files,
batch files, ASCII files, or any electronic files or file fragments, regardless of the
media on which they reside and regardless of whether such electronic data consists of
an active file, back-up file, deleted file, or file fragment. Electronically Stored
Information or ESI also includes, but is not limited to, any items stored on
computer memory or memories, hard disks, floppy disks, zip drives, CD-ROM discs,
-3-
BlackBerry, iPhone, or other handheld devices, instant messenger programs, back-up

and/or magnetic tapes of any type or kind, microfiche, and/or computer chips.
8.
Employee means any person who at any time acted or purported to act
on behalf of an entity, or another person or persons, including, but not limited to, all
present and former officers, directors, executives, partners, principals, managers, staff
personnel, accountants, agents, representatives, in-house attorneys, independent
contractors, advisors, and consultants of such entity, person, or persons.
9.
Meeting means the contemporaneous presence of any natural persons
for any purpose, whether or not such presence was by chance or prearranged, and
whether or not the meeting was formal or informal or occurred in connection with
some other activity, and includes telephone or video conferences when, whichever the
means employed, participants can hear or otherwise communicate with each other.
10.
Person or persons means natural persons, proprietorships,
corporations, partnerships, trusts, joint ventures, groups, associations, organizations,

governmental agencies, and other agencies.
11.
Philidor or You or Your means Philidor Rx Services, LLC and its
subsidiaries, divisions, affiliated persons, predecessors, successors, and all present and
former directors, officers, members, analysts, employees, investment bankers,
representatives, agents, intermediaries, and all other persons acting on its behalf.
-4-
12.
Refer, relate, referring, or relating means all documents which
comprise, explicitly or implicitly refer to, were reviewed in conjunction with, or were
created, generated, or maintained as a result of the subject matter of the request,
including, but not limited to, all documents which reflect, record, memorialize,
embody, discuss, evaluate, consider, review, or report on the subject matter of the
request.
13.
You or your refers to the party responding to this request and
includes every one of that partys affiliated persons, predecessors, successors, and all
present and former directors, officers, analysts, employees, investment bankers,
representatives, agents, intermediaries, and all other persons acting on its behalf,
including attorneys.
14.
Valeant means Valeant Pharmaceuticals International, Inc., and any of
its present and former divisions, segments, subsidiaries, parents, affiliates,

predecessors, successors, and assignees; its present and former officers, directors,
partners, employees, agents, consultants, accountants, and lawyers; and all other
persons who are acting or who have acted on behalf of or who are or have been
subject to the direction or control of Valeant.
15.
The connectives and and or shall be construed either disjunctively or
conjunctively as necessary to bring within the scope of the request all other responses
that might otherwise be construed to be outside of its scope.
-5-
16.
The use of the singular form of any word includes the plural and vice
versa.
II.
INSTRUCTIONS
1.
In responding to these requests, you shall produce all responsive
documents which are in your possession, custody, or control, or in the possession,

custody, or control of your agents, employees, attorneys, accountants, or other
representatives. A document shall be deemed to be within your control if you have
the right to secure the document or a copy of the document from another person
having possession or custody of the document.
2.
Pursuant to Rule 34 of the Federal Rules of Civil Procedure, you are to
produce for inspection and copying by Plaintiff original documents as they are kept in
the usual course of business in their original folders, binders, covers, and containers,
or facsimiles thereof, or, with respect to ESI, in either TIFF or TIFF along with native
format, as set forth in the ESI Production Format attached hereto as Exhibit 1 and as
explained in more detail below. You shall organize and label the documents to
correspond with the categories in these requests. If the original is not in your custody,
then a copy thereof, and all non-identical copies which differ from the original or from
the other copies produced for any reason, including, but not limited to, the making of
notes thereon, shall be produced.
-6-
3.
These requests are specifically intended to encompass any data or
information maintained in any form of computer memory or on computer hard drives

or diskettes, including any word processing or spread sheet programs or electronic
mail systems, or in any form of electronic or computer-related storage, whether or not
you currently have hard copy printouts of the same.
4.
All ESI will be produced as single page TIFF images with .opt image
cross-reference files and delimited, Unicode database load files that contain the
metadata fields listed in Exhibit 1, attached hereto. Each TIFF image should be
linked directly to the corresponding native document using the NATIVEPATH field
as set forth in Exhibit 1. To the extent that you have identical information in both
paper and ESI format, Plaintiff requests production of ESI rather than paper
documents.
5.
Scanned documents should be provided as single page TIFF images with
.opt image cross-reference files and delimited Unicode database load files. Each
database load file should contain the following fields: BegBates, EndBates,
Pages, Volume, and Custodian/Source, as set forth in Exhibit 1.
The
documents should be logically unitized (i.e., contain correct document breaks: for
instance, a five-page fax consisting of a cover page and four-page memo should be
unitized as a five-page document). Multi-page OCR text for each document should
also be provided.
-7-
6.
If you claim any form of privilege or any other objection, whether based
on statute, common law, or otherwise as a ground for not producing any requested
document, please furnish a list identifying each document for which the privilege or
other objection is claimed together with the following information:
(a)
the privilege being asserted;
(b)
the person on whose behalf the privilege is asserted;
(c)
a precise statement of the facts upon which the claim of privilege is
(d)
the following information describing each purported privileged
based; and
document:
(i)
a brief description sufficient to identify its nature, i.e.,
agreement, letter, memorandum, tape, etc.;

(ii)
the subject matter and purpose of the document;
(iii)
the date the document was prepared;
(iv)
the date the document bears;
(v)
the date the document was sent;
(vi)
the date the document was received;
(vii)
the identity of the person preparing the document;
(viii)
the identity of the person sending the document;
(ix)
the names of the persons who received the document;
-8-
(x)
the identity of each person to whom the document was sent
or was intended to have been sent, including all addressees and all recipients of
copies;
(xi)
all persons to whom the documents contents have been
(xii)
a precise description of the place where each copy of the
disclosed;
document is kept, including the title or description of the file in which the document
may be found, and the location of such a file; and
(xiii)
a statement as to whom each identified person represented or
purported to represent or was an employee of.

7.
If a portion of any document responsive to these requests is withheld
under claim of privilege pursuant to Instruction 6, any non-privileged portion of such

document must be produced with the portion claimed to be privileged redacted.
Whenever a document is not produced in full or is produced in redacted form, so
indicate on the document and state with particularity the reason or reasons it is not
being produced in full, and describe to the best of your knowledge, information, and
belief, and with as much particularity as possible, those portions of the document
which are not being produced.
8.
You are to produce each document requested herein in its entirety, with
attachments and enclosures and without deletion or excision (except as qualified by
-9-
Instructions 6 and 7 above), regardless of whether you consider the entire document to
be relevant or responsive to the requests. All pages now stapled or fastened together
should be produced stapled or fastened together, and each document that you cannot
legibly copy should be produced in its original form. Documents not otherwise
responsive to any of the discovery requests herein must be produced if such
documents are attached to a document called for by these requests. Whenever a
document or group of documents is removed from a file folder, binder, file drawer,
file box, notebook, or other cover or container, a copy of the label of such cover or
other container must be attached to the document or group of documents.
9.
If a document responsive to these requests was at any time in your
possession, custody, or control, but is no longer available for production, as to each

such document, state the following information:
(a)
whether the document is missing or lost;
(b)
whether the document has been destroyed;
(c)
whether the document has been transferred or delivered to another
person and, if so, at whose request;

(d)
whether the document has been otherwise disposed of; and
(e)
a precise statement of the circumstances surrounding the
disposition of the document and the date of its disposition.
- 10 -
10.
If in responding to these requests, you claim any ambiguity in
interpreting a request, or definition or instruction applicable thereto, such claim shall

not be utilized by you as a basis for refusing to produce responsive documents.
Instead, there shall be set forth as part of your response the language deemed to be
ambiguous and the interpretation chosen or used in responding to the request.
11.
With respect to any category of documents, the production of which you
contend is in some way burdensome or oppressive, please state the specific reason
for that objection.
12.
All requests shall be deemed continuing requests, and you are required to
supplement your answers with any new or newly discovered materials responsive to
these requests in accordance with Rule 26(e) of the Federal Rules of Civil Procedure.
III.
RELEVANT PERIOD
All requests herein refer to the period from June 30, 2012 through and including
the date of this Subpoena, unless otherwise specifically indicated, and shall include all
documents and information that relate to such period, even though prepared or
published outside of the Relevant Period.
IV.
DOCUMENTS TO BE PRODUCED
1.
All documents sufficient to show Your organizational and/or ownership
structure, including, but not limited to, all officers, executives, directors, and
- 11 -
members, as well as the titles, roles, and responsibilities of Andrew Davenport and
Matthew Davenport.
2.
All documents sufficient to identify any and all pharmacies within Your
network of pharmacies, including, but not limited to, R&O Pharmacy, Inc., Orbit
Pharmacy, Safe Rx Pharmacy, Inc., and West Wilshire Pharmacy.
3.
All documents concerning the acquisition, or planned acquisition, of any
and all pharmacies within Your network of pharmacies, including, but not limited to,
R&O Pharmacy, Inc., Orbit Pharmacy, Safe Rx Pharmacy, Inc., and West Wilshire
Pharmacy.
4.
All documents sufficient to identify any and all employees or
representatives that You employed or were affiliated with You during the Relevant
Period.
5.
All documents sufficient to identify Your list of customers during the
Relevant Period.
6.
All documents sufficient to identify the services You provided to Valeant
during the Relevant Period.

7.
All documents concerning retention letters, contracts, or agreements for
the services You provided to Valeant during the Relevant Period.

8.
All regularly prepared financial statements, including, but not limited to,
balance sheets, income statements, and statements of cash flow.
- 12 -
9.
All documents sufficient to show all payments from Valeant to You
during the Relevant Period, including all documents sufficient to demonstrate the
reasons for any such payments.
10.
All documents sufficient to show all payments from You to Valeant
during the Relevant Period, including all documents sufficient to demonstrate the
reasons for any such payments.
11.
All documents sufficient to identify the Valeant products relevant to or
covered by the services You provided for Valeant, including, but not limited to, the
total gross revenue of all Valeant products generated by Your services during the
Relevant Period.
12.
All documents relating to pricing of Valeant products or changes thereto,
including, but not limited to, price lists, communications with insurance providers or
pharmacy benefit managers regarding such prices, and complaints from insurance
providers or patients regarding such prices.
13.
All correspondence with Valeant regarding this Action.
14.
All documents concerning the creation of Philidor, including, but not
limited to, Defendants role in the creation of Philidor.

15.
All documents concerning Valeants option to buy You, including, but
not limited to, documents concerning any payments received by You pursuant to such
option.
- 13 -
16.
All documents concerning Your financial performance or position during
the Relevant Period that were provided to Defendants.

17.
All documents concerning Your decision to shut down Your operations,
including, but not limited to, all communications with Defendants concerning Your
decision to shut down Your operations and a copy of the letter sent by Andrew
Davenport to Philidor employees on or about November 2, 2015 regarding Your
closing.
18.
All documents relating to Your plan to wind-down Your operations,
including procedures for the maintenance and/or destruction of documents, ESI, and
Your network servers, databases, and back-up tapes.
19.
All documents concerning audits of You by any insurance carrier or
insurance company during the Relevant Period.

20.
All documents relating to communications between You and any of the
Defendants, Laizer Kornwasser, Gary Tanner, Ari Kellen, Deb Jorn, Robert ChaiOnn, Pavel Mirovsky, or Anne Whitaker, including, but not limited to, all documents
relating to such communications involving Andrew Davenport, Matthew Davenport,
Alan Gubernick, or Gregory W. Blaszczynski.
21.
All communications between You and BQ6 Media Group concerning
You or Defendants.
- 14 -
22.
All documents relating to Your efforts to obtain a license to operate as a
nonresident pharmacy in the State of California, including, but not limited to, all
communications with the California Board of Pharmacy and all communications with
Defendants related thereto.
23.
All communications between You and Defendants concerning Your
efforts to obtain a license to operate in the State of California.

24.
All communications between You and Defendants concerning Your
efforts to conduct business in the State of California.

25.
All documents relating to Your efforts to sell, market, distribute, or seek
reimbursement for products sold by or through other entities in the State of California.
26.
All documents concerning the creation of Isolani LLC.
27.
All documents concerning the creation of Lucena Holdings LLC.
28.
All communications between You and KGA Fulfillment Services Inc.
29.
All communications between You and End Game LLP or End Game
Partnership LLC.
30.
All documents relating to the naming of Philidor, Isolani LLC, Lucena
Holdings LLC, KGA Fulfillment Services Inc., End Game LLP, End Game
Partnership LLC, and BQ6 Media Group.
- 15 -
31.
All documents relating to communications or requests for comment
between You and reporters, analysts, consultants, or other third parties concerning
Valeant.
32.
All tapes or sound recordings regarding any conversations concerning
Valeant and/or any of the Defendants and all documents relating to any such
recordings.
33.
All documents, including, but not limited to, transcripts, copies, notes, or
minutes, concerning any conversations or communications between You and anyone

concerning Valeant.
34.
All documents concerning any policy You have or had regarding the
preservation or destruction of documents or any electronically stored data of the type

requested herein.
35.
All documents sufficient to identify each current or former Valeant
employee, agent, or representative that works or previously has worked for or on

behalf of Philidor, whether paid or unpaid.
36.
All documents produced to or provided by You to any regulatory agency
or legislative body, including, but not limited to, the U.S. Securities & Exchange
Commission, the Department of Justice, the U.S. Congress or any committee thereof,
or any U.S. Attorneys office concerning You or Valeant during the Relevant Period.
- 16 -
37.
All documents relating to any complaints, disputes, or concerns raised
with regarding to the pricing of any Valeant products.

38.
All documents relating to patient copays for Valeant products, including,
but not limited to, waiver of copays, financial assistance, discounts, or access
programs provided to patients, or documents referring to anti-kickback laws or
violations.
39.
All documents relating to any training or instruction provided to You
from Valeant or by You to Your employees regarding copayments and anti-kickback

laws.
40.
All documents sufficient to show patient copays collected and written off,
in whole or in part.
41.
All documents relating to any claim that Valeant or You were engaged in
illegal or unethical conduct, or conduct in violation of any contract.

42.
All documents relating to meetings between You and Valeant, including,
but not limited to, Andrew Davenport and Matthew Davenports calendars, notes of
such meetings, time and place of such meetings, topics, or agendas.
43.
All documents relating to meetings of Your board of directors, members,
or executive management, including, but not limited to, notes, agendas, and minutes.
44.
All employee manuals.
- 17 -
45.
All documents relating to instructions provided to Your employees
regarding handling of any aspect of Valeant products, including, but not limited to,
instructions regarding changing codes on prescriptions, dispense as written orders,
filling prescriptions with Valeant products rather than generics or other products,
handling insurance providers and Medicare, use of national provider identifier
(NPI), and handling the rejection of Valeant products or rejection of payment for
Valeant products.
46.
All documents relating to NPIs used by You other than Your assigned
47.
All documents relating to Cambria Central Fill, Stephen Bailkin, or
NPI.
Cambria Pharmacies.
48.
All documents concerning non-privileged communications in the matter
proceeding as R&O Pharmacy, LLC v. Valeant Pharmaceuticals North America LLC,

Case No. 2:15-cv-07846-SJO-JEM (C.D. Cal.) and/or the matter proceeding as
Isolani, LLC v. R&O Pharmacy, LLC & Russell N. Reitz, Case No. BC 593 861 (Cal.
Super. Ct.), including, but not limited to, communications with Defendants concerning
such matters.
- 18 -
DATED: November 13, 2015

PETER S. PEARLMAN
PETER S. PEARLMAN
Telephone: 201/845-9600
201/845-9423 (fax)
psp@njlawfirm.com
DOWD LLP
ROBERT J. ROBBINS
120 East Palmetto Park Road, Suite 500
Telephone: 561/750-3000
561/750-3364 (fax)
FRANK J. JOHNSON
600 West Broadway, Suite 1540
San Diego, CA 92101
Telephone: 619/230-0063
619/255-1856 (fax)
frankj@johnsonandweaver.com
- 19 -

Discovery Letter To Andy Davenport

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Case 3:15-cv-07658-MAS-LHG Document 9-16 Filed 11/20/15 Page 1 of 65 PageID: 210

Case 3:15-cv-07658-MAS-LHG Document 9-16 Filed 11/20/15 Page 2 of 65 PageID: 211

November 13, 2015

Potter v. Valeant Pharmaceuticals International,Inc.

Dear Mr. Davenport:

120 East Palmetto Park Road

Boca Raton, FL 33432

Tel 561 750 3000

Fax 561 750 3364

COHN LIFLAND PEARLMAN

DEMAND FOR JURY TRIAL

Plaintiff Laura Potter (Plaintiff), who resides at 1112 West Avenue,

This is a federal securities class action on behalf of all persons who

Valeant is a specialty pharmaceutical and medical device company that

develops, manufactures, and markets a range of branded, generic, and branded

The Company states that its strategy is to focus on core geographies

In that regard, Valeant is a serial acquirer, using an advantageous tax

In large measure, the Companys tactics worked. Revenues skyrocketed

But questions surrounding the Companys business practices began

That same day, it was reported by

Bloomberg that [a]ll Democratic members of House Oversight and Government

In the September 28, 2015 Congressional Committee letter, U.S.

Representatives wrote, in part:

After closing at $199.47 on September 25, 2015, the price of Valeant

On October 5, 2015, as U.S. stocks saw broad increases, shares of

Valeants Chief Executive Officer (CEO) J. Michael Pearsons (Pearson)

In a slide deck accompanying the earnings conference call, Valeant

included a list of anticipated Questions from Investors. One of the anticipated

We have viewed our relationship with Philidor and our other

Similar to many pharmaceutical companies in the U.S., an

We find specialty pharmacies improve patients access to

In almost all cases, our inventory with specialty pharmacies and

5% of our U.S. channel inventory sits in the specialty pharmacy

Philidor, one of our specialty pharmacy partners, provides

Based on a VIE (variable interest entity) assessment in accordance

For many of our dermatology products, many of our specialty

We understand that Philidor:

Provides services under our programs for commercially

Does not restrict prescriptions it fills to any particular

Dispenses generic products as specified in patients

Pearson also stated that an increasing percentage of our revenue is

coming from products dispensed through multiple specialty pharmacies.

As the call continued, Pearson declined to discuss the subpoenas from

Reporting on the newly disclosed relationship between Valeant and

Specialty pharmacies are most known for providing patients with

Then, on October 21, 2015, Citron Research published a report entitled,

Continuing, the Citron report charged that Valeant is using a network of

The market reacted swiftly to the disclosures in the Citron report. On

Jurisdiction is conferred by Section 27 of the 1934 Act, 15 U.S.C. 78aa.

Venue is proper in this District pursuant to Section 27 of the 1934 Act.

In connection with the acts alleged in this Complaint, Defendants,

directly or indirectly, used the means and instrumentalities of interstate commerce,

Plaintiff Laura Potter purchased Valeant stock as described in the

Defendant Valeant Pharmaceuticals International, Inc. is incorporated in

Chairman of Valeants board of directors.

Defendant Howard B. Schiller (Schiller) was an Executive Vice

Defendant Robert L. Rosiello (Rosiello) has been the Companys CFO

Defendants Pearson, Schiller, and Rosiello (collectively, the Individual

Plaintiff brings this action as a class action pursuant to Rule 23 of the

impracticable. The disposition of their claims in a class action will provide

There is a well-defined community of interest in the questions of law

whether Defendants violated the 1934 Act;

whether Defendants omitted and/or misrepresented material

whether Defendants statements omitted material facts necessary

whether Defendants knew or recklessly disregarded that their

statements were false and misleading;