Valeant Pharma (VRX) CEO Hospitalized with Severe Pneumonia

Valeant Pharma (NYSE: VRX) CEO, Mike Pearson, has been hospitalized with severe pneumonia. The company does not expect his absence to disrupt operations since Mr. Pearson had scheduled an absence during the holiday period.

Commenting on the news, Mizho analyst Irina Koffler said, "We continue to monitor the situation, but note that we still see an unfavorable risk / reward to buying the shares given what we see as uncertainties associated with the company's growth forecast, coupled with its investigation / headline / management risk."

They reiterate a Neutral rating and expect more volatility in the stock until there is a favorable update on Mr. Pearson's condition.

As of late last night, the latest reports off of Bloomberg indicate that Mr. Pearson has been discharged from Morristown Medical Center but remains hospitalized elsewhere at an undisclosed location.

Koffler notes an emergency succession planning has previously been considered: "In August we spoke with management about succession planning and learned that succession planning is "the number one topic of discussion for the Board of Directors" and the company has a strategy in place in case of emergencies. That said, senior management ranks have been relatively unstable at Valeant so there is a very short list of possible successors to Pearson, in our view."

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