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Valeant's looming M&A hiatus deals blow to investment banks

The company logo of Valeant Pharmaceuticals International Inc is seen at its headquarters in Laval, Quebec May 19, 2015.

The controversy surrounding Valeant Pharmaceuticals' (VRX.N) strategy and its market slide this week are bad news for Wall Street investment banks that stand to lose one of their best clients.

The specialty drug company has emerged as the fifth largest payer of investment banker fees over the past three years thanks to its rapid acquisition-driven and debt-financed expansion that has made it a darling of investors.

But its business model, which has also relied on aggressive price hikes for acquired drugs, has come under growing scrutiny because of political backlash against high drug prices, dragging Valeant shares down from record highs scaled in August.

The company said earlier this week it would now focus on buying back shares and paying off debt after spending about $40 billion on some 150 acquisitions since 2008 only to see its shares plummet further after...