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Valeant Hits a Two-Year Low After Ackman's Presentation

Valeant Pharmaceuticals International Inc. tumbled to a two-year low, closing out its worst month ever, after billionaire shareholder William Ackman failed to persuade investors the stock was undervalued and short-seller Citron Research hinted at fresh allegations of wrongdoing.

With new questions surfacing about the drug company’s business practices, Ackman, the chief executive of Pershing Square Capital Management, offered a full-throated, and at times rambling, defense of Valeant, saying its stock would bounce back and eventually soar to new heights. His prediction: $448 by 2019. The stock hit $103.84 before a tweet by Citron Research at 11:25 a.m. Friday sent it tumbling to $93.77 at the close, a 16 percent drop for the day.

The overall picture that Ackman, and his coterie of legal and financial advisers, sought to paint was one of a misunderstood and occasionally bumbling, but essentially decent business. He dedicated little time to exploring the question of Valeant’s relationship with Philidor, the pharmacy at the center of the recent scandal rocking Valeant’s shares, and instead lashed out at what he characterized as an inept public and investor relations effort by Valeant. Particular criticism was leveled at a Valeant PR adviser, who Ackman described as having done a "horrible job."

"Ackman cannot know what Valeant is really doing and this call proved that," said Bill Kavaler, a New York-based managing director at brokerage firm Olivetree Financial. "There is nothing he said that isn’t already known."

He also blamed rival drugmakers for stirring the pot when it came to Valeant’s...