Ackman unloads entire stake in Valeant

Pershing Square Capital Management CEO Bill Ackman stated Monday that his hedge fund sold all its shares in Valeant Pharmaceuticals, sending the drugmaker's stock down as much as 9 percent. "We elected to sell our investment and realise a large tax loss, which will enable us to dedicate more time to our other portfolio companies and new investment opportunities," Ackman said.

Pershing Square, which is selling its 27.2 million shares for a total value of $306.4 million, noted "at its current market value, the Valeant position represented 1.5 percent to 3 percent of the various Pershing Square funds," but that "the investment required a disproportionately large amount of time and resources." In a 2015 securities filing, Ackman disclosed that his fund held a 5.7-percent stake in Valeant worth nearly $3.9 billion. Meanwhile, Ackman also indicated that he will step down from Valeant's board, which he joined last year, but that he will stay on until its upcoming annual meeting.

The hedge fund teamed up with Valeant in 2014 to pursue an ultimately unsuccessful takeover of Allergan, and has invested in the Canadian drugmaker since 2015. However, Valeant has faced multiple controversies since then, including criticism over drug pricing and allegations surrounding its relationship with the specialty pharmacy Philidor Rx, as well as questions regarding the reporting of some of its financial results.

More recently, US federal prosecutors disclosed charges against former Valeant manager Gary Tanner, as well as former Philidor Rx Services CEO Andy Davenport, for engaging in a multimillion-dollar fraud and kickback scheme. Last month, the executives pleaded not guilty to charges of fraud in a US district court.