The Securities and Exchange Commission is seeking information about Valeant Pharmaceuticals’ attempt in Delaware Chancery Court to get Milan Panic, the company’s former chairman and chief executive officer and others to return bonuses it paid in connection with an initial public offering, according to the company. Panic was prime minister of Yugoslavia from 1992 to 1993.
Valeant also reported that the Securities and Exchange Commission has launched an informal inquiry concerning trading in Valeant stock and is seeking the public release of data from a clinical trial of one of the company’s drugs. The SEC is also asking for data on the company’s stock option grants since January 1, 2000.
Valeant has been in litigation with Panic regarding the payment of a bonus in connection with the IPO of Ribapharm, which makes Viramidine, an anti-viral medication aimed at treating hepatitis C. The company noted that it had previously reported that the lawsuit against Panic, who is now chairman and CEO of MP Biomedicals, had been settled. But Panic’s “failure to make timely payment of the initial amount due under the settlement agreement and breach of various other requirements of the settlement agreement, caused the company to return to court in Delaware to pursue a judgment at a hearing on September 6, 2006,” the company stated.
Pierce O’Donnell, a Los Angeles lawyer representing Panic, however, told CFO.com that under an original settlement agreement, Valeant was obliged to dismiss the case. Under the terms of the agreement, Panic was required to return $20 million out of a $30 million bonus payment, he said, noting that Panic had already made an initial $8 million payment. “Once he paid, they [i.e. Valeant] had an obligation to dismiss,” O’Donnell said. “We’ve sued to enforce that obligation.”
The drug trial that the SEC wants to know more about concerns Viramidine. The commission wants data on a late stage in the drug- testing process.
The drug maker, which has a $1.8 billion market cap, said in a press release on the SEC’s actions that the company is cooperating with the commission. The company also said it is conducting an internal review of its historical stock option grant practices.