Criminal Charges Against Former Valeant Exec 'Not Pertinent But Underscores Cautious Outlook'

It was further alleged that $40 million was routed toward Davenport through various entities, and Tanner received $10 million in kickbacks. Moreover, Tanner may have used his position at Valeant to expand the number of products sold through the specialty pharmacy and resisted efforts to have receivables collected.

Neil Maruoka of Canaccord Genuity commented in a research report on Friday that the latest charges are "not pertinent" to Valeant, as the charges do not relate to any financial statement of fraud or intentionally inflating revenue as has been a prior concern.

The analyst added that the investigation did not name Valeant's former CEO Michael Pearson or its former CFO Howard Schiller, although the investigation remains ongoing.

Analyst Stays Sidelined

Nevertheless, the charges do underscore the analyst's cautious stance, as Maruoka reiterated a Hold rating and $17 price target on Valeant's stock as the headline risk is one of several overhangs.

Other negative overhangs include a series of disappointing operational updates, including negative year-over-year unit volume growth in dermatology and continued headwinds next year based on the recent guidance update and the fact that the company needs to sell assets to de-lever the balance sheet and has announced just a few divestitures so far.