TORONTO – The Toronto stock market kicked off a shortened trading week Monday with a solid advance as Canadian pharmacare giant Valeant Pharmaceuticals announced its CEO is leaving the company.
The S&P/TSX composite index climbed 64.02 points to 13,561.09, with the health-care and utilities sectors the biggest gainers.
Shares in Valeant (TSX:VRX) rose after the embattled drug company disclosed a shakeup to its corporate leadership, which included the departure of chief executive Michael Pearson and the appointment of activist investor Bill Ackman to its board of directors.
Its stock gained more than eight per cent, or $2.97, to $37.90. At its peak last August, the share price was $346.32 on the Toronto Stock Exchange.
“What investors are looking at today with the appointment of Ackman to the board is a bit more involvement from the activist investor side of things that could potentially right the ship a little bit quicker,” said Craig Fehr, a Canadian markets strategist with Edward Jones.
“Time will tell, obviously. (Valeant’s) got a lot of issues they will continue to work through but I think the market is finding some solace that there’s a bit of a shakeup at the top today that could help put this company and stock back on course.”
Valeant has been battling a number of controversies in the past few months, including investigations by the U.S. Securities and Exchange Commission, U.S. Attorney’s offices in Massachusetts and New York, and U.S. Congress on allegations that it is gouging customers on drug prices. The company has denied the accusations.
Last month, the drugmaker also had to restate its financial results for 2014 and 2015 after discovering that about US$58 million of sales were recognized at the wrong time. It expects to resubmit revised financial statements to regulators by April 29.
Meanwhile, the Canadian dollar shed 0.28 of a U.S. cent to 76.42 cents US.
In New York, markets were up modestly amid a disappointing report on housing sales.
Sales of previously occupied U.S. homes sank 7.1 per cent last month as a result of a limited inventory in many markets. The limited inventory has driven home prices higher and reduced affordability. The trend could weigh on homebuilders, many of whom rely on buyers who must sell their home before they can purchase a newly built one.
The Dow Jones industrial average rose 21.57 points to 17,623.87, while the broader S&P 500 added 2.02 points to 2,051.60 and the Nasdaq rose 13.22 points to 4,808.87.
In commodities, the May contract for benchmark North American crude oil rose 38 cents to US$41.52 a barrel, while April natural gas plunged eight cents to US$1.83 per mmBtu. April gold lost $10.10 to US$1,244.20 a troy ounce while May copper added a penny to US$2.29 a pound.
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