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Bill Ackman Making Money On Valeant For First Time In Living Memory

You can't keep an Ack Man down!
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Back in his happy place.

Bill Ackman was right to be bullish on the dawn of the Trump era. After a year in which just about everything that could go wrong did, 2017 is looking up following a slow start. Just consider Valeant Pharmaceuticals. Sure, Ackman’s Pershing Square Capital Management is still way, way, way underwater on his $4 billion bet on the company, whose stock is down nearly 95% from its all-time high in mid-2015—a major contributor to PS’ 20.5% drop in 2015 and 13.5% decline last year. But for the first time in ages, Ack & co. are beating the broader market, up 4.8% through the year’s first seven weeks. And it has Valeant to thank.

After being down 2% for the year through last week, has since risen more than 12%, including a gain of nearly 7% on Tuesday alone, juiced in part by anticipation of the FDA approval for one of its new drugs, which it received Thursday….

In dollar terms, an even larger contributor to the week's jump in performance was Restaurant Brands International, the company that owns Burger King and Canadian coffee chain Tim Hortons. Restaurant Brands' stock gained nearly 9% during the last week, Ackman reported, thanks partially to its strong quarterly earnings report on Monday. Because the fast-food company is now Ackman's top holding—his stake is worth more than $2 billion—that gain boosted his portfolio by roughly $175 million in a single week….

All of Ackman's known stock holdings were up for the week….

Of course, this being Bill Ackman and Valeant, even good news comes with money-losing caveats.

The Food and Drug Administration has assigned a so-called “Black Box” warning, since suicidal ideation and behavior have been reported among patients on the drug. As a result, patients will need to give formal informed consent to using the drug before a doctor can prescribe it. That could depress sales.

Meanwhile, Valeant owes $130 million in milestone payments to collaboration partner AstraZeneca thanks to the approval.

Valeant Stock Is Bringing Bill Ackman’s Hedge Fund Back From the Dead [Fortune]
New Valeant Approval is a Surprise Irritant [WSJ]


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