"I don't think Mike Pearson, the CEO, can or should survive this," George told CNBC's "Power Lunch." "It's a house of cards he's created."
Valeant's share price continued its slide on Thursday, the influential short-selling firm Citron Research accused the company of using a network of pharmacies to create phantom sales of its products.
The declines have chopped $16 billion from the company's market capitalization in the past two days. Valeant has categorically denied the allegations made in the Citron report, saying it only books revenue once its drugs reach patients.
George said one of the company's problems is that its board members are mostly financial professionals instead of those with a health-care background. The new CEO, he said, should be someone "who really understands health care and can create a business model based on health care, not just pleasing all the hedge fund and activist investors."
George is now a professor at the Harvard Business School.
Peter Anderson, Congress Wealth Management CIO and a Valeant shareholder, said he wants the company to explain to the public "what is going on."
"Time is their enemy. If they keep waiting and let the rest of us try to figure out how to read these tea leaves, it's very threatening to the stock," he said on the same show Thursday.
Anderson did say that for investors who can take risk and wait, the stock could surprise to the upside. "Say this is all put behind them, then I think this company will be morphed more into a reasonably growing company and not a hair-on-fire company."
On Thursday, Valeant announced it would hold a conference call on Monday to discuss the "allegations made against our company regarding our relationship with Philidor and R&O, our accounting practices, and channel stuffing that contain numerous errors, unsupported speculation and incorrect interpretations of facts and circumstances to the detriment of the shareholders of the company."
— Reuters contributed to this report.