Pershing Square raised its holdings by 14,644,618 shares to 34,118,551 — meaning a total stake of about 9.9 percent from 5.68 percent. Pershing was already one of the largest holders of Valeant stock.
The fund revealed its new holdings in an updated Schedule 13D filing with the U.S. Securities and Exchange Commission, and announced the move in a Monday afternoon news release.
Shares in the company jumped more than 2 percent in after-hours trading.
This comes after Ackman told CNBC on October 21 that he had purchased an additional 2 million shares of Valeant as the stock plunged on an explosive note from Citron Research that alleged the drugmaker is channel stuffing.
Ackman told CNBC at the time that he still believed in the company despite Citron claims.
Read MoreBill Ackman: I believe in Valeant
Citron alleged that Valeant is using a network of specialty mail-order pharmacies that the company actually controls to prop up sales of its high-priced drugs and to keep patients and their insurance companies from switching to less costly generics. The report went so far as to call Valeant the "pharmaceutical Enron."
Since that report, Valeant has seen significant turmoil, forcing the company to offer cash and stock incentives to retain staff.
Valeant's stock has fallen about 60 percent over the last three months.