Pharma woes continue to gnaw at investors amid the recent tumble in Valeant Pharmaceuticals' stock.
Valeant filed an unaudited earnings report for the fourth quarter Tuesday in place of its annual comprehensive overview amid a Securities and Exchange Commission probe. The preliminary earnings and forward guidance report did not soothe investor concerns, however, as the pharmaceutical company warned that the delayed filing may drive it to default risk.
The news sent its shares into a downward spiral resulting in more than 50 percent loss on Tuesday.
Longtime bear Jim Grant told CNBC's "Closing Bell" on Wednesday that while the company has very light debt obligations, it has an "existential threat to solvency" due to its accounting procedures and lack of filling.
Still, activist investor Bill Ackman released a note Tuesday in effort to reassure investors. The billionaire founder and CEO of hedge fund Pershing Square Capital Management said that his fund will assume a "more proactive role at the company to protect and maximize the value of [its] investment," adding that Steve Fraidin, Pershing Square's chairman, joined the Valeant board last week.