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Ackman says Valeant board may find new CEO in weeks

Bill Ackman
David A. Grogan | CNBC

Billionaire investor Bill Ackman on Wednesday said the board of embattled drug maker Valeant Pharmaceuticals could find a new chief executive officer in "weeks" and said the stock will become "investable" again once the annual report is filed.

Speaking on an investor conference call Wednesday, Ackman said Valeant is now on track to deliver its delayed 10-K by month end which will likely give the company a shot in the arm because investors will look at the company anew.

Pershing Square Capital Management blocked off one hour on Wednesday morning for Ackman and his analysts to walk investors through exactly how one of its funds lost 25 percent in the first three months of 2016, including bets on Platform Specialty Products, Herbalife and Valeant.

The losses are a severe blow for one of the hedge fund industry's most closely followed investors and come on top of a record 20.5 percent drop in 2015.

Can you trust Valeant?

A spokesman for Ackman declined to comment.

Five months ago Ackman held a call that lasted nearly four hours as he tried convince investors that Valeant was still a good buy. That message seemed to fall on deaf ears as the stock price has tumbled nearly 70 percent since then.

Ackman lost roughly $1 billion on his Valeant investment in one day last month when its stock fell 50 percent on fears it could default. That prompted even long-time Valeant supporters such as Brave Warrior Advisors' Glenn Greenberg to liquidate half of his stake.

Bill Ackman
Ackman defends Pershing Square's financial strength

Overall, Ackman's investors appear to be sticking with him. Redemption requests for the first quarter totaled roughly 2 percent of the firm's roughly $12 billion in assets.

"This is going to be a badly scraped knee that may even require stitches but it is not life threatening," one Ackman investor said about the losses and Valeant situation.

The structure of Pershing Square shields it from a sudden sharp loss of capital - investors can only withdraw their money gradually and some of them can only exit by selling shares to another investor.

In a rare piece of good news, Valeant said on Tuesday that it has finished an internal review and found no additional problems that would require further restatements of its financial statements. Its shares climbed 10 percent.

— CNBC's Mary Thompson and Krysia Lenzo contributed to this report.