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Valeant shares drop 3% after new short bet, ex-CEO stock sale

Former Valeant CEO J. Michael Pearson unloaded more of his personal holdings than was originally thought, CNBC has learned.

According to documents not made public yet but obtained by CNBC, Pearson sold nearly 5 million shares and options for a total of $96.8 million. The news comes the same day that the Sequoia Fund revealed it is completely out of the stock. Sequoia was at one time the largest Valeant shareholder.

Wednesday also saw short seller Andrew Left say the company's stock could be headed to zero. That news took more than 7 percent out of its shares.

"I think it's obvious it's a zero now," Left told The Street. Left's firm, Citron Research, did not immediately respond to CNBC's request for comment.

Pearson sold about 288,000 shares on June 30 for proceeds of $5.7 million, according to the documents. A day later, he sold more than 4 million shares with proceeds of nearly $83 million, and then on July 5, he sold some 411,000 shares, according to the documents. Total proceeds: $96.8 million.

Valeant told CNBC it was not responsible for filing stock transactions on Pearson's behalf since his employment was terminated in May. Still, a spokesperson for the company said the former CEO "continues to retain a significant ownership position in Valeant."

Shares in the drugmaker were up 2 percent around noon on Wednesday, but then fell to a more than 5 percent decline after news that Left had made a bet against the company.

Valeant, which has been embattled amid U.S. investigations of its business and accounting practices, announced in March that Pearson would leave the company. The company's shares are trading about 90 percent lower than the same time last year, and the price has moved little over the last month.

Also in March, the company slashed its 2016 revenue forecast and said that a delay in filing its annual report could pose a debt default risk. When it finally issued its delayed report, the Canadian drugmaker identified misstatements that would reduce some of its previously reported revenue.

The company came under fire when The New York Times reported that Valeant and other pharmaceutical companies were using a network of specialty pharmacies to sustain sales of their high-priced drugs and prevent patients and insurers from switching to cheaper generic drugs. Citron Research subsequently published a note calling Valeant the "pharmaceutical Enron."

In response, Valeant formed an ad hoc committee to review the allegations regarding specialty pharmacy Philidor RX Services. The U.S. Securities and Exchange Commission is investigating the relationship between the two companies.

"It's been a privilege to lead Valeant for the past eight years. While I regret the controversies that have adversely impacted our business over the past several months, I know that Valeant is a strong and resilient company, and I am committed to doing everything I can to ensure a smooth transition to new leadership," Pearson said in a March statement.

—Reuters and CNBC's Christine Wang and Fred Imbert contributed to this report.