NEW YORK (TheStreet) -- Shares of Valeant Pharmaceuticals (VRX) were retreating in late-afternoon trading on Monday as people who bought its drugs sue the Canadian company for allegedly charging them excessive prices.
The class-action complaint was filed in the U.S. District Court in Manhattan on behalf of unionized New York City police detectives and hotel employees who are seeking compensatory and triple damages for health plans and others that purchased the drugs between January 2013 and October 2015, Reuters reports.
The complaint alleges that Valeant dissuaded patients and doctors from generic treatments in favor of its branded drugs through a network of pharmacies connected to specialty pharmacy Philidor, with which Valeant has since cut ties.
Valeant falsified demand and consequently boosted prices by hiding its ties to Philidor, the complaint alleges, according to Reuters. If Valeant had not done so, the plaintiffs "would have denied claims submitted by pharmacies in the Valeant Enterprise and insisted on the substitution of generic equivalents," the complaint noted.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
Valeant's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: VRX
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.