The world has started to realize that traditional pharmaceutical companies are not quite as boring as was once thought. Sure, they aren’t as sexy and cool as new tech and car companies are, but they have found a way to make major headlines in the past few years.

The problem is, a good amount of that coverage is overwhelmingly negative.

Of course the pharma industry is no stranger to controversy. Even politicians are steering clear of discussion on drug pricing and the woefully excessive markups of lifesaving medicines.

Drugs that could be healing people across the world are sold at an eye watering margin that make them too expensive for people in countries that need them most. But companies in this industry have justified this excess by saying that the profits were being used to cover the research and development of new drugs.

That theory is still up for debate, but Canada-based Valeant Pharmaceuticals decided it wanted to distance itself from that conversation. The company did this by cutting R&D spend and, instead, focusing on acquisitions, but it would soon become clear that not everything was on the up and up…

The Rise

Valeant was originally founded in the United States in 2008 and was run by Michael Pearson, who worked as a consultant at McKinsey & Company for more than two decades. He wanted to bring a new way of thinking to the industry, and decided to start by moving the company headquarters to Canada and going on an acquisition spree over the next few years.

The company eventually grew sales by taking over other businesses instead of investing in research to develop its own. This meant they now owned household brands like contact lens kings Bausch & Lomb, as well as a host of much needed drugs developed by other companies.

Pearson’s aggressive pursuit of growth seemed like it was paying off. Sales grew rapidly over the years and despite some skeptics suggesting the business model had limits, hedge funds continued to pump money into the company at breakneck speed. In fact, Valeant’s stock went from hovering around $8 a share in 2008 (when Pearson took over) to more than $257 in 2015. The company was a hedge fund darling with what seemed to be a very rosy future.

No one was more infatuated with Valeant than Pershing Square’s hedge fund manager Bill Ackman. Ackman had bought more than 5% of the company in October 2015, when it was close to its all-time high, and many experts considered his buy to be a great deal done at the perfect time.

The Fall

That came to an abrupt end last year with a single report put out by a relatively unknown short seller. A few months after Ackman revealed his massive stake in Valeant, Citron Research published a report on the company that the stock was overpriced and the accounting flawed. Ackman, incidentally, had bought even more shares on the very same day that the report had been released. It would turn out to be the worst decision of his career.

Citron’s report was outright scathing. It accused the company of inflating drug prices and using the funds to make bad acquisitions. Perhaps the biggest reveal was the company’s use of “specialty drug pharmacies.” Their records showed that Valeant held an option to buy specialty pharmacy Philidor Rx at zero dollars. The report stated that the company used the pharmacy to store its inventory and classify the transaction as a sale, thus inflating the sales figures in annual reports.

The stock dropped like a rock the day the report came out, and trading was paused three different times. By the end of the day the stock was down 28%. It now hovers around $30, a fall of over 88%.

The Sickness Spreads

Valeant now seems to be circling the drain as federal prosecutors sent a subpoena, and even Hillary Clinton brought it up as an example of corporate greed and price gouging in the pharma sector. Warren Buffett’s partner, Charlie Munger called the company's pricing strategy “deeply immoral” and compared it to for-profit schools.

Even major investors with long and rich reputations are being caught up – Robert Goldfarb recently stepped down as leader of Sequoia Fund Inc. Due to its large stake in Valeant (over 30% of Sequoia’s portfolio), the fund had gone down 11.6% as of about a week ago and withdrawals from the fund are at nearly $230 million in March alone.

As lawmakers across the country continue to investigate the company, CEO Mike Pearson announced he would be resigning and Bill Ackman has assumed the post of board member. He is trying to rebuild the company, recover the earnings lost in the accounting scandal, hold off regulators, replace the management and defend his reputation all at the same time.

It remains to be seen if the pharmaceutical giant that once employed over 19,500 employees around the world can regain its market position or will go down in history as Canada’s biggest corporate scandal and the “Enron of the Pharma industry.”