What if you bought Valeant / Bausch in 2012?
US Health · Pharma. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play0.2× · S&P 500 same money: $5,312
$1,000 in Valeant / Bausch at the start of 2012 would be worth about $170 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
Valeant Pharmaceuticals, under former McKinsey consultant Michael Pearson, had a radical strategy: buy drug companies, slash research, and raise prices on existing medicines, financed with mountains of debt. Wall Street loved it; activist Bill Ackman's Pershing Square became a major shareholder, and in 2014 the two jointly tried to take over Allergan. By mid-2015 Valeant was one of the most valuable companies in Canada.
Then it unravelled. Congressional scrutiny of steep price hikes on old heart drugs combined with revelations in late 2015 about Philidor, a specialty pharmacy closely tied to Valeant that helped steer prescriptions toward its products. Accounting questions followed, guidance was cut, Pearson departed, and the shares lost around 90 percent. Ackman sold at an enormous loss in 2017. The company renamed itself Bausch Health in 2018 and spent years trying to shrink its debt load, selling assets and floating its eye-care business, Bausch + Lomb. Anyone who chased the stock near its peak saw almost all of the money disappear.
The lesson: A roll-up strategy that depends on cheap debt, aggressive pricing and adjusted earnings can look brilliant right up until the market questions any part of it.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2012 | $47.00 | $170 | $5,312 | 0.2× |
| 2015 | $143 | $55.94 | $3,301 | 0.1× |
| 2018 | $21.00 | $381 | $2,519 | 0.4× |
| 2020 | $30.00 | $267 | $2,092 | 0.3× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2018, turning $1,000 into $381. The S&P 500 from that same year: $2,519.
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Valeant / Bausch is one of 258 positions on the wheel — including the ones that went to zero.
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