Embattled Valeant Pharmaceuticals shares sold off heavily Tuesday after a disappointing profit report for the fourth quarter and a slashed guidance for the current quarter and the full year.

Shares slumped 50 per cent on the TSX on Tuesday, changing hands at $45.14 a share at the close.  As recently as September the stock was worth $320. 

The Canadian drugmaker is facing a Securities and Exchange Commission investigation and, separately, scrutiny from Congress over its drug pricing. CEO Michael Pearson recently returned to work after two months recovering from severe pneumonia, then delayed the company's quarterly earnings report by two weeks.

Valeant shares seemingly peaked in August right before Valeant's practice of buying rights to old drugs and jacking up the prices came under congressional scrutiny.

Pressure from Ackman

Investor activist Bill Ackman's hedge fund, Pershing Square Capital Management, which is one of Valeant's biggest shareholders, then began pushing for changes. Earlier this month, Valeant added three directors to its board, including a Pershing Square executive.

On Tuesday, Valeant Pharmaceuticals International Inc. said its still-preliminary results indicate it lost $336.4 million, or 98 cents per share, in the three months ended Dec. 31. Excluding one-time items, earnings were $2.50 per share, far short of per-share earnings of $2.64 that Wall Street expected, according to a survey by Zacks Investment Research.

Revenue totaled $2.79 billion, which topped analyst projections for $2.76 billion. The company said sales were down in its dermatology, gastrointestinal, ophthalmology, women's health and Western Europe businesses, among others.

On March 3, Valeant replaced Deb Jorn, the executive vice president in charge of its U.S dermatology and gastrointestinal businesses.

Valeant, which did not release results from a year earlier for comparison as is typically done, stressed that the results are preliminary as it reviews its relationship with one-time partner, Philidor. The company is now including a line-item in its earnings particularly related to costs of winding down that arrangement.

"The challenges of the past few months are not yet behind us and our goal for 2016 is to better balance our priorities across all of our constituencies - physicians, patients, employees, payers, debt holders and shareholders," CEO Michael Pearson said in a statement.

Valeant said Tuesday that it settled a lawsuit over a billing dispute with R&O Pharmacy LLC, with R&O making an unspecified payment to Valeant. Valeant has said that Philidor's pharmacy network includes R&O. Other terms of the settlement remain confidential, and Valeant said it refutes any suggestion of wrongdoing.

Separately, Valeant said it has struck a deal to distribute Mysimba, a diet pill made by Orexigen Therapeutics Inc. of San Diego, to distribute the drug in central and eastern Europe.

Valeant, which is based in Laval, Quebec, now anticipates a first-quarter adjusted profit between $1.30 and $1.55 per share on revenue in a range of $2.3 billion to $2.4 billion. Its prior outlook was for an adjusted profit between $2.35 and $2.55 per share on revenue in a range of $2.8 billion to $3.1 billion.

For 2016, the company now foresees an adjusted profit between $9.50 and $10.50 per share on revenue in a range of $11 billion to $11.2 billion. Its previous forecast was for an adjusted profit between $13.25 and $13.75 per share on revenue in a range of $12.5 billion to $12.7 billion.

Analysts polled by FactSet expect first-quarter profit of $2.62 per share on revenue of $2.84 billion and a 2016 profit of $13.27 per share on revenue of $12.42 billion.

With files from CBC News