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The relationship between Valeant Pharmaceuticals and a small pharmacy is again in focus.

Investigative-journalism website ProPublica reported that specialty pharmacy Philidor Rx Services — which is owned by Valeant and at the center of allegations of financial impropriety — was denied permission to operate in California.

Months later, an employee of the specialty pharmacy purchased a stake in another California pharmacy, West Wilshire Pharmacy, amounting to about 10%,Charles Ornstein reports.

Investors are asking how Valeant is connected to a whole host of smaller companies right now.

Short-selling firm Citron has alleged that Valeant improperly benefited from its relationship with Philidor. Philidor subsequently said it has the option to buy R&O Pharmacy.

In a release Wednesday, Valeant said that Philidor is a legitimate distribution network. Valeant announced today that it would host a conference call Monday to address the allegations made by Citron.

BMO analysts asked in a note Wednesday: “We believe most VRX investors didn’t know about Philidor; what else is out there that we don’t know?”

Valeant’s stock fell around 7% to $110 Thursday. It opened the week Monday at around $170.

As reported by Business Insider