Valeant Pharmaceuticals Intl Inc. (VRX) obtained consent from over half of loan holders to push back regulatory filing deadlines and loosen financial conditions on the loans. The week marks a series of positive developments for the struggling drug maker and, mirroring the positive developments, Valeant shares surged $5.44, or 19% Wednesday to close at $34.17, making the latest increase the biggest one-day percentage jump since Sept. 9, 2005. Shares are up again about 7 percent today on news that it secured a commitment from loan holders to amend terms of its debt, buying time as the drugmaker attempts to resuscitate itself.

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Valeant Pharmaceuticals Intl Inc. secures consent from lenders to amend terms of debt

Citing people familiar with the developments, The Wall Street Journal reports that Valeant on Wednesday convinced holders of over half of its loans, by principal amount, to amend the terms of its debt and loosen financial conditions. Wednesday’s deal acquires significance in the light of Valeant’s statement last month that while it intended to file its annual report, or 10-K, within the requirements of its lending agreements, it might miss a deadline that could allow lenders to accelerate loan payments.

Following the reports of Valeant’s agreement with the lenders, the company’s shares gained 4.2% more in after-hours trading Wednesday. The drug maker’s loans are the most widely-held investment among loan funds called Collateralized Loan Obligations.

Valeant has been battling several challenges, including the delayed 10-K filing, a board investigation into the dealings with Philidor, and items relating to its accounting policies. Analysts at Deutsche Bank wondered whether the drug maker can grow in its current position and beat its debt obligations.

On Tuesday, Valeant indicated that the Ad hoc Committee of the Board of Directors that was investigating Philidor-related matters had completed its investigation and didn’t find problems that would require further earnings restatements beyond the $58 million revenue adjustment that was previously disclosed. Exuding confidence, lenders said Wednesday that the Valeant deal was attractive, particularly when the drug maker clarified that no further restatement of its earnings was required.

Valeant Pharmaceuticals Intl Inc.  may name new CEO within weeks

Bill Ackman, whose Pershing Square Capital Management is one of the Canadian company’s biggest holders, said Valeant’s search for a new chief executive officer could be finished soon.

In his conference call Wednesday, he said: “We’re cautiously optimistic it’s a matter of weeks and not months in terms of identifying new management for the company.”

Ackman indicated that investors had lost confidence in Valeant’s financial statements and management and had concerns about governance. He highlighted that getting the delayed 10-K annual report filed is the drug maker’s “highest priority.” He added that investors can’t own securities when regulatory filings are delayed.

During his conference call, Ackman also said he decided to go active after watching events unfold over the past four or five months. He indicated that Valeant now is at a low, which is great for a new CEO.