Valeant’s Rebound Falters as Key Drug Rejection Breaks Momentum

Valeant Pharmaceuticals International Inc.’s rebound from this year’s low in March was stopped in its tracks after U.S. regulators rejected its application for a plaque psoriasis lotion, Duobrii, that management saw as the first of many new drugs to hit the market in the next few years.

The shares, which peaked last week at the highest levels since 2016, tumbled as much as 9.9 percent Monday. Trading volume was more than 1.5 times the full-day average of the past three months as investors retreated even after the company pointed out that the Food and Drug Administration’s ruling was related to ...