Valeant Pharmaceuticals International Inc., the drugmaker that lost $60 billion of market value after closer investor scrutiny of its business practices, has even further to fall by next spring, says one strategist.

Michael Lewitt, an investment manager at Third Friday Group Llc., is recommending that investors buy put options that will profit as Valeant’s stock sinks below $50 a share by March. Valeant today declined 14 percent to $79.03 by 10:50 a.m. New York time.

“The company’s business model is predatory and unethical,” Lewitt writes in the November issue of his Credit Strategist newsletter. “Valeant acquires other drug companies using huge amounts of debt, fires most of their employees and then raises their drug prices by huge amounts.”

He recommends that traders buy March puts with a strike price of $50 a share for up to $4.50 a contract. The puts traded at $5.60 a contract at 11:20 a.m. Thursday, outside of Lewitt's recommended purchase price.

A put is an options contract to sell a stock at a pre-set price. If Valeant’s stock falls below $45.50 by March ($50 strike price minus $4.50 purchase price equals $45.50), then the put would be profitable. If the price of the stock rises above $50 by March, the put becomes worthless.

“This circus will be in town for a long time,” Lewitt says.

Valeant, whose market value peaked at about $89 billion in August, was accused last month by short seller Citron Research of using a pharmacy to boost its sales artificially. The drugmaker denied those claims.

A U.S. Senate panel on Wednesday opened an investigation into the pricing practices of drug companies including Valeant. The Senate’s Special Committee on Aging also requested information from Turing Pharmaceuticals, Retrophin Inc. and Rodelis Therapeutics.

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