The CEO of Valeant Pharmaceuticals is in the hospital with "severe" pneumonia, the company said Saturday.

J. Michael Pearson has been the head of Valeant (VRX) since 2008, leading the company during an aggressive expansion and merger. More recently, he's had to steer the company through some serious fraud allegations as well.

Shares of Valeant have fallen nearly 50% in the last three months. In October, federal investigators subpoenaed the firm for information on how it prices and distributes drugs.

Shortly after, stock researchers at Citron, a short-selling firm, called Valeant a "pharmaceutical Enron" that's deceiving investors and inflating sales through bogus pharmacies.

Pearson and Valeant have staunchly denied the claims. But its image only got worse when the company closed down the controversial pharmacy -- and hired a top-notch lawyer.

Last week, the company cut earnings guidance for its fourth quarter, and said full-year revenue could be more than 18.8% lower than initially projected.