Controversial drugmaker Valeant Pharmaceuticals is reportedly in the process of hiring a new CEO after the hospitalization of its current chairman, Michael Pearson, due to a severe case of pneumonia. Based on the reports, current CFO Robert Rosiello and former CFO Howard Schiller both have the potential to take the CEO spot for an indefinite period.

During the last quarter of 2015, Valeant's stocks began to collapse due to the federal investigations into the company's pricing practices as well as the allegations of accounting irregularities from a short seller. With the revelation of the company's clandestine relationship with Philidor, a pharmacy that is also now under investigation for questionable practices with insurance claims, only made matters worse.

Pearson's leave of absence, however, is the latest challenge that the Canadian drug manufacturer is facing, following their 60 percent sales decline since last August. According to Business Insider, Pearson, who initiated the company's strategy of expanding its product line through aggressive acquisitions instead of spending money on R&D, has been sick for weeks. And it was already known that he would not be presenting at the JPMorgan Healthcare Conference in San Francisco next week, as said by a Valeant spokesperson.

Due to Pearson's hospitalization, which was disclosed on Dec. 25, Valeant will appoint an interim chief executive officer to take over his responsibilities in the company. According to an insider familiar with the matter, it remains uncertain if the replacement would be temporary or permanent. Unfortunately, the reports regarding Valeant's leadership change, which came after the drugmaker's announcement last week that a group of company executives would take over for Pearson until he returned, have sent the company's stocks to drop seven percent on Tuesday, Reuters noted.

Michael Pearson joined Valeant as CEO in 2010 following a 23-year career at consultancy McKinsey & Co. Under his leadership, he made immediate acquisitions, which greatly increased Valeant's size and share price. The company also boosted credibility with wary investors last month by collaborating with leading pharmacy chain Walgreens Boots Alliance Inc. to distribute its drugs.

In line with Valeant's pursuit for a new CEO, potential candidates include Chief Financial Officer Robert Rosiello and Howard Schiller. Rosiello is one of the three members of the committee that Valeant created last week to temporarily replace Pearson. He was joined by General Counsel Robert Chai-Onn and Group Chairman Ari Kellen. Schiller, on the other hand, is a Valeant director who resigned as chief financial officer last year, Wall Street Journal has learned.

Meanwhile, Valeant Pharmaceuticals has declined to comment about its plans to appoint a new CEO.