UPDATE 1-Buffett, Munger slam Valeant; drugmaker turned into 'a sewer'

(Adds Sequoia open to new investors)
By Jennifer Ablan and Trevor Hunnicutt
NEW YORK, April 30 (Reuters) - Warren Buffett and Charlie
Munger made clear that they are no fans of embattled drugmaker
Valeant Pharmaceuticals International Inc (NYSE:VRX) VRX.TO VRX.N .
"In my view, the business model of Valeant was enormously
flawed," Buffett said at the annual Berkshire Hathaway (NYSE:BRKa) meeting
on Saturday. Buffett responded to a question about whether he
agreed with his right-hand man, Charlie Munger, who last year
called Valeant's core strategy of buying smaller pharmacies and
then raising prices of their drugs "deeply immoral."
Buffett implied that Valeant was similar, in some respects,
to "chain letter" companies designed to fool investors.
Shares in Valeant have lost 87 percent of their value from
their 2015 high, and its former chief executive was called to
testify before Congress this week about the company's
drug-pricing policies.
Buffett said the Sequoia Fund SEQUX.O , which traces its
roots to Buffett, took an "unusually large position" in Valeant,
mainly a result of the fund becoming "overly entranced with the
business model."
Sequoia, which at one point had more than 30 percent of its
assets in Valeant, had 19 percent of its money in the drug stock
as of Dec. 31.
Buffett noted the money manager responsible for Sequoia's
investment in Valeant, then-chief executive Robert Goldfarb, has
left the fund. Buffett said he also was approached by multiple
people asking if he wanted to invest in Valeant and meet former
Valeant CEO Michael Pearson (LON:PSON). Buffett said he declined to do
either of those things, and was wary of the company from the
very beginning.
All told, Buffett expressed support for portfolio managers
of the Sequoia, which has long invested in Berkshire and shared
similar values, characterizing them as "very smart, decent
people."
Munger concurred that Sequoia "reconstituted" itself. He
added: "We think the whole thing is fixed. Valeant was a sewer,
and those who created it deserved the opprobrium they got."
Friday, Sequoia said in a regulatory filing that the $5.3
billion mutual fund is reopening to new investors. It will
accept direct purchases from new customers but remains closed to
those seeking to buy through intermediaries.