Some of the world’s top hedge fund managers, including John Paulson and Bill Ackman, swallowed a bitter pill Tuesday as Valeant Pharmaceuticals International Inc. (NYSE:VRX) saw one of its worst trading days on record.

Shares in Valeant sank $32.74, or 47.4 percent, to $36.30 during trading in New York Tuesday morning, as the company’s executives scrambled to control damage stemming from slashed earnings expectations at the troubled company.

Ackman’s Pershing Square Capital Management, which owns 9 percent of outstanding Valeant shares, lost close to $1 billion between Monday’s close and Tuesday afternoon. Paulson’s fund saw its value drop roughly $430 million.

In recent years the Canadian drugmaker has become a favorite of hedge funds as its distinctive strategy of acquiring niche drugs and sharply hiking their prices yielded meteoric growth. Today, some two-dozen major hedge funds have Valeant stock in their top 10 equity holdings, according to Goldman Sachs. Nearly 30 percent of Valeant stock is held by hedge funds.

But Valeant’s business model has come under increasing scrutiny — and multiple federal investigations — following a series of revelations about its specialty pharmacy ties and revenue recognition. Since peaking in August, shares of Valeant have plunged more than 85 percent.

Through it all, however, Valeant’s hedge fund champions have stuck up for the wayward drugmaker. Ackman, famed for his activist investing, has consistently responded to drops in Valeant’s stock by pouring more cash into the investment, including a 1 million-share increase in early February.

Though Ackman apologized in an annual letter to clients for not selling sooner, he remained sanguine on Valeant. “We continue to believe that the value of the underlying business franchises that comprise Valeant are worth multiples of the current market price,” Ackman wrote in an email to investors Tuesday. “Getting to those values, however, will require restoration of shareholder confidence in the management and governance of the company.”

Earlier this month Valeant added three board members, including a Pershing Square vice president.

Another big Valeant owner, Jeffrey Ubben of ValueAct Capital, took to the airwaves Monday to defend the company ahead of its announcement, telling CNBC: “We’re solving problems as we speak.” Ubben’s fund saw more than $490 million evaporate Tuesday.