Mizuho Securities’ healthcare analyst Irina Rivkind Koffler weighed in today with her views on Valeant Pharmaceuticals Intl Inc (NYSE:VRX), after Citron Research said in a report that it appears that Valeant and the specialty pharmacy Philidor have created a network of phantom pharmacies to fool auditors, and that Philidor appears to own R&O Pharmacy, a company Valeant has accused of improperly withholding payments.

Koffler noted, “Valeant has a lot to explain to allay investor concerns. We think that it must openly address the rationale for Philidor creation, provide evidence of truthful revenue booking and accounting, and, furthermore, support the viability of its other business segments and next year’s $7.5B EBITDA guidance. We think the company could have difficulty defending its former R&D strategy from PhRMA criticism, as it has been tied to significant headcount cuts (which have not yet hit the broader media), but management has already guided to higher investment next year.”

“We remain cautious on VRX sentiment heading into the call, but do think that the vast majority of its business comprised of units like Salix, B+L is legitimate and unrelated to Philidor. In our prior discussions with management we were told that Philidor is primarily used to distribute dermatology products and we have spoken to practices that have used it. Valeant reported U.S. Dermatology sales of $465.5M in 3Q:15 so this segment represents approximately 17% of company revenues.”

Koffler concluded, “We think that the VRX call could be a catalyst to the entire sector: The more isolated Valeant appears relative to the group, the better it is for the sector, in our view.”

The analyst reiterated a Neutral rating on Valeant shares, with a price target of $155, which implies an upside of 33% from current levels.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind Koffler has a total average return of 39.0% and a 62.9% success rate. Koffler has a 38.1% average return when recommending VRX, and is ranked #5 out of 3801 analysts.

Out of the 20 analysts polled by TipRanks, 14 rate Valeant stock a Buy, 5 rate the stock a Hold and 1 recommends Sell. With a return potential of 115%, the stock’s consensus target price stands at $249.24.