Biotech Beat: Analysts Weigh In On Valeant Pharmaceuticals Intl Inc (VRX), Synergy Pharmaceuticals Inc (SGYP), Spectrum Pharmaceuticals, Inc. (SPPI)


Analysts are weighing in on the controversial drug giant Valeant Pharmaceuticals Intl Inc (NYSE:VRX), NY-based drug company Synergy Pharmaceuticals Inc (NASDAQ:SGYP) and NV-based pharma company Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), with positive ratings and views.

Valeant Pharmaceuticals Intl Inc

In a research report released today, Mizuho Securities analyst Irina Rivkind Koffler upgraded shares of Valeant Pharmaceuticals from a Hold to a Buy rating, while keeping her price target at $155, which represents a potential upside of 40% from where the stock is currently trading.

Koffler explained, “We have lowered the WACC in our model from 14% to 13% to account for the additional disclosures in the 10/26 investor call. We like the increased openness associated with VRX’s internal investigation and Big 4 audit, and the Philidor indemnification, which could off-load some legal risk. More, we think the company has taken the appropriate steps to deal with political and industry criticism by promising to end its former pricing practices and raise R&D investment. While the stock could remain highly volatile and potentially range-bound in the short term while investors await the results of the internal audit and further media/ political shake-out, we believe that VRX’s “Volkswagen event” has largely played out.”

The analyst concluded, “We think the VRX story is less risky following the additional transparency offered on the investor call and are upgrading the stock to BUY. The bigger questions now pertain to the future business outlook, which we attempt to conservatively characterize.”

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 41.7% and a 67% success rate. Koffler has a 41.7.% average return when recommending VRX, and is ranked #3 out of 3802 analysts.

Synergy Pharmaceuticals Inc

Rodman & Renshaw analyst Ram Selvaraju weighed in with a few insights on Synergy Pharmaceuticals, following a meeting with the company’s management team at the American College of Gastroenterology (ACG) Annual Meeting in Honolulu, HI. The analyst reiterated a Buy rating on the stock, with a price target of $20, which represents a potential upside of 238% from where the stock is currently trading.

Selvaraju wrote, “The feedback from both key opinion leaders and other gastrointestinal (GI) tract-focused firms on Synergy’s lead candidate plecanatide was overwhelmingly positive, and appeared to indicate widespread awareness of the potential diarrhea-related withdrawals that may be experienced by patients on plecanatide’s closest competitor, the marketed drug Linzess® (linaclotide). Synergy’s team appeared well-prepared for a possible launch of plecanatide in the U.S., with a strategy that may prove significantly more cost-effective and capital-efficient than is assumed by the investment community, in our opinion. Given this update, we remain positive on plecanatide’s prospects in chronic idiopathic constipation (CIC) and constipationpredominant irritable bowel syndrome (IBS-C) and reiterate our Buy rating.”

According to TipRanks.com, analyst Ram Selvaraju has a total average return of 4.2% and a 43.8% success rate. Selvaraju has a -10.6% average return when recommending SGYP, and is ranked #954 out of 3802 analysts.

All the 5 analysts polled by TipRanks rate Synergy Pharmaceuticals stock a Buy. With a return potential of 136.5%, the stock’s consensus target price stands at $14.

Spectrum Pharmaceuticals, Inc.

H.C. Wainwright analyst Swayampakula Ramakanth came out with a bullish call on shares of Spectrum Pharmaceuticals, despite the recent news that the company has received a CRL from the FDA regarding the
market application for EVOMELA, its lead pipeline product for the treatment of multiple myeloma.

Ramakanth wrote, “We believe the 20% drop in Spectrum’s stock price on October 23 to $5.33 per share as a result of the FDA’s complete response letter (CRL) to EVOMELA’s application is an unwarranted overreaction. Since the CRL was not caused by any clinical concerns, we believe the viability of the EVOMELA program and the associated risks remain unchanged. Furthermore, as outlined below, we do not expect the drug to be a significant contributor to the company’s top line results. Therefore, we view the weakness in the stock price as a buying opportunity.”

The analyst reiterated a Buy rating on shares of Spectrum Pharmaceuticals, with a price target of $10, which represents a potential upside of 90.5% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Swayampakula Ramakanth has a total average return of -18.2% and a 16.7% success rate. Ramakanth is ranked #3757 out of 3802 analysts.

Out of the 4 analysts polled by TipRanks, 3 rate Spectrum Pharmaceuticals stock a Buy, while 1 rates the stock a Hold. With a return potential of 81%, the stock’s consensus target price stands at $9.50.