As Valeant Pharmaceuticals Intl Inc (NYSE:VRX) continues to deal with bad press, one analyst believes there is nothing to worry about. On the other hand, one analyst is bullish on RXi Pharmaceuticals Corp (NASDAQ:RXII) as the company moves forward with its lead candidate and diversifies its pipeline.
Valeant Pharmaceuticals Intl Inc
Rodman & Renshaw analyst Reghuram Selvaraju remains bullish on the battled healthcare company, Valeant, as it requests a credit facility amendment. The analyst also reminds investors that while officials are hunting for additional accounting discrepancies in Valeant’s 8-K, none have been found.
As expected, the analyst points out, Valeant launched a credit facility amendment yesterday, which must be approved by lenders. Along with this extension request, Selvaraju notes that Valeant “is seeking to” postpone its 10-K filing to the end of May, and also seeking to posting its 1Q2016 filing to the end of July. The analyst explains, “These extensions are intended to provide relief under the credit facility in the event that” the two filings cannot be postponed.
Valeant is seeking additional relief as the analyst explains, “Valeant is also asking its lenders to amend the interest coverage maintenance covenant and certain financial definitions, which would provide additional cushion in its financial covenants.” Although this measure entail several restrictions on Valeant’s freedom with acquisitions and dividends, Selvaraju notes “none of these requests are surprising or substantially different from what the company originally indicated it would be asking from its lenders when it held its update call earlier this month.”
Lastly, Selvaraju explains that since Valeant filed its 8-K, no additional discrepancies have been found in the report. He explains, “We are cautiously optimistic that the damage will remain limited and that Valeant can effectively mount an expedient recovery from several of the issues that have plagued the company over the past several months.” As a result, Selvaraju reiterates a Buy rating on Valeant with a $118 price target.
According to TipRanks, 7 analysts are bullish on Valeant, 4 are bearish, and 11 remain neutral. The average 12-month price target between these 22 analysts is $55, marking a 106% potential upside from current levels. Reghuram Selvaraju has a 40% success rate recommending stocks with an average one-year loss of 0.6% per rating.
RXi Pharmaceuticals Corp
In light of RXi’s progressing pipeline, Mark Breidenbach of H.C. Wainwright reiterates a Buy rating on the company with a $3.50 price target. The analyst highlights RXi’s pipeline of RXI-109, Samcyprone, RXI-185, and RXI-231.
RXI-109, the company’s lead product candidate, is in testing to reduce scarring after surgery. The analyst acknowledges that this product “remains the company’s primary driver.” The company is working to optimizing dosing of RXI-109, which Breidenbach believes is paying off. Based on the current results, the analysts notes the company is taking “a significant step toward ensuring an optimal dosing schedule, a prerequisite for advancing into larger studies.”
Aside from RXI-109, the analyst is pleased to see that RXi is diversifying its pipeline. He points to Samcyprone to treat DPCP, RXI-185 for collagenase, and RXI-231 for tyrosinase. Breidenbach believes that that latter two pipeline drugs “could benefit from an expedited path to commercialization that avoids a traditional IND.”
Thanks to RXi’s broad pipeline, multiple data readouts anticipated in the near-term, and the company’s discounted valuation, Breidenbach remains bullish on the company.
According to TipRanks, Mark Breidenbach has a 41% success rate recommending stocks with an average annual loss of 18.6% per rating. He is the only analyst who covers the stock on TipRanks.