Following what is “clearly a disappointing setback in a month that to date had proved to be one of positive surprises for the company,” Rodman & Renshaw analyst Raghuram Selvaraju reiterates a Buy rating on shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX), with a price target of $90, marking a notable 294% increase from where the shares last closed.

The FDA countered Valeant Pharma’s New Drug Application for its pipeline contender, Vesneo (latanoprostene bunod), a product designed to treat open-angle glaucoma or intraocular pressure, with a roadblock against approval in its present form. However, Selvaraju still has faith for the drug to receive regulatory approval a little further down the road, as the FDA did not specify issues of safety or efficacy as reasons for the delay. The concerns instead lie with Good Manufacturing Practices deficiencies, which Valeant intends to address immediately with the FDA.

Selvaraju anticipates a Class 1 resubmission followed by an approval date by October 2016, although he acknowledges it could take further to turn around the decision. The analyst supports his confidence for VRX, commenting, “We note that the FDA and Valeant had already held labeling discussions on the product prior to the issuance of the CRL and therefore we remain confident that it should ultimately receive approval and enter the market in the U.S. this year.” Once Vesneo enters the market, Selvaraju believes it will stand alone on its competitive edge against existing drugs like Pfizer’s latanoprost. By then, the analyst believes the delay won’t negatively impact Vesneo’s commercial potential; as such, Selvaraju remains bullish.

As usual, we recommend taking analyst notes with a grain of salt. They are often successful in moving the stock price, but you always need to take things into perspective. According to TipRanks, Raghuram Selvaraju is ranked #3,612 out of 4,077 analysts, reaching a success rate of 39% and averaging a loss of 2.5% per each recommendation.

TipRanks analytics show Valeant Pharma to be a Hold. Out of 17 analysts polled for VRX in the last 3 months, the overall consensus indicates 5 rate a Buy, 9 maintain a Hold, and 3 issue a Sell. The average price target stands at $41.64, indicating an 82% upside from where the stock is currently trading.