Healthcare analysts are weighing in on healthcare giants Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Biogen Inc (NASDAQ:BIIB). While one analyst becomes more bullish on Valeant as covenants are renegotiated and the company pays down debt, the other shines light on Biogen in light of recent Form 10 release for Bioverativ. Let’s take a closer look:

Valeant Pharmaceuticals Intl Inc

Valeant has been facing a volatile year as the biotech giant deals with the negative publicity of an SDNY investigation. Yet, in the wake of its second-quarter earnings call, Morgan Stanley analyst David Risinger sees a clear vision for VRX thanks to new leadership from CEO Joe Papa to better its financial prospects.

With a renewed bullish stance, Risinger upgrades VRX from Equal Weight to Overweight rating, while raising the price target from $33 to $42.

Especially with anticipated expansion in upcoming quarters, though the analyst assesses the risk of high profit drug competition, the drug maker’s growth franchises and cost efficiencies should rise to the occasion and “more than offset pressure.”

However, regarding fine risk poking thorns in the company’s cash flow from numerous investigations and lawsuits, Risinger admits that this is the one non-fixed variable, as “we are not lawyers and the company could face more risk” than Risinger can calculate.

Risinger contends, “Although VRX still faces risks, we see the upside skew as attractive. Risk of severe financial stress should diminish as covenants are renegotiated and VRX pays down debt, and deleveraging should drive equity value accretion.”

According to TipRanks, three-star analyst David Risinger is ranked #1,767 out of 4,124 analysts. Risinger has a 58% success rate and earns 1.3% in his average returns. However, when recommending VRX, Risinger loses 4.4% in average profits on the stock.

TipRanks analytics exhibit VRX as a Hold. Based on 17 analysts polled in the last 3 months, 6 rate a Buy on VRX, 9 maintain a Hold, and 2 issue a Sell. The 12-month average price target stands at $38.70, marking a 29% upside from where the stock is currently trading.

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Biogen Inc

Biogen has been a hot topic churning in the acquisition rumor mill, only to roar more following the release of Form 10 for Bioverativ. Bioverativ is to become BIIB’s hemophilia spinoff, a standalone, publicly-traded global biotech company expected to launch early 2017.

In reaction, Morgan Stanley analyst Matthew Harrison has cut all hemophilia costs and revenues after 2016, and has reduced R&D and SG&A expenses as well in 2017 onward by two-thirds of the total Bioverativ spending. The analyst values Bioverativ at an estimated $3.8 billion, the low end of his prior analysis taking into account EV/Sales, EV/EBITDA, and DCF. This new model takes into account key changes involving higher revenues, higher COGS and lower overall margins resulting from higher SG&A and R&D.

Harrison reiterates an Overweight rating on shares of BIIB, while trimming the price target from $385 to $368 as a further reflection of removed hemophilia costs, marking a 17% increase from where the stock is currently trading.

The analyst affirms, “We are OW Biogen. While we acknowledge a base business slowdown, we see optionality in the pipeline and management’s ability to impact near-term revenues through M&A.”

Additionally, Harrison notes, “We also updated our hemophilia revenue ramps to better reflect competitor timelines to the market and the slope of the European launches which just began in early 2016.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst is ranked #805 out of 4,124 analysts. Harrison has a 56% success rate and earns 5.4% in his annual returns. However, when recommending BIIB, Harrison loses 0.1% in average profits on the stock.

TipRanks analytics demonstrate BIIB as a Buy. Based on 19 analysts polled in the last 3 months, 10 rate a Buy on BIIB, while 9 maintain a Hold. The consensus price target stands at $336.46, marking a 7% upside from where the shares last closed.

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