Valeant Pharmaceuticals9


Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is a global specialty pharmaceutical firm with a focus on branded products for the dermatology, gastrointestinal, and ophthalmology markets.


Valeant announced today that it has received lender consent for amendments to its credit facility. The amendments include a reduction in the interest coverage maintenance covenant, greater flexibility to sell assets, and additional options to repay term loans. In exchange for these amendments, Valeant agreed to increase the interest rate on its credit facility by 0.50% and pay a fee equal to 0.25% of the aggregate principal.

CEO Joseph C. Papas said, “We are pleased to have the support of our lenders and appreciate their confidence in the Company’s future. The amendment provides us with additional flexibility and allows us to focus on executing our strategic plan, developing our pipeline and improving patients’ lives.”

Buy? Sell? Hold?

In a research report issued today, Canaccord analyst Neil Maruoka reiterated a Hold rating on shares of Valeant, while slightly raising the price target to $33 (from $31). The analyst commented, “On balance, we view this as positive news for equity investors, but we believe that the company must still divest assets and execute operationally to fully turn the ship around. As we had noted following the quarter, the foundation has been laid and the targets have now been set; we will continue to monitor these signals (such as the new prior authorization program with Walgreens, the reacceleration of Xifaxan, asset sales, debt repayment, and operational execution) before revisiting our recommendation.”

Echoing his colleague at Canaccord, RBC Capital analyst Douglas Miehm reiterated a Sector Perform rating and $36 price target on VRX, noting, “We view these amendments positively.”

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, analysts Neil Maruoka and Douglas Miehm have a yearly average loss of 39.2% and 11.6% respectively. Maruoka has a success rate of 13% and is ranked #4,032 out of 4124 analysts, while Miehm has a success rate of 42% and is ranked #3,730.

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