Everyone’s favorite troubled biotech giant Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is making the news cycles rumble once again with official talks that the firm’s Salix GI segment might be on its way to a sale, and subsequent money to help Valeant’s greater debt issues might be stepping up to the occasion in the near future if the deal goes through. Meanwhile, Shire PLC (ADR) (NASDAQ:SHPG) also has made some waves, releasing third-quarter earnings that initially sent shares on a slight decline.

BTIG analyst Tim Chiang is weighing in from the sidelines on VRX, debating the good and the bad with this multi-billion-dollar asset deal along with other advantages in the firm’s favor. With regards to SHPG, Chiang enters with a confident perspective, believing investors have no need to be worried, for the biopharma group’s strengths outclass the concerns.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Tim Chiang is ranked #141 out of 4,173 analysts. Chiang has a 55% success rate and gains 20.7% in his annual returns. However, when recommending VRX, Chiang loses 21.7% in average profits on the stock. When suggesting SHPG, Chiang earns 29.4%.

Let’s dive in:

Valeant Pharmaceuticals Intl Inc

Yesterday, Valeant brought biotech buzz to channels like Dow Jones and The Wall Street Journal regarding the firm’s advanced discussions with the Japanese drug company Takeda Pharmaceutical to sell its Salix GI segment at a price tag circling $10 billion, sending shares rising almost 34% yesterday.

In reaction to the confirmation of the troubled biotech giant declaring prospective forthcoming asset sales, Chiang reiterates a Neutral rating on shares of VRX with a $24 price target, which represents a 4% increase from current levels.

The analyst explains that though the billion-dollar bid does not match Salix’s original price, Valeant needs to get creative to tackle its looming debt issues. Chiang notes, “Based on our estimated CY16 sales estimate for Salix of ~$1.5B, a possible $10 billion bid would value Salix at ~6.7x sales. While this figure is substantially below what Valeant paid for Salix (~$15.8 billion), we think a major asset sale is needed to reduce its sizeable debt load (~$30 billion).”

Additionally in Valeant’s favor, Chiang points to Xifaxan, designed to treat irritable bowel syndrome with diarrhea (IBS-D) and hepatic encephalopathy (HE), underscoring that the pipeline drug is “currently Valeant’s single largest product with $408 million of sales generated in 1H16.”

Lastly, Chiang highlights in his research report the giant issued financial guidance at the start of August expecting revenue in the range of $9.9 to $10.1 billion and an EPS target of $6.60 to $7.00 per share, along with EBITDA of $4.8 to $4.95 billion. From the analyst’s perspective, this guidance is significant.

“We believe this guidance reflects a recovery for several of its key segments including dermatology, Salix, and a rebound with its emerging market segment. Overall, we think the Co.’s CY16 financial targets may need to be revised lower as we believe the Co.’s ability to raise prices has been constrained in the US,” Chiang contends.

TipRanks analytics exhibit VRX as a Hold. Based on 11 analysts polled in the last 3 months, 3 rate a Buy on VRX, 6 maintain a Hold, while 2 issue a Sell. The 12-month price target stands at $32.61, marking a nearly 37% upside from where the shares last closed.screen-shot-11-02-16-at-02-58-pm

Shire PLC (ADR)

Yesterday, Shire posted third-quarter earnings that though reveal some weaknesses have not deterred Chiang from making a bullish forecast for the biopharma group, reiterating a Buy rating on SHPG with a price target of $242, which represents a 47% increase from where the shares last closed.

SHPG brought in revenue of $3,452 million, which fell short of Chiang’s projection of $3,477 million, along with adjusted EPS of $3.17, under the analyst’s estimate calling for $3.29. Gross margins circled 75% along with operating margins of approximately 40%. Tax rate resulted in a lower than anticipated 13%. The company maintained its full year 2016 financial guidance, including $10.8 to $11 billion in product sales and adjusted EPS ranging from $12.70 to $13.10. However, shares nonetheless took a 2% dip yesterday on back of the print.

Chiang believes, “The culprit appears to be weaker than expected sales from the Hematology segment which declined 6% YOY. Shire highlighted that pro forma growth in this segment was mostly in line with market trends, but was impacted by the timing of large orders. While we recognize investors’ concerns with the Co.’s hematology segment, we believe it is unlikely that patients (mostly children) would switch to other clotting factors due to safety concerns. We believe management is up to the task of integrating Baxalta, while commercializing new products like Xiidra.”

For the analyst, Shire’s shining light lies in its pipeline drug Xiidra, a treatment for signs and symptoms of dry, which just impressed with a robust initial launch and should not be “overlooked.” Chiang affirms, “We see Xiidra becoming a major product for Shire with billion dollar sales potential by 2022.”

While Chiang acknowledges, “Recent comments made by Express Scripts (ESRX, Not Rated) on the high costs for hemophilia treatments appear to be spooking investors,” ultimately, even though investors have concerns that Express Scripts will control the patient/doctor/treatment situation, he finds these fears “overdone.” Based on the analyst’s channel checks, he deems it “unlikely” that patients will find themselves shifting to different clotting agents out of concerns for safety.

TipRanks analytics demonstrate SHPG as a Strong Buy. Based on 8 analysts polled in the last 3 months, 6 rate a Buy on SHPG, while 2 maintain a Hold. The consensus price target stands at $244.75, marking a nearly 49% upside from where the stock is currently trading.screen-shot-11-02-16-at-02-59-pm