Analysts are out with varied research reports on three of the biotech sector’s players: Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Biogen Inc (NASDAQ:BIIB), and Eagle Pharmaceuticals Inc (NASDAQ:EGRX). One analyst cuts the price target on VRX, one maintains confidence with key drivers ahead for BIIB’s pipeline, and one steps to the sidelines on EGRX. Let’s delve a little deeper:

Valeant Fundamentals Remain Challenging

After Valeant indicated three new reporting segments, specifically Bausch & Lomb/International, Branded Rx, and US Diversified, and on the heels of its third-quarter earnings release, BMO Capital analyst Gary Nachman has subsequently revised his model, reiterating a Market Perform rating on shares of VRX while cutting the price target from $29 to $21, which represents a 15% increase from current levels. Additionally, the firm has offered key business units as well as top 10 products and margins for each new segment.

Nachman believes, “The good news is that VRX is attempting to provide greater visibility on its businesses. The bad news is that significant pressures remain in several key areas and the numbers are coming down more meaningfully than anticipated. We maintain our Market Perform as it remains challenging to get comfortable with underlying fundamentals, and as we await updates on potential asset sales to accelerate debt paydown.”

Taking into account that the management team for the troubled biotech giant has “significantly” lowered 2016 guidance and indicated “cautious commentary regarding 2017 being a down year,” in response, Nachman has cut revenue projections “meaningfully” by $297 million in 2016 and by $905 million to $1.105 billion in 2017 through 2020. Meanwhile, the analyst has taken adjusted EBITDA estimates in 2016 down by $297 million and by $780 to $960 million in 2017 through 2020, with adjusted EPS reduced by $0.96 in 2016 and by a range of $2.00 to $2.36 in 2017 through 2020.

Though the analyst has pulled back on estimates, he notes, “We appreciate the additional visibility, adding, “We do like that the bar has been set much more realistically for the near-to-medium term.”

Ultimately, Nachman is wary of “key concerns going forward,” with his eyes peeled to revenue troubles in 2017, growth for core assets remaining “uncertain,” with “timing, valuation and possible disruption” to asset sales for “those businesses in the interim” all “unknowns”, “product disruptions […] and manufacturing issues” that require resolution, and an overall “challenge of balancing the need for cost-cuts while reinvesting in pipeline and key growth assets” facing the giant.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Gary Nachman is ranked #280 out of 4,223 analysts. Nachman has a 77% success rate and garners 15.5% in his annual returns. When recommending VRX, Nachman gains 4.0% in average profits on the stock.

TipRanks analytics exhibit VRX as a Hold. Out of 12 analysts polled by TipRanks, 2 are bullish on Valeant stock, 8 remain sidelined, and 2 are bearish on the stock. With a return potential of nearly 29%, the stock’s consensus target price stands at $23.45.screen-shot-11-16-16-at-02-52-pm

Biogen Risk/Reward Presents Unique Opportunity

As Biogen prepares to close 2016, the biotech firm has forthcoming prominent Alzheimer’s updates that J.P. Morgan analyst Cory Kasimov believes could “meaningfully impact the perceived value of Biogen’s AD pipeline.” Therefore, the analyst remains confident on the firm’s prospects and reiterates an Overweight rating on BIIB with a price target of $384, which represents a 19% increase from where the shares last closed.

Kasimov elaborates, “From BIIB we’ll get longer term/titration data from the Phase 1b PRIME study of aducanumab at the CTAD meeting in early Dec. Perhaps more importantly, LLY’s EXPEDITION-3 data […] will be the key readout for the AD space in general. Given the intense investor interest in aducanumab, we expect BIIB shares could be volatile around these updates. While the range of potential outcomes is wide, we think the risk/reward is skewed to the upside and would recommend owning shares into these events.”

Additionally, the analyst notes, “Outside of AD, there are a number of additional variables in the Biogen story, including the potential approval and launch of nusinersen in SMA, Tecfidera IP litigation, and the ongoing CEO search.”

“Bottom line: we continue to think BIIB’s high risk/high reward pipeline (and M&A optionality) presents a unique opportunity in the large cap biotech space,” Kasimov contends.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst Cory Kasimov is ranked #4,091 out of 4,223 analysts. Kasimov has a 36% success rate and faces a loss of 9.7% in his yearly returns. When suggesting BIIB, Kasimov forfeits 12.7% in average profits on the stock.

TipRanks analytics demonstrate BIIB as a Buy. Based on 12 analysts polled by TipRanks, 8 rate a Buy on BIIB, while 4 remain sidelined. The 12-month price target stands at $345.22, marking a 7% upside from where the shares last closed.screen-shot-11-16-16-at-01-49-pm

Eagle Catalysts Have Become Less Impactful

Following Eagle’s Analyst Day and on back of Teva’s third-quarter financial print, Mizuho top analyst Irina Rivkind Koffler believes shares are presently “fairly valued” for Eagle’s Bendeka royalty as well as in the context of the value of its pipeline.

Specifically in light of valuation, the analyst downgrades from a Buy to a Neutral rating on shares of EGRX with a $78 price target, which represents just under a 5% downside from where the stock is currently trading.

Koffler predicts, “We expect the stock to plateau after the Analyst Day due to lighter catalyst flow, weaker Treanda/Bendeka revenues reported by partner Teva, and fully loaded pipeline valuation.”

In her revised estimates, Koffler factors in “more generous” assumptions for Ryanodex, the firm’s injectable treatment for malignant hyperthermia (MH), believing “more optimistic forecasts may be unrealistic.”

Additionally, the analyst notes, “We don’t expect additional catalysts from small Arsia deal announcements nor progress of the EHS filing. We still believe that a company sale represents the most optimistic scenario but now hypothesize it could get pushed out into next year or beyond to allow for more Ryanodex market penetration.”

Lastly, Koffler finds that catalysts have become “smaller and less impactful, in our view.” The biotech firm has already commenced the submission of bringing an NDA for Ryanodex in the treatment of Exertional Heat Stroke (EHS) while circling approval from the agency by the middle of 2017, all of which the analyst considers “largely in the stock already.”

“Eagle is also meeting with FDA in early-2017 for a pre-IND meeting for its Faslodex 505(b)(2) submission and will be filing its reformulated Alimta in December of this year, which may be approved in late 2017. We think both of these are smaller products that may have more competition,” Koffler surmises.

Irina Rivkind Koffler has a very good TipRanks score with a 53% success rate and she stands at #48 out of 4,223 analysts. Koffler realizes 18.6% in her annual returns. When rating EGRX, Koffler yields 103.4% in average profits on the stock.

TipRanks analytics indicate EGRX as a Strong Buy. Out of 4 analysts polled by TipRanks, all are bullish on Eagle stock. With a return potential of nearly 16%, the stock’s consensus target price stands at $95.00.