Following unanimous FDA AdCom recommendation for Valeant Pharmaceuticals Intl Inc (NYSE:VRX) psoriasis-fighting pipeline drug brodalumab, Rodman & Renshaw analyst Raghuram Selvaraju reiterates a Buy with a price target of $90.00, essentially a 266% increase from where shares last closed.
Up-to-date projections have not yet factored in this potential FDA approval; a pivotal point that could drive Selvaraju’s estimates even further upside. The PDUFA action date on the drug is November 16, 2016. Selvaraju believes, “In our view, the vote in favor of brodalumab constitutes a meaningful positive value driver for Valeant, since it substantially increases the likelihood of brodalumab approval later this year.”
Meanwhile, in the line of positive FDA AdCom news also comes the FDA approval of oral Relistor- new treatment to help opioid-induced constipation (OIC). Prior to this approval, the ingredient methylnatrexone bromide was only possible through injection. The analyst predicts, “From our perspective, an oral formulation could allow the product to attain blockbuster (>$1B) status in annual sales.”
In closing, Selvaraju does not foresee the same blockbuster status for brodalumab. Yet, the analyst evaluates such strong efficacy for the drug that he still thinks once gains official approval from the FDA could very well generate $400 to $500 million in sales; even in spite of the black box warning Selvaraju expects to be attached. Once Oral Relistor hits the market, the analyst forecasts a sharp competitive edge in the scope of orally-bioavailable drugs for opioid-induced constipation.
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 #3,585 out of 4,073 analysts, retaining a success rate of 40% and averaging a loss of 2.4% per every recommendation Selvaraju makes.
TipRanks analytics reveal VRX stock to be a present Hold. In the context of 17 analysts who have offered recommendations on VRX in the last 3 months, 5 rate a Buy, 9 have maintained a Hold, and 3 have issued a Sell. The average 12-month price target stands at $38.73, marking a nearly 58% upside from current levels.