Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Exelixis, Inc. (NASDAQ:EXEL) have stirred up interest after Valeant has stepped closer to FDA approval for Vesneo with an NDA resubmission and Exelixis brought to the table two collaboration agreements, placing the spotlight on its drug Cabometyx. Rodman & Renshaw remains sidelined for now, but could soon be betting on Valeant once again, with William Blair continuing to be bullish on Exelixis’ clinical potential. Let’s take a closer look:

Valeant Could be Circling FDA Green Light in the Next 2 Months

Valeant shares were surging forward 3% yesterday following the news that the biotech giant and its partner Nix S.A. have resubmitted their drug Vesneo (latanoprostene bunod), an intra-ocular pressure (IOP)-lowering single-agent eye drop product for treatment of open angle glaucoma or ocular hypertension, for FDA consideration.

Praising Vesneo’s “compelling” efficacy profile as well as a “favorable” competitive edge, Rodman & Renshaw analyst Ram Selvaraju is cautiously optimistic, acknowledging potential for him to shift away from the sidelines should the biotech giant impress with fourth quarter results. At this time, the analyst reiterates a Neutral rating on shares of VRX with a $23 price target, which represents a 39% increase from where the stock is currently trading.

For context, upon the first round of consideration, the FDA countered the original Vesneo New Drug Application (NDA), first submitted in July of 2016, with a Complete Response Letter (CRL) on back of deficiencies detected in the facility in Tampa, Florida where the drug was meant to be manufactured; specifically highlighting issues in Good Morning Practices (CGMP).

However, “Since the original CRL did not identify any requirement for additional safety or efficacy data for Vesneo®, we believe that this resubmission should be reasonably routine and that, if categorized as a Class I resubmission, should pave the way for the approval of Vesneo® within the next two months. As such, therefore, we believe the drug could be launched by May 2017. While the resubmission is an incremental positive, we remain at a Neutral rating for now given the broader uncertainty over Valeant’s operating performance, and would point investors to the company’s earnings report for 4Q16 and FY2016—scheduled for tomorrow—as the first indicator of what the future may hold. If Valeant delivers better-than-anticipated performance in 4Q16 and provides improved guidance for 2017, we could elect to revise our thesis on the name,” Selvaraju contends.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, one-star analyst Ram Selvaraju is ranked #3,861 out of 4,504 analysts. Selvaraju has a 40% success rate and faces a loss of 1.3% in his annual returns. However, when recommending VRX, Selvaraju earns 9.7% in average profits on the stock.

TipRanks analytics exhibit VRX as a Hold. Out of 11 analysts polled by TipRanks in the last 3 months, 1 is bullish on Valeant stock, 7 remain sidelined, and 3 are bearish on the stock. With a return potential of 5%, the stock’s consensus target price stands at $17.60.

Exelixis on the Brink of Bolstering Cabometyx’s Clinical Value

Yesterday, Exelixis investors sent shares racing 6% following the pre-market reveal that the biotech firm has two collaboration agreements in the works with Bristol-Meyers Squibb Company as well as with Roche. William Blair analyst John Sonnier likewise sees this news as a positive, encouraged that these alliances further showcase EXEL’s advanced kidney cancer drug Cabometyx’s compatibility with IO agents spanning various types of tumors.

Moreover, the analyst foresees future strides for Cabometyx coupled with checkpoint inhibitors beyond indications of renal cell carcinoma (RCC) and urothelial carcinoma (UC). In reaction, the analyst reiterates an Outperform rating on EXEL without listing a price target.

“We believe both deals highlight the potential for Cabometyx to be combined with checkpoint inhibitors (both anti-PD-1 and anti-PD-L1 antibodies), and pending successful study results, materially increase Cabometyx’s clinical utilization in various tumor types. In addition, we believe Exelixis could benefit from Bristol-Myers’s R&D infrastructure and the experience with immuno-oncology (IO)- IO combinations, as well as the cost-sharing framework with Bristol-Myers and partners Ipsen and Takeda. In our view, the collaborations are motivated by the data generated from a National Cancer Institute study, assessing Cabometyx in combination with Opdivo with or without Yervoy in urothelial carcinoma and genitourinary cancers; data were presented at the European Society of Clinical Oncology (ESMO) 2016 Congress […], and updated results were available at the American Society of Clinical Oncology Genitourinary Cancers Symposium (ASCO-GU) […]” Sonnier surmises.

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 John Sonnier is ranked #426 out of 4,501 analysts. Sonnier has a 52% success rate and realizes 17.2% in his yearly returns. When recommending EXEL, Sonnier garners 117.1% in average profits on the stock.

TipRanks analytics demonstrate EXEL as a Strong Buy. Based on 3 analysts polled by TipRanks in the last 3 months, all 3 rate a Buy on EXEL stock. The 12-month average price target stands at $20.00, marking a 13% downside from where the stock is currently trading.