Biotech Beat: Analysts Weigh In on Valeant Pharmaceuticals Intl Inc (VRX) and Relypsa Inc (RLYP)

Analysts are weighing in on the controversial drug giant Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and biopharmaceutical company Relypsa Inc (NASDAQ:RLYP), following recent events.

Valeant Pharmaceuticals Intl Inc

In a research report released Monday, Nomura’s healthcare analyst Shibani Malhotra reiterated a Buy rating on shares of Valeant Pharma, with a price target of $290, after the company announced it has formed a committee to review allegations against the company. Valeant shares reacted to the news, dropping 5.25% to $110.06 on heavy volume.

Malhotra observed, “While Valeant management did an excellent job of addressing investor concerns regarding Philidor, we were somewhat disappointed that today’s investor call was so narrowly focused. This is more so as the company now has three government investigations ongoing, of which one is criminal. Specifically, we had hoped that management recognized that regaining investor credibility is the single most important thing for the company at present.”

“Our diligence had suggested the Citron recent report was based on misinformation, and this was well proven during today’s presentation; however, the bigger issue here is that investors were willing to believe the report and Valeant lost nearly $24bn in market value last week alone. Given that the Valeant business model is complex, there are likely many areas that investors do not fully understand, and we believe it is unlikely that we will see a near-term end to bear accusations (whether manufactured or not).”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Shibani Malhotra has a total average return of 27.9% and a 82.6% success rate. Malhotra has a -14.3% average return when recommending VRX, and is ranked #218 out of 3801 analysts.

Out of the 20 analysts polled by TipRanks, 14 rate Valeant Pharmaceuticals stock a Buy, 5 rate the stock a Hold and 1 recommends a Sell. With a return potential of 121%, the stock’s consensus target price stands at $246.59.

Relypsa Inc

Wedbush analyst Liana Moussatos weighed in today with an optimistic view on Relypsa, following the FDA approval of Veltassa (patiromer) for the treatment of hyperkalemia. The analyst reiterated an Outperform rating, with a price target of $75, which implies an upside of 395% from current levels.

Moussatos wrote, “Following Veltassa’s approval RLYP sold off due to a misperception in our view that DDI dose separation was an unusual complexity and would hurt compliance and limit sales potential. The FDA put an unusual box warning on the Veltassa product insert that dosing with other medications should be separated by 6 hours in order to simplify theoretical drugdrug interactions seen in vitro even though DDIs were NOT seen in clinical trials. We understand that the Street viewed this as an unusual dosing complexity that would significantly reduce compliance and sales potential. It was also implied that since ZS-9 also did not appear to have DDI’s in the clinical trials, that it would not have a similar requirement on its label if approved.”

That said, “We continue to project Veltassa can achieve over $1 billion in gross peak annual sales just in the United States. Relypsa plans to launch Veltassa in the first week of January and we anticipate a successful launch. We believe that with manufacturing in place, a small specialty sales force of ~120 reps in the U.S., the co-detailing partnership with Sanofi, and distribution hub for the chronic market, a successful launch is likely and project peak annual sales to reach over $1 billion in the U.S. alone. With FDA approval in hand, we project full year profitability in 2019.”

According to, Liana Moussatos has a total average return of 12.1% and a 38.4% success rate. Moussatos has a -32.9% average return when recommending RLYP, and is ranked #259 out of 3801 analysts.

All the 5 analysts polled by TipRanks rate Relypsa Inc stock a Buy. With a return potential of 274%, the stock’s consensus target price stands at $56.25.



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