Hold Your Horses: Healthcare Analysts Cautious on Valeant Pharmaceuticals Intl Inc (VRX), Sarepta Therapeutics Inc (SRPT)

Valeant Pharmaceuticals Intl Inc

Wells Fargo analyst David Maris weighs in on shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX), as the drug maker focuses on operational turnaround following recent management changes. Maris rates Valeant Pharmaceuticals an Underperform with a valuation range of $10-$13.

Maris noted, “We believe the departures may reflect instability at Valeant and note that Whitaker has been at Valeant for less than two years. While some will say this is bringing on the new team for the “new Valeant,” we believe that these changes will have no impact on the business trajectory that is already underway, and if anything, makes us even more convinced that potential sales of Salix, B&L, or other business units are less likely, as in our experience, companies do not usually hire executives for businesses that are about to be divested,” the analyst commented.”

“We believe these departures are part of creating the “new Valeant” narrative, of which we remain critical, as we believe the “new Valeant” looks a lot like the “old Valeant,” only with lower growth, lower profitability, and higher debt,” the analyst concluded.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst David Maris has a yearly average return of 11% and a 53% success rate. Maris has a 43.4% average return when recommending VRX, and is ranked #462 out of 4285 analysts.

Out of the 11 analysts polled by TipRanks (in the past 3 months), 2 rate Valeant Pharmaceuticals stock a Buy, 7 rate the stock a Hold and 2 recommend to Sell. With a return potential of 161%, the stock’s consensus target price stands at $37.08.

Sarepta Therapeutics Inc

Jefferies analyst Gena Wang reiterated a Hold rating on shares of Sarepta Therapeutics Inc (NASDAQ:SRPT), while reducing the price target to $32 (from $46), after conducting due diligence with 4 private payers, 3 Medicaid experts, and several DMD KOLs with first-hand experience of Exondys 51, Sarepta’s DMD drug that has been recently approved by the FDA.

Wang noted, “Based on >10 KOL feedback and payer policies from 21 private plans, our in-depth analysis suggest stronger payer pushback and slower uptake/launch for Exondys 51. We expect significant portion of Medicaid coverage and restrictive payer policies could further slow Exondys 51 launch in the near term and we reduce PT to $32.”

“Our analysis suggests likely slow uptake of Exondys 51 due to additional time required for genetic tests, uncertainty of clinical benefit, and exhaustive payer oversight; decisions to continue would likely depend on close monitoring of clinical benefits, safety and pt interest,” the analyst added.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks.com, analyst Gena Wang has a yearly average return of -8.1% and a 34% success rate. Wang has a -170.5% average return when recommending SRPT, and is ranked #4061 out of 4285 analysts.

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