Though Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares were surging nicely ahead at almost 6% yesterday, and continuing to rise today, top analyst Irina Rivkind Koffler at Mizuho remains bearish on the stock. From the analyst’s perspective, even though the biotech giant’s psoriasis drug Siliq (brodalumab) received the green light from the FDA yesterday, one day in advance of its PDUFA date, she believes the drug “appears dead in the water.”
As such, the analyst maintains caution and reiterates an Underperform rating on shares of VRX with an $11 price target, which represents a 36% downside from where the stock is currently trading.
Koffler asserts, “Our key concern is that the company’s underlying portfolio and pipeline may not provide sufficient growth to offset the declines of older products as well as the impact of asset sales (vs. consensus expectations of a return to growth in 2018). Furthermore, the debt load limits management’s optionality to invest in future growth. The recent approval of a highly anticipated pipeline drug in psoriasis is unlikely to improve the company’s situation […]”
Overall, “[…] we believe that prescribing information may be even more restrictive than expected. Siliq is indicated for moderate-to-severe plaque psoriasis in patients who are candidates for phototherapy and systemic therapy, that no longer respond to these agents (in other words, as a drug of last resort). Siliq also has a Black Box warning for suicidal ideation and is only available through a risk management program that requires both physician and pharmacy training and certification, which we view as particularly onerous,” Koffler concludes.
Looking ahead, the analyst models VRX’s share of 2020 profits to circle $72 million, which she deems “insufficient.”
Irina Rivkind Koffler has a very good TipRanks score with a 55% success rate and a high ranking of #83 out of 4,460 analysts. Koffler yields 21.3% in her annual returns. When recommending VRX, Koffler realizes 18.7% in average profits on the stock.
TipRanks analytics exhibit VRX as a Hold. Out of 10 analysts polled by TipRanks in the last 3 months, 1 is bullish on Valeant stock, 6 remain sidelined, and 3 are bearish on the stock. The consensus price target stands at $16.78.
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