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Biotech Beat: Analysts Weigh In On Valeant Pharmaceuticals Intl Inc (VRX), Synergy Pharmaceuticals Inc (SGYP), Spectrum Pharmaceuticals, Inc. (SPPI)


Analysts are weighing in on the controversial drug giant Valeant Pharmaceuticals Intl Inc (NYSE:VRX), NY-based drug company Synergy Pharmaceuticals Inc (NASDAQ:SGYP) and NV-based pharma company Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), with positive ratings and views.

Valeant Pharmaceuticals Intl Inc

In a research report released today, Mizuho Securities analyst Irina Rivkind Koffler upgraded shares of Valeant Pharmaceuticals from a Hold to a Buy rating, while keeping her price target at $155, which represents a potential upside of 40% from where the stock is currently trading.

Koffler explained, “We have lowered the WACC in our model from 14% to 13% to account for the additional disclosures in the 10/26 investor call. We like the increased openness associated with VRX’s internal investigation and Big 4 audit, and the Philidor indemnification, which could off-load some legal risk. More, we think the company has taken the appropriate steps to deal with political and industry criticism by promising to end its former pricing practices and raise R&D investment. While the stock could remain highly volatile and potentially range-bound in the short term while investors await the results of the internal audit and further media/ political shake-out, we believe that VRX’s “Volkswagen event” has largely played out.”

The analyst concluded, “We think the VRX story is less risky following the additional transparency offered on the investor call and are upgrading the stock to BUY. The bigger questions now pertain to the future business outlook, which we attempt to conservatively characterize.”

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