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Is Valeant Pharmaceuticals (VRX) Back From the Dead?

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Call it an overreaction, a temporary reprieve or even a dead cat bounce — all terms used Tuesday to describe the 10% rise in shares of Valeant Pharmaceuticals (VRX), reaching a high of $16.97 following the company’s second quarter earnings beat — one thing is certain, those who have waited with pitchforks and shovels to bury the company will have to wait a little longer.

Fresh of its second straight earnings beat in five quarters, it would seem the embattled drug giant still has tons of life left.

Indeed, the fact that all of Tuesday’s gains evaporated by the close of market underscores the degree to which investors believe Valeant still has tons of deficits to overcome. Not the least of which is its massive debt burden of more than $27 billion. Beyond the earnings beat, Valeant revealed it’s on track to cut some $5 billion off its debt by February 2018, meaning investors must now reconcile that a new Valeant is forming.

By “new” I’m referring to the fact that Valeant's share price (down 35% in 12 months before the earnings results) reflects a lot of negativity and bearish assumptions that Tuesday’s Q2 numbers suggest the company is on track to overcome.

In the three months...