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Cannacord Boosts Valeant Pharma Price Target On IBS-D Approval

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In a report published Thursday, Canaccord Genuity analyst Neil Maruoka maintained a Buy rating on Valeant Pharmaceuticals Intl Inc (NYSE: VRX), while raising the price target from $250 to $275.

Valeant has received the FDA approval for Xifaxan for irritable bowel syndrome with diarrhea. "The drug is already close to a $1 billion run rate from the current two indications in hepatic encephalopathy and Traveler's diarrhea, and we believe the IBS-d market should easily support an incremental >$1 billion opportunity," Maruoka mentioned.

The company's long term growth and earnings prospects are expected to be driven by its highly profitable and early cycle assets like Jubila and Xifaxan.

In the report Canaccord Genuity noted, "Valeant prepared to seize Xifaxan's blockbuster potential. With several price increases already taken this year (and we assume another soon following this approval), we forecast Xifaxan is already at a $1 billion annualized run-rate by year end – even before IBS-d kicks in. Valeant will immediately begin promoting the new indication with the package insert and later this year with DTC advertising."

Although Valeant faces competition from Actavis Plc (NYSE: ACT), which has FDA approval for eluxadoline for the same indication as Xifaxan, its drug has certain advantages.

Valeant's share price has appreciated by 16.4 percent since the company's 1Q results when the company revealed that it was in labeling negotiations with the FDA. Referring to the stock's valuation, analyst Neil Maruoka said that "expectations of success have been somewhat priced in."

Latest Ratings for VRX

Dec 2017JP MorganDowngradesNeutralUnderweight
Nov 2017Deutsche BankMaintainsHold
Nov 2017BMO CapitalMaintainsMarket Perform

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Posted-In: Canaccord GenuityAnalyst Color Price Target Reiteration Analyst Ratings


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