Analysts Mixed Following Valeant's Latest Developments

Investors of Valeant Pharmaceuticals Intl Inc

had several developments to play with on Tuesday regarding the embattled pharma company. The company announced that the ad hoc committee of the board of directors have completed the accounting review, including various Philidor matters, and has not identified any additional items that would require restatements beyond those previously disclosed. The company intends to file its Form 10-K on or before April 29, 2016. The news sent shares up as much as 14.5 percent to $29.91. Shares of Valeant surged 10 percent to $28.73. http://www.benzinga.com/news/16/04/7802935/valeant-shares-squeezed-higher-as-ad-hoc-committee-closes-review-finds-no-added-i A Reuters report said that Valeant plans on cutting its sales force for Addyi, a treatment aimed at female sexual dysfunction. Read more: http://www.benzinga.com/general/biotech/16/04/7802044/vrx-memo-addyis-third-party-sales-force-to-be-cut-when-contract-ends-a#ixzz44yRP1D1O In another interesting development, a Bloomberg report said the company's creditors were resistant to relaxed lending standards. Read more: http://www.benzinga.com/news/16/04/7799590/valeant-creditors-reportedly-balking-at-revised-lending-agreement-investors-conce#ixzz44yRmvOWu Wall Street analysts were mixed on Valeant after the recent developments: Commenting on the job cut report, Mizuho Securities said: "We view this as an expected first step in the shrinking of the business. We estimate SG&A cost savings in the $60M range associated with these terminations, with some one-time expenses associated with severance payments." "These terminations are likely to rattle an already fearful and paralyzed organization. We think the company may actively explore additional divestitures, which may further erode its EBITDA, and Pearson should be able to identify additional efficiencies in promotional budgets and within R&D that can generate additional cost savings," analyst Irina Koffler wrote in a client note. "After that, there isn't much left to do since we view the majority of Valeant's assets as unattractive to potential buyers. Our thesis is that there are no quick fixes for Valeant's situation while additional risks and unknowns persist," the analyst noted. Mizuho reiterated its Underperform rating and $18 price target on Valeant shares. JP Morgan, while maintaining its Overweight rating on VRX shares, said SOTP valuation suggests upside to current Valeant levels. JPMorgan analysts led by Chris Schott noted that the Ad Hoc Committee's findings de-risk the stock. In addition, Schott sees additional catalysts that could further de-risk the story. "We see focus returning to both fundamentals (quarterly results/cash flows) and SOTP valuation, where we see Valeant's current asset base representing meaningful upside vs. today's share price," the analyst elaborated. Read more: http://www.benzinga.com/analyst-ratings/analyst-color/16/04/7803943/jpmorgan-isnt-concerned-about-valeants-ad-hoc-committee-#ixzz44ySRfHto Meanwhile, BMO Capital said if Valeant files 10-K and prevents technical default then company 'could be on the verge of a significant inflection point.' The brokerage maintained its Market Perform rating on the stock.