Valeant Pharma (VRX): This Isn't Just Headline Risk - Mizuho
- S&P, Dow rise on health stocks; Nasdaq weighed by Comcast
- Unusual 11 Mid-Day Movers 10/27: (PCMI) (OCN) (TTMI) Higher; (CYH) (RWLK) (AMFW) Lower
- Twitter (TWTR) Tops Q3 EPS by 4c; Announces Restructuring, Workforce Reduction
- Qualcomm (QCOM) to Acquire NXP Semi (NXPI) in $47B Deal
- Tesla (TSLA) Posts Q3 adj.-EPS of 71c
Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.
Mizuho Securities analyst, Irina Koffler, reiterated her Underperform rating on shares of Valeant Pharmaceuticals (NYSE: VRX) and highlighted the importance of last night's WSJ report that VRX is under criminal investigation by the U.S. attorney's office. The charges are for mail and wire fraud and obscuring the company's real relationship with Philidor from insurers.
The company responded that this investigation has been previously disclosed in its SEC filings (and that it is fully cooperating) but the analyst points out that this degree of detail was not previously provided. This investigation may be a follow-on to a similar but separate NJ RICO case that seeks treble damages on "hundreds of millions in sales" during the period from Jan 2013-Nov 2015, with over $500M in sales alleged in 2015 alone.
The analyst has been struggling with what to do with this stock as we are still not comfortable with the sequential decline in U.S. sales, which is unique amongst other companies in our space, the reiterated 2016 guidance which seems challenging, and the company's ability to meet its existing interest coverage ratio covenants (which it is in the midst of hurriedly amending).
No change to the price target of $11.00.
Shares of Valeant Pharmaceuticals closed at $27.32 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Rosenblatt Upgrades NETGEAR (NTGR) to Buy
- Mizuho Securities Downgrades Community Health (CYH) to Underperform
- Needham & Company Raises Price Target on AXT, Inc. (AXTI) Following 3Q Beat and Guidance
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Litigation
Related EntitiesIrina Koffler
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!