Valeant Pharma (VRX) EBITDA Was North of $1B, Which Was Better than Feared - Evecore ISI Raffat

November 8, 2016 7:53 AM EST
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Price: $14.77 -0.87%

Rating Summary:
    10 Buy, 12 Hold, 4 Sell

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    Up: 29 | Down: 30 | New: 23
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Evecore ISI analyst Umer Raffat weighed in on Valeant Pharma (NYSE: VRX) quarter. He notes that based on his investor conversations, buyside sentiment had MASSIVELY shifted when the stock moved from ~$30 to <$20.

He said there was fears that Q3 EBITDA may be <$1B and that didn't happen - Valeant tracked at $1.16B.

He said the new 2016 EBITDA guidance ($4.25-$4.35B) appears a touch below consensus, "but even if you straight-line Q3 EBITDA into Q4, you get to consensus-like $4.4-4.5B (and recall there are price increases + more SG&A cuts in Q4)."

Elsewhere, he notes cash flow conversion better in Q3 vs Q2.

On products: Xifaxan tracked at $273M this quarter (vs $200-208M range for last quarters). In addition, new Xifaxan formulation entering Ph 3 in 2H17 as per slides (v impt from lifecycle mgmt/patent perspective). Also, Raffat notes they may be seeing early signs of improvement in derm: Jublia came out at $44M in Q3 (Vs $31M in Q2). On neuro/other, they saw sequential drops in Isuprel, Wellbutrin, Xenazine etc.

Shares of VRX are down 7.5% to $17.69 in pre-open trade.

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