Deutsche Bank Suspends Coverage on Valeant Pharma (VRX)

Deutsche Bank suspended its rating on Valeant Pharma (NYSE: VRX). The bank's prior rating was 'Hold'.

Analyst Gregg Gilbert said, "Based on Valeant’s plans to restate prior results, the delay in filing its 10-K, the removal of prior ’16 guidance, and an ongoing Board investigation, we are suspending our rating and estimates for the stock. We have long been skeptical of the VRX business model that had formerly depended heavily on fast-paced acquisitions, aggressive cost cutting, tax arbitrage, aggressive US price increases, and a heavy debt load. As the company transitions to more of an “organic” execution and de-leveraging story, it will become increasingly important, if not crucial, to be able to track the company’s financial performance. With the stock having sold off significantly, and with some other analysts having become more cautious, we would acknowledge that the risk/reward profile of the stock has become more interesting."

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