Valeant: Three Steps to a Recovery?

Ever since Teva Pharmaceuticals Industries (TEVA) reported its terrible earnings, specialty pharmaceutical companies have been under pressure–and Valeant Pharmaceuticals International (VRX) has been no exception. Despite jumping 9% in early trading on Aug. 8 after reporting earnings, the stock has fallen 10.5% since the announcement.


Still, investors appear to have a better idea of what they need to see from Valeant from here on in. Consider this from RBC’s Douglas Miehm and Joel Hurren, who offer their thoughts on Valeant following a trip to visit the company:

Valeant will be focusing on three key items as it progresses through its turn-around strategy: (i) debt repayment; (ii) growing EBITDA; (iii) resolving legacy legal issues (largely Philidor), which it expects to do over the next ~2 years. As per usual, we expect VRX to provide 2018 guidance when it reports Q4/17 results. Management believes it currently has some visibility into 2018 and expects it will continue to focus on growing EBITDA (largely through GI, Bausch Lomb, and new product launches)

But can it deliver?

Shares of Valeant Pharmaceuticals International have fallen 0.4% to $13.76 at 9:40 a.m. today, while Teva Pharmaceuticals Industries has declined 0.3% to $17.14.

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