Pharmaceutical giant Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has had a lot of positive developments lately, which include the sale of its non-core assets. Moreover, the Laval-based company has also conducted a successful phase 3 study for the treatment of plaque psoriasis. The recent survey suggested a success in the treatment, as 203-subject study ended with statistically significant results. Although the next logical step for the $5.11 billion company would be to file marketing applications, yet it has provided no guidance for it.
The recent developments have created a wave of optimism among investors, as shares of the Laval-based company continue to trade 12.25% higher in pre-market at $17.23 as at 7:34 AM EDT. The recent deal with L’Oréal is also considered equally important by investors as Valeant will get $1.3 billion from the sale of three skin care units, including CeraVe, AMBI, and AcneFree. CEO Joseph Papa has expressed his optimism on the recent deal as he seeks to focus only on the core areas of the company, while the sale proceeds from non-core assets will be utilized to fund the Canadian drug maker.
The move seems a lot more justified as Valeant will be able to focus on its strong areas in the near-term. However, whether it helps to streamline the operations soon is an altogether different debate. SmartStockNews notes that the recent deal finalized by the company will aid to its financial health in the near-term, which will help it to repay $5 billion of its debt by 2018.
SSN suggests that the recent developments will only have a short run impact on the share prices, while our views will remain bearish until more favorable developments take place. Short sellers are equally active in the stock, which further raises a red flag on the bullish sentiment.