Valeant Pharmaceuticals Intl Inc (NYSE:VRX) had its Underweight rating reiterated by Piper Jaffray analyst David Amsellem after the analyst remained pessimistic over the company’s prospects in Siliq division. The analyst maintained a price target of $10 as he sees a limited adoption of Siliq going forward. However, the price target suggests about 4.7% upside to current price levels. Despite the upside, Valeant shares traded in red yesterday and declined 3.05% during active trading.
According to Mr. Amsellem, a survey of about 27 dermatologists showed that Siliq has little to get excited about. While the dermatologists announced their plans to use IL-17A antagonists in patients suffering from moderate to severe plaque psoriasis, Siliq is still likely to lag considerably far behind other IL-17A antagonists when it comes to adoption. Therefore, the analyst does not see Siliq altering the fortunes of the beleaguered drug maker’s dermatology unit. This is also expected to negatively impact VRX shares, which have already fallen 34.23% since the beginning of the year and crashed 71.64% during last 12 months.
Other brokerage firms have also weighed in on the $3.35 billion business. On April 11, Royal Bank of Canada reiterated its Sector Perform rating for VRX while lowering the price target by 16.67% from $20 to $18, reflecting firm’s low hopes from the drug maker. Earlier in April, Wells Fargo also reiterated its Underperform rating along with $10 PT. In contrast, in months before that, firms such as Deutsche Bank and Barclays PLC provided Hold ratings for Valeant.
Wall Street analysts have weighed in the pharmaceutical. The company has received three Buy, one Overweight, 14 Hold, one Underweight, and three Sell recommendations from analysts at FactSet Fundamentals. The analysts, however, remain very optimistic and have maintained an average PT of $19.03, indicating 99.26% upside potential over the last close.