Valeant Pharmaceuticals | $VRX Stock | Takeover Target?


Valeant Pharmaceuticals International, Inc. (NYSE: VRX)

Valeant Pharmaceuticals, the Canada based multinational specialty pharmaceutical company, has been under close scrutiny in the past several months as it has lost nearly 90% of its share price since August of 2015 on a string of negative news along with questionable business operations. In recent headlines, speculation has surfaced that VRX could stand to be a potential takeover target.


Analyst Expectations

An analyst at Piper Jaffray had the following comments on VRX.

Valeant takeover rejection report ‘difficult to fathom,’ says Piper Jaffray. Piper Jaffray analyst David Amsellem noted the report claiming that Valeant (VRX) previously rejected a takeover offer from Takeda (TKPYY) and TPG prior to appointing Joe Papa as CEO, but said he finds it “difficult to fathom” why a buyer would have interest in the entire asset portfolio, since he believes the value of its segments to be “meaningfully” below the company’s $31B in total debt outstanding. Amsellem, who thinks there would be significant strategic interest in Valeant’s gastroenterology assets, believes that any strategic activity will come in the form of asset sales or a breakup of the company. The firm keeps an Underweight rating on Valeant shares.

VRX Technicals


Since August of 2015, VRX has plunged $230, or 90%. VRX was once the most valuable company in Canada until the recent collapse fueled by constant negative news on their internal business practices.

Trading just off the lows, VRX does have huge risk/reward potential as it starts to consolidate near its recent lows. Geometrically speaking, VRX has been slowly attempting to form a falling wedge pattern for several months and is nearing a completed pattern. Falling wedge patterns can resolve explosively to the upside once a proper resolution occurs. Ideally, a break of the falling wedge to the upside on high relative volume would signal a shift in momentum as the buy pressure pours in.

About Valeant Pharmaceuticals International, Inc.

Valeant Pharmaceuticals International, Inc., incorporated on August 9, 2013, is a specialty pharmaceutical and medical device company. The Company is engaged in developing, manufacturing, and marketing a range of branded, generic and branded generic pharmaceuticals, over-the-counter (OTC) products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices), which are marketed directly or indirectly in over 100 countries. The Company focuses on eye health, dermatology and neurology therapeutic classes, primarily on branded generics, OTC products and medical devices. The Company operates through two segments: developed markets and emerging markets. – Reuters