UPDATE: Stifel Nicolaus Downgrades Medicis Pharmaceutical to Hold

Stifel Nicolaus reduced its rating on Medicis Pharmaceutical

from Buy to Hold and suspends its price target, previously at $42 a share. Stifel Nicolaus noted, "In light of Valeant's $44/share takeout bid for Medicis and subsequent stock runup, we currently view Medicis shares as trading at fair value. Due to the highly complementary portfolios and cost synergies from a VRX-MRX combination, along with significant accretion potential by applying VRX's tax structure to MRX's assets, we do not expect a considerably higher competitive bid in coming months (though possible). Furthermore, the fact that both companies' boards agreed to the deal indicates to us that the negotiation was friendly and price was mutually acceptable. Any incremental bids, in our view, would be only modestly higher." Medicis Pharmaceutical closed at $43.65 on Tuesday.