Wainwright Reiterates Buy Rating For Valeant On The Back Of Two FDA Wins In A Row

Shares of Valeant Pharmaceuticals Intl Inc VRX traded up almost 4 percent on Wednesday, driven by two consecutive FDA drug approvals.

On the one hand, an FDA advisory committee unanimously approved the company’s brodalumab, an investigational anti-interleukin-17 (anti-IL-17) monoclonal antibody for moderate-to-severe plaque psoriasis – although safety monitoring and label warnings were recommended. On the other hand the FDA approved, on late Tuesday, an oral formulation of Relistor (methylnaltrexone bromide) for the treatment of opioid-induced constipation in adults with chronic non-cancer pain. Although the drug was originally developed by Progenics Pharmaceuticals, Inc. PGNX, Valeant is the exclusive licensee.

Wainwright Says ‘Buy’

Following the good news, and anticipating the potential approval of Vesneo (latanoprostene bunod) for the treatment of glaucoma later this week, Wainwright analyst Raghuram Selvaraju issued a report reiterating a Buy rating and $90 price target on the stock. In his view, “the vote in favor of brodalumab constitutes a meaningful positive value driver for Valeant, since it substantially increases the likelihood of brodalumab approval later this year.”

Moreover, Selvaraju noted, although an injectable formulation of Relistor already exists, the oral form could help the drug reach blockbuster status in annual sales – surpassing $1 billion.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.