Valeant Pharmaceuticals (NYSE: VRX) continues to do everything right but markets not only yawn, but punish the stock for its good deeds. Refinancing and product announcements on the week of October 16 are positive developments that put the company on the right track.
VRX stock closed at $12.13 a share on October 20, despite an intraocular lens product announcement from its B+L unit. The ‘next-generation hydrophobic acrylic intraocular lens, enVista MX60E with StableFlex technology’ is long-overdue. B+L spent years failing to innovate its products. This product is well-positioned to help the company gain back market share in the contact lens market for patients needing a specialized lens.
In the next few weeks or perhaps during its earnings call on November 7, Valeant may announce product updates at its Salix division. Ahead of the news, the short float on VRX stock is on the decline, at 10.7%.
Previously, Valeant announced a $1-billion bond offering that ended up over-subscribed. Not only do the lower rates lessen the interest costs for Valeant, but the company closes upcoming debt and pushes maturity out further. This makes Valeant’s steady drop in the last week surprising. It also sets up for the potential of an awesome rally should management exceed estimates and raise guidance.
Valeant is only weeks away from its earnings report date. Even meeting consensus estimates may lead to and end to strong selling on higher volume.
