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Valeant shares recover a bit after two-day slide

Published 2016-02-23, 09:39 a/m
© Reuters. Valeant shares recover a bit after two-day slide
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Feb 23 (Reuters) - Shares of Valeant Pharmaceuticals (N:VRX)
International Inc VRX.N were up more than 6 percent in early
U.S. trading on Tuesday following a two-day selloff, with some
analysts saying that selling of the Canadian drugmaker's stock
had been overdone.
The shares, which were trading at $80.90 shortly after the
opening, had fallen more than 19 percent since Friday after
Wells Fargo (N:WFC) initiated coverage with an "underperform" rating and
a valuation of $65 to $68 per share.
The stock fell further in after-hours trading on Monday
after Laval, Quebec-based Valeant VRX.TO said it would restate
results for 2014 and 2015 after identifying some sales to drug
distributor Philidor Rx Services that should have been
recognized only when the drugs were dispensed to patients.
J.P. Morgan analyst Chris Schott said in a client note that
given the narrow timeframe and the minimal revenue from the
distribution of drugs through Philidor in late 2014 and 2015, he
expected only a limited impact on historical results.
Valeant cut ties with Philidor Rx in October after it was
revealed that the distributor had used aggressive tactics to try
to increase insurer reimbursements, mostly for dermatology
drugs, to help the Valeant inflate revenue.
The restatement will reduce its reported 2014 GAAP earnings
by about 10 cents per share and increase 2015 GAAP earnings by
about 9 cents per share, Valeant said.
"We view this as a marginal impact and certainly not one
that warranted the significant pressure late in the day and
after market yesterday," Stifel analyst Annabel Samimy wrote in
a client note.
Valeant, whose Toronto-listed shares were up 6 percent at
C$110.22, said it would release unaudited fourth-quarter results
next Monday.

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