Valeant Pharmaceuticals Intl Inc (VRX) Sells Off Ahead of Congressional Testimony

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is trading lower, as traders brace for this afternoon's testimony before the U.S. Senate

Apr 27, 2016 at 2:20 PM
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Outgoing Valeant Pharmaceuticals Intl Inc (NYSE:VRX) CEO Michael Pearson, as well as activist investor and board member Bill Ackman, are both testifying before Congress this afternoon about the company's alleged price-gouging tactics. Pearson is expected to say he regrets hiking certain drug prices, calling it a "mistake." It didn't help that Wells Fargo this morning published a report saying Valeant has already raised prices on 16 products this year. 

As the anticipation builds, the stock is down 3.2% at $35.07, adding to its disastrous run on the charts. While today's intraday options activity is slower than usual, put traders in recent weeks have been predicting extended losses in the near future for VRX. 

Elsewhere, short interest has been rising on the struggling stock. Over the last two reporting periods, short interest popped by almost 90%. However, at average daily volumes, it'd take VRX short sellers less than one day to buy back their positions -- leaving little chance for a short-squeeze, if the stock ever manages to rally.

Several analysts apparently still believe in Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Six brokerage firms call the stock a "strong buy," while VRX's average 12-month price target stands at $63.88 -- an 82% premium to current levels. Looking ahead, the embattled biotech has until the end of May to file its long-delayed annual financial report -- though VRX has said it'll have the report ready by this Friday. 
 

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