Jim Cramer -- Valeant's Sales Struggles Mean Allergan Could Profit

Analysts are concerned about Valeant Pharmaceuticals but that can only help Action Alerts PLUS holding Allergan, Cramer says.
By Bret Kenwell ,

Valeant Pharmaceuticals (VRX)  shares continue their fall, down over 1% Tuesday and hitting a new 52-week low, causing investors yet more pain. 

The stock is now down 60% over the past month and more than 70% over the past three months. "This is the hedge fund Grim Reaper," TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment. 

Analysts at Deutsche Bank, which has a hold rating on the stock, are concerned with the possible fallout from Valeant's Philidor affiliation and the subsequent ending of its working relationship. Analysts at Morgan Stanley cut their price target from $200 to $98 while maintaining an equal-weight rating.


VRX and AGN data by YCharts

Cramer pointed out that Valeant's dermatology treatments are very similar to those from Allergan  (AGN) - Get Report , an Action Alerts PLUS holding. As the continued turmoil tears at Valeant's sales right now, it's possible Allergan could see a sales boost, he said. 

Allergan CEO Brent Saunders has done a great job building a strong portfolio of products, including the well-known Botox treatment, as well as the recent acquisition of Kythera Biopharmaceuticals (KYTH) for $2.1 billion, a company known for its double-chin treatment, Cramer noted.

At the time of publication, Cramer's Action Alerts PLUS had a long position in AGN.

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