NEW YORK (TheStreet) -- Valeant Pharmaceuticals (VRX) stock closed down by 4.20% to $111.93 on Thursday, as CVS Pharmacy ends its agreement with specialty pharmacy Philidor, which has an exclusive partnership with Valeant.
CVS is removing Philidor from its Caremark program after auditing the specialty pharmacy and citing "noncompliance" with its provider agreement, MarketWatch reports.
Last week, Valeant's stock collapsed on allegations by Citron Research that Valeant not only collaborates with Philidor to inflate drug prices, but also has created a network of "phantom" pharmacies tied to Philidor to inflate sales and avoid auditor scrutiny.
Shares of the company are sliding by 0.72% to $110.70 in after-hours trading.
Separately, TheStreet Ratings team rates VALEANT PHARMACEUTICALS INTL as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate VALEANT PHARMACEUTICALS INTL (VRX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 35.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- VALEANT PHARMACEUTICALS INTL has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VALEANT PHARMACEUTICALS INTL turned its bottom line around by earning $2.67 versus -$2.62 in the prior year. This year, the market expects an improvement in earnings ($11.70 versus $2.67).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 82.0% when compared to the same quarter one year ago, falling from $275.40 million to $49.50 million.
- The share price of VALEANT PHARMACEUTICALS INTL has not done very well: it is down 14.68% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full analysis from the report here: VRX