NEW YORK (TheStreet) -- Valeant Pharmaceuticals (VRX) stock is rising 14.50% to $107.80 in afternoon trading on Tuesday after announcing a 20-year drug pricing and distribution agreement with pharmacy chain Walgreens Boots Alliance (WBA).

Valeant will lower the prices for its dermatological and ophthalmological products by 10%, according to a statement.

The pharmaceutical company expects the deal to save the healthcare system up to $600 million annually and simplify consumers' access to its products through 8,000 Walgreens locations and participating independent pharmacies. 

Before this agreement, Valeant used specialty pharmacies such as Philidor to distribute its drugs. Valeant cut ties with Philidor in late October following reports that the two businesses collaborated to vastly inflate prices. 

Walgreens will obtain a "meaningful" portion of Philidor's revenues of roughly $700 million to $800 million, Leerink analysts claim, according to Barron's.

 "This had been a major source of pain for the hedge funds, and the source of pain is alleviated. That brings buyers out," TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning.

High growth stocks are back and names that have been shorted are back, Cramer noted.

Additionally, the deal is giving Valeant a "big credibility boost," as investors finally have a sense of Valeant's pharmacy and distribution strategy after ending its relations with Philidoraccording to Evercore, Barron's reports.

Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate VALEANT PHARMACEUTICALS INTL as a Hold with a ratings score of C. 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. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 3.6%. 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.
  • Net operating cash flow has increased to $736.40 million or 19.02% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.45%.
  • 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 ($11.24 versus $2.67).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Pharmaceuticals industry and the overall market, VALEANT PHARMACEUTICALS INTL's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.56%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 82.71% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, VRX is still more expensive than most of the other companies in its industry.
  • You can view the full analysis from the report here: VRX