NEW YORK (TheStreet) -- Valeant Pharmaceuticals (VRX) shares are down 2% to $228.60 in early market trading on Friday after the biotech company approached animal health company Zoetis (ZTS) with a potential buyout offer, according to the Wall Street Journal.
Valeant has been criticized in the past for a growth plan that is driven by acquisitions and cost cutting, according to Reuters.
Zoetis was spun off from Pfizer (PFE) in 2013 and has a current market value of approximately $25 billion.
Valeant Pharmaceuticals has been active in acquisitions in recent months and closed an $11 billion acquisition of Salix Pharmaceuticals in March.
Analysts have pegged the company as a potential takeover target since activist investor William Ackman took an 8% stake in the company last November, according to the Journal.
Zoetis shares are down 8.4% to $50.72.
TheStreet Ratings team rates VALEANT PHARMACEUTICALS INTL as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate VALEANT PHARMACEUTICALS INTL (VRX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- You can view the full analysis from the report here: VRX Ratings Report