Why FDA Delay on Brodalumab is Actually Great News For Valeant (VRX)
11/30/2016 6:29:21 AM
As if all the scandals, management fiascos, and ultra bearish calls even after the stock collapsed an astonishing 93% from its 2015 highs weren’t enough, Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) was dealt another blow to the gut on November 8th when the Food and Drug Administration announced that it was delaying its decision on potential blockbuster psoriasis drug brodalumab by three months.
At first glance by any cursory logic, an FDA delay is a bad thing, especially considering that the efficacy of brodalumab over current Johnson & Johnson (NYSE:JNJ) blockbuster Stelara is obvious and understood, even by the FDA panel that reviewed the drug back in July. However, as counterintuitive as it may sound, the delay may actually be a great sign for embattled Valeant, drowning in debt and in desperate need of a blockbuster shot in the arm.
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