Valeant Pharmaceuticals slumped yet again on Thursday, this time after analysts downgraded the stock. The drug maker’s shares tumbled earlier this week after regulatory filings revealed that even activist investor Bill Ackman is starting to cut his losses.

valeant pharmaceuticals

Valeant Pharmaceuticals’ bulls are abandoning it

Morgan Stanley analyst David Risinger downgraded Valeant stock from Overweight to Equal-weight and slashed his price target from $25 to $17 per share. He said the company has so far failed to stabilize as he had expected it to, so he has moved to the sidelines until more corporate updates reveal improvements. In fact, he flat out admitted that he was wrong, noting that since the thesis he developed when upgrading Valeant in August has failed to develop. In addition to stability, he had been looking for some big divestures aimed at speeding up deleveraging.

The analyst has reduced his estimates for Valeant Pharmaceuticals, saying that he no longer believes its shares can outperform. He also expects the stock to remain volatile for some time as positive and negative headlines yank it in both directions. He trimmed his 2017 estimates for sales and EBITDA by about $100 million to reflect the weak business trends, bringing, his new revenue estimate for next year 1% below consensus to $9.2 billion. His adjusted EBITDA estimate falls 4% below consensus to $3.9 billion.

Risinger noted that Valeant Pharmaceuticals’ U.S. monthly prescription sales fell 7% in October, an acceleration from the 4% decline observed in September and the 3% decline in August. Also sales of the company’s number one drug, Xifaxan, decelerated into the low-single digits.

Bill Ackman’s Pershing Square cuts Valeant stake

The drug maker also announced on Dec. 12 that some of its executives are leaving. Coincidentally, that was the same day Bill Ackman’s firm revealed in regulatory filings that it had cut its stake, meaning that John Paulson is now Valeant’s biggest shareholder. Ackman unloaded about 3.36 million shares of Valeant Pharmaceuticals, which amounted to about 16% of his holdings in the drug maker. His firm collected about $52 million from the share sales.

This week Valeant Chief Executive Joseph Papa pointed to media “noise” as being the main reason his company has underperformed this year.

The Wall Street Journal quoted him as saying at an investor conference this week, “People like to write articles about Valeant. They may not have any of the facts, but they like to do that. And they like to get their clicks, and they’ve done that.”

Of course it’s hard to imagine there not being any noise about Valeant, given that some of the company’s executives were arrested recently in a criminal probe along with some executives at specialty pharmacy Philidor. Also the drug maker cut its guidance last month, sending shares plummeting.

Shares of Valeant Pharmaceuticals slumped by as much as 4.39% to $13.50 during regular trading hours on Thursday, hovering around their lowest level in more than six years.