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Valeant Pharmaceuticals International, Inc. (VRX - Analyst Report) received positive news when the U.S. Food and Drug Administration (FDA) issued marketing clearance for Bausch + Lomb's newest frequent replacement silicone hydrogel contact lenses.

The lenses are made using the MoistureSeal Technology. The results from a multi-site study of Bausch + Lomb contact lenses with MoistureSeal technology showed that it offers superior comfort and vision as compared to other lenses. 

We note that Valeant acquired Bausch + Lomb in Aug 2013. 

With a history of 160 years, Bausch + Lomb currently has recognized prescription and over the counter (OTC) brands such as Besivance, Lotemax, Ocuvite and PreserVision and vision care brands such as Biotrue ONEday, PureVision, renu and Boston under its portfolio. 

The company also has surgical brands such as enVista, Storz, Stellaris and VICTUS under its extensive portfolio.

The new silicone hydrogel lenses will further strengthen its ophthalmology portfolio. 

We remind investors that Valeant acquired Bausch+Lomb to strengthen its ophthalmology portfolio, which was a miniscule portion of Valeant’s overall portfolio. 

We believe the acquisition will help Valeant to penetrate into the growing eye health market fueled by an aging patient population, an increased rate of diabetes, and increasing demand from the emerging markets. 

Concurrent with second-quarter results, Valeant upped its guidance for 2013 to include the Bausch+Lomb acquisition. Valeant now expects revenues between $5.8 billion and $6.2 billion, up from the previous projection of $4.4 billion – $4.8 billion. 

Earnings per share on a cash basis are now projected around $6.00 – $6.20, up from the earlier projection of $5.55 –$5.85. 

Valeant now expects synergies more than the earlier estimate of $800 million from this acquisition. Of the total projected synergies, $500 million is expected in 2013. 

We are impressed by the company’s integration efforts and increase in expected synergies.

Valeant currently carries a Zacks Rank #3 (Hold). Right now, Actelion Ltd. (ALIOF), Jazz Pharmaceuticals (JAZZ - Analyst Report), and Cempra, Inc. (CEMP - Snapshot Report) look attractive. While Actelion and Jazz Pharma carry a Zacks Rank #1(Strong Buy), Cempra carries a Zacks Rank #2 (Buy).

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