Shadowed by nearly $30B in debt, Valeant's $50M guidance raise looks pretty paltry, analyst says

Faced with a crippling pile of debt, Valeant on Tuesday slightly increased its 2017 earnings guidance, one small positive development as it works to rebound from its noted downfall.

The Canadian drugmaker reported first-quarter revenues of $2.11 billion on Tuesday, missing FactSet consensus estimates of $2.19. But the company sees things going well enough to increase its 2017 earnings guidance to between $3.6 and $3.75 billion, slightly increased from a previous range of $3.55 billion to $3.7 billion.

The move triggered a 20% run-up in share price by mid-morning Tuesday, but at least one analyst urged caution. Wells Fargo's David Maris pointed out that “that the $50 million raise is relative to approximately $28.88 billion of total debt.”

“Key products and areas such as Xifaxan and [Bausch & Lomb] continue to underperform,” Maris continued.

GI med Xifaxan turned in $185 million in first-quarter sales, significantly below Wells Fargo’s estimate of $250 million, Maris wrote. At $1.15 billion, eye unit Bausch & Lomb and international revenues slightly beat the firm's expectations of $1.1 billion, but Maris noted that U.S. diversified products sales at $355 million lagged far behind a Wells Fargo estimate of $420 million.

For their part, Barclays analysts estimated $228 million for Xifaxan sales, $1.045 billion in Bausch & Lomb and international revenues and $320 million for U.S. diversified products. Based on those estimates, Valeant only came short in the group with Xifaxan.

Industry-watchers are well aware of Valeant's turnaround challenge. The company has mostly been on a slide since it started facing price-hike scrutiny back in 2015 and, soon after, investigations into its ties with specialty pharmacy Philidor. The drugmaker’s stock has fallen dramatically, trading at around $11.30 on Tuesday compared with $261.23 in August 2015.

Related: Billions in the hole, battered hedge funder Ackman finally ditches his long, painful Valeant investment

Valeant reported its first-quarter results as it's working to defend against a lawsuit alleging insider trading against the company and former shareholder Bill Ackman, who once upon a time teamed up with Valeant on a hostile bid for Allergan. A settlement could total $500 million, one source told Bloomberg, with Valeant on the hook for 60%. After losing billions on his Valeant investment, Ackman recently described his bet on the company as a “huge mistake.”

Related: Troubled Valeant unloads Dendreon, skin care brands for $2.1B in turnaround cash

Facing those hurdles, Valeant has been working to generate cash through divestitures, selling Dendreon for $820 million and some skincare brands for $1.3 billion. One such deal fell through, though, when Valeant and Takeda got into a pricing dispute over Salix last November, according to the Wall Street Journal.