Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is one of the decade’s great cautionary tales. Everyone now knows the story behind VRX stock.

The Valeant Pharmaceutical strategy was to buy drug companies for their sales, ditch the research, hike the prices and move the profits to Canada, where taxes are lower. They were caught, the price of VRX stock fell 90%, the CEO behind the strategy was pushed out and hedge fund billionaire Bill Ackman lost billions of dollars.

But that is the past. If you are brave enough to buy Valeant Pharmaceutical now, you are buying a stabilized company at one-half its sales, which had a decent profit margin in the first quarter and with a more patient hedge fund billionaire, John Paulson, now on the board.

It’s true that the debt remains worrisome, with $28.198 billion of $42.333 billion in assets subject to long-term debt at the end of March. But the company seems capable of handling the payments. The immediate threat of bankruptcy is past, absent a recession.

Valeant Pharmaceutical 2.0

Under Joseph Papa, the company is focused on high-margin drugs for eyes, guts and skin conditions. The Bausch + Lomb unit is still around, and units that aren’t part of that core, like iNova, which fetched $930 million recently, are being sold off. Valeant has also dumped low-margin consumer brands, like CeraVe. Three were sold to L’Oreal SA (ADR) (OTCMKTS:LRLCY) for another $1.3 billion in January. 

This money won’t make a big dent in the debt, but it gives Valeant Pharmaceutical time to go back to the drawing board, building a new drug pipeline, and becoming a conventional pharmaceutical outfit again. For those who criticize the price on some sales there’s a simple answer — the units were non-strategic.

Getting Paulson, the largest stockholder with a 5.9% stake, onto the board is another step in that direction. He’s not a plunger or fast profit guy like Ackman. He became a player after betting right on the 2008 financial crisis.

VRX can still entertain offers for Salix, which is the “gut” unit, or parts of Bausch + Lomb , the “eye” unit, but this is no longer a fire sale situation.

What’s left for VRX stock is the company’s drug pipeline, which includes new drugs for such things as rheumatoid arthritis, Crohn’s Disease and glaucoma.

All these new products would enter competitive markets, but Valeant Pharmaceutical doesn’t have to become a dominant player to make serious money. Getting just a 5% share in its targets could mean sales of $3.4 billion, on top of what remain profitable franchises.

VRX Stock: The Wall of Worry

Success for Valeant Pharmaceutical is no slam-dunk.

While I’m skeptical about how far VRX can get with its new strategy, other InvestorPlace writers are beyond skeptical. Against this wall of worry, gains can be made, especially if the whole pharma group rises with Trump officials saying the regulatory coast is now clear. The iShares Dow Jones US Pharm Indx (ETF) (NYSEARCA:IHE) is up over 13% so far this year, with half that gain coming in just the last week.

Still, the wall of worry is high. Tom Taulli calls Valeant Pharmaceutical hazardous to your portfolio’s health. James Brumley insists the company is not healed by Paulson being on the board. We even have a fellow named Dana Blankenhorn who called Valeant a “dead drugmaker walking” as recently as April. 

Maybe that last guy was premature in calling the coroner. VRX stock may never be a $200 per share stock again, but if the market cap gets to even half the five times sales of, say, Johnson & Johnson (NYSE:JNJ) you’re looking at a gain of 500% from current levels.

If you’re a speculative investor, with mad money to play with, that might be worth speculating on. If you all had fun making Bill Ackman look stupid, imagine how much fun it will be making me look stupid.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article.