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What: After Valeant Pharmaceuticals (NYSE:BHC) reassured investors on Tuesday that it can still deliver on its previously issued full-year financial guidance, shares shot 19.3% higher at 12:30 p.m. EDT.

So what: Payer pushback after the disclosure of rampant price increases and the shuttering of a relationship with a key distributor resulted in Valeant Pharmaceuticals shares losing more than 80% of their value since last summer. However, shares are gaining back some ground today after management reiterated guidance for sales of at least $9.9 billion and non-GAAP earnings per share of at least $6.60 this year.

The decision to stick by these targets marks the first time this year that management hasn't had to lower its outlook. The guidance is also encouraging given that it comes even as second-quarter revenue fell 11% year over year, to $2.4 billion, and non-GAAP EPS dropped to $1.40 from $2.14 last year. These top-line and bottom-line results were $40 million and $0.08 shy of the industry watchers' forecast, respectively.

Additionally, CEO Joseph Papa announced plans to restructure and reorganize Valeant, and reported that efforts to firm up relationships with lenders continues:

We continue to make progress toward stabilizing the organization. We are also announcing a new strategic direction for Valeant today, which, at its heart has a mission to improve patients' lives, and will involve reorganizing our company and reporting segments. I am continuously encouraged by the commitment of our employees who work hard daily, rebuilding our relationships with prescribers, patients and payors, and regaining the trust of our debt holders and shareholders. Although it will take time to implement and execute our turnaround plan, I am confident that we will show progress in the coming quarters.

Now what: Optimism that Papa can restore credibility with payers, reduce the company's debt load, and eventually return the company to growth is ticking higher today, but investors should recognize that this turnaround is still in the early stages and there are still hurdles to overcome.

One of those hurdles includes maximizing the potential opportunity associated with a 20-year fulfillment deal that the company cut with Walgreens Boots Alliance (NASDAQ:WBA) late last year. After discontinuing a relationship with the specialty distributor Philidor, Papa's predecessor agreed to pay service fees to Walgreens to fill patient scripts.

Unfortunately, that relationship -- so far -- has been a bigger win for Walgreens than it's been for Valeant. Unlike traditional relationships, Walgreens doesn't purchase Valeant's drugs and resell them to consumers and payers. Instead, Walgreens fills the prescription and payers reimburse Valeant directly. In the first couple of quarters, there have been delays in receiving payment, and in some cases, payments have been too low for Valeant to turn a profit.

Walgreens has said it's working with Valeant to improve the situation, but sluggish second-quarter sales suggest that there's more fixing that needs to get done before this deal kick-starts Valeant's growth. Nevertheless, Valeant's second-quarter results contained few surprises, and given the company's track record over the past few conference calls, that's music to investors' ears. 

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