Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) gains Tuesday after saying it has made steps to reduce wholesaler inventory levels of its drugs XIFAXAN 550, APRISO and UCERIS to a target of three months by the end of 2015. The company’s revised earnings guidance could equate to a miss for fiscal 2015 but an improved 2016.
Shares of the specialty pharmaceutical company were up 7.82% at $111.09 near midday, with a 52-week range of $83.26 – $172.98.
Salix Pharmaceuticals, Ltd. (SLXP) said that the Food and Drug Administration (FDA) provided written notice to the company that it has extended the Prescription Drug User Fee Act Action Date for XIFAXAN 550 for the treatment of irritable bowel syndrome with diarrhea, or IBS-D, to May 27, 2015. SLXP remains confident that FDA approval for XIFAXAN 550 for the treatment of IBS-D will be obtained, and it maintains its previously-announced peak year sales estimate for this product of $2.1 billion.
The company intends to sell to its wholesalers minimal amounts of XIFAXAN 550, APRISO and UCERIS during Q4 2014. Based on this accelerated inventory reduction plan and the expectation of finalizing the distribution services agreements with its principal wholesalers in Q1 2015, the company expects total net product revenue for fiscal 2015 of between approximately $1.25 billion and $1.35 billion. It believes total net product revenue would increase by $400 million – $450 million if the company sold its products based on prescription demand in 2015. It also sees EPS of $3.10 – $4.10, versus the Capital IQ consensus estimate of $4.64.
For fiscal 2016, it sees total net product revenue of between $1.9 billion and $2.0 billion, and EPS of $8.50 – $9.50. Analysts are looking for revenue of $1.91 billion and EPS of $6.43.
For FY15, it sees year-over-year prescription demand growth for XIFAXAN 550, APRISO, RELISTOR and UCERIS of 18%, 10%, 67% and 47%, respectively. For FY16, it expects year-over-year prescription demand growth of 13%, 9%, 16% and 25%, respectively. The company assumes that there will be minimal sales of XIFAXAN 550, APRISO and UCERIS during Q4 2014.
Salix Pharmaceuticals, Ltd. (SLXP) last released quarterly earnings on November 06th for the period ending September 30th 2014. The company reported actual earnings per share of $1.32 against Zack’s Research estimate of $0.73. This represents a 80.82% surprise upside to the expected number.
The average broker recommendation according to Zacks is 1.86 based on 14 recommendations. On a consensus basis, analysts have a short term target price of $116.62 and expect a long term growth rate of 18.60%. Zacks gives a current quarter EPS estimate of 0.56 and a Hold rating of 3 which is based on short term performance over the next one to three months. Of the companies included in the Zack’s consensus rating, 8 rate the stock a Strong Buy, 6 see it as a Hold.