NEW YORK (AP) - Drugmaker Salix Pharmaceuticals Ltd. reported a larger-than-expected profit for the fourth quarter on growing sales of its drug Xifaxan.
Salix said its profit jumped 37% in the fourth quarter, to $33.6 million, or 56 cents per share. If payments to a partner and a variety of one-time charges are excluded, its profit totaled $1.18 per share. Revenue increased 31%, to $155.2 million from $118.5 million.
Analysts expected Salix to report a profit of 93 cents per share and $152.6 million in revenue, according to FactSet.
Salix makes treatments for gastrointestinal diseases, and its main product is Xifaxan, which treats traveler's diarrhea and neurological problems associated with liver failure. Revenue from Xifaxan grew 29% to $107.2 million.
The Raleigh, N.C., company reported a profit of $87.4 million, or $1.44 per share, in 2011. Its revenue jumped 60% to $540.5 million as sales of Xifaxan rose 48% to $371.7 million.
Salix said it expects to report an adjusted profit of $2.45 per share in profit in 2012, with revenue growing about 36% to $735 million. Based on prescription data from January, it said it is on pace for $422 million in revenue from Xifaxan, $101 million from its bowel cleansing products, and $70 million from its drug Apriso, which is used to maintain remission of ulcerative colitis.
Analysts are forecasting a larger profit of $2.59 per share in profit on revenue of $731.5 million on average.
Salix's first-quarter profit forecast was also beneath Wall Street expectations, as the company said it expects income of 52 cents per share on $170 million in revenue. Analysts were calling for a profit of 61 cents per share and revenue of $164.4 million.
Jefferies & Co. analyst Corey Davis said a series of one-time items contributed to Salix's profit. The largest was a $27 million adjustment to consideration for its drug Relistor. Salix licensed Relistor from Progenics Pharmaceuticals Inc. early in the year. The drug treats constipation cause by opioid pain medications, and Salix is trying to win broader approval for the drug.
Davis kept a "Buy" rating on Salix stock and raised his price target to $54 per share from $50.
JMP Securities analyst Liisa Bayko said Xifaxan sales were better than she expected, but the company's costs are increasing because it is spending more money on marketing and clinical research, and is hiring some employees from Oceana Therapeutics, a company Salix bought in December. Bayko kept a "Market Perform" rating on the stock.
Date: February 28, 2012
Source: Associated Press