Salix Pharma Q1 Adj Profit Tops View, But Revenues Miss; Backs 2014 Outlook

(RTTNews) - Pharmaceutical products and medical devices company Salix Pharmaceuticals, Ltd. (SLXP) reported Thursday a net loss for the first quarter compared to a profit last year, hurt by hefty Santarus transaction costs.

Stripping down the costs, adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also provided earnings guidance for the second quarter, below Street view, and maintained its outlook for the full-year 2014.

"We continued to experience positive momentum in the business in the first quarter of 2014 demonstrated by strong prescription growth for XIFAXAN 550, APRISO and UCERIS, with all three key products reaching new record-highs for total monthly prescriptions in March," President and CEO Carolyn Logan said in a statement.

Raleigh, North Carolina-based Salix reported a net loss of $43.87 million or $0.69 per share for the first quarter, compared to net income of $22.44 million or $0.35 per share in the prior-year quarter.

Results for the latest quarter include the impact of the Santarus acquisition, which was completed on January 2, 2014.

Excluding items, adjusted net income was $77.8 million or $1.05 per share, compared to $40.1 million or $0.63 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.91 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net product revenue surged 90 percent $384.37 million from $202.60 million in the same quarter last year, primarily driven by the Santarus acquisition, but missed fourteen Wall Street analysts' consensus estimate of $372.94 million.

Revenues primarily include Xifaxan sales of $114.3 million, Uceris sales of $62.9 million, Glumetza sales of $130.3 million, and Zegerid sales of $37.6 million.

Xifaxan 550 mg prescriptions grew 19 percent, and Apriso prescriptions surged 58 percent from last year.

"As we transitioned Santarus into our distribution model, sales of XIFAXAN 550 and APRISO were below prescription demand for the first quarter of 2014 as wholesalers and drug chains focused on securing Santarus' products to establish adequate inventories, resulting in very strong revenue growth in Santarus' products," Logan added.

Total costs and expenses and expenses soared to $422.46 million from $153.33 million in the year-ago quarter, including transaction costs of $86.41 million.

Looking ahead to the second quarter, Salix expects adjusted earnings of about $1.63 per share, on projected total net product revenues of about $395.0 million. Analysts expect earnings of $1.71 per share on quarterly revenues of $393.39 million for the quarter.

For fiscal 2014, the company continues to project adjusted earnings of about $6.33 per share, on anticipated total net product revenues of about $1.6 billion. Street is currently looking for full-year 2014 earnings of $6.59 per share on annual revenues of $1.62 billion.

Looking ahead, Logan said, "We expect XIFAXAN 550 sales to exceed prescription demand or be in line with prescription demand in the second quarter of 2014 as wholesalers bring XIFAXAN 550 inventories back to more typical levels, and shipments for all of the Company's products to track in line with prescription growth by the second half of the year."

SLXP closed Thursday's regular trading session at $105.81, down $5.04 or 4.55% on a volume of 1.04 million shares. The stock lost a further $2.53 or 2.39% in after-hours trading.