WASHINGTON (dpa-AFX) - Salix Pharmaceuticals, Ltd. (SLXP), Monday reported a swing to profit in the second quarter, as revenues grew 42 percent driven by Xifaxan sales and improved gross margins. The company's revenue forecast for the full year and third quarter are expected to miss current estimates.
Net income for the second quarter was $19.2 million or $0.32 per share, compared to a loss of $23.6 million or $0.41 per share in the prior-year quarter.
On a non-GAAP basis, earnings were $33.8 million or $0.54 per share, compared to earnings of $14.0 million or $0.24 per share in the similar quarter last year.
On average, twelve analysts polled by Thomson Reuters expected the company to report earnings of $0.48 per share for the quarter. Analysts estimate typically excludes one-time items.
Total product revenue for the second quarter increased 42 percent to $133.2 million from $93.8 million in the corresponding quarter last year. Fifteen analysts on consensus had a revenue estimate of $131.52 million for the quarter.
Xifaxan revenue for the quarter was $87.0 million, a 20 percent increase from $72.4 million a year ago. On a milligram basis, Xifaxan 550 mg tablets grew 78 percent compared to the second quarter of 2010.
Xifaxan is indicated in the treatment of travelers' diarrhea caused by E. coli.
Second quarter gross margin on total product revenue was 81.0 percent, compared to 81.7 percent in the previous year.
Salix Pharma had cash and cash equivalents of $476.5 million as of June 30, 2011.
Additionally, the company said it would continue with the development of Xifaxan 550 for the treatment of irritable bowel syndrome.
Looking ahead to full year 2011, the company continues to expect product revenue of about $520 million, an increase of 54 percent from 2010. The Street currently anticipates revenue of $531.19 million for the year.
For the third quarter, the company expects product revenue of nearly $140 million, but below current Street expectation of $141.07 million.
The company said, 'Based on the anticipated near-term growth of our business, we believe we can generate $1 billion in revenue in 2013, assuming the timely approval of subcutaneous injection RELISTOR for OIC in chronic, non-cancer pain and excluding the potential XIFAXAN IBS indication.'
SLXP closed Monday's regular trading at $32.70, down $1.90 or 5.49%, on a volume of 1.76 million shares. In after hours, the stock gained $0.26 or 0.81%.
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