Tuesday, Salix Pharmaceuticals, Ltd. (SLXP) reported a fourth quarter loss that narrowed from last year, helped essentially by a 16% rise in revenue. Both earnings and revenues came in ahead of Street expectations. Looking ahead, the company also provided its guidance for the first quarter and full year 2010.
Morrisville, North Carolina-based Salix a fourth quarter loss that narrowed to $7 million or $0.13 per share from $11 million or $0.23 per share in the comparable quarter last year.
On average, 10 analysts polled by Thomson/Reuters expected the company to report a loss of $0.14 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total product revenue for the quarter edged up 16% to $70.2 million from $60.6 million in the same quarter last year. Analysts expected the company to generate revenue of $68.19 million for the fourth quarter.
Product-wise, Xifaxan revenue increased to $24.9 million in the quarter from $23.8 million in the year-ago period. Revenue from the company's key bowel cleansing products Moviprep and Osmopre was $30.4 million, a 54% increase from $19.8 million in the same quarter last year.
Gross margin on total product revenue was 75.1%, slightly lower from 75.9% in the prior year quarter.
Total cost and expenses increased to $77.7 million from $71.6 million in the year-ago quarter, as cost of products sold rose to $17.5 million from $14.5 million and selling, general and administrative expenses increased to $36.4 million from $27.5 million in the year-ago period.
For the fiscal year 2009, the company reported net loss of $43.6 million or $0.88 per share, compared to $ 47.6 million or $0.99 per share in the prior year. Total product revenue increased 30% to $232.9 million from $178.8 million a year-ago.
Analysts estimated a loss of $0.89 per share on revenue of $231.13 million for the full year.
Adam Derbyshire, executive vice president and chief financial officer said, "We believe several factors should contribute to an increase in product revenue over the coming years, namely the continued growth of our currently marketed products - including APRISO and METOZOLV ODT, our two products launched in 2009; the launch of new product candidates currently in late-stage development; the expanded contribution of rifaximin if additional indications are approved and the further expansion of our product portfolio via development activities, licensing and acquisitions."
Looking forward to the fiscal year 2010, Salix estimates earnings of $0.04 per share on revenue of about $334 million, a 43% growth over 2009 revenue. The revenue estimate is based on the assumption of timely approval of Xifaxan 550 mg for hepatic encephalopathy.
Street analysts currently expects earnings of $0.16 per share on revenue of $335.94 million for the full year 2010.
The company expects first quarter 2010 loss of about $0.50 per share on revenue of about $40 million, which includes the impact of Xifaxan 550 mg business on the Xifaxan 200 mg business, if Xifaxan 550 mg is approved in time.
Analysts currently expect a loss of $0.08 per share on revenue of $69.94 million for the first quarter.
SLXP closed Tuesday's regular trading at $31.23, up $0.18 or 0.58%, on a volume of 1.15 million shares on the Nasdaq. In after hours, the stock fell 0.77% or $0.24, trading at $30.99.
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