Piper Jaffray Reinforces Bullish Thesis for Salix Pharmaceuticals
According to a research reported published by Piper Jaffray, it will remain bullish on Salix Pharmaceuticals (NASDAQ: SLXP) due to favorable dynamics for Xiafaxan and subcutaneous Relistor.
“Retail prescription (Rx) growth for Relistor remains strong, and Rx growth for Xifaxan550 in 4Q remained solid even as the decline in Rx's for the 200 mg dose slowed noticeably. We believe visibility on high-teens EPS growth for 2012 is strong (and that is with an effective tax rate going from 10% in 2011 to 38% in 2012). Further, with contribution from oral Relistor starting in 2013, plus contribution from secondary drivers (e.g., the ramp up in Solesta sales once a Jcode is in place; the 2H12 approval of crofelemer), we believe EPS growth north of 20% for 2013 and 2014 is realistic, translating into ample room for value creation in the context of a 2012 P/E of 16x,” Piper Jaffray stated in the report.
Piper Jaffray maintains its Overweight rating and $57 PT on Salix Pharmaceuticals, which closed Friday at $46.11.
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