UPDATE: Bank of America Raises PT on Salix Pharmaceuticals on Sales Estimates

Bank of America analyst Gregg Gilbert published a report on Salix Pharmaceuticals

that reiterated its Buy rating and raised price target from $50 to $56. Bank of America reported that, “We added sales estimates for budesonide foam and rifaximin EIR to our model. For budesonide foam, we model launch in 2015 and peak sales of $50mn (by year 7). For rifaximin EIR, we assume launch in 2017 and peak sales of $250mn (by year 7). We also made several other adjustments to our model. We lowered our Xifaxan sales estimate for 2013 to $617mn (from $646mn) based on a lower sales/Rx assumption. We raised our 2013 sales estimates for the Purgatives and Relistor, which more than offset the reduction for Xifaxan. We also pushed out sales and expenses related to the launch of Xifaxan for the IBS indication from 2014 to 2015, which reduced our Xifaxan sales estimates for 2014 and beyond. We also increased our SG&A assumptions related to the IBS launch; we now model an incremental $60mn of spend in 2015 for 200 new sales reps vs. our prior assumption of $30mn for 100 new reps. Table 1 compares our new and prior estimates.” Shares of Salix Pharmaceuticals closed at $48.98 on Tuesday.