Auxilium's Xiaflex Launch Slow, But Significant Opportunity Remains (AUXL)

Deutsche Bank analysts David Steinberg, Edward Chung, and Rosemary Wang maintained a Buy rating for Auxilium Pharmaceuticals

, but dropped their price target $10. Auxilium's new drug Xiaflex had a slow launch, falling $2 million short of consensus Q2 estimate of $4 million for Xiaflex. Xiaflex is intended to treat Dupuytren’s contracture, a hand condition that mostly affects older men of Northern European descent. Deutsche Bank thinks that adoption rates remain positive despite the slow launch, although reimbursement headwinds remain. The analysts think that with the issuance of a permanent J-code in 2011 and as doctors become more comfortable with the treatment and the reimbursement process, Xiaflex could still see its $400 million potential. AULX had a 2009A EPS of ($1.23). Deutsche Bank predicts 2010 EPS of ($1.06), 2011 EPS of ($0.10), and 2012 EPS of ($0.77). Auxilium will have a "breakout" year in 2013, with estimated EPS of $1.57, according to Deutsche Bank. The new $30 dollar price target (vs $40 previously) is based on 25X 2013 EPS of $1.57. AUXL is trading down 2% today to $22.73. Learn how to find the best

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