Bank of America Sees Buying Opportunity on Salix's Weakness

Bank of America has published a research report on Salix Pharmaceuticals

as the shares are showing weakness today, which Bank of America believes creates a buying opportunity. In the report, Bank of America writes, "SLXP shares are weak today following the release of FDA draft guidance for generics of the 550mg strength of Xifaxan, which is SLXP's most important product. In contrast with prior draft guidance for the 200mg strength, the guidance does not require a clinical study in the target patient population of hepatic encephalopathy (

) patients, and thus presents a more straightforward generic pathway relative to what the market may have expected. Given the importance of Xifaxan to SLXP (70% of revenue) and the stock's premium multiple, we are not overly surprised by today's volatility." Bank of America maintains its Buy rating and $60 price objective on Salix Pharmaceuticals, which is currently trading down $2.71 from yesterday's $48.89 closing price.