Salix Pharmaceuticals swung to a $24.5 million net profit in the fourth quarter, a performance that was helped by strong sales revenue gains for the company’s gastrointestinal products.
Earnings for the three months ending Dec. 31, 2010 were 42 cents per share. Revenue in the quarter was $118.5 million. A year ago, Morrisville, North Carolina-based Salix (NASDAQ: SLXP) reported a $7 million loss on $70.2 million in revenue.
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Though an improvement over last year, the financial results fell short of consensus analyst expectations, which estimated earnings of 49 cents per share on revenue of $120.39 million. But many of the analysts who participated in the company’s quarterly conference call wanted to talk about something else: Last week, Salix disclosed that the U.S. Food and Drug Administration had signaled it would not approve the company’s drug Xifaxan for treating irritable bowel syndrome.
Xifaxan was approved in 2004 for treating traveler’s diarrhea. Last year, the company received approval for treating hepatic encephalopathy, a brain disorder associated with severe liver disease. Salix had been seeking to add irritable bowel syndrome as a new indication for the drug.
Salix disclosed on Feb. 23 that the FDA, in a telephone conversation, indicated it would be sending a complete response letter for the irritable bowel indication, meaning it needs more information in order to approve the drug.
Bill Forbes, Salix’s executive vice president, research and development and chief development officer, told analysts that the FDA’s position came up in a phone converation about drug labeling. But he said it’s hard to know what information and how much additional information the FDA will require.
“When we get the complete response letter, hopefully we’ll have a better understanding,” Forbes said.
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Shares of Salix fell 14 cents to $33.20 in after-hours trading.
