Salix Pharmaceuticals "neutral," target price reduced

03/04/08 - Credit Suisse

NEW YORK, March 4 (newratings.com) - Analysts at Credit Suisse maintain their "neutral" rating on Salix Pharmaceuticals Ltd (SLXP). The target price has been reduced from $7 to $6.

In a research note published this morning, the analysts mention that the company has posted its 4Q07 adjusted EPS in-line with the consensus. Salix Pharmaceuticals has issued its EPS guidance for 2008 at -$1.12, with its SG&A and R&D expenditures rising by nearly 50%-60% on a y/y basis. The significant rise in spending is likely to offset the impact of the termination of the Eisai co-promotion and the launch of the 1100mg Colazal in 2H08 and of Granulated Mesalamine and Metoclopramide-Zydis in early-2009, the analysts add. The company expects to achieve near-profitability levels by end-2009.