NEW YORK (AP) — Shares of Salix Pharmaceuticals Ltd. jumped Thursday after the drugmaker reported third-quarter results that topped Wall Street's expectations and said it expects greater income in 2012.
THE SPARK: The Raleigh, N.C., company is now forecasting adjusted net income of about $3.13 per share in 2012. Previously Salix said it would earn about $2.86 per share, and according to FactSet, analysts expected $2.90 per share on average.
The company still expects about $735 million in product revenue, just below analyst estimates of $740.2 million.
THE BIG PICTURE: Salix said its third-quarter net income fell by more than half, to $16.5 million, or 26 cents per share, as it reported greater research and development marketing costs for Xifaxan and other drugs, and took a $41.6 million impairment charge.
Excluding one-time items, the company said it earned 95 cents per share in the latest quarter. Revenue rose 27 percent to $185.1 million.
Analysts were expecting adjusted net income of 70 cents per share and $187.6 million in revenue.
During the quarter Salix said Xifaxan revenue rose 43 percent to $137.9 million. The drug is approved as a treatment for traveler's diarrhea and neurological problems associated with liver failure. Sales of its ulcerative colitis drug Apriso grew 31 percent to $19.7 million.
The company said prescriptions for its constipation drug Relistor nearly doubled.
SHARE ACTION: Salix stock gained $2.88, or 7.5 percent, to $40.85 in afternoon trading. The shares had lost more than 28 percent of their value since July 30, when the Food and Drug Administration asked Salix for more data on Relistor. Salix and Progenics Pharmaceuticals Inc. are seeking broader marketing approval for the drug.