Salix Pharmaceuticals (SLXP) third quarter results exceeded expectations with higher revenues boosting performance. With the company raising its revenue guidance, we have raised our estimates as well. Salix is well-positioned for growth in the gastrointestinal market.
We believe lead product Xifaxan will continue to experience solid, above-market trend growth given its safety profile and lack of systemic absorption. We were pleased to see Xifaxan gain approval for the hepatic encephalopathy indication, as we believe that the main potential for Salix lies in gaining approval for additional indications for Xifaxan.
Meanwhile, we are pleased to see the company expanding its pipeline through in-licensing deals and acquisitions. We expect the company to continue pursuing suitable in-licensing opportunities in order to grow revenues. We believe the current price represents an attractive entry point for long-term investors and maintain our Outperform recommendation on the stock.
