Zacks Investment Research downgraded shares of Auxilium Pharmaceuticals, Inc. (AUXL) from NEUTRAL to UNDERPERFORM on November 16, 2012, with a target price of $17.00.
Auxilium reported a loss of $0.21 per share in the third quarter of 2012, wider than the year-ago loss of $0.08 and the Zacks Consensus Estimate of a loss of $0.06. Lower-than-expected revenues and higher costs led to the disappointing results. Revenues, which increased 6.4% to $71.0 million, were well below the Zacks Consensus Estimate of $80 million. In addition to reporting weak results, the company cut its sales guidance for Testim and US sales guidance for Xiaflex. The company also announced the termination of its Pfizer agreement for Xiaflex, effective April 24, 2013. Although Auxilium expects Testim sales to improve, we expect some weakness in the shares until Testim shows signs of sustainable improvement. We are, therefore, downgrading the stock to Underperform with a target price of $17.00.
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