Salix reports Q4 loss after inventory reduction plan

Salix Pharmaceuticals reported a fourth quarter loss Monday as a result of the Raleigh company halting sales to wholesalers as part of its effort to bring down inventory levels of several of its drugs.

Salix reported a net loss of $288 million, or $4.51 per share, in the fourth quarter, compared to net income of $40 million, or 58 cents per share, during the same period in 2013. Salix had net product revenue of $13 million for the quarter, compared to $238 million in the fourth quarter of 2013.

Salix disclosed in December that it planned to sell its wholesalers minimal amounts of Xifaxan, Apriso, Glumetza and Uceris in the fourth quarter in order to reduce the inventory of those drugs to three months by the end of 2015. The plan was implemented after Salix said in November that it had been reported elevated levels for those drugs.

Salix reported Monday that inventory levels of Xifaxan and Apriso have since been reduced to six months, while Glumetza levels are at five months and Uceris at four months. Subscriptions for Xifaxan, Salix’s best-selling drug, increased 23 percent in the fourth quarter compared with the same period in 2013.

Last month, Valeant Pharmaceuticals reached a deal to acquire Salix in a transaction valued at $14.5 billion. Valeant is paying $158 per share for Salix. The deal ended ending months of speculation about Salix’s future.

Salix, which has a portfolio of 22 drugs, had annual revenue of $1.134 billion last year, compared to 914 million in 2013.

For the full year, Salix reported a net loss of $415 million, or $6.53 per share, compared to net income of $131 million, or $1.99 per share in 2013.

Salix didn’t not provide financial guidance for 2015, citing its pending acquisition by Valeant. The deal is expected to close in the second quarter.

Salix shares closed Monday at $156.88, down 32 cents.

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