August 8, 2012 / 11:28 PM / 5 years ago

Salix Pharma raises fiscal year profit forecast, shares rise

* Raises FY12 EPS forecast to $2.86 vs est $2.65

* Buys marketing rights to Alfa Wassermann’s experimental drug

* Shares up 9 pct after market

Aug 8 (Reuters) - Salix Pharmaceuticals Ltd reported a better-than-expected quarterly profit and raised its full-year forecast as it no longer expects to incur higher costs after an expanded use of its constipation drug was rejected by U.S. health regulators.

In its previous full-year profit forecast, Salix had accounted for expected costs related to expanding its sales force to market its drug, Relistor, for a wider indication to include adult patients with chronic, non-cancer pain.

The subcutaneous injection is currently approved to treat opioid-induced constipation in patients with advanced illnesses where laxatives are not sufficient.

The U.S. Food and Drug Administration in July declined to widen the patient population for Relistor.

Salix more than tripled it full-year net income forecast to $183 million, or $2.86 per share, from its previous estimate of $52 million, or 81 cents per share. It maintained its revenue forecast of $735 million.

Analysts on average expect a profit of $2.65 per share on revenue of $742.26 million, according to Thomson Reuters I/B/E/S.

Net income rose to $20.1 million or 32 cents per share in the second quarter from $19.2 million or 32 cents share a year earlier.

Excluding special items, the company earned 79 cents per share. Revenue for the quarter rose 36 percent to $181 million.

Analysts were expecting a profit of 54 cents per share, on revenue of $180.8 million, according to Thomson Reuters I/B/E/S.

Separately, Salix said it bought exclusive rights in the United States and Canada to experimental formulations of rifaximin to treat gastrointestinal and respiratory indications through an agreement with Italy-based pharmaceutical company Alfa Wassermann S.p.A

Salix will pay $10 million up-front and a $25 million development milestone payment upon FDA approval of the drug. The pharmaceuticals company will also pay sales-based milestones and royalties.

Shares of the Raleigh, North Carolina-based company were up 9 percent at $49.20 in after market trade. They closed at $44.99 on the Nasdaq on Wednesday. (Reporting By Pallavi Ail in Bangalore; Editing by Phil Berlowitz)

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