Zacks senior pharmaceutical industry analysts Jason Napodano, CFA and Arpita Dutt, CA have recently downgraded the shares of pharmaceutical company Auxilium Pharmaceuticals, Inc. (AUXL) from a Hold to Sell. Here are some of the reasons why:
'Auxilium Pharmaceuticals is a specialty pharmaceutical company focused on treating diseases and conditions that accompany aging. The company's only approved product is Testim, a 1% testosterone gel indicated for the treatment of hypogonadism.
'We are concerned that the termination of Auxilium's co-promotion agreement for Testim could have a negative impact on the product's growth prospects. We are also worried about the renewed promotional efforts behind Testim's main competitor in the gel prescription market - AndroGel (Solvay Pharmaceuticals), which is the current market leader.
'We do not see Auxilium achieving profitability over the next few years and recommend investors to avoid the name. We are maintaining our Sell rating on Auxilium based on our concerns regarding the growth prospects for Testim. The potential negative impact the termination of the company's co-promotion agreement with Oscient Pharmaceuticals (OSCI) could really hurt Testim sales. Testim had responded well to Oscient's increased promotional efforts.
'Though the stock regained some lost ground recently, we do not see sizable upside based on our earnings model. We would avoid the name until we gain more visibility on Testim's long-term growth prospects and the pipeline. We rate the stock a Sell with a price target of $14.'
Read the full analyst report on AUXL.
Read the full analyst report on OSCI.
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