Salix Pharmaceutical () plummeted today after the drug maker cut its full-year forecast following a revision in its accounting and said inventory for its leading drugs piled up.
Shares of the Raleigh North Carolina-based company lost 33 percent to $93.53 at 2:31 p.m. in New York.
Salix said it now expects 2014 profit of $5.20 per share before special items on revenue of $1.4 billion according to a statement released yesterday. It had previously forecast a profit of $6.16 per share on revenue of $1.6 billion.
18 analysts on average were expecting a profit of $6.17 per share on revenue of $1.6 billion.
The company said inventories of its key treatments rose to at least a five-month supply. Previously Salix had said it had only a few weeks' worth of inventory. Inventory as of Sept. 30 was $155 million up about 50 percent since the beginning of the year.
The company also posted a net loss of $88.6 million or $1.39 per share for the third quarter compared with net income of $47.3 million or $0.71 per share a year earlier. Removing special items the company earned $1.53 per share.
Revenue increased 49 percent to $355 million.
Wall Street had projected a profit of $1.55 per share on revenue of $392.4 million.
The company also announced that its chief financial officer Adam Derbyshire has resigned and he was replaced by Timothy Creech as acting CFO.
The resignation was related to an accounting scandal involving inventory levels of key gastrointestinal drugs forcing a reduction in Salix's financial forecasts for the remainder of the year.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.