On Thursday, the Salix Pharmaceuticals Ltd cut its entire-year estimate, saying its key drug inventory piled up, which discouraged the Allergan Inc. to acquire the drug maker, according to some experts.
Allergan and Salix almost sealed a deal, however, Allergan hesitated after issues on inventory levels. Those experts requested anonymity since the negotiations remained confidential. Representatives of both companies refused to comment.
Meanwhile, the latest earnings forecast, including inventory disclosure occurred during the third quarter earnings of Salix, bringing its shares low about 36% after the bell.
Allergan stated it has been meeting up with another party, disclosed as the Actavis Inc that it was approached by Allergan. A deal is brewing that Valeant Pharmaceuticals International would take over Allergan at 54 billion dollars, and arguments indicate that such would diminish Allergan’s growth due to deep cost-cutting.
The bowel drug maker, Salix, indicated adequate stock goo for 5 months, contrary to previous statements that showed stock would only last for weeks. As of September 30, inventory was 155 million dollars, up 50% since the year’s start.
Carolyn Logan, CEO of Salix said accounting of sales and wholesalers have always been appropriate, but the audit committee of the company is reviewing issues associated with its wholesale inventory.
The company expects a 5.20 dollar per share as 2014 profit to 1.4 billion dollar revenue, excluding special products, compared to the previous forecast of 6.16 dollars every share on 1.6 billion dollar revenue.
Analysts expected a 6.17 dollar every share on 1.6 billion dollar revenue.