Salix shares slide on reports of wholesale stock backlog

Shares in gastrointestinal specialist Salix Pharmaceuticals (Nasdaq: SLXP) fell nearly 36% after Thursday’s trading as the company cut its 2014 forecast and acknowledged a large backlog of inventory for key drugs. Contrary to previous reports that its inventory would last mere weeks, its wholesale stock levels for its four key drugs showed enough stock for more than five months.

In the third quarter of 2014, Salix achieved net product revenue of $354.7 million, up 49% on the same quarter in 2013, but below predictions of $392.3 million.

Earnings before interest, tax, depreciation and amortization (EBITDA) increased 63% to $161.2 billion, while earnings per share stood at a loss of $1.39 on a GAAP (generally-accepted accounting principles) basis, down from a profit of $0.71 in the same quarter last year.