Collins Stewart Upgrades Auxilium Pharmaceuticals (AUXL) to Buy; Positive Risk/Reward for Peyronie's

Collins Stewart upgraded Auxilium Pharmaceuticals (NASDAQ: AUXL) from Neutral to Buy with a price target of $23.00.

Collins analyst says, "We are upgrading AUXL given we view the risk/reward for Xiaflex in Peyronie's disease (PD) as favorable at current levels. We do not currently model for PD, however, we believe several changes to the P3 IMPRESS study design vs. the P2b (see details below) increase the likelihood of success. While the Xiaflex launch in Dupuytren's has underperformed expectations, AUXL's EV suggests Xiaflex WW peak sales of $114,8M (fully-diluted; based on a 4x Xiaflex peak sales multiple and 1.5x FY11 Testim sales) vs. FY11 Xiaflex U.S. consensus of $45.8M and Testim consensus of $201.8M. As a result, we believe the following represent a free-call option: 1) Xiaflex in PD (we estimate a ~$350M+ WW peak opportunity); 2) slower-than-expected Testim market share loss; and 3) additional Xiaflex indications (P2 studies in frozen shoulder and cellulite to initiate in 4Q11 and 1H12)."

For more ratings news on Auxilium Pharmaceuticals click here and for the rating history of Auxilium Pharmaceuticals click here.

Shares of Auxilium Pharmaceuticals closed at $16.60 yesterday.

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