Deutsche Bank Maintains Buy Rating, $28 PT On AUXL

Deutsche Bank is tweaking its Auxilium Pharmaceuticals, Inc. (NASDAQ: AUXL) 2011 revenue estimate from $268M to $269M but lowering its 2011 EPS estimate from $(0.56) to $(0.83), primarily on higher R&D and lower gross margins.

“We are also modestly lowering our 2012-14 revenue and EPS estimates, primarily on slightly lower Testim sales,” Deutsche Bank writes. “With a current market cap of $1.14B, the implied value for Xiaflex is approx $384M (ex-cash of $128M and applying a 3x rev multiple to our 2011 Testim est of $208M).

“We view this as increasingly attractive, given its potential applicability in a number of other unmet medical needs (e.g., Peyronies, cellulite, etc.).

“Rolling forward our valuation metrics, our 12-month PT remains $28, based on 24x our fully taxed 2013 EPS est of $1.33 (previously $1.57), discounted back 1 year at 15%. Key risks to our target include potential regulatory, reimbursement, or commercial setbacks for Xiaflex, as well as potential changes in the Testim growth outlook.”

Auxilium Pharmaceuticals closed Thursday at $22.24.