Launch of Auxilium's New Drug Xiaflex Falls Flat

Auxilium Pharmaceuticals' (NASDAQ: AUXL) drug Xiaflex had a disappointing launch.

Hapoalim Securities analyst Jon LeCroy is pessimistic about Xiaflex's prospects. Adoption rates will remain slow, and ultimately the product will not penetrate the market as much as previously thought, according to the analyst.

Lecroy said, "A steady run rate implies to us that Xiaflex will sell approximately $1.5 million in 2Q10, which is well below the consensus expectation of approximately $5 million. As result of the lower than expected run rate, we are lowering our forecasts for Xiaflex and think that the product could eventually sell approximately $200 million worldwide, which is below consensus."

Hapoalim downgraded AUXL from Buy to Hold. AUXL's price target dropped $15, from $42 to $27. AUXL is currently trading at $25.64.