Piper Jaffray Reiterates Salix Pharmaceuticals (SLXP) Overweight Rating

Piper Jaffray analysts David Amsellem and Michael Dinerman reiterated their Overweight rating and $58 price target for shares of Salix Pharmaceuticals, Ltd. (Nasdaq: SLXP).

The statement came after the Food and Drug Administration (FDA) approved Salix Pharmaceuticals' 550 mg dose of Xifaxan (rifaximin) for hepatic encephalopathy (HE).

The analysts believe that with a relatively clean label, Xifaxan will generate sales of at least $400 million to $500 million to treat HE alone.

With a label expansion in non-constipation irritable bowel syndrome (IBS) 2011, they say Salix Pharmaceuticals' Xifaxan could easily produce $1 billion in annual sales.

The Piper Jaffray analysts wrote, "SLXP expects to start shipping the new dose in early May. We expect that the 550 mg pill will be priced between $18-$19 per pill ($36-$38 per day at at daily dose of 1,100 mg). May will also be an eventful month for SLXP with the presentation of detailed Phase III data for Xifaxan in non-constipation IBS at the Digestive Disease Week (DDW) plenary session on May 3."