Salix Pharma says inventory rises, cuts 2014 forecast

(Reuters) - Salix Pharmaceuticals Ltd slashed its full-year forecast and said inventory for its key drugs piled up, sending its shares down nearly 36 percent after the bell. The company, which makes bowel drugs, said wholesale inventory levels for its four key drugs showed enough stock for at least five months, in contrast to earlier statements that indicated stocks that would last just weeks. Inventory as of Sept. 30 was $155 million, up about 50 percent since the beginning of the year. The company's audit committee is conducting a review of issues related to how the management characterized the wholesale inventory levels, Salix said in a call with analysts. "Management believes that the company's accounting with respect to sales to wholesalers has at all times been appropriate," Salix Chief Executive Carolyn Logan said. Salix said it was currently negotiating with its wholesalers to enter into distribution services agreements for each of the products. The company said it now expects 2014 profit of $5.20 per share, before special items, on revenue of $1.4 billion. It had previously forecast a profit of $6.16 per share on revenue of $1.6 billion. Analysts on average were expecting a profit of $6.17 per share on revenue of $1.6 billion, according to Thomson Reuters I/B/E/S. The company also reported a net loss of $88.6 million, or $1.39 per share, for the third quarter ended Sept. 30, compared with net income of $47.3 million, or 71 cents per share, a year earlier. Excluding special items, the company earned $1.53 per share. Revenue increased 49 percent to $355 million. Analysts on average had expected a profit of $1.55 per share on revenue of $392.4 million, according to Thomson Reuters I/B/E/S. Salix shares were down 37 percent at $88.10. Up to Thursday's close, they had gained about 67 pct this year. (Reporting by Vidya L Nathan in Bangalore; Editing by Joyjeet Das and Saumyadeb Chakrabarty)