Why Auxilium Pharmaceuticals Shares Popped

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Auxilium Pharmaceuticals (NAS: AUXL) rose as much as 12% today after it noted that Xiaflex, its treatment for Dupuytren's contracture (which causes curvature of the fingers due to tendon thickening and shortening), also proved effective in reducing curvature of the penis.

So what: Auxilium's press release noted that the drug was being tested as a treatment for Peyronie's disease in which scar tissue can harden and curve the penis. Thus far, Xiaflex demonstrated positive results with minimal side effects in stage 2 clinical trials. Auxilium states that Xiaflex would be the first biological treatment for Peyronie's disease if approved, and would help treat the 65,000 to 120,000 men diagnosed annually.


Now what: Xiaflex accounted for roughly 20% of Auxilium's sales last year, so any additional revenue streams could be the bump it needs to turn the corner to profitability. The silver lining of rare diseases is they rarely have many, if any, competitors. However, most biotechs will need more than just a handful of drugs to turn profitable due to the small number of patients their drugs will treat. At this point in time, I'd wait on the sidelines until Auxilium can demonstrate it can turn and maintain a profit.

Craving more input? Start by adding Auxilium Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners