Auxilium cuts sales view on drugs, expands urology business Mon Apr 29, 2013 12:22pm EDT (Reuters) - Auxilium Pharmaceuticals Inc reported a big fall in quarterly sales in the United States for both its drugs, and said it acquired Actient Holdings LLC to bolster its urology business. Shares of Auxilium fell as much as 13.5 percent to $13.87 - their lowest in a year-and-a-half - on the Nasdaq on Monday. Revenue fell 10 percent in the first quarter to $66.2 million, below analysts' average estimate of $81.23 million, according to Thomson Reuters I/B/E/S. Testosterone gel Testim's sales, almost all of which come from the United States, fell 23 percent to $45.5 million. Chief Executive Adrian Adams blames the slide on slowing growth of the testosterone replacement therapy market, competition and reduced managed care cover. Testim covered 71 percent of patients under managed care plans, down from 83 percent in the fourth quarter. Endo Pharmaceuticals Inc's Fortesta, which bagged some big managed care contracts, could have affected Testim sales by competitive pricing, Stifel Nicolaus analyst Annabel Samimy said. It seems like the competitive environment is overwhelming them. They were going to depend on market growth to maintain their sales level. U.S. sales of Xiaflex, a drug that treats a thickening of the fibrous tissue layer underneath the skin of the palm and fingers, fell 5 percent to $12 million in the quarter ended March 31. The drug's total sales, however, grew 39 percent. Auxilium cut its forecast range for 2013 global Testim sales to $210 million to $240 million from $250 million to $265 million. The company also reduced its U.S. sales forecast for Xiaflex - also being developed as a treatment for Peyronie's disease, a curvature of the penis caused by scar tissue - by $10 million to between $65 million and $80 million. Auxilium also announced the acquisition of Actient from private equity firm GTCR for $585 million plus contingent payments. "You've got a deal that was done on the same day as they reported unfortunate performance for their base products, so it calls into question the urgency of the deal," Samimy said. It feels a bit like a defensive move for Auxilium. Actient's testosterone replacement therapies Testopel and Striant and erectile dysfunction products such as Edex complement Auxilium's drugs. The combined company will sell 11 products for urology, orthopedic and respiratory ailments. "With a broader portfolio we will have a more diverse revenue stream, reducing our reliance on any single product," CEO Adams said. Auxilium expects the deal to contribute $85 million to $95 million to 2013 revenue and immediately add to adjusted net income. It now expects 2013 revenue of $360 million to $415 million, up from $325 million to $355 million forecast earlier. The company said it would fund the deal by cash on hand and a $225 million loan from Morgan Stanley Senior Funding Inc. Auxilium recorded a net loss of $8.2 million, or 17 cents per share, in the quarter ended March 31, compared with a loss of $1.7 million, or 4 cents per share, a year earlier. Shares of the company, one of the biggest losers on the Nasdaq on Monday, were trading down 11.6 percent at $14.16 a little after noon. Reporting By Vrinda Manocha in Bangalore