September quarter sales of Acrux Limited’s (ACR) Axiron testosterone lotion reported overnight by partner Eli Lilly were 10% below the June quarter at US$16M, but a comparison to market leader Androgel suggests that this is at least partly due to a seasonal effect. The softer sales number, combined with prescription data showing that market share has stalled at around 12.9% for the past 4 months indicate that Axiron is struggling to make headway in the face of Abbot’s aggressive promotion of its new low-volume Androgel product. While we expect the more aggressive detailing to doctors and the direct-to-consumer advertising campaign planned by Lilly for 2013 to lead to resumed market share growth, in the light of the current uncertainty we lower our peak market share forecast from 22% to 20%. We retain our STRONG BUY recommendation and lower our price target to A$4.24, in line with our DCF valuation.
ACR Price at posting:
$3.29 Sentiment: None Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)