Salix Pharmaceuticals, Ltd. develops and markets prescription pharmaceutical products for the treatment of gastrointestinal diseases. For the FY ended 12/31/00, total revenues increased from $3.1M to $14.5M. Net loss fell 35% to $3M. Revenues benefitted from the signing of an agreement with Shire. Lower loss reflects decreased R&D costs due to the completion of a balsalazide disodium clinical trial, partially offset by higher license fees.

April 8, 2001

Salix Pharmaceuticals, Ltd. is a pharmaceutical company that acquires and develops brand name, prescription pharmaceutical products used to treat gastrointestinal diseases. SLXP went public on November 20th. The stock began trading at $10 but it slipped below its IPO price to an all-time low of $5.75 just 9 days later. Since then, shares of SLXP have performed rather nicely. On Friday, the stock traded to an all-time high of $16.31, which represents a 63% gain from the IPO price and a 184% gain from the November 29th low. We believe that SLXP is in the early stages of rally after moving to NASDAQ National Market from the SmallCap Market, so the stock could see new highs in the near future. From a technical perspective, support is the 5-dma at $14.49 with additional support at the 10-dma, currently at $14.13. Resistance is the February 22nd intra-day high of $15.50 and then $16.31, Friday’s intra-day high. A bounce off of $14.49 or a move above $15.50 on midday volume of at least 60,000 shares may be possible entry points. One caveat, this can be a volatile stock since it occasionally trades on light volume. We plan to set stops at $13.50 as downside protection.

Picked on April 8th @ $15.06
Change since picked +0.00
Stop Loss @ $13.50

April 10, 2001

Salix has been moving higher over the past five sessions in anticipation of its presentation at the Robinson-Humphrey Institutional Conference. The company appeared at 1:30 p.m. EDT on Tuesday and the stock responded positively shortly afterwards. Shares of SLXP traded to an intra-day high of $16.10 (3:00 p.m.) before settling at $16.01 on heavy volume of 193,000 shares. The volume was particularly impressive due to the increased frequency of 10,000+ share trades over the past two days. Going forward, support is Tuesday’s intra-day low of $15.42 with additional support at $15.09, the 5-dma. Resistance is the all-time high of $16.31 and then possibly $17 or $17.50. Traders should be looking for entry points on a bounce off of $15.42 or a breakout above $16.31 on midday volume greater than 70,000 shares. We have moved our stops up to $14.75 to limit potential losses.

Picked on April 8th @ $15.06
Change since picked +0.95
Stop Loss @ $14.75