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 17, 2001

Salix has lost its momentum after hitting an all-time high of $16.75 last week. On Monday, shares of SLXP fell to an intra-day low of $14.50 before making a recovery late in the day. We were stopped out at $14.75 so we are dropping SLXP tonight.

Picked on April 8th @ $15.06
Profit/Loss = -0.31 (- 2%) (Stopped Monday @ $14.75)
Best Profit = +1.69 (+11%)

April 12, 2001

Salix is breaking out to new highs. On Thursday, shares of SLXP traded to an all-time high of $16.75 before pulling back to a close of $16.45 on volume of 123,000 shares. The stock has now made four consecutive higher highs coupled with higher lows and heavy volume. Momentum is quite strong so SLXP could continue to hit new highs. For now, the stock has support is Thursday’s intra-day low of $16.37 with additional support at the 5-dma, currently at $15.94. Resistance is now up to Thursday’s intra-day high of $16.75 and then possibly $17 or $17.50. Consider entry points on a bounce off of $16.37 or a breakout above $16.75 on volume of at least 70,000 shares by noon. We are leaving our stops at $14.75 to limit potential losses.

Picked on April 8th @ $15.06
Change since picked +1.39
Stop Loss @ $14.75