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Auxilium Pharmaceuticals Inc.

AUXILIUM PHARMACEUTICALS INC. (Malvern PA) said that patients taking its Dupuytren's contracture treatment Xiaflex in a two-year study had a recurrence rate of 19.3%, comparatively better than those who underwent surgical procedures. Dupuytren's contracture is a condition in which the tendons of the hand grow constricted, causing the fingers to curve inward. Xiaflex is approved as a treatment in the U.S. and is undergoing regulatory review in Europe. The company said the long-term Xiaflex results compare with a 39% recurrence rate for patients undergoing a surgical procedure called fascietomy and a recurrence rate of 85% with another surgical procedure, called needle fasciotomy. Auxilium shares fell, however, as several analysts voiced concern over healthcare reimbursement for the treatment. The stock closed the week down $2.31, or 8%, at $26.24. Shares have traded between $24.21 and $38.50 over the last 52 weeks. Collins Stewart analyst Salveen J. Kochnover reaffirmed a "Buy" rating and $54 price target on the stock, citing the better recurrence rates. Also, he said the launch of Xiaflex, which was approved earlier in 2010, continues to make progress with over 1,400 physicians now approved to administer the drug. But, he added, reimbursement rates continue to remain a concern.

Jefferies & Co. analyst Thomas Wei also cited reimbursement concerns for the drug, but reaffirmed a "Buy" rating while lowering his price target to $42 from $44. "We continue to believe that physician adoption is largely gated by reimbursement concerns rather than clinical concerns," Wei said in a note to investors. "We anticipate reimbursement will be resolved over the course of 2010 and maintain our peak sales estimates for Xiaflex and see long-term upside to the stock."
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Title Annotation:CORPORATE
Date:Jun 14, 2010
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