Salix to Restate Seven Quarters After Audit Committee ReportDrew Armstrong
Salix Pharmaceuticals Ltd. will restate financial filings for 2013 and most of 2014 after the board conducted an accounting review of how inventory of top drugs built up with wholesalers.
Salix will lower its reported revenue for 2013 and the first three quarters of 2014 by $20.7 million, and reduce net income over the same period by $11.9 million, the Raleigh, North Carolina-based company said Wednesday in a statement.
The company said it didn’t plan on making any other major adjustments.
Chairman Thomas W. D’Alonzo called the restatement “an important milestone” for the company. “While in total the restatements are minor in scale, the Audit Committee takes these matters very seriously and is in the process of promptly enhancing controls and procedures to ensure this never happens again,” he said in the statement.
Salix said in November that its chief financial officer had resigned and that the board was conducting an internal review after inventory of two of its drugs, Xifaxan and Apriso, increased to about nine months’ worth, far beyond industry norms. The chief executive officer, Carolyn Logan, announed on Jan. 5 that she would retire at the end of this month.
The drugmaker withdrew its fourth quarter and 2014 financial projections in December, and announced a new plan to strictly limit sales of some of the drugs to let distributors clear out the excess inventory.