Auxilium (NASDAQ:AUXL) Should Suffer Minimum Impact from Eli Lilly's (NYSE:LLY) Axiron

According to Jefferies, the recent approval by the FDA of Eli Lilly's (NYSE:LLY) Axiron shouldn't have a dramatic impact on Auxilium (NASDAQ:AUXL), as their key product driving the company is Xiaflex.

Jefferies said, "We believe Xiaflex adoption is gated by reimbursement concerns rather than clinical concerns and anticipate steady Xiaflex sales growth in 2011 with sales acceleration in 2012. We remain positive on a long-term peak sales potential in excess of $500m."

Although Jefferies doesn't believe Axiron will take over the entire market now served by Auxilium's Testim, it will take a big share, as it produced an 84 percent success rate versus Testim's 74 percent success rate.

Jefferies maintains a "Buy" rating on Auxilium, which closed Friday at $19.58, dropping $0.08, or 0.41 percent.