Salix Pharmaceuticals today saw a 50% share increase based on Phase III clinical trial results. Salix (Nasdaq: SLXP) already sells rifaximin as a treatment for travelers’ diarrhea. That product, marketed with the name Xifaxan, provided $26.3 million of Salix’s $52.2 million in second-quarter revenue. The company is seeking FDA approval to market the drug for a different indication. On a side note, Salix Pharmaceuticals will market METOZOLV ODT under a licensing agreement with Wilmington Pharmaceuticals from recent approval on Sept 9, 2009.
Bill Forbes, Salix’ senior vice president and chief development officer, said in a statement that if approved, rifaximin would be the first new option on the market for managing HE in more than 30 years. Salix estimates that HE represents a $600 million market in the United States.
Rifaximin also has been granted an orphan drug designation by the FDA for treatment of HE. That designation provides seven years of marketing exclusivity in the United States if the drug gains FDA approval.
Salix Pharmaceuticals, Ltd. (NASDAQ: SLXP) announced on August 25, 2009, the FDA has accepted for filing and designated for Priority Review the Company's New Drug Application for rifaximin tablets 550 mg for the maintenance of remission of hepatic encephalopathy. Additionally, the FDA has informed the Company of its plan to schedule an Advisory Committee meeting in late February 2010 to discuss the application.
A Priority Review classification is granted to drugs offering major advances in treatment, or providing a treatment where no adequate therapy exists. Based on this classification, the FDA has issued an action date of December 24, 2009 under the Prescription Drug User Fee Act. However, the convening of an Advisory Committee in late February 2010 signals the December 24, 2009 action date will be delayed.
Salix's List of Products
Notably Pepcid was acquired by Merck in February 2007
Salix Pharmaceuticals Announces Statistically Significant Results for Both the Primary and Key Secondary Analyses Of Rifaximin in the Treatment of Non-Constipation Irritable Bowel Syndrome in Two Phase 3 Trials (Target 1 and Target 2)
"We are extremely pleased with the outcome of our pivotal Phase 3 trials of rifaximin in the treatment of non-constipation irritable bowel syndrome," stated Bill Forbes, Pharm.D., Senior Vice President and Chief Development Officer, Salix Pharmaceuticals. "Irritable bowel syndrome, characterized by abdominal pain, bloating and altered bowel habits, is one of the most common chronic medical conditions. Non-constipation IBS comprises the most common forms of IBS by including patients that have either diarrhea-predominant or diarrhea-constipation alternating symptoms. Based on the most current understanding of IBS, TARGET 1 and TARGET 2 were designed to investigate the utility of rifaximin, a broad spectrum, minimally absorbed, gut-selective antibiotic, with minimal side effects, in relieving the symptoms of IBS by altering the bacteria believed to be responsible for creating the symptoms. TARGET 1 and TARGET 2 will serve as the confirmatory trials for the Company's New Drug Application seeking marketing approval for rifaximin as a treatment option in this condition which is associated with widespread prevalence, incapacitating symptoms and substantial medical costs. The Company is targeting to submit the NDA during the first half of 2010."
From Reuters today: Salix Pharma's drug meets late-stage goals, shares soar
Looking over Salix's Financials can be found here: SALIX PHARMACEUTICALS LTD Form 10-Q August 10, 2009
Total Assets were 377M. Total Liabilities were 137M. Total Liabilities and stock holder's equities were 377M with 63M in long term debt. For 6 months Revenue was 97M with a net loss of 29M. Net income from 2008 annual data was a loss of 47M on 178M in total evenue. Looking ahead to the third quarter of 2009, Salix expects to recognize a loss of approximately $0.30 per share and product revenue of about $60 million. Wall Street analysts expect the company to lose $0.28 per share on revenue of $60.43 million.
So financially they have been struggling a bit but most clinical trials are very expensive. With this approval and the NDA filing in Feb 2010 maybe they can turn the corner and make a substantial profit. I see the stock dropping a bit from the current volatility and hype but it should prove to be a profitable trade in the future. Most of their clinical trials are out of the way and they are an aggressive company acquiring the rights for future Gastrointestinal products.
Disclosure: Long SLXP