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SALIX PHARMACEUTICALS ANNOUNCES PRICING OF ITS $300 MILLION PUBLIC OFFERING OF CONVERTIBLE SENIOR NOTES DUE 2015
RALEIGH, NC, May 27, 2010 – Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced that it has entered into an agreement to sell $300 million aggregate principal amount of its 2.75% convertible senior notes due 2015. In addition, Salix has granted the underwriters an overallotment option to purchase up to an additional $45 million aggregate principal amount of notes on the same terms and conditions.
The notes will be senior unsecured obligations of Salix and interest will be payable semi–annually at a rate of 2.75% per year. The notes will mature on May 15, 2015. The notes will be convertible subject to certain conditions at an initial conversion rate of 21.5592 shares of Salix common stock per $1,000 principal amount of notes (representing an initial conversion price of approximately $46.38 per share of Salix common stock), subject to adjustment in certain circumstances. This represents approximately a 30% premium to the last reported sale price of Salix's common stock on The NASDAQ Global Select Market on May 27, 2010. Salix will be entitled to settle any such conversion by delivery of cash, shares of Salix common stock or a combination of cash and shares. Holders of the notes may require Salix to purchase all or a portion of their notes at a price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, in cash, upon the occurrence of certain fundamental changes involving Salix.
In connection with this offering, Salix entered into capped call transactions with certain underwriters in the offering or their respective affiliates. Subject to certain exceptions, the capped call transactions are expected to reduce potential dilution upon conversion of the notes, except to the extent that the volume–weighted average price per share of the Salix common stock, as measured under the terms of the capped call transactions at the time of exercise, exceeds the cap price of the capped call transactions. The capped call transactions have cap prices approximately 75% higher than the closing price of Salix common stock on May 27, 2010. In connection with hedging the capped call transactions, the counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Salix common stock concurrently with and shortly after pricing of the notes. In addition, the counterparties or their respective affiliates may from time to time following pricing of the notes and prior to conversion or maturity of the notes enter into or unwind various derivatives and/or purchase or sell Salix common stock or other of our securities (including the notes) in secondary market transactions or instruments they may wish to use in connection with such hedging or modify or unwind such hedge positions. These activities could have the effect of increasing or preventing a decline in, or of having a negative effect on, the price of Salix common stock (including concurrently with or shortly after pricing of the notes or during any cash settlement averaging period related to a conversion of the notes), adversely affecting the value of the notes, and, potentially the value of the shares of Salix common stock and/or the amount of cash holders may receive upon conversion of the notes.
The net proceeds to Salix from this offering will be approximately $290 million after deducting underwriting discounts and estimated offering expenses, but exclusive of any proceeds attributable to any possible exercise of the underwriters' overallotment option. Salix intends to use approximately $38.6 million of the net proceeds from this offering to pay the cost of the capped call transactions and the remaining net proceeds for business development activities and other general corporate purposes, including commercialization of product candidates, clinical trials, research and development expenses and general and administrative expenses. If the underwriters exercise their option to purchase additional notes to cover overallotments, Salix expects to use a portion of the net proceeds from the sale of the additional notes to enter into additional capped call transactions.
BofA Merrill Lynch and Jefferies & Company, Inc. acted as joint book–running managers for the offering.
Salix has filed a registration statement (including a preliminary prospectus) with the U.S. Securities and Exchange Commission (SEC) for the offering to which this communication relates. Before you invest, you should read the registration statement and accompanying preliminary prospectus for more complete information about Salix and this offering. You may get the preliminary prospectus for free by visiting IDEA on the SEC website at www.sec.gov. Alternatively, copies may be obtained by contacting: BofA Merrill Lynch, 4 World Financial Center, New York, NY 10080, Attn: Preliminary Prospectus Department, or via email at prospectus.requests@ml.com; or Jefferies & Company, Inc., 520 Madison Avenue, New York, NY 10022, Attn: Syndicate Prospectus Department, (888) 449–2342.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities, in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
About Salix
Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, develops and markets prescription pharmaceutical products for the treatment of gastrointestinal diseases. Salix's strategy is to in–license late–stage or marketed proprietary therapeutic drugs, complete any required development and regulatory submission of these products, and market them through the Company's gastroenterology specialty sales and marketing team.
Salix trades on The NASDAQ Global Select Market under the ticker symbol "SLXP."
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Forward–Looking Statements
Please Note: This press release contains statements relating to the offering of notes and the capped call transactions that are forward–looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially, including, but not limited to, the following: general economic conditions; our need to return to profitability; market acceptance for approved products; the unpredictability of the duration and results of regulatory review of New Drug Applications and Investigational NDAs; the cost, timing and results of clinical trials and other development activities involving pharmaceutical products; litigation and the possible impairment of, or inability to obtain, intellectual property rights and the costs of obtaining such rights from third parties; revenue recognition and other critical accounting policies and the need to acquire new products. The reader is referred to the documents that Salix files from time to time with the SEC.
Investors in Salix are cautioned not to place undue reliance on its forward–looking statements, which speak only as of the date such statements are made. Salix does not undertake any obligation to publicly update any forward–looking statements to reflect events, circumstances or new information after this press release, or to reflect the occurrence of unanticipated events.
APRISO™ is a locally-acting aminosalicylate indicated for the maintenance of remission of ulcerative colitis in patients 18 years and older.
APRISO is contraindicated in patients with hypersensitivity to salicylates, aminosalicylates, or to any of the components of APRISO capsules.
The recommended dose of APRISO is four 0.375 g capsules once daily in the morning (1.5 g/day) with or without food. Because dissolution of the coating of APRISO
granules depends on pH, APRISO should not be coadministered with antacids. Patients with phenylketonuria should be aware that APRISO contains aspartame,
equivalent to 0.56 mg of phenylalanine. In two well-controlled clinical trials, the most common treatment-related adverse events occurring in at least 3%
of adult patients taking 1.5 g/day of APRISO were headache (11% vs. 8% for placebo), diarrhea (8% vs. 7% for placebo), upper abdominal pain (5% vs 3% for placebo),
nausea (4% vs 3% for placebo), nasopharyngitis (4% vs 3% for placebo), influenza and influenza-like illness (4% vs 4% for placebo) and sinusitis (3% vs 3% for placebo).
For complete Prescribing Information, please click here.
MOVIPREP® (PEG-3350, sodium sulfate, sodium chloride, potassium chloride, sodium ascorbate and ascorbic acid for oral solution) is indicated for cleansing of the
colon as a preparation for colonoscopy in adults 18 years of age or older. MOVIPREP is contraindicated in patients who have had a severe hypersensitivity reaction
to any of its components. MOVIPREP should be used with caution in patients using concomitant medications that increase the risk of electrolyte abnormalities, in patients with known or suspected hyponatremia,
severe ulcerative colitis, ileus, gastrointestinal obstruction or perforation, gastric retention, toxic colitis, toxic megacolon, or glucose-6-phosphate dehydrogenase deficiency. In clinical trials, abdominal
distention, anal discomfort, thirst, nausea, and abdominal pain were the most common adverse reactions to MOVIPREP administration. MOVIPREP contains a maximum of 2.33 mg of phenylalanine per treatment.
Consult with your physician to see if this product is right for you.
For complete Prescribing Information, please click here.
Important Safety Information about OSMOPREP
There have been rare, but serious reports of acute phosphate nephropathy in patients who received oral sodium phosphate products for colon cleansing prior
to colonoscopy. Some cases have resulted in permanent impairment of renal function and some patients required long–term dialysis. While some
cases have occurred in patients without identifiable risk factors, patients at increased risk of acute phosphate nephropathy may include those with
increased age, hypovolemia, increased bowel transit time (such as bowel obstruction), active colitis, or baseline kidney disease, and those using
medicines that affect renal perfusion or function (such as diuretics, angiotensin converting enzyme [ACE] inhibitors, angiotensin receptor blockers
[ARBs], and possibly nonsteroidal anti–inflammatory drugs [NSAIDs]).
It is important to use the dose and dosing regimen as recommended (PM/AM split dose).
OSMOPREP® (sodium phosphate monobasic monohydrate, USP, and sodium phosphate dibasic anhydrous, USP) Tablets are indicated for cleansing
of the colon as a preparation for colonoscopy in adults 18 years of age or older. Considerable caution should be advised before OSMOPREP is used in
patients with severe renal insufficiency, congestive heart failure, ascites, unstable angina, gastric retention, ileus, severe chronic constipation,
bowel perforation, toxic megacolon, gastric bypass or stapling surgery, or hypomotility syndrome. Use with caution in patients with impaired renal
function, patients with a history of seizures or at higher risk of seizure, patients with higher risk of cardiac arrhythmias, known or suspected electrolyte
disturbances (such as dehydration), or people taking drugs that affect electrolyte levels. Patients with electrolyte abnormalities such as
hypernatremia, hyperphosphatemia, hypokalemia, or hypocalcemia should have their electrolytes corrected before treatment with OSMOPREP.
OSMOPREP is contraindicated in patients with a known allergy or hypersensitivity to sodium phosphate salts or any of its ingredients, and in patients with
biopsy–proven acute phosphate nephropathy. In clinical trials, the most commonly reported adverse reactions (reporting frequency >3%) were
abdominal bloating, nausea, abdominal pain, and vomiting. It is recommended that patients receiving OSMOPREP be advised to adequately hydrate before,
during, and after the use of OsmoPrep.
For complete Prescribing Information for OSMOPREP including BOXED WARNING, please click here.
Important Safety Information about XIFAXAN 550 mg
XIFAXAN® 550 mg is indicated for reduction in risk of overt hepatic encephalopathy (HE) recurrence in patients ≥18 years of age. In the trials of XIFAXAN for HE, 91% of the patients were using lactulose concomitantly. XIFAXAN has not been studied in patients with MELD scores >25, and only 8.6% of patients in the controlled trial had MELD scores over 19. There is increased systemic exposure in patients with more severe hepatic dysfunction. Therefore, caution should be exercised when administering XIFAXAN to patients with severe hepatic impairment (Child-Pugh C).
XIFAXAN is contraindicated in patients with a hypersensitivity to rifaximin, any of the rifamycin antimicrobial agents, or any of the components in XIFAXAN. Hypersensitivity reactions have included exfoliative dermatitis, angioneurotic edema, and anaphylaxis.
Clostridium difficile–associated diarrhea (CDAD) has been reported with use of nearly all antibacterial agents, including XIFAXAN, and may range in severity from mild diarrhea to fatal colitis. Treatment with antibacterial agents alters the normal flora of the colon which may lead to overgrowth of C difficile. If CDAD is suspected or confirmed, ongoing antibiotic use not directed against C difficile may need to be discontinued.
The most common adverse reactions occurring in >8% of patients in the clinical study were edema peripheral (15%), nausea (14%), dizziness (13%), fatigue (12%), ascites (11%), muscle spasms (9%), pruritus (9%), and abdominal pain (9%).
For complete Prescribing Information, please click here.
Important Safety Information about METOZOLV ODT
Treatment with metoclopramide can cause tardive dyskinesia, a serious movement disorder that is often irreversible.
The risk of developing tardive dyskinesia increases with the duration of treatment and the total cumulative dose.
Metoclopramide therapy should be discontinued in patients who develop signs or symptoms of tardive dyskinesia.
There is no known treatment for tardive dyskinesia. In some patients, symptoms may lessen or resolve after metoclopramide treatment is stopped.
Treatment with metoclopramide for longer than 12 weeks should be avoided in all but rare cases where therapeutic benefit is thought to outweigh the risk of developing tardive dyskinesia.
METOZOLV® ODT
(metoclopramide HCl) is indicated as short-term (4 to 12 weeks) therapy for adults with symptomatic, documented gastroesophageal
reflux disease (GERD) who fail to respond to conventional therapy and for the relief of symptoms associated with acute and
recurrent diabetic gastroparesis (diabetic gastric stasis) in adults. Therapy should not exceed 12 weeks in duration. Take on
an empty stomach up to four times daily, at least 30 minutes before eating and at bedtime.
METOZOLV ODT is contraindicated in patients with intestinal obstruction, hemorrhage, or perforation; pheochromocytoma;
known sensitivity or intolerance to metoclopramide; epilepsy; or are receiving concomitant medications with extrapyramidal reactions.
Extrapyramidal symptoms (EPS), manifested primarily as acute dystonic reactions, occur in approximately 1 in 500 patients treated with the
usual adult dosages of 30 to 40 mg/day of metoclopramide. These usually are seen during the first 24 to 48 hours of treatment with metoclopramide,
occur more frequently in pediatric patients and adult patients less than 30 years of age and are even more frequent at higher doses.
Drug-induced Parkinsonism can occur during metoclopramide therapy, more commonly within the first 6 months after beginning treatment,
but also after longer periods. Patients with a history of Parkinson’s disease should be given metoclopramide cautiously, if at all,
since such patients can experience exacerbation of Parkinsonian symptoms when taking metoclopramide.
There have been rare reports of an uncommon but potentially fatal symptom complex sometimes referred to as Neuroleptic Malignant Syndrome (NMS) associated
with metoclopramide. Clinical manifestations of NMS include hyperthermia, muscle rigidity, altered consciousness, and evidence of autonomic instability.
The management of NMS should include immediate discontinuation of metoclopramide and other drugs not essential to concurrent therapy.
Depression associated with metoclopramide use has occurred in patients with and without a history of depression.
For those patients with a prior history of depression, metoclopramide should only be given if the expected benefits outweigh the potential risks.
In one study in hypertensive patients, intravenously administered metoclopramide was shown to release catecholamines; hence, caution should be exercised
when metoclopramide is used in patients with hypertension. Any rapid rise in blood pressure associated with METOZOLV ODT use should result in immediate
cessation of metoclopramide use in those patients.
Since metoclopramide produces a transient increase in plasma aldosterone, patients with cirrhosis or congestive heart failure may be at risk of developing
fluid retention and volume overload. If these side effects occur at any time in any patients during metoclopramide therapy, the drug should be discontinued.
Adverse reactions, especially those involving the nervous system, may occur after stopping the use of METOZOLV ODT.
In clinical studies, the most frequently reported adverse events (≥2% occurrence) were headache, nausea, fatigue, somnolence, and vomiting.
Full Prescribing Information for METOZOLV ODT, including BOXED WARNING.