Salix Pharmaceuticals Announces 2Q2007 Financial Results Conference Call And WebCast
RALEIGH, NC, August 2, 2007 – Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced financial and operating results for the second quarter ended June 30, 2007.
Total product revenue increased 26% year–over–year to $66.7 million for the second quarter of 2007, compared to $52.9 million for the second
quarter of 2006. Total product revenue for the first six months of 2007 was $126.5 million, a year–over–year increase of 34%. Xifaxan®
revenue for the second quarter of 2007 was $15.8 million, a 52% increase compared to the second quarter of 2006. Xifaxan revenue for the first half of 2007 increased 84% compared to the first half of 2006. MOVIPREP®, OSMOPREP™ and VISICOL®,
which comprise our bowel cleansing product line, generated revenue of $11.4 million for the second quarter of 2007, compared to $17.5 million
for the second quarter of 2006. Bowel cleansing revenue for 2Q06 reflected OSMOPREP initial launch stocking during the period of approximately $10.0 million. Our bowel cleansing product line contributed $22.4 million in product revenue for the first half of 2007 compared to $27.4 million for
the first six months of 2006. Revenue from these three products, contributed 17% and 18% of 2Q07 and 1H07, respectively, of total product revenue.
COLAZAL® generated revenue of $31.2 million for the second quarter of 2007 compared to $23.2 million for the second quarter of 2006.
COLAZAL generated revenue of $61.3 million for the first six months of 2007 compared to $46.1 million for the first six months of 2006. Our "other
products" category generated revenue of $8.3 million and $11.6 million for the second quarter and first half of 2007, respectively; compared to $1.7 million and $4.3 million for the corresponding periods of 2006. The year–over–year increases of 397% and 172% in "other products" revenue
for the second quarter and first half of 2007 reflected the contribution of PEPCID® OS.
Total cost of products sold was $13.0 million for the second quarter and $25.0 million for the first six months of 2007. Gross margin on total product
revenue was 80.4% for the second quarter of 2007 compared to 82.5% for the second quarter of 2006 and 80.2% for the first six months of 2007, compared
to 81.5% for the first six months of 2006. Research and development expenses were $19.0 million for the second quarter of 2007, compared to $11.7
million for the prior year period. Research and development expenses were $40.8 million for the first half of 2007, compared to $21.8 million for the prior year period. Selling, general and administrative expenses were $21.8 million for the second quarter of 2007 and $43.2 million for the first
six months of 2007, compared to $23.4 million and $42.8 million, respectively, for the corresponding periods of 2006. The Company reported net
income of $10.2 million, or $0.21 per share, fully diluted, for the second quarter of 2007 which represent year–over–year 48% and 50% increases,
respectively, compared to second quarter 2006 net income of $6.9 million and second quarter 2006 EPS of $0.l4, fully diluted. For the first
half of 2007 the Company reported net income of $13.1 million, or $0.27 per share, fully diluted, which represent 24% and 23% increases, respectively,
compared to first half 2006 net income of $10.6 million and first half 2006 EPS of $0.22, fully diluted.
Cash, cash equivalents and investments were $46.4 million on June 30, 2007. As of July 31, 2007 cash, cash equivalents and investments were $95 million
including the collection of approximately $60 million in accounts receivable.
Commenting on the performance of the Company, Adam Derbyshire, Senior Vice President and Chief Financial Officer, stated, "Solid year–over–year
growth throughout our business contributed to generate record total product revenue and net income for the second quarter of 2007.
"As planned, we continued to invest substantial resources, approximately $19.0 million or 28% of revenue, in research and development efforts during the
second quarter of 2007. The R&D spend for the quarter reflects numerous activities primarily related to both our inflammatory bowel disease and Xifaxan
efforts. For the second half of 2007 we continue to expect that R&D expenditures will moderate substantially and, as we previously stated, should
be approximately 25% of revenue for the entire year of 2007. We continue to believe that total product revenue for 2007 will be approximately
$260 million and that we will be able to generate $0.85 in earnings per share, fully diluted, assuming a 17% tax rate, for the year ending December
31, 2007. The projected 2007 EPS of $0.85 represents a 50% increase, on a tax–adjusted basis, compared to 2006 EPS of $0.65. We believe our
ability over the long term to significantly strengthen our product portfolio by means of product acquisition and label expansion of existing products
while continuing to grow revenue and EPS at these rates distinguishes Salix from many of its peers and bodes well for our future."
Commenting on the Company and its performance, Carolyn Logan, President and Chief Executive Officer stated, "The 26% year–over–year increase
in total product revenue demonstrates our ability to consistently build and grow the business. We are focused on executing our long–term strategy
to increase revenue by expanding the indications for our current products and securing additional products, and then leveraging our industry–leading
sales force to sell these products to our targeted universe of high–prescribing physicians. We are making impressive strides to advance the clinical development of our existing products. Most notably, on July 17 the FDA received our New Drug Application seeking approval to market an 1100 mg tablet formulation of balsalazide disodium. Our 750 mg capsule formulation of balsalazide disodium, which we market in the United States
under the trade name COLAZAL, has experienced steady market acceptance and growth since we launched it in 2001. Balsalazide's unique, azo–bonded
prodrug formulation provides for excellent efficiency in delivery of the anti–inflammatory agent 5–ASA to the colon. We believe
balsalazide tablets, if approved, should provide added convenience with twice–a–day dosing and fewer pills per day providing a therapy
that will better serve the needs of gastroenterologists and their patients. At this time we expect top–line results of our completed Phase III trials of granulated mesalamine to be released during the fourth quarter of 2007, and we expect to submit the NDA for granulated mesalamine by the
end of December 2007. We believe that the availability of these patent–protected products will serve to protect and strengthen the Company's
inflammatory bowel disease business. Xifaxan development efforts during the quarter included the completion of patient enrollment in our Phase IIb
trial of Xifaxan in the treatment of irritable bowel syndrome, or IBS. At this time, we expect to release top–line results of this trial during
the third quarter of 2007.
"Product revenues for the second quarter of 2007 reflect the contribution of two products that were not sold by the Company during the second quarter of
2006. MOVIPREP, our two–liter liquid PEG bowel cleansing prep, launched in October 2006, and PEPCID Oral Suspension, acquired in February 2007,
made significant contributions to revenue for the second quarter of 2007. We are continuing to pursue additional products to strengthen and broaden
our portfolio and further diversify our revenue base. Also, in keeping with our strategy to focus on the U.S. market, during the quarter we announced
the receipt of a milestone payment from Zeria Pharmaceutical Co., our licensee, upon marketing approval of VISICLEAR® in Japan.
VISICLEAR, or sodium phosphate monobasic monohydrate and sodium phosphate dibasic anhydrous, tablets are marketed in the United States under the
trade name VISICOL®.
"During the second quarter of 2007 our 96–member specialty sales force continued to perform extremely well and to drive our business. In May Xifaxan
achieved a record high of prescriptions written in a single month. Our newest product line – bowel cleansing – continues to demonstrate
strong growth. In April OSMOPREP, and in May MOVIPREP, achieved monthly record highs in terms of prescriptions. Our products now command an impressive 25% share of the prescription bowel cleansing market. The Company is achieving its sales goals and our sales and marketing teams are committed
to continuing to build on the keen interest in and momentum surrounding our products in order to grow our business."
The Company will host a conference call to discuss the contents of this press release after the close of the U.S. financial markets at 5:00 p.m. ET on Thursday, August 2, 2007. Interested parties may access the conference call by way of web cast or telephone. The live web cast will be available at www.salix.com. A replay of the web cast will be available at the same location.
The telephone numbers to access the conference call are (800) 946–0741 (U.S. and Canada) or (719) 457–2649 (international.) The access code
for the call is 9104131. A replay of the call will be available beginning at 7:00 p.m. ET. The telephone numbers to access the replay of the call
are (888) 203–1112 (U.S. and Canada) or (719) 457–0820 (international.) The access code for the replay is 9104131.
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 150–member gastroenterology specialty sales and
marketing team.
COLAZAL® (balsalazide disodium) Capsules 750 mg, is an anti–inflammatory drug approved for the treatment of mildly to moderately active
ulcerative colitis. Safety and effectiveness of COLAZAL beyond 12 weeks has not been established. COLAZAL was well tolerated in clinical studies.
In clinical trials, patients reported the following adverse reactions most frequently: headache (8%); abdominal pain (6%); diarrhea (5%); nausea
(5%); vomiting (4%); respiratory infection (4%); and arthralgia (4%). Withdrawal from therapy due to adverse reactions was comparable to placebo.
Xifaxan® (rifaximin) tablets 200 mg are indicated for the treatment of patients (≥12 years of age) with travelers' diarrhea caused by noninvasive
strains of Escherichia coli. Xifaxan should not be used in patients with diarrhea complicated by fever or blood in the stool or diarrhea
due to pathogens other than Escherichia coli. Xifaxan should be discontinued if diarrhea symptoms get worse or persist more than 24–48
hours and alternative antibiotic therapy should be considered. In clinical trials, Xifaxan was generally well tolerated. The most common side
effects (vs. placebo) were flatulence 11.3% (vs. 19.7%), headache 9.7% (vs. 9.2%), abdominal pain 7.2% (vs. 10.1 %) and rectal tenesmus 7.2% (vs.
8.8%).
OSMOPREP™ Tablets (sodium phosphate monobasic monohydrate, USP, and sodium phosphate dibasic anhydrous, USP) 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 Tablets
are used in patients with severe renal insufficiency, congestive heart failure, ascites, unstable angina, gastric retention, ileus, acute obstruction
or pseudo–obstruction of the bowel, severe chronic constipation, bowel perforation, acute colitis, toxic megacolon, gastric bypass or stapling
surgery, or hypomotility syndrome. Use with caution in patients with impaired renal function, patients with a history of acute phosphate nephropathy,
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 Tablets.
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 should be used with caution in patients
using concomitant medications that increase the risk of electrolyte abnormalities such as diuretics or angiotensin converting enzyme (ACE)–inhibitors
or in patients with known or suspected hyponatremia. MOVIPREP should also be used with caution in patients with severe ulcerative colitis,
ileus, gastrointestinal obstruction or perforation, gastric retention, toxic colitis, or toxic megacolon. In clinical trials, abdominal distension,
anal discomfort, thirst, nausea and abdominal pain were some of the most common adverse reactions to MOVIPREP administration. Vomiting occurred
less frequently.
Salix also markets VISICOL® (sodium phosphate monobasic monohydrate, USP, and sodium phosphate dibasic anhydrous, USP) Tablets, PEPCID®
(famotidine) for Oral Suspension, Oral Suspension DIURIL® (Chlorothiazide), AZASAN® Azathioprine Tablets,
USP, 75/100 mg , ANUSOL–HC® 2.5% (Hydrocortisone Cream, USP), ANUSOL–HC® 25 mg Suppository (Hydrocortisone
Acetate), PROCTOCORT® Cream (Hydrocortisone Cream, USP) 1% and PROCTOCORT® Suppository (Hydrocortisone Acetate Rectal
Suppositories) 30 mg. SANVAR® IR (vapreotide acetate), balsalazide tablet, granulated mesalamine and Xifaxan® for
additional indications are under development.
For full prescribing information on Salix products, please visit www.salix.com.
Salix trades on the NASDAQ Global Select Market under the ticker symbol "SLXP".
For more information please visit our web site at www.salix.com or contact the Company at 919–862–1000. Information on our web site is not incorporated
in our SEC filings.
ANUSOL® is a trademark of Johnson & Johnson
AZASAN® is a trademark of AaiPharma Inc. and AaiPharma LLC
MOVIPREP® is a trademark of Norgine B.V.
PEPCID® and DIURIL® are trademarks of Merck & Co., Inc.
SANVAR® is a trademark of Debiopharm S. A.
Xifaxan® is a trademark of Alfa Wassermann Hungary LLC
Table Follows
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Second Quarter 2007 Statement - Unaudited (PDF 42KB)
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COLAZAL® (balsalazide disodium) Capsules 750 mg are indicated for the treatment of mildly to moderately active Ulcerative Colitis in patients 5 years of age and older.
COLAZAL does not relieve symptoms in all patients; your patients' results may vary. In four well-controlled clinical trials, patients receiving a COLAZAL dose of 6.75g/day most frequently reported the following events
(reporting frequency > 3%): headache (8%), abdominal pain (6%), diarrhea (5%), nausea (5%), vomiting (4%), respiratory infection (4%), and arthralgia (4%). Withdrawal from therapy due to adverse events was comparable to
placebo. In the pediatric trial, patients most frequently reported the following adverse events: headache (15%), abdominal pain upper (13%), abdominal pain (12%), vomiting (10%), diarrhea (9%), colitis ulcerative (6%),
nasopharyngitis (6%) and, pyrexia (6%). COLAZAL is contraindicated in patients with a hypersensitivity to salicylates or the components of COLAZAL capsules or balsalazide metabolites. The safety and effectiveness of
COLAZAL beyond 8 weeks in children (ages 5-17 years) and 12 weeks in adults have not been established.
Consult with your physician to see if this product is right for you.
For complete Prescribing Information, please click here.
Xifaxan® (rifaximin) Tablets are indicated for the treatment of patients (≥12 years of age) with travelers' diarrhea caused by non-invasive strains of
Escherichia coli. Xifaxan should not be used in patients with diarrhea complicated by fever or blood in the stool or diarrhea due to pathogens other than Escherichia coli. Xifaxan should be
discontinued if diarrhea symptoms get worse or persist more than 24-48 hours and alternative antibiotic therapy should be considered.
In clinical trials, Xifaxan was generally well tolerated. The most common side effects (vs. placebo) were flatulence 11.3% (vs. 19.7%), headache 9.7% (vs. 9.2%), abdominal pain 7.2% (vs. 10.1 %), rectal tenesmus 7.2%
(vs. 8.8%), defecation urgency 5.9% (vs. 9.2%) and nausea 5.3% (vs. 8.3%).
Consult with your physician to see if this product is right for you.
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.
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, acute obstruction or pseudo-obstruction of the bowel, severe chronic constipation, bowel perforation, acute colitis, toxic megacolon, gastric bypass or stapling surgery, or hypomotility syndrome.
Use with caution in patients with impaired renal function, patients with a history of acute phosphate nephropathy, 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. 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.
Consult with your physician to see if this product is right for you.
For complete Prescribing Information, please click here.