Salix Pharmaceuticals Reports 1Q2008 Results
XIFAXAN®, Bowel Cleansers and Other Product Revenue Increases 11% Over 1Q2007
Rifaximin Hepatic Encephalopathy Phase 3 Enrollment Completed
Budesonide Products Acquired from Dr. Falk Pharma
RALEIGH, NC, May 6, 2008 – Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced
financial and operating results for the first quarter ended March 31, 2008.
Total product revenue was $34.3 million for the first quarter of 2008, compared to $59.8 million for the first quarter of 2007. XIFAXAN®
revenue for the first quarter of 2008 was $16.7 million, a 9% increase compared to the first quarter of 2007. MOVIPREP®, OSMOPREP®
and VISICOL®, which comprise our bowel cleansing product line, generated revenue of $10.3 million for the first quarter
of 2008, compared to $11.0 million for the first quarter of 2007. MOVIPREP and OSMOPREP generated revenue of $14.3 million for 1Q08 compared to $10.3 million for 1Q07, an increase of 39%. The decrease in revenue for the total bowel cleansing franchise (MOVIPREP, OSMOPREP and VISICOL) for the period reflected a one–time VISICOL product return due to product expiration. The returned product was shipped prior to the OSMOPREP launch, and
we do not anticipate additional, significant VISICOL product returns. COLAZAL® generated revenue of $1.3 million for the first quarter
of 2008, compared to $30.1 million for the first quarter of 2007. The decrease in COLAZAL revenue was due to the approval of three generic balsalazide
capsule products on December 28, 2007. Our other products category generated revenue of $5.9 million for the first quarter of 2008, compared
to $3.3 million for the first quarter of 2007.
Total cost of products sold was $7.3 million for the first quarter. Gross margin on total product revenue was 78.8% the first quarter of 2008 compared
to 79.9% for the first quarter of 2007. Research and development expenses were $25.9 million for the first quarter of 2008, compared to $21.8 million
for the prior year period. The increase in R&D expenses was due primarily to costs associated with ongoing late–stage studies to expand the
rifaximin label, studies of granulated mesalamine and initiatives to support the 1100 mg balsalazide tablet submission. Selling, general and administrative
expenses were $21.2 million for the first quarter of 2008, compared to $21.4 million in the prior year period. A total of $1.5 million in fees and costs related to license agreements, including a milestone payment to Wilmington Pharmaceuticals upon acceptance of the metoclopramide–ZYDIS
New Drug Application by the FDA and a one–time payment to Dr. Falk Pharma for U.S. rights to Falk's portfolio of budesonide products,
was paid during the first quarter. The Company reported a net loss of $24.0 million, or $0.50 per share, fully diluted, for the first quarter of 2008,
in line with previously stated guidance.
Cash, cash equivalents and investments were $111.5 million on March 31, 2008.
Commenting on the performance of the Company, Adam Derbyshire, Senior Vice President and Chief Financial Officer, stated, "Combined product revenue from
XIFAXAN, our bowel cleansing products and other products achieved year–over–year growth of 11% for the first quarter of 2008. We believe
several factors should contribute to an increase in product revenue over the coming years, namely: the continued growth of our currently marketed
products; the commercialization of products currently undergoing FDA review; the expanded contribution of rifaximin as additional indications are approved and the further expansion of our product portfolio via development activities and acquisitions. We continue to believe, based on current development
programs and financial projections, that our revenue generation capability, combined with our cash reserve, should be sufficient for the Company
to execute its current business plan and return to profitability without the need to raise additional funds.
"The current annualized run rates, based on dollarizing the latest prescription data, for XIFAXAN, our bowel cleansing product line and other products are approximately $73 million, $61 million and $28 million, respectively. We continue to believe total Company product revenue for 2008 will be approximately
$180 million. The Company intends to continue to evaluate and invest in promising development projects, and as discussed last quarter, research
and development expense should be front–end loaded for 2008. Also during 2008 the Company intends to continue launch preparation activities
for our three products currently undergoing FDA review. Consequently, we continue to anticipate generating a loss of approximately $1.12 per share,
fully diluted, for the year ending December 31, 2008. Based upon information currently available, we expect to generate product revenue of approximately
$41 million and report a loss of approximately $0.36 per share, fully diluted, for the second quarter of 2008.
Commenting on the Company and its performance, Carolyn Logan, President and Chief Executive Officer stated, "During the first quarter of 2008 we continued
to execute our long–term strategy to build our revenue by expanding the indications for our current products and securing additional products.
We intend to expand our presence in the inflammatory bowel disease market with the addition of balsalazide tablet and granulated mesalamine. The FDA has granted a May 16, 2008 PDUFA date for balsalazide tablet and an October 31, 2008 PDUFA date for granulated mesalamine. Additionally, the FDA has granted a November 30, 2008 PDUFA date for metoclopramide–ZYDIS, licensed from Wilmington Pharmaceuticals. We anticipate regulatory actions
by the respective PDUFA dates for these patent–protected products and are continuing with launch activities in anticipation of a balsalazide
tablet launch in the third quarter of 2008 and granulated mesalamine and metoclopramide–ZYDIS launches in early 2009.
"We made very good progress during the quarter with respect to our Phase 3 programs for rifaximin in the treatment of hepatic encephalopathy (HE) and non–constipation
predominant irritable bowel syndrome (non–C IBS). As previously announced, we completed patient enrollment in the HE Phase
3 trial during the first quarter of 2008. Patients in this trial are dosed for six months; therefore, patient dosing should be completed during
the third quarter of this year. Provided the results of the trial support a submission, we anticipate submitting the NDA for the HE indication late
in the fourth quarter of 2008 or in the first quarter of 2009. The application has the potential for a six–month review based upon the current
unmet medical need in treating this serious medical condition. The decision whether to accelerate the review cycle will be made by the FDA at the
time of submission. We anticipate initiating patient enrollment in our Phase 3 non–C IBS trials by the end of June 2008. Based on current
timelines, we anticipate completing these trials and submitting a New Drug Application in mid–2010.
"Additionally, Debiopharm, which licensed vapreotide acetate to Salix, made progress during the first quarter in the confirmatory Phase 3 trial of vapreotide
acetate for treatment of acute esophageal variceal bleeding, or EVB. EVB is a life–threatening and frequent complication of late–stage
liver cirrhosis, and vapreotide, if approved, will be the only approved treatment for EVB in the United States. Based upon information and projections
available at this time, we anticipate a mid–2009 approval.
"In March 2008 the Company acquired Dr. Falk Pharma's portfolio of budesonide products, including a rectal foam and a gastro–resistant capsule. Dr. Falk Pharma markets these patent–protected products in Europe. We look forward to developing and marketing these products in the United States
and are working to initiate late–stage clinical trials in 2009.
"Our on–going business continued to grow during the first quarter of 2008. Demand for our bowel cleansing products increased 26% year–over–year
for 1Q2008 compared to 1Q2007 in terms of prescriptions. MOVIPREP and OSMOPREP are performing well. As we expected, our ability to provide
both a tablet agent and a two–liter PEG agent creates distinct advantages in the marketplace and an unprecedented opportunity for Salix to
establish a leadership position. XIFAXAN continued to grow during the period. A record–breaking number of XIFAXAN tablets – approximately
5.3 million – were prescribed during the first quarter of 2008.
"The level of interest in the utility of rifaximin to potentially treat a broad spectrum of gastrointestinal disorders continues to remain high. Digestive
Disease Week 2008, which will be held May 17–22, provides a forum for researchers and clinicians to discuss additional results from the Company–sponsored
Phase 2b trial of rifaximin in diarrhea–associated IBS as well as work by independent investigators."
The Company will host a conference call to discuss the contents of this press release at 5:00 p.m. ET, on Tuesday, May 6, 2008. 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 (877) 856–1962 (U.S. and Canada) or (719) 325–4823 (international.). A replay of the
call will be available beginning at 8:00 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 4730505.
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 events 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 events 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 PEPCID® (famotidine) for Oral Suspension, VISICOL® (sodium phosphate monobasic monohydrate, USP, sodium
phosphate dibasic anhydrous, USP) tablets, 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. Balsalazide tablet, encapsulated mesalamine granules, vapreotide acetate, metoclopramide–Zydis® and rifaximin
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 Properties, Inc.
MOVIPREP® is a trademark of Velinor AG
PEPCID® and DIURIL® are trademarks of Merck & Co., Inc.
VISICOL® is a trademark of InKine Pharmaceutical Company, Inc.
XIFAXAN® is a trademark of Alfa Wassermann Hungary LLC
ZYDIS® is a trademark of R. P. Scherer Technologies, Inc.
Table Follows
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First Quarter 2008 Statement - Unaudited (PDF 24KB)
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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.