Salix Pharmaceuticals Reports 2Q2008 Results
XIFAXAN, Bowel Cleansers and Other Product Revenue Increases 16% Over 2Q2007
2008 Guidance Revised Upward to Reflect Lower Operating Expenses
Rifaximin Phase 3 Non–Constipation IBS Trial Initiated
RALEIGH, NC, August 4, 2008 – Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced
financial and operating results for the second quarter ended
June 30, 2008.
Total product revenue was $41.1 million for the second quarter of 2008, compared to $66.7 million for the second quarter of 2007. Total product revenue
for the first six months of 2008 was $75.3 million compared to $126.5 million for the first six months of 2007. The decrease in total product revenue
for the quarter and six months was due to the genericization of COLAZAL® on December 28, 2007. XIFAXAN® revenue for the second quarter of 2008 was $18.0 million, a 14% increase compared to the second quarter of 2007. XIFAXAN revenue for the first half of 2008 was
$34.8 million compared to $31.2 million for the first half of 2007. MOVIPREP®, OSMOPREP® and VISICOL®,
which comprise our bowel cleansing product line, generated revenue of $15.7 million for the second quarter of 2008, compared to $11.4 million for
the second quarter of 2007. Total product revenue for our bowel cleansing product line was $26.0 million for the first half of 2008 and $22.4 million
for the first half of 2007.
Total cost of products sold was $7.1 million for the second quarter and $14.4 million for the first six months of 2008. Gross margin on total product revenue was 82.7% for the second quarter of 2008 compared to 80.4% for the second quarter of 2007 and 80.9% for the first six month of 2008, compared to 80.2% for the first six months of 2007. Research and development expenses were $15.4 million for the second quarter of 2008 and $41.3 million for the first six months of 2008, compared to $19.0 million and $40.8 million, respectively, for the prior year periods. Selling, general and administrative
expenses were $23.0 million for the second quarter of 2008, compared to $21.8 million for the second quarter of 2007, and these expenses were $44.1
million and $43.2 million for the first six months of 2008 and 2007, respectively. The Company reported a net loss of $7.1 million, or $0.15 per
share, fully diluted, for the second quarter of 2008.
Cash and cash equivalents were $90.9 million on June 30, 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 16% for the second quarter of 2008. We continue
to 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 if additional indications
are approved and the further expansion of our product portfolio via development activities and acquisitions.
"For the third quarter of 2008, based upon information currently available, we expect to generate product revenue of approximately $43 million and report
a loss of approximately $0.30 per share, fully diluted. We continue to believe total Company product revenue for 2008 will be approximately $180
million, assuming the approval and launch of granulated mesalamine during 2008. 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, $64 million, and $28 million, respectively.
"With a second quarter loss of $0.15, we anticipate generating a loss of approximately $1.02 per share, fully diluted, for the year ending December 31,
2008 compared to our previous guidance of a loss of approximately $1.12 for the year. This improvement in loss per share guidance for 2008 reflects
a change in the timing of approximately $5 million in operating expenses, primarily associated with the launch of balsalazide tablet, previously anticipated
for 2008 and now anticipated for early 2009."
Carolyn Logan, President and Chief Executive Officer stated, "Our proprietary products continued to grow and progress during the second quarter of 2008.
XIFAXAN prescriptions grew 7% year–over–year for both the second quarter and first six months of 2008. Prescription demand for our bowel
cleansing products grew 12% and 18%, respectively, for the second quarter and first six months of 2008 compared to the corresponding periods of
2007.
"The acceptance and utilization of XIFAXAN as a treatment for travelers' diarrhea continued to expand during the second quarter of 2008. We are pleased
to announce that the United Nations Medical Services Department recently revised their international travel guidelines to include XIFAXAN and now will include XIFAXAN in travel kits dispensed by the organization.
"The initiation of TARGET 1 and TARGET 2, our Phase 3 multicenter studies to assess the efficacy and safety of rifaximin 550 mg in the treatment of non–constipation
irritable bowel syndrome, was the highlight of the second quarter. Based on the most current understanding of irritable bowel syndrome,
or IBS, we believe rifaximin, our gut–specific antibiotic, may be a strong candidate for treating this disease that affects approximately
15 percent of the U.S. population.
"On May 16, 2008 the U.S. Food and Drug Administration informed the Company that it considered the balsalazide tablet New Drug Application to be approvable.
Subsequently, on June 30, 2008 the Company submitted a complete response to the FDA's approvable letter. The FDA has up to six months to review
the submission so the Company expects a response from the Agency by December 31, 2008.
"Both rifaximin and balsalazide tablet were topics of interest at the Digestive Disease Week 2008 annual meeting in May. Statistically significant findings
from two analyses of the Phase 2b trial of rifaximin for the treatment of diarrhea–associated irritable bowel syndrome presented at DDW provided further support of the potential of rifaximin as a treatment for IBS symptoms. Results of the Phase 3 trial of balsalazide tablet presented at DDW demonstrated that twice–daily balsalazide tablet treatment resulted in significant improvement in rectal bleeding, bowel frequency and bowel
healing, as well as emotional and social functions, as early as week 2 compared to placebo. Additional research findings regarding rifaximin, as
well as granulated mesalamine, will be presented at the American College of Gastroenterology annual meeting in October.
"In April the Company and its licensor, Norgine B.V., reported that they had received a notice of Paragraph IV Certification on behalf of Novel Laboratories,
Inc. advising of the submission of an Abbreviated New Drug Application (ANDA) for MOVIPREP. Salix and Norgine have full confidence in the intellectual
property rights that protect MOVIPREP and on May 14, 2008 announced that they had filed a lawsuit in the United States District Court, District
of New Jersey, against Novel Laboratories for infringement of Norgine's patent protecting MOVIPREP. On July 25 the Company received a notice
of Paragraph IV Certification on behalf of Novel Laboratories advising of the submission of an ANDA for OSMOPREP. Salix has full confidence in the
intellectual property rights that protect OSMOPREP and intends to use all reasonable means at its disposal to continue to vigorously defend and enforce
the intellectual property rights protecting its products."
The Company will host a conference call at 5:00 p.m. ET, on Monday, August 4, 2008. Interested parties can 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 live conference call are (877) 718–5104
(U.S. and Canada) or (719) 325–4755 (international.) 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 5814298.
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 markets COLAZAL® (balsalazide disodium) Capsules 750 mg, XIFAXAN® (rifaximin) tablets 200 mg , OSMOPREP®
(sodium phosphate monobasic monohydrate, USP and sodium phosphate dibasic anhydrous, USP) Tablets, MOVIPREP® (PEG 3350, Sodium Sulfate, Sodium Chloride, Potassium Chloride, Sodium Ascorbate and Ascorbic Acid for Oral Solution), 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. Vapreotide acetate, metoclopramide–ZYDIS®,
balsalazide tablet, granulated mesalamine and rifaximin for additional indications are under development.
For full prescribing information on Salix products, please visit www.salix.com or
contact the Company at 919–862–1000.
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.
Table Follows
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Second Quarter 2008 Statement - Unaudited (PDF 32KB)
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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.