Salix Pharmaceuticals Reports 3Q2008 Results
XIFAXAN and Bowel Cleanser Revenue Increases 31% Over 3Q2007
APRISO™ Granted FDA Marketing Approval
Rifaximin Pivotal Phase 3 Results in Hepatic Encephalopathy are Highly Statistically Significant
Revised ACG Guidelines for IBS Incorporate Rifaximin
RALEIGH, NC, November 5, 2008 – Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced
financial and operating results for the third quarter ended September 30, 2008.
Total product revenue was $42.9 million for the third quarter of 2008, compared to $67.4 million for the third quarter of 2007. Total product revenue for the first nine months of 2008 was $118.2 million compared to $193.8 million for the first nine months of 2007. The decrease in total product revenue
for the quarter and nine months was due to the genericization of COLAZAL® on December 28, 2007. XIFAXAN® revenue for the third quarter of 2008 was $21.4 million, a 33% increase compared to the third quarter of 2007. XIFAXAN revenue for the first nine months of 2008
was $56.1 million compared to $47.3 million for the first nine months of 2007, an increase of 19%. MOVIPREP®, OSMOPREP®
and VISICOL®, which comprise our bowel cleansing product line, generated revenue of $15.5 million for the third quarter of 2008,
compared to $12.1 million for the third quarter of 2007, a 28% increase. Total product revenue for our bowel cleansing product line was $41.5 million
for the first nine months of 2008 and $34.6 million for the first nine months of 2007, a 20% increase.
Total cost of products sold was $7.8 million for the third quarter and $22.1 million for the first nine months of 2008. Gross margin on total product revenue was 81.9% for the third quarter of 2008 compared to 80.6% for the third quarter of 2007 and 81.3% for the first nine months of 2008, compared to 80.3% for the first nine months of 2007. Research and development expenses were $14.4 million for the third quarter of 2008 and $55.7 million for the first nine months of 2008, compared to $16.0 million and $56.8 million, respectively, for the prior year periods. Selling, general and administrative
expenses were $23.4 million for the third quarter of 2008, compared to $20.9 million for the third quarter of 2007, and these expenses were $67.6
million and $64.1 million for the first nine months of 2008 and 2007, respectively. The Company reported a net loss of $5.4 million, or $0.11 per
share, fully diluted, for the third quarter of 2008.
Cash and cash equivalents were $121.9 million on September 30, 2008.
Commenting on the performance of the Company, Adam Derbyshire, Senior Vice President and Chief Financial Officer, stated, "Combined product revenue from
XIFAXAN and our bowel cleansing products achieved year–over–year growth of 31% for the third 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 launch of new 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, licensing and acquisitions.
"In August the Company closed a $60 million convertible note offering. This funding should facilitate our ability to finance development and licensing
activities and acquisitions in a timely fashion.
"We believe total Company product revenue for 2008 will be approximately $178 million to $180 million, including the revenue associated with the initial
stocking of APRISO (mesalamine) extended–release capsules 0.375 g. The current annualized run rates, based on dollarizing the latest prescription
data for XIFAXAN, our bowel cleansing product line and other products are approximately $84 million, $67 million, and $31 million, respectively.
"With a third quarter loss of $0.11, we anticipate generating a loss of approximately $0.90 per share, fully diluted, for the year ending December 31, 2008
compared to our previous guidance of a loss of approximately $1.02 for the year. This improvement in guidance for 2008 reflects a change in research
and development expenditures for the year. Even though enrollment in our two phase 3 IBS trials is progressing ahead of goal,
research and development expense for the year will be approximately $8 million less than previous guidance
primarily due to the timing of certain smaller supportive studies and the elimination of other smaller studies related to rifaximin and the timing of the
initiation of studies related to budesonide foam."
Carolyn Logan, President and Chief Executive Officer stated, "Our proprietary products continued to grow and progress during the third quarter of 2008.
XIFAXAN prescriptions grew 10% year–over–year for the third quarter and 8% for the first nine months of 2008. Prescription demand for
our bowel cleansing products grew 13% and 16%, respectively, for the third quarter and first nine months of 2008 compared to the corresponding periods
of 2007.
"Recent highlights focus on the progress made in both the hepatic encephalopathy (HE) and irritable bowel syndrome (IBS) development programs for rifaximin
and the approval of APRISO, our extended–release capsule formulation of mesalamine. In early October we were pleased to announce the successful
completion and outcome of our pivotal Phase 3 trial to evaluate the efficacy, safety and tolerability of rifaximin in preventing hepatic encephalopathy.
The study demonstrated that a 6–month course of rifaximin dosed at 550 mg twice–daily provides a highly statistically significant
result in preventing HE, compared to placebo. Additionally, this primary result was corroborated by the secondary endpoints. Hepatic encephalopathy
is a serious medical condition that often results in hospitalization and has no FDA–approved drug therapies available for preventing
this relapsing condition. It is our belief that the market is poised for an effective treatment that will work to alleviate the great economic, social,
familial and personal burden resulting from this debilitating disease. We look forward to completing and submitting the NDA during the first quarter of 2009.
Rifaximin has been granted orphan drug designation by the United States Food and Drug Administration for use in hepatic encephalopathy.
We believe that this designation will provide seven years of marketing exclusivity in the United States if rifaximin gains approval from the FDA for HE.
"During the third quarter of 2008 patient enrollment progressed ahead of goal in TARGET 1 and TARGET 2, our two 600–subject trials to assess the efficacy
and safety of rifaximin 550 mg, dosed three times daily, in the treatment of subjects with non–constipation irritable bowel syndrome. Irritable bowel
syndrome is among one of the most common chronic conditions and affects approximately 15% of adults in the United States. Based on the
most current understanding of IBS and the alterations of bacterial flora in the gut as a potential factor in IBS, we believe rifaximin may be a strong
treatment candidate.
"The irritable bowel syndrome and hepatic encephalopathy indications present significant potential for the future growth of Salix. Currently we estimate
the commercial opportunity represented by these markets combined is approximately $2.8 billion.
"This year's American College of Gastroenterology (ACG) Annual Scientific Meeting provided a venue for widespread exposure and discussion related to our
products and product candidates. Four scientific posters and one oral presentation discussed the use of mesalamine granules in the maintenance of
remission of ulcerative colitis. Thirteen scientific posters presented results of investigator–initiated studies investigating the potential
use of rifaximin for a variety of indications. Members of the ACG's expert panel on IBS presented a preview of the College's revised draft treatment
guidelines for IBS. We are pleased that the panel highlighted the guidelines' recommendation for the use of antibiotics, notably the non–absorbed
agent rifaximin. The final guidelines are scheduled for publication in January 2009 as a supplement to the American Journal of Gastroenterology.
Salix currently is assessing the use of rifaximin in the treatment of IBS.
"We were pleased to announce the marketing approval of APRISO last week. APRISO is the first and only once–a–day mesalamine product for the
maintenance of remission of ulcerative colitis. We believe APRISO's patent–protected Intellicor™ delivery system provides a delivery
profile that physicians and patients will find beneficial in maintaining remission of ulcerative colitis. We intend to begin stocking the product with wholesalers
in December and January and to launch the product to physicians during the first quarter of 2009.
"The review of the METOZOLV™ ODT (metoclopramide) and balsalazide tablet NDAs continued to progress during the third
quarter. We continue to anticipate a decision from the FDA on METOZOLV by November 28 and balsalazide tablet by December 30, 2008."
The Company will host a conference call at 5:00 p.m. ET, on Wednesday, November 5, 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) 857–6177
(U.S. and Canada) or (719) 325–4796 (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 4531858.
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.
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, aminosalicylate, 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 greater than 3% of adult patients taking 1.5 g/day of APRISO (versus placebo) were headache (11% vs 8%), diarrhea (8%
vs 7%), upper abdominal pain (5% vs 3%), nausea (4% vs 3%), nasopharyngitis (4% vs 3%), influenza and influenza–like illness (4% vs 4%) and
sinusitis (3% vs 3%).
Salix markets 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, COLAZAL® (balsalazide disodium) Capsules 750 mg, 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. METOZOLV™ ODT (metoclopramide),
balsalazide tablet, vapreotide acetate 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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Third Quarter 2008 Statement - Unaudited (PDF 33KB)
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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.