Salix Pharmaceuticals Reports 2Q2009 Results
Updates Full Year Guidance
MOVIPREP Prescriptions Increase 81% Year–over–Year
XIFAXAN Prescriptions Increase 13% Year–over–Year
METOZOLV FDA Action Date September 11, 2009
Rifaximin NDA for Hepatic Encephalopathy Submitted June 24, 2009
Rifaximin IBS Phase 3 Results Expected late Q3/early Q4
RALEIGH, NC, August 10, 2009 – Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced
financial and operating results for the second quarter ended June 30, 2009.
Total product revenue was $52.2 million for the second quarter of 2009, compared to $41.1 million for the second quarter of 2008. Total product revenue
for the first six months of 2009 was $97.0 million compared to $75.3 million for the first six months of 2008. XIFAXAN® revenue for
the second quarter of 2009 was $26.3 million, a 46% increase compared to the second quarter of 2008. XIFAXAN revenue for the first six months of 2009 was $50.4 million compared to $34.8 million for the first six months of 2008. MOVIPREP®, OSMOPREP® and VISICOL®,
which comprise our bowel cleansing product line, generated revenue of $16.5 million for the second quarter of 2009, compared to $15.7 million for the second quarter of 2008. Total product revenue for our bowel cleansing product line was $29.2 million for the first six months of 2009
and $26.0 million for the first six months of 2008.
Total cost of products sold was $11.4 million for the second quarter and $21.3 million for the first six months of 2009. Gross margin on total product
revenue was 78.1% for the second quarter of 2009 compared to 82.7% for the second quarter of 2008 and 78.0% for the first six months of 2009, compared
to 80.9% the first six months of 2008. The lower gross margins for 2009 relative to the comparable periods for 2008 were due to a change in the
product revenue mix. We expect gross margins for the year ending December 31, 2009 to be 79% to 80%. Research and development expenses were $22.8
million for the second quarter of 2009 and $42.9 million for the first six months of 2009, compared to $15.4 million and $41.3 million, respectively
for the prior year periods. Selling, general and administrative expenses were $29.0 million for the second quarter of 2009 and $54.0 million for
the first six months of 2009, compared to $23.0 million for the second quarter of 2008 and $44.1 million for the first six months of 2008. The Company
reported a net loss of $15.3 million, or $0.32 per share, fully diluted, for the second quarter of 2009.
Cash and cash equivalents were $86.0 million on June 30, 2009.
Commenting on the performance of the Company, Adam Derbyshire, Executive Vice President and Chief Financial Officer, stated, "We continue to be extremely
pleased with the ongoing robust growth of XIFAXAN, our most compelling long–term opportunity, as well as our bowel cleansing franchise. Combined
product revenue from XIFAXAN and our bowel cleansing products achieved year–over–year growth of 27% for the second quarter of 2009.
We believe we are positioned to continue to build our business and to deliver year–over–year increases in product revenue by: 1) growing
our currently marketed products, 2) securing the approval of additional products and additional indications for rifaximin and 3) expanding our portfolio of products via development activities, licensing and acquisitions.
"Previously we stated that we would update 2009 revenue and loss per share guidance if and when METOZOLV™ ODT is approved and launched
to physicians. Based on the facts and circumstances associated with the anticipated launch of METOZOLV ODT we currently intend to recognize METOZOLV
ODT revenue based on prescription pull–through rather than product shipment or sell–in to wholesalers. Based on a pull–through
methodology for METOZOLV ODT, 2009 total Company product revenue should be approximately $230 million, representing 29% growth over 2008 revenue, and
we should recognize a loss of approximately $0.90 per share, fully diluted, for the year ending December 31, 2009. If the facts and circumstances
change, we might recognize METOZOLV ODT revenue based on product shipment to wholesalers. Based on a sell–in methodology for METOZOLV ODT, 2009 total Company product revenue could be approximately $240 million, representing 34% growth over 2008 revenue, and we could recognize a loss of approximately
$0.70 per share, fully diluted, for the year ending December 31, 2009.
"The current annualized run rates, based on dollarizing the latest prescription data for XIFAXAN, our bowel cleansing product line and our "other products"
category are approximately $108 million, $80 million, and $34 million, respectively. Additionally, we previously stated that research and development
expenses and selling, general and administrative expenses for 2009 should be approximately $99 million and $111 million, respectively. We now
anticipate that R&D and S,G&A expenses for 2009 should be approximately $93 million and $120 million, respectively. The updated 2009 selling, general
and administrative guidance includes anticipated METOZOLV ODT launch expenses primarily associated with the hiring of a second sales force comprised
of 64 sales representatives.
"The continuing growth of our business and broadening of our product portfolio necessitates the expansion of our sales effort. During the remainder of
2009 we will be hiring, training and launching the second sales force comprised of 64 sales representatives. In the short term the added impact of
this second sales force, combined with the ongoing efforts of our existing 96–member sales force, should serve to increase the share of voice
we will be able to capture in the ulcerative colitis market and increase our ability to gain share in the bowel cleansing market. Then, as METOZOLV
ODT and other products and/or indications are approved, the combined efforts of the two sales forces should generate increased product revenue.
"For the third quarter of 2009 we anticipate total Company product revenue will be approximately $60 million and should generate a loss of approximately
$0.30 per share, fully diluted."
Carolyn Logan, President and Chief Executive Officer, stated, "XIFAXAN prescription demand and sales continued to increase during the second quarter of
2009, as they have every quarter since the product was launched in 2004. We look forward to expanding the label and use of this non–absorbed,
gut–selective antibiotic in the U.S. market potentially beyond the treatment of travelers' diarrhea to bring relief to patients suffering from
other bacterial complications of the gut.
"The bowel cleansing market represents a dynamic and growing opportunity for Salix. For the second quarter of 2009 prescription demand for our bowel cleansing franchise increased 17% year–over–year. MOVIPREP prescriptions increased 81% year–over–year, while OSMOPREP prescriptions
for the comparable period decreased 41%.
"The March 2009 introduction of APRISO, our once–a–day therapy for ulcerative colitis, combined with the introduction of a competitive once–a–day
product in 2007, should transition the ulcerative colitis market from a multi–dose per day market to a once–a–day
market. During APRISO's first six months on the market, it continues to make progress with respect to increasing share of new prescriptions and share of new physician prescribers. We believe APRISO, with its unique Intellicor™ delivery system, should position Salix to compete
very effectively in the evolving ulcerative colitis market in the months and years to come. We continue to believe peak year sales of APRISO should
exceed $100 million.
"As previously announced, positive results of our Phase 3 study of the use of rifaximin in the treatment of hepatic encephalopathy (HE) were presented
at the annual meeting of Digestive Disease Week on May 30 to June 4, 2009. The 299–patient, multinational, randomized, double–blind, placebo–controlled
trial, was designed to assess the long–term (six months) efficacy, safety and tolerability of rifaximin in maintaining
remission compared to placebo among patients with a history of HE. These new data demonstrated that rifaximin significantly reduced the risk of HE–related
hospitalizations in patients with previous episodes of HE and showed a highly significant reduction in the risk of breakthrough HE during
the six month study. One analysis showed that rifaximin significantly reduced the risk of HE–related hospitalizations compared to placebo
(50% risk reduction, p=0.01) during the six month treatment period. A second analysis showed that rifaximin treatment after adjusting for significant
prognostic factors (such as age, duration of current verified remission, number of prior HE episodes and model for end–stage liver disease
[MELD] – that can contribute to breakthrough HE) resulted in a 60% risk reduction demonstrating a highly significant protective effect (p<0.0001)
in preventing HE breakthrough. We are extremely pleased with the results of our pivotal study and are encouraged with the level of interest generated
by these data.
"We submitted the hepatic encephalopathy NDA to the U. S. Food and Drug Administration (FDA) on June 24, 2009. Rifaximin has been granted orphan drug designation by the FDA 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.
"Currently we estimate the U.S. commercial opportunity represented by the HE market is approximately $600 million. Hepatic encephalopathy occurs frequently
in patients with cirrhosis as a result of their end–stage liver disease. Typically the cirrhosis is caused by a number of factors such
as alcohol and/or drug abuse, chronic viral hepatitis and autoimmune disease. Cirrhosis is a leading cause of death in the United States. The number
of cases of liver disease in the United States and around the world is rapidly increasing with more than 7 million people in the United States being
diagnosed with chronic liver disease. There are reported to be more than 100,000 patients in the United States with overt HE.
"With respect to our development program for rifaximin in the treatment of irritable bowel disease, we completed enrollment well ahead of schedule, in May 2009, and exceeded our patient enrollment quota of 1200 in TARGET 1 and TARGET 2, our two 600–patient studies to assess the efficacy, safety
and tolerability of rifaximin 550 mg, dosed three times daily, in the treatment of patients with non–constipation irritable bowel syndrome. Currently, we expect top–line data should be available late third quarter or early fourth quarter of 2009, and we are targeting to submit the non
C–IBS NDA during the first half of 2010. Once the data are made public, assuming a positive outcome, we intend to begin the process of identifying
a commercial partner to promote rifaximin to primary care physicians for the treatment of non C–IBS, if and when approved.
"Irritable bowel syndrome is among one of the most common chronic medical conditions and affects approximately 15% of adults in the United States. Currently
we estimate the U.S. commercial opportunity represented by the non–C IBS market is approximately $2.2 billion.
"The FDA review of METOZOLV ODT progressed during the second quarter of 2009. The FDA accepted Wilmington Pharmaceutical's complete response for METOZOLV
ODT and granted an action date of September 11, 2009.
"Last week Stage 1, the (dose selection stage), of the Phase 3 trial of crofelemer for the treatment of chronic diarrhea in people living with HIV, or HIV–associated diarrhea, was completed. Stage 2 (final stage) is now underway with the objective to determine the proportion of HIV–positive
patients experiencing relief of diarrhea with crofelemer compared to placebo. The protocol for this trial has been reviewed and approved by the
FDA as a Special Protocol Assessment, or SPA, and has been granted fast track designation.
"Recently the Company entered into an agreement with AstraZeneca to co–promote Nexium® (esomeprazole magnesium) for the treatment of acid reflux disease, which in 2008 had net sales of $3.8 billion in the United States. Beginning August 31, our current 96–member specialty sales
force will begin calling on targeted gastroenterologists to promote Nexium for six months. This co–promotion should provide an opportunity
for our current sales force to gain better access with certain physicians and to develop expertise in a new disease state, as well as generating a small amount of additional revenue.
"We look forward to continued growth and expansion during 2009 and beyond. We plan to continue to execute our business strategy by in–licensing late–stage and marketed products, developing the products in our pipeline and ensuring that our marketed products are provided with the attention
and support required to achieve success."
The Company will host a conference call at 5:00 p.m. ET, on Monday, August 10, 2009. 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 (888) 510–1783
(U.S. and Canada) or (719) 457–2621 (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 5354538.
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 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, APRISO™ (mesalamine) extended–release capsules 0.375 g, 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), crofelemer, budesonide foam and rifaximin for additional indications are under development.
For full prescribing information and important safety information on Salix products, please visit www.salix.com where the Company promptly posts press releases, SEC filings and other important information 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 . Information on our web site is not incorporated in
our SEC filings.
Table Follows
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Second Quarter 2009 Statement - Unaudited (PDF 21KB)
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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.