Salix Pharmaceuticals Reports 3Q2009 Results
METOZOLV™ ODT Receives FDA Marketing Approval
XIFAXAN® Prescriptions Increase 15% Year-over-Year
Rifaximin Demonstrates Statistical Significance in Two Phase 3 Trials for
Non-Constipation Irritable Bowel Syndrome
Rights Acquired for Bioadhesive Technology for Extended Release Rifaximin Product
RALEIGH, NC, November 9, 2009 – Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced
financial and operating results for the third quarter ended September 30, 2009.
Total product revenue was $65.7 million for the third quarter of 2009, a 53 percent increase compared to $42.9 million for the third quarter of 2008. Total
product revenue for the first nine months of 2009 was $162.7 million compared to $118.2 million for the first nine months of 2008. XIFAXAN®
revenue for the third quarter of 2009 was $42.7 million compared to $21.4 million for the third quarter of 2008, and $93.0 million for the
first nine months of 2009 compared to $56.1 million for the first nine months of 2008. Our bowel cleansing products MOVIPREP® and
OSMOPREP® generated combined revenue of $16.4 million for the third quarter of 2009, compared to $14.8 million for the third quarter
of 2008. Total combined product revenue for these two products was $47.6 million for the first nine months of 2009 and $44.4 million for the first
nine months of 2008.
Total cost of products sold was $13.2 million for the third quarter and $34.5 million for the first nine months of 2009. Gross margin on total product
revenue was 79.9% for the third quarter of 2009 compared to 81.9% for the third quarter of 2008 and 78.8% for the first nine months of 2009, compared
to 81.3% for the first nine 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 continue to expect gross margins for the year ending December 31, 2009 to be 79% to 80%. Research and development expenses
were $26.1 million for the third quarter of 2009 and $69.6 million for the first nine months of 2009, compared to $14.4 million and $57.3 million,
respectively for the prior year periods. Research and development expenses for the third quarter of 2009 include a $5 million up–front payment
related to the acquisition of the exclusive U.S. right to Lupin's proprietary bioadhesive technology for use with rifaximin. Selling, general
and administrative expenses were $29.6 million for the third quarter of 2009 and $83.6 million for the first nine months of 2009, compared to $23.4
million for the third quarter of 2008 and $67.6 million for the first nine months of 2008. The Company reported a net loss of $7.3 million, or $0.15
per share, fully diluted, for the third quarter of 2009.
Cash and cash equivalents were $69.1 million on September 30, 2009.
Commenting on the performance of the Company, Adam Derbyshire, Executive Vice President and Chief Financial Officer, stated, "We continue to be pleased
with the Company's ongoing product revenue growth. Our 53 percent year-over-year revenue growth was driven primarily by the increase in
XIFAXAN revenue for the quarter.
"The current annualized run rates, based on dollarizing September monthly prescription data for XIFAXAN, our bowel cleansing products and our "other products"
category are approximately $117 million, $85 million and $34 million, respectively. We continue to anticipate that R&D and SG&A expenses for
2009 should be approximately $93 million and $120 million, respectively. This SG&A guidance accounts for METOZOLV™ ODT launch expenses
primarily associated with the hiring of 64 sales representatives during the third quarter.
"For the fourth quarter of 2009 we anticipate total Company product revenue will be approximately $68 million and should generate a loss of approximately
$0.14 per share, fully diluted.
"We continue to believe that 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. This guidance incorporates the recognition
of METOZOLV ODT revenue based on prescription pull-through."
Carolyn Logan, President and Chief Executive Officer, stated, "The third quarter of 2009 was one of the most exciting and rewarding periods in the Company's
history to date. The milestones achieved during the quarter are the result of the dedicated efforts contributed by every employee of the Company.
We are committed to building the leading U.S. specialty pharmaceutical company providing innovative products to healthcare professionals to prevent
or treat gastrointestinal disorders. We believe the accomplishments over the past several months are only the initial results of our focused efforts over the past several years. We look forward to continued and ongoing growth as we build our business by leveraging our expanding product portfolio,
our strong relationships with our customers and our 220-member strong specialty sales force.
"In August the FDA accepted for filing our New Drug Application for rifaximin 550mg tablets for the maintenance of remission of hepatic encephalopathy and also announced that the NDA had been designated for Priority Review. A Priority Review classification is granted to drugs offering major advances
in treatment or providing a treatment where no adequate therapy exists. We believe this designation reflects and confirms our belief that rifaximin
potentially represents a novel and substantial new therapeutic option for this debilitating condition. The FDA also announced that it will convene
an Advisory Committee in late February 2010 to discuss the application. Last week the FDA informed the Company that they are extending the goal date
by three months to provide time for a full review. The extended user fee goal date is March 24, 2010.
"On September 4 METOZOLV ODT, our orally disintegrating tablet formulation of metoclopramide, was granted marketing approval by the FDA. We believe METOZOLV
ODT again demonstrates our commitment to provide innovative products to meet the unmet GI treatment needs of physicians and patients. Our rapidly-dissolving
tablet formulation should give diabetic gastroparesis and refractory GERD patients a new treatment choice that may be more convenient
than traditional metoclopramide tablets. We intend to launch METOZOLV ODT to physicians beginning mid-November.
"During the third quarter of 2009, in anticipation of the approval and launch of METOZOLV ODT, we completed the hiring and training of 64 specialty sales
representatives. The efforts of these new representatives combined with the ongoing coverage currently provided by our 96 specialty sales representatives
should serve to extend our reach and deepen our penetration to targeted physicians.
"On September 14 we announced the successful outcome of our two Phase 3 randomized, double-blind, placebo-controlled, multicenter trials –
TARGET 1 and TARGET 2. These trials, with more than 600 patients each, were designed to evaluate the efficacy and safety of rifaximin 550mg tablets
in the treatment of patients with non-constipation irritable bowel syndrome (IBS). In each trial, rifaximin-treated patients demonstrated
a statistically significant improvement for both the primary endpoint and key secondary endpoint compared to placebo patients. Rifaximin delivered
adequate relief of IBS symptoms and relief of IBS-related bloating over a one-month period following the completion of a 14-day
course of therapy. The results of these two trials affirm the utility of a gut-selective antibiotic in the treatment of IBS and will serve
as the basis for the Company's New Drug Application seeking marketing approval for rifaximin as a treatment option for this widespread condition.
The Company continues to target submitting the NDA during the first half of 2010.
"As part of the Company's lifecycle management strategy for rifaximin, we continue to broaden, strengthen and expand the intellectual property portfolio
related to this compound. In October we secured the exclusive right in the United States to Lupin's bioadhesive drug delivery technology for use with rifaximin.
The two companies entered into an agreement to collaborate in the development and commercialization of a new formulation of rifaximin
that combines Lupin's proprietary technology of both bioadhesion as well as extended release characteristics. Additionally, Lupin has agreed to exclusively
supply Salix with rifaximin active pharmaceutical ingredient in the United States, and Salix has agreed to make up-front and regulatory
milestone payments, as well as royalties on sales of the product. We believe a next-generation rifaximin product incorporating Lupin's drug
delivery platform with our gut-targeted antibiotic might prove to provide a number of clinical advantages including patient compliance and patient convenience.
Also in October we secured the exclusive right in the United States to Cipla's amorphous rifaximin PCT Patent Application. The acquisition of the rights to Lupin's
and Cipla's respective proprietary rights should serve to further protect rifaximin's intellectual property position.
"In recent weeks, two additional patents relating to rifaximin were issued by the U.S. Patent and Trademark Office. One patent provides further protection
relating to a previously-issued patent that covers several physical states, or polymorphous forms, of rifaximin. Forms have been filed with
the FDA to list the patent in the Orange Book. This patent should provide protection until June 2024. A second patent provides protection for rifaximin relating to
treating bloating caused by small intestinal bacterial overgrowth associated with irritable bowel syndrome. The patent will be listed in the Orange Book if and when
marketing approval is granted to rifaximin for the treatment of IBS. The patent should provide protection until
August 2019.
"The development of crofelemer and budesonide progressed during the third quarter of 2009. In August, we completed the dose selection stage (Stage 1) of the ADVENT trial,
our Phase 3 trial of crofelemer for the treatment of chronic diarrhea in people living with HIV, or HIV-associated diarrhea,
and initiated the final stage (Stage 2). Stage 2 of ADVENT involves the enrollment of 150 additional patients with HIV-associated diarrhea.
Enrollment for Stage 2 is anticipated to be completed in the first half of 2010, and currently we anticipate filing the crofelemer NDA during the second half of 2010.
The FDA reviewed and granted the protocol for this trial as a Special Protocol Assessment, or SPA, and granted the crofelemer IND fast track designation.
"In early October we submitted an IND to the FDA to conduct two identically designed Phase 3, multi-center, double-blind, randomized, placebo-controlled
studies evaluating the effectiveness and safety of budesonide rectal foam for the treatment of mild to moderate ulcerative proctitis
or proctosigmoiditis. The studies are designed to compare 2mg/25mL budesonide foam dosed twice-a-day (BID) for 2 weeks followed by
once-a-day (QD) dosing for 4 weeks, versus placebo foam. Each study is targeted to enroll approximately 430 subjects, and currently enrollment
is scheduled to begin by the end of 2009."
The Company will host a conference call at 5:00 p.m. ET, on Monday, November 9, 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) 500-6970
(U.S. and Canada) or (719) 325-2292 (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 5047001.
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, METOZOLV™ ODT (metoclopramide HCl), 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. Crofelemer, budesonide foam and rifaximin for additional indications are under development.
For full prescribing information and important safety information, including BOXED WARNINGS for VISICOL, OSMOPREP and METOZOLV, 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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Third Quarter 2009 Statement - Unaudited (PDF 42KB)
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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).
Please see accompanying brief summary of Prescribing Information for OsmoPrep, including
BOXED WARNINGS.
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, please click here.
SAFETY CONSIDERATIONS
Xifaxan® (rifaximin) Tablets 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. Escherichia coli has been shown to develop resistance to rifaximin in vitro. However, the clinical significance of such an effect has not been studied.
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%).
For complete Prescribing Information, please click here.