Salix shares up after FDA clears liver disorder drug

(Reuters) - Salix Pharmaceuticals Ltd (SLXP.O) shares rose 9 percent in premarket trade Thursday, a day after the U.S. health regulator approved the use of its Xifaxan antibiotic as a treatment for reducing the risk of a debilitating liver disorder in adults.

"Salix proved it has the credibility to execute an on-time Food and Drug Administration approval with yesterday's new indication for hepatic encephalopathy," Jefferies & Co analyst Corey Davis wrote in a note to clients.

He raised the price target on Salix stock to $42 from $38.

On Wednesday, the Food and Drug Administration approved the drug for reducing the risk of recurrent hepatic encephalopathy, a disorder caused by chronic liver failure that can cause confusion, memory problems or coma.

Salix currently markets Xifaxan for traveler's diarrhea and also expects to seek approval for the drug's use in another indication -- non-constipation irritable bowel syndrome (IBS).

Shares of the company were up 9 percent at $36.50 in premarket trade. They closed at $33.52 Wednesday on Nasdaq.

(Reporting by Shailesh Kuber in Bangalore; Editing by Ratul Ray Chaudhuri)