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UPDATE 2-Salix Pharma's drug meets late-stage goals, shares soar
September 14, 2009 / 11:04 AM / 8 years ago

UPDATE 2-Salix Pharma's drug meets late-stage goals, shares soar

* Says rifaximin meets primary endpoint

* Says targeting marketing application in H1 2010

* Says targeting profitability during 2010

* Shares up about 60 pct (Adds company comments, analyst comments; updates share movement)

By Vidya L Nathan

BANGALORE, Sept 14 (Reuters) - Salix Pharmaceuticals Ltd’s SLXP.O drug rifaximin met the main goal of two late-stage trials, providing adequate relief from symptoms of irritable bowel syndrome, and the company said it was targeting profitability during 2010, sending its shares up 60 percent.

The drug was safer and more efficacious than a dummy drug in both the studies testing it in patients with non-constipation irritable bowel syndrome (non-C IBS), said the company, which has also applied for marketing approval of rifaximin to treat a potentially fatal liver disease.

Salix spokesman Michael Freeman told Reuters that the target for profitability was set assuming U.S. regulatory approval for the drug in the liver indication -- hepatic encephalopathy.

Rifaximin is already marketed under the brand name Xifaxan as a treatment for traveller’s diarrhoea.

“Successful development of rifaximin in non-C IBS and hepatic encephalopathy could substantially enhance rifaximin’s commercial potential,” Wells Fargo Securities analyst Michael Tong said.

“We believe additional clarity on the clinical profile will be necessary to drive additional off-label use in this indication (non-C IBS),” added Tong, who has a “market perform” rating on the stock.

The company said data from the late-stage studies showed that the drug also met the secondary goals of providing relief from bloating related to IBS, and was targeting filing for marketing approval in the bowel indication in the first half of 2010.

Xifaxan, which garnered $26.3 million in sales during the second quarter, faces competition from smaller rival Lexicon Pharmaceuticals Inc’s (LXRX.O) LX1031, which is in mid-stage development for irritable bowel syndrome.

Shares of the company were up 50 percent at $20.05 Monday afternoon on Nasdaq. They touched a four-year high of $21.34 earlier in the session. (Editing by Aradhana Aravindan)

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