Salix Pharmaceuticals, Ltd. (SLXP) received a positive recommendation from the US Food and Drug Administration’s (FDA) Gastrointestinal Drugs Advisory Committee for its proposed study design for the use of Xifaxan for irritable bowel syndrome (IBS) with diarrhea.
Salix had submitted a supplemental new drug application (sNDA) for the use of Xifaxan 550 mg for the treatment of non-constipation irritable bowel syndrome (non-C IBS) and IBS-related bloating. However, earlier this year, the FDA issued a complete response letter for the sNDA and asked for re-treatment information.
Salix has been working on fixing the study design in collaboration with the FDA. The study will be conducted to evaluate the safety, efficacy and durability of response with repeat treatment cycles of Xifaxan in IBS patients with diarrhea.
The company will continue working with the FDA to finalize the study protocol. The multi-center, randomized, double-blind, placebo-controlled trial is expected to start enrolling patients from the first quarter of 2012. Currently, Salix expects the development and regulatory process to take about 24 months.
Salix has been working on new indications of Xifaxan to help drive long-term growth. Xifaxan 550 mg was launched in 2010 for the reduction of the risk of the recurrence of overt hepatic encephalopathy (HE) in adult patients. The HE indication should have excellent incremental potential.
Salix enjoys orphan drug designation for the HE indication, which means that Xifaxan 550 mg should enjoy 7 years of marketing exclusivity.
We currently have an Outperform recommendation on Salix, which carries a Zacks #1 rank (short-term “Strong Buy” rating). We are pleased to see that Salix is working on developing new indications for Xifaxan 550 mg. We believe that the IBS indication represents significant commercial opportunity for the company. Salix has also been working on expanding its product portfolio over the past few years through acquisitions and in-licensing of candidates in late stage clinical development.
