Salix Pharmaceuticals, Ltd.
) recently said that the FDA has approved the company's
anti-diarrhea drug for HIV/AIDS patients. Fulyzaq (crofelemer)
125 mg delayed-release tablets gained FDA approval for the
symptomatic relief of non-infectious diarrhea in HIV/AIDS
patients on anti-retroviral therapy (ART). Salix expects to
launch the product shortly.
Although Fulyzaq will most likely be a modest contributor to
Salix' pipeline, its approval comes as a positive for Salix. The
company's approval track record over the past few quarters has
not been encouraging with the company facing two major regulatory
The first of these setbacks came in March 2011 when Salix
received a complete response letter (CRL) from the FDA for the
non-constipation irritable bowel syndrome with diarrhea (IBS-D)
indication for Xifaxan 550. The IBS-D indication represents
significant commercial potential and the delay in gaining
approval for this indication is a big disappointment. With
another study being conducted, approval for the IBS-D indication
is not likely to come before the first half of 2014.
More recently, Salix received a CRL for its supplemental new
drug application (sNDA) for the use of Relistor in chronic
non-cancer pain patients with opioid-induced constipation. Salix
conducted an end of review meeting in October in order to gain a
better understanding of the CRL. Given concerns regarding a risk
associated with the chronic use of new opioid antagonists in
patients taking opioids for chronic pain, the company may be
required to conduct a very large, well-controlled chronic
administration trial. According to Salix, currently available
post-marketing, clinical and preclinical data could be enough to
gain approval. We expect to hear more on the path forward in
We currently have a Neutral recommendation on Salix, which
carries a Zacks #3 Rank (Hold). While we expect investor focus to
remain on regulatory updates, we note that Xifaxan continues to
perform well and should keep driving growth. We believe Salix
will continue seeking suitable in-licensing opportunities in
order to grow revenues.
Meanwhile, some pharma companies that currently look more
). Both stocks carry a Zacks #1 Rank (Strong Buy).
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