The share price of Salix Pharmaceuticals Ltd. (SLXP) reached a new 52-week high, touching $69.03 on Jul 8, 2013. The closing price of $68.63 reflects a robust year-to-date return of 61.6%. The average trading volume for the last three months was about 616,531 shares. The company had a market capitalization of $4.11 billion on Jul 8.
Salix, a Raleigh, N.C.-based specialty pharmaceutical company, focuses on the development and commercialization of drugs used for the treatment of a variety of gastrointestinal diseases. Salix carries a Zacks Rank #3 (Hold).
Salix received a major boost recently when the US Food and Drug Administration (:FDA) announced that its advisory panel will review the company’s supplemental new drug application (sNDA) for Relistor for opioid-induced constipation (OIC) in patients with chronic pain. Thus, Salix saw share prices moving by 5% on the news. This came as a positive surprise because Salix had received a complete response letter (CRL) from the FDA in Jul 2012 for the Relistor sNDA.
While we believe an additional study will most likely be required for approval, we do not expect a significant delay in the approval process for Relistor. A positive feedback from the panel would also clear the decks for the company’s plans for submitting an sNDA for its oral formulation of Relistor.
Meanwhile, Salix has made significant progress on its pipeline. In May 2013, the company announced statistically significant data from two late-stage studies conducted with budesonide foam for the treatment of active mild-to-moderate ulcerative proctitis (:UP) or ulcerative proctosigmoiditis (UPS). Salix intends to file for FDA approval on the basis of these positive results by the end of Sep 2013.
Lead product, Xifaxan, continues to perform well and should keep driving growth. Successful development and approval of the 550 mg formulation for non-constipation irritable bowel syndrome with diarrhea (IBS-D) would be a major boost for the stock. We believe that the IBS-D indication represents significant commercial opportunity for the company. The company is also working on an extended intestinal release (:EIR) formulation of rifaximin which is slated to move into two phase III studies in the second half of 2013 for the treatment of Crohn’s disease.
Over the last 7 days, the Zacks Consensus Estimate for 2013 has gone up from $3.59 per share to $3.68 per share. Meanwhile, the Zacks Consensus Estimate for the second quarter of 2013 has gone up to $0.85 from $0.82 per share over the last 7 days.
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