Positive drug trial news sends Salix shares soaring more than 51%

Updated Sep. 15, 2009 at 6:06 a.m.

Positive drug trial news sends Salix shares soaring more than 51%

On The Web

Salix
FCC

Site Search

Get the latest news alerts: Follow LTW at Twitter.

Local Tech Wire

RALEIGH, N.C. – Good news from two Phase III clinical trials announced before the stock market opened Monday ignited a rush to buy shares in Salix Pharmaceuticals.

Salix (Nasdaq: SLXP) opened at $19.84, up more than $6 from Friday’s close of $13.38.

At one point, Salix hit a four-year high of $21.34 before closing at $20.22, up $6.84 or 51 percent.

In after-hours trading, Salix added another 6 cents in value.

By early afternoon, more than 10 million shares had traded hands. Average daily volume is some 420,000.

In a statement issued early Monday, Salix said the new version of an irritable bowel drug called Xifaxan was significantly better than placebo and also treated bloating. The drug in trials coffers non-constipation irritable bowel syndrome. If approved by the U.S. Food and Drug Administration, Salix could be a player in a $2.2 billion market.

"This is the best possible outcome for the trials and Salix," said Merriman Curhan Ford analyst Edward H. Nash, in a statement. "There was much deliberation over the potential success and failure of this trial given that IBS trials have historically ended in failure, mainly due to the complexity of the disease and the high placebo effect rate."

Nash reaffirmed a “Buy’ rating for Salix, adding that the results leave “no ambiguity” about its effectiveness.

More than 1,200 people were involved in two trials.

“We are extremely pleased with the outcome of our pivotal Phase III trials of rifaximin in the treatment of non-constipation irritable bowel syndrome,” said Bill Forbes, chief development officer at Salix. “Irritable bowel syndrome, characterized by abdominal pain, bloating and altered bowel habits, is one of the most common chronic medical conditions. Non-constipation IBS comprises the most common forms of IBS by including patients that have either diarrhea-predominant or diarrhea-constipation alternating symptoms.”

Salix plans to submit a new drug application for Rifaximin in the first six months of 2010.

Tags: Biotech & Life Science, Salix

Editor's Blog

The latest blog posts from our WRAL Tech Wire and WRAL editors. Read more articles…

WRAL Tech Wire