Salix strikes $12M licensing deal for bowel prep drug

Raleigh-based Salix Pharmaceuticals, which focuses on gastrointestinal treatments, is adding another product to its lineup.

Salix (Nasdaq: SLXP) is committing $12 million plus royalties to RedHill Biopharma (Nasdaq: RDHL) for a bowel prep drug.

The deal, which was announced early Thursday, calls for Salix to pay an upfront fee of $7 million and $5 million in milestone payments plus royalties.

In return, Salix gains worldwide rights to RHB-106, an encapsulated bowl prep.

Salix recently filed a New Drug Application with the FDA for a rectal inflammation drug and closed on a $2.6 billion acquisition of 

“Salix is pleased to enter this strategic collaboration with RedHill and to secure what we believe could be the first prescription encapsulated bowel prep product,” said Carolyn Logan, chief executive officer at Salix. “Many patients find the taste and palatability of current bowel prep products to be unacceptable. We believe the availability of a tasteless solid oral formulation bowel prep, if approved by the FDA, could potentially go a long way in helping to increase patient compliance and to ease patient burden associated with bowel cleansing prior to various medically important abdominal procedures.”

The deal entrusts commercialization of the drug, which is in late clinical trial testing, to Salix.

Dror Ben-Asher, RedHill Biopharma’s CEO, noted in the announcement: “The licensing transaction with Salix is an important milestone for RedHill and yet another validation of our business model. This is the first licensing deal derived from RedHill’s late clinical-stage pipeline, and we are confident that Salix, a leading company in the gastrointestinal field with a proven track record in drug development and commercialization, is the right partner. I would like to thank our shareholders for their continued support and RedHill’s team for their hard work and dedication towards the realization of this important transaction.”

RedHill describes RHB-106 as “an encapsulated formulation intended for the preparation and cleansing of the gastrointestinal tract prior to the performance of abdominal procedures, including diagnostic tests, such as colonoscopy, barium enema or virtual colonoscopy, as well as surgical interventions, such as laparotomy. The RHB-106 preparation is a tasteless solid oral dosage potentially allowing an unobstructed procedure with reduced side-effects and improved compliance. It avoids patient exposure to the often unacceptable taste of current products.”