Salix Pharmaceuticals Ltd. (Nasdaq: SLXP) says it has received an “approvable letter” from the Food and Drug Administration (FDA) for the New Drug Application (NDA) for rifaximin, an investigational drug under review for the treatment of travelers’ diarrhea.
The FDA letter had a dramatic impact on the stock price of Salix shares, which closed at $7.98 for the day. That’s an increase of almost 80 percent, or $3.53, after closing Thursday at $4.45. The volume was 2,457,500 and the day’s range was between $5.40 and $8.47.
The approvable letter is a sort of “middle ground” that the FDA uses to indicate that a particular drug is between “not approvable” and “approved,” according to Adam Derbyshire, chief financial officer and vice president of finance and administration for Salix. Derbyshire adds that the approvable letter…while good news…doesn’t necessarily mean rifaximin will be approved.
“We’re definitely pleased with the approvable letter … very much so,” Derbyshire tells Local Tech Wire. “If you look at other companies’ first actions, it’s very rare to get an approvable letter.”
The NDA for rifaximin, a new molecular entity, was accepted for filing on Feb. 24 and was assigned a User Fee goal date of Oct. 25. The User Fee allows the FDA to bring more resources to bear in reviewing the drug, Derbyshire says, adding that the average review time for new molecular entities is 17 to 19 months.
Salix is some 10 months into the approval process for rifaximin. From here, Derbyshire says the company will review the approvable letter, which it received this morning, and then follow up with the FDA. He says Salix will have to submit an amendment covering questions in the letter, at which time the FDA will have six months to take one of three actions: issue another approvable letter, approve the drug or not.
“We are committed to bringing rifaximin to market in an expeditious manner and look forward to working with the (FDA) to successfully complete the approval process,” Carolyn Logan, president and chief executive officer, said in a statement. “Rifaximin is a gastrointestinal tract-restricted antibiotic that we believe will fulfill an important unmet medical need in the United States.”
Rifaximin is characterized by the deliverance of high concentrations to the therapeutic site of action (gastrointestinal tract). Salix licensed rifaximin from Alfa Wassermann, which has marketed the product in Italy since 1988 under the trade name Normix. It also is licensed by Alfa Wassermann in Mexico to GlaxoSmithKline and Schering-Plough under the respective trade names RedActive and Flonorm.
In addition to being developed as a treatment for travelers’ diarrhea, rifaximin also is being studied in a number of other diseases. Clinical investigation is underway to assess the utility of rifaximin for the treatment of hepatic encephalopathy, a severe condition caused by compromised liver function. A clinical study of the use of rifaximin in Crohn’s disease is also underway.
Salix, headquartered in Raleigh, develops and markets prescription pharmaceutical products for the treatment of gastrointestinal diseases. Salix says its strategy is to in-license late-stage or marketed proprietary therapeutic drugs; complete the required development and regulatory submission of these products; and market them through the company’s 60-member gastroenterology specialty sales force.