When Salix Pharmaceuticals (Nasdaq:SLXP) disclosed that the Food and Drug Administration would not approve its drug Xifaxan for the new indication of irritable bowel syndrome, the gastrointestinal treatments company made clear it believed its drug met all of the targets needed for approval.

Now we’re starting to see how much more ground the drug company needs to cover.

Salix is preparing for new set of Xifaxan phase 3 clinical trials studying the IBS indication, which puts approval about two years away. But first the company will meet with an FDA advisory panel on Wednesday, eight months after receiving the complete response letter from the agency declining approval on Xifaxan as a new IBS treatment. The meeting will cover the design of the forthcoming trials.

Xifaxan is not a new drug. Salix has already received FDA approval on the broad spectrum antibiotic for treating traveler’s diarrhea and hepatic encephalopathy, a brain disorder associated with severe liver disease. The previous approvals could have smoothed the way for approval in the IBS. While IBS is a new indication, the approvals demonstrate the drug’s safety profile — the downfall of many drugs. But safety was not the concern. Reviewers concluded that in the IBS trials, patients on Xifaxan did not show statistically significant improvement compared to those on a placebo. On Monday, the FDA released background documents for Wednesday’s meeting that shed light on the agency’s concerns.

Here are the main points Salix must address.

  • Efficacy. FDA reviewers don’t think the treatment’s effect lasted over the 12-week trial. In fact, the reviewer’s reading of the trial results are that efficacy “lasts only for the first 4 weeks after treatment, then decreases after the sixth or seventh week.”
  • Time. Xifaxan’s documented treatment effect for about four weeks is not long enough to treat a chronic condition especially because there is not much data on efficacy of repeat courses of treatment.
  • Patient selection. Salix did not identify or study the patient population most likely to benefit from an antibiotic treatment. No antibiotics have been approved for treating IBS, though antibiotics have been used off label to treat the condition. Salix said that the drug would help IBS patients with small intestinal bacterial overgrowth, or SIBO. But the FDA noted that SIBO was not considered for patient eligibility in the trials; no testing was done to attempt to prove Salix’s theory that SIBO causes IBS; and while the company proposes treating non-constipation IBS patients, only IBS-diarrhea patients were studied in trials. The FDA also noted that the trials exclude patients with severe symptoms, which the FDA believes is important to include in the study.

The issues raised by the panel were previously unknown to some analysts. The Associated Press reported that Jefferies & Co. analyst Corey Davis said the panel seems “unexpectedly skeptical about Xifaxan as an IBS treatment.” But he does think the drug will ultimately be approved.

Even if the new set of trials addresses the FDA concerns, Xifaxan does pose other issues. Given that IBS is a chronic condition, the FDA asked for more information on retreating patients with the drug after they’ve already gone through the first cycle of treatment. Also, an FDA advisory body noted that using an antibiotic to treat IBS raises concerns about antibiotic resistance, which could raise the risk of other intestinal infections. As a chronic condition, IBS is likely to require repeated Xifaxan use. That makes addressing antibiotic resistance an important point. Salix needs to show that not only do IBS patients clearly benefit from Xifaxan, but also that these benefits outweigh the potential for greater bacterial drug resistance.

So far, the FDA has seen neither outcome.

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