If Salix Pharmaceuticals (NASDAQ:SLXP) was in the running to acquire Montreal specialty drug company Aptalis Pharma, company executives aren’t tipping their hands.
A day after Reuters reported that Raleigh-based Salix was one of two potential buyers who passed on the $3 billion asking price for the Montreal company, Salix executives said they are always looking to add to Salix’s portfolio and the size of a deal is not a limiting factor.
“If it treats or prevents gastrointestinal disease, we are interested in taking a look at it,” Salix CEO Carolyn Logan told analysts on a conference call to discuss second quarter financial results. “We like to look at every opportunity in gastrointestinal disease because even though we have a very large portfolio right now there’s still a lot of holes in our portfolio.”
Logan acknowledged that Salix’s name has come up in recent media reports but she declined to discuss them, choosing instead to talk about Salix’s M&A approach from a broad perspective. Salix’s top product, Xifaxan, treats hepatic encephalopathy, a brain disorder assoicated with severe liver disease. Logan said Salix could be interested in other products that treat conditions related to the liver. She added that while the company is developing Xifaxan as a potential Crohn’s disease treatment, that disease is treated by many products and the company could acquire another drug for that indication. Logan said Salix typically in-licenses drugs that are in late-stage development or are already commercialized. But she said that the company could monitor a potential acquisition target for awhile, waiting for developments showing safety or efficacy.
CFO Adam Derbyshire added that besides acquiring drugs, Salix also buys companies. Salix’s most recent acquisition was the $300 million deal for Oceana Therapeutics in 2011.
“There’s nothing that’s limiting us from a size perspective,” he said.
Reuters, citing four confidential sources, reported that the private equity owner of Aptalis has been exploring a sale of the specialty pharma company. Aptalis’ areas of focus include inflammatory bowel disease, liver diseases and ulcer diseases – areas that match with Salix’s gastrointestinal focus. Besides Salix, the sources identified Indian drug company Sun Pharmaceutical as dropping out of the bidding.
Salix’s current drug portfolio continued to grow in sales during the second quarter. Total product revenue in the quarter was $235.4 million, up 30 percent from the second quarter of 2012. Xifaxan was the top revenue producer, generating $150.6 million in sales in the quarter, a 29 percent year-over-year increase. But Salix’s net income of $21.0 million in the second quarter was just a slight increase compared to the $20.1 million in profit a year ago.
As of June 30, Salix reported $818.0 million in cash and cash equivalents.
Salix’s stock has been on a steady climb since the start of the year and closed Thursday at $73.46 per share, not far from its 52-week high of $75.87.
