Salix Pharmaceuticals (NASDAQ:SLXP) is kicking off 2014 with a bigger sales team carrying big expectations following the company’s $2.8 billion acquisition of Santarus – expectations that pushed the company’s stock price to a new all-time high.
Salix shares traded as high as $97.22 per share on Monday after the company released details of an expanded sales team projected to generate $1.6 billion in 2014 product sales revenue for the Raleigh company. Salix, which focuses on gastrointestinal treatments, settled down by the end of the trading day, closing at $95.52, up 2 percent from Friday’s closing price. Salix’s stock price is now more than double what it was a year ago.
Salix Santarus acquisition on Jan. 2. The company had announced in the fall an agreement to buy the San Diego specialty pharmaceutical firm, news that started Salix’s stock price on a sharp upward trajectory.
Like Salix, Santarus also sold gastrointestinal treatments, such as the ulcerative colitis drug Uceris. Santarus’s top selling drug Glumetza improves glycemic control in adults with type 2 diabetes. With the Santarus acquisition now closed, the new Salix has 22 marketed products. In addition to bringing to Salix its drug portfolio and pipeline, Santarus also brings a sales force accustomed to selling to primary care doctors – a connection that Salix lacked.
The expanded Salix sales force will encompass about 521 sales representatives. By comparison, Salix’s sales team was about 335 a year ago. Salix Associate Vice President, Investor Relations and Corporate Communications Michael Freeman was not able to offer any details on how much hiring Salix is doing locally for the expanded sales force. But companywide, here’s how the reconfigured sales force breaks down.
- Three specialty sales force teams focusing on gastroenterologists, hepatologists and colorectal surgeons. Each of the three teams will have about 100 sales reps.
- A digestive disease specialty sales force comprised of 161 representatives.
- Institutional and HIV sales, which will be handled by three teams totaling about 60.
Salix said Monday that the majority of its field sales managers are currently in place and more than 90 percent of overall hiring of additional sales staff is complete. The company expects its expanded team to be close to 100 percent operational during Salix’s national sales meeting scheduled for late February.
In addition to releasing details of its realigned sales team, Salix also issued financial guidance for 2014. The company expects earnings of $650 million on total product revenue of $1.6 billion. Salix said that the projections reflect revenue and cost synergies from combining with Santarus.
Salix also offered an update on the phase III clinical trial studying rifaximin as a treatment for irritable bowel syndrome with diarrhea, or IBS-D. Rifaximin is Salix’s top-selling drug approved by the Food and Drug Administration for treating traveler’s diarrhea. It is also approved as a treatment for hepatic encephalopathy, or HE, a brain disorder associated with severe liver disease. Salix had been seeking to add IBS-D as another indication for the drug, which is marketed as Xifaxan. But in 2011, the FDA told Salix it needed more information to make an approval decision on that indication.
Salix determined it would need to conduct another phase III study to provide additional information on safety and efficacy of repeat treatments. Enrollment in the double-blind study is expected to be completed at the end of the month. Initial trial results are expected by mid July.