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Salix Drug for HIV Patients Wins FDA Approval

Salix Drug for HIV Patients Wins FDA Approval [the News & Observer (Raleigh, N.C.)]

From News & Observer (Raleigh, NC) (January 1, 2013)

Jan. 01--Raleigh drug company Salix Pharmaceuticals has won regulatory approval for a new medicine with major sales potential to treat chronic diarrhea in HIV/AIDS patients.

The Food and Drug Administration announced Monday that it has granted marketing approval to Fulyzaq, a drug derived from red goo found in Croton lechleri trees in South America. One analyst -- Tim Lugo of William Blair -- has projected that peak annual sales for the drug could be in the range of $150 million to $200 million.

Salix spokesman Michael Freeman said in an email that the company will issue a press release on Wednesday.

In 2008 Salix, which specializes in treatments for gastrointestinal ailments, acquired the rights to sell Fulyzaq in North America, Europe and Japan from Napo Pharmacueticals for a $5 million licensing fee and future milestone payments. Those payments include up to $50 million for regulatory approvals and up to $250 million for achieving certain sales levels.

In 2011, Napo sued Salix, complaining that the company intentionally delayed the development of the drug and sought to terminate the licensing agreement. Salix contends the lawsuit is without merit.

Julie Beitz, a drug evaluation director at FDA, said in a statement that Fulyzaq is the first drug approved for HIV-associated diarrhea.

"Fulyzaq may be helpful to HIV/AIDS patients with the troublesome condition," she said.

Salix has forecast that its total revenue for 2012 will total $735 million, which would be a 36 percent increase over 2011.

Salix shares closed Monday at $40.47, up 78 cents. Its shares declined 15 percent in 2012.

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Posted: January 2013