Shares of Salix Pharmaceuticals (SLXP) jumped 35 percent in premarket trading after the company announced that its two late-stage trials for a new therapy for non-constipation irritable bowel syndrome beat out a placebo effect with statistically significant results. Salix, which had already seen its stock rise by more than half this year in the lead-up to Friday's close, says the data clears the way to a new drug application in the first half of 2010.
Salix licensed rifaximin from Alfa Wassermann and has been selling it in the U.S. as a treatment for travelers' diarrhea caused by noninvasive strains of Escherichia coli. The drug has been available in Italy for 24 years and now appears to be close to an approval that will open the door to a $2.2 billion market for non-constipation IBS. The biotech company is also studying the drug's ability to treat the neurological disorder hepatic encephalopathy. The FDA granted a priority review for that indication at the end of August.
Salix specializes in gastrointestinal disorders and has recently begun beefing up its sales force as it adds new products. The developer announced last month that it is hiring 64 new sales people to go after the ulcerative colitis market. In the last quarter, Salix disclosed that its losses had more than doubled after R&D costs spiked.
- here's the piece from the Wall Street Journal