Salix buys potential billion-dollar seller

Salix Pharmaceuticals, one of the Triangle's best-performing public companies over the past year, is adding another drug to its portfolio.

The Morrisville company has agreed to buy the rights to Relistor, a drug that treats constipation in patients taking pain medicines.

The deal with Progenics Pharmaceuticals, based in Tarrytown, N.Y., calls for Salix to pay $60 million up front and payments worth up to $290million more if the drug meets development and sales milestones.

Relistor had just $16 million in worldwide sales last year, but Salix thinks the drug has the potential for peak annual sales of a billion dollars. Relistor is an injected drug used in patients taking opioid painkillers, which often cause severe constipation.

Salix plans to seek regulatory approval for an oral version of the drug, and to get it approved for use by patients who have chronic, nonmalignant pain.

The company plans to promote Relistor among the network of gastroenterologists who are familiar with Salix's other products.

"We'll get our gastroenterology community on board first; obviously that's an easy target for us. We have a big presence there; we are well-known and trusted there," Salix CEO Carolyn Logan said Monday during a conference call with analysts.

Salix, one of the few small drug companies based in the Triangle with actual products and revenue, sells drugs to treat gastrointestinal ailments. The company has 395 employees, including 150 in Morrisville.

Salix's best-selling drug, Xifaxan, is approved to treat traveler's diarrhea and a rare liver condition.

Salix is also seeking U.S. Food and Drug Administration approval to market Xifaxan for irritable bowel syndrome. A hearing on the application is set for March 7.

If Xifaxan is approved to treat irritable bowel syndrome, Salix estimates it could bring $2.5 billion a year in sales.

Logan was asked during the conference call why Relistor hasn't performed better, given the potential Salix thinks the drug has. The drug is approved for use in more than 50 countries; the U.S. market accounted for $10 million of sales last year.

Logan said one possible explanation is that the drug, which was licensed to Wyeth, was overlooked when Pfizer acquired Wyeth.

"Oftentimes what happens in a big acquisition like that, some smaller products can get lost," she said, "and at that time, Relistor just maybe did not receive all the attention it would receive in an organization such as ours."

Salix shares fell 14 cents to $40.12. The stock is up 46 percent in the past year.