Salix Pharmaceutical shares closed 14 percent higher Tuesday after the Raleigh-based drug company announced upbeat test results for its best-selling drug.
At least two Wall Street analysts raised their target prices for the company’s stock in the wake of the good news. Tim Lugo, an analyst with William Blair & Co., raised his 12-month target price from $127 to $158.
Salix shares closed Tuesday at $140.02, up $16.67. The company’s shares have risen 56 percent this year.
Salix reported that its latest Phase 3 study for Xifaxan showed that it produced significantly better results than a placebo for patients suffering from irritable bowel syndrome with diarrhea, or IBS-D.
Never miss a local story.
Xifaxan currently is used to treat travelers’ diarrhea and a rare liver condition and is Salix’s top seller. But the company is seeking Food and Drug Administration approval to also market it as a treatment for IBS-D.
“IBS represents a 3 million patient population and is one of the top diagnosed syndromes by gastroenterologists,” Lugo wrote in a research note. “We believe this indication has the potential to drive future growth for the company for the next three to five years.”
An FDA Advisory Committee is likely to consider Xifaxan as an IBS treatment later this year, according to Lugo.