Federal regulators on Wednesday approved Salix Pharmaceuticals best-selling drug Xifaxan for the treatment of irritable bowel syndrome.
The ruling by the Food and Drug Administration was widely expected, and was a major reason that Valeant Pharmaceuticals paid $11.1 billion to acquire Salix in early April.
The company is now a subsidiary of Valeant.
Salix had earlier said it believes peak annual sales for the treatment could reach $2.1 billion, with sales totaling between $125 million and $150 million during the first four quarters after approval by the FDA. Salix had annual revenue of $1.134 billion last year.
Salix is expected to generate about $1 billion in revenue for Valeant over the final three quarters of 2015. That estimate does not include revenue from sales of Xifaxan to treat irritable bowel syndrome.
Valeant estimates that as many as 35 million adult Americans experience IBS.
Xifaxan is also approved to treat travelers’ diarrhea and a rare liver condition.
Immediately after acquiring Salix, Valeant reported that it was laying off 258 people at Salix's Raleigh headquarters and would maintain a limited presence here going forward.