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Salix Is One Of The First Rtp-Area Companies To Launch Therapeutic Product

In the last year, Salix Pharmaceuticals Ltd. (Nasdaq:SLXP) of Raleigh was on the fast track. The Silicon Valley transplant all of a sudden turned up in the area, found a home and a cast of top executives, and announced that it had a product nearly ready for the gastroenterology market.

Part of Salix's pace comes from being a specialty pharmaceutical company. By identifying and acquiring only proprietary pharmaceutical products that have reached Phases II and III clinical trials, Salix can move those products quickly toward commercialization with minimal research and the assistance of a contract manufacturer.

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In 1999, founders Randy W. Hamilton and Loin K. Johnson, PhD, and the Salix board of directors, offered the helm of the company to Robert P. Ruscher, who held various executive positions with Salix even though he lived in the Raleigh area.

Ruscher moved here from Silicon Valley in 1994 to work for Wyrick Robbins Yates & Ponton LLP of Raleigh, where he handled legal matters for Salix and other science companies.

He didn't want to move back to the West Coast, but he offered to take the post if Salix moved to North Carolina. The founders and the board agreed.

"The Bay area (greater San Francisco) is not a place to run a pharmaceutical company because of the cost, and it is also not an area to conduct sales and marketing activities because it is hard to recruit," Ruscher said. "It is a no-brainer. This area (RTP) is more efficient and its easier to recruit top candidates."

Salix's activities increased even more at that point. In addition to several new executives coming on board, the company raised $14 million in a private placement and received a listing on the Nasdaq stock exchange.

The European rights to Colazal[TM] (balsalazide disodium), Salix's lead product for the treatment of mildly to moderately active ulcerative colitis, were sold to Shire Pharmaceuticals of the U.K. Colazal[TM] then received approval in the U.S. in late July 2000. Earlier this month the new drug was launched by a new sales force of 30.

"Our goal is to build a franchise with gastroenterologists so that we can bring other products to them," said G. Michael Freeman, director of investor relations.

Colazal[TM] is the first new drug approved in ten years and the first new therapy approved in seven years by the U.S. Food and Drug Administration for the treatment of mildly to moderately active ulcerative colitis, a chronic and debilitating inflammatory disease of the gastrointestinal tract. In clinical studies, Colazal[TM] has fewer side effects and quicker recovery times when tested against a drug already sold to treat the condition.

Symptoms of active ulcerative colitis include rectal bleeding, abdominal pain, increased stool frequency, loss of appetite, fever and weight loss. There is no known cure for ulcerative colitis except for removal of the colon.

Colazal[TM] is an anti-inflammatory agent. The precursor to this family of aspirin-like drugs was first derived from the weeping willow tree. Salix babylonica is the genus name for the weeping willow, and Salix the company takes its name and its logo from this source.

Salix estimates that there are up to 500,000 patients with ulcerative colitis in the United States. In 1999, U.S. sales of prescription products used to treat ulcerative colitis totaled approximately $350 million. Prescription dollar sales have been growing at an annual compound rate of more than 25 percent for the last 10 years.

Salix's follow-on product candidate is Rifaximin, a broad-spectrum gastrointestinal-targeted antibiotic. Nine Salix researchers based in Palo Alto, Calif., recently completed Phase III clinical development of Rifaximin for the potential treatment of bacterial infections of the lower gastrointestinal tract. Traveler's diarrhea, or Montezuma's revenge, is the most well known infection of this type.

The researchers will likely move on to testing Rifaximin for other conditions, like antibiotic-associated colitis. Also, the antibiotic has already attained Orphan Drug Status as a treatment for hepatic encephalopathy, caused by the buildup of toxins in the bloodstream when the liver does not function properly.

In the meantime, Salix's Raleigh headquarters are getting settled in north Raleigh. The company is currently the anchor tenant in the Alphanumeric office building on Wake Forest Road, but has pre-leased office space at Colonnade I, located at the corners of Six Forks and Strickland Roads. The building is scheduled for completion in March 2001.

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Salix Is One Of The First Rtp-Area Companies To Launch Therapeutic Product

BT Catalyst, Jan, 2001

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