Salix's constipation drug gets approval for expanded use
(Adds detail, analyst comment, shares)
By Natalie Grover
Sept 29 (Reuters) - Salix Pharmaceuticals Ltd said the U.S. Food and Drug Administration approved an expanded use of its constipation treatment.
The injection, Relistor, has now been approved for use in patients on opioids for chronic pain unrelated to cancer, the company said on Monday.
Relistor was first approved in 2008 to treat opioid-induced constipation in severely ill patients who did not respond to laxatives.
It will compete with Nektar Therapeutics and AstraZeneca Plc's oral drug Movantik, approved by the FDA earlier this month for the same patient population.
Progenics Pharmaceuticals Inc, which licensed the worldwide rights to Relistor to Salix in 2011, stands to earn $40 million following the approval.
An expanded use for Relistor raises the addressable patient population to 11 million from 1 million, with potential peak sales rising to more than $300 million from about $137 million, Salix Chief Executive Carolyn Logan said on the company's latest post-earnings conference call in August.
The subcutaneous injection generated about $9 million in sales in the second quarter and will likely face tough competition from oral formulations.
With the additional indication, Cantor Fitzgerald analyst Irina Koffler modeled $86.4 million in 2020 sales for Relistor.
"We are more conservative than management because we assume fewer patients may utilize injectables, especially if oral Relistor launches during this time," Koffler said.
Salix, which said it will merge with Cosmo Pharmaceuticals SpA's Irish subsidiary, is in talks with Allergan Inc and Actavis Plc about a potential sale, sources have told Reuters in recent weeks.
Relistor belongs to a class of drugs that fight the effects of opioid painkillers on the gut without reducing centrally mediated pain relief.
These drugs, called peripherally acting mu opioid receptor antagonists (PAMORA), have been linked with cardiovascular risk in the past.
The FDA in 2012 had sought additional cardiovascular outcome trial data when it rejected Salix's initial attempt to expand Relistor's label.
However, an FDA panel recommendation that large cardiovascular safety trials were not needed prior to the approval of PAMORA drugs brightened the prospects of both Relistor and Movantik.
Salix and Progenics are working to chart a path to approval for an oral version of the drug.
Once approved, the oral formulation could expand the sales potential of Relistor to about $1.3 billion, CEO Logan had said.
Koffler said an oral version of Relistor would eventually win approval but expects just $344 million in peak sales in 2023.
Salix shares were largely unchanged after closing at $155.78 on the Nasdaq on Monday. Progenics' stock rose 2.4 percent in extended trading after closing at $5.25.
(Reporting by Natalie Grover in Bangalore; Editing by Sriraj Kalluvila)
