DJ Salix Pharma Down; Clinical Trial Disappoints - Wachovia
By Michelle Rama
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Shares of Salix Pharmaceuticals Inc. (SLXP) shed 14% Wednesday on reports its Xifaxan study in hepatic encephalopathy patients didn't show statistical significance.
Salix, which develops drugs to treat gastrointestinal diseases, in May received approval for Xifaxan, an oral antibiotic, as a treatment for traveler's diarrhea caused by noninvasive strains of E. coli. The drug recently completed tests for the additional use of treating hepatic encephalopathy, which is brain and nervous system damage observed in patients with cirrhosis or other liver diseases.
Results of the trial were called "disappointing" by Wachovia analyst Michael Tong in a research note Wednesday. Tong noted that Xifaxan "showed some therapeutic benefit but did not achieve significance in the blood ammonia primary endpoint."
In the study's three endpoints, both Xifaxan and placebo achieved statistical significance compared with baseline, Tong said. But this was more likely due to a large placebo effect, not a failure of Xifaxan. Placebo effect refers to an improvement in health observed in patients who are taking the placebo instead of the actual treatment, usually associated with a psychological benefit from the patient's belief that he is being treated.
Salix officials were unavailable for comment.
An abstract of the hepatic encephalopathy study results were available to members of the American Association for the Study of Liver Diseases, or AASLD, on the organization's Web site. Salix will present the abstract at the AASLD meeting in Boston on Oct. 29 through Nov. 2.
Shares recently changed hands 11% lower, or $2.09, to $17.10 on volume of 3.3 million. Average daily volume is 360,602.
"These results may not be robust enough to support an additional approved indication or significant off-label use of Xifaxan in the treatment of hepatic encephalopathy," Wells Fargo analyst Robert Uhl said of the study in a research note Wednesday.
In addition, the analyst raised questions about weekly prescription trends for Xifaxan, initial shipments of which were $12 million in July. Given the number of prescriptions that have been written, "it could be some months before trade inventory has fallen enough to warrant significant reorders of Xifaxan."
Xifaxan also has been tested as a treatment for Crohn's disease and the prevention of traveler's diarrhea. It is currently in trials for the prevention of Shigella-induced diarrhea.
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