FDA Approves Fulyzaq(tm) (Crofelemer) 125 mg Delayed-Release Tablets for the Symptomatic Relief of Diarrhea in Patients with HIV/AIDS on Anti-Retroviral Therapy (ART)

Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced that the Food and Drug Administration has approved Fulyzaq™ (crofelemer) 125 mg delayed-release tablets for the symptomatic relief of non-infectious diarrhea in adult patients with human immunodeficiency virus (HIV)/ acquired immune deficiency syndrome (AIDS) on anti-retroviral therapy (ART).

“The FDA approval of Fulyzaq™ is a significant step forward in addressing the unmet medical need of people with HIV/AIDS on ART who experience non-infectious diarrhea, which often can lead to reduced treatment compliance,” said Carolyn Logan, President and CEO of Salix. “Since the introduction of antiretroviral therapy, people with HIV are living longer and thus medication compliance and tolerability as well as quality of life issues are increasingly important components of their overall health outlook. Diarrhea negatively affects quality of life and is a common reason for discontinuing or switching ART regimen. Salix’s expertise in gastrointestinal medicine should position the Company to deliver this much-needed treatment to HIV patients.”

“Fulyzaq™ is a locally-acting, minimally-absorbed drug which is derived from a botanical source. Fulyzaq™ is believed to act by blocking chloride secretion and thus reducing the accompanying high volume water loss as seen in HIV associated diarrhea. It is this secretion that is believed to lead to diarrhea with the associated symptoms of dehydration, electrolyte imbalance, abdominal cramping, urgency and increased frequency. FULYZAQ™ is believed to improve HIV associated diarrhea via dual mechanisms of action with inhibition of both CFTR (Cystic Fibrosis Transmembrane Conductance Regulator Protein) and CaCC (calcium-activated chloride channel) resulting in reduced chloride ion secretion into the GI lumen,” said Bill Forbes, Pharm. D., Executive Vice President, Medical, Research and Development, and Chief Development Officer, Salix. “Data support the use of Fulyzaq™ as an orally administered, anti-secretory anti-diarrheal agent that may provide relief to patients through the inhibition of chloride secretion into the gut. In addition, the Phase 3 study showed that Fulyzaq™ did not influence the efficacy or safety of the patients HIV medications.”

The FDA approval of Fulyzaq™ is based on a randomized, double-blind, placebo-controlled (one month) and placebo-free (five month), multi-center study of 374 HIV-positive patients on ART, with a history of diarrhea for one month or more. The primary efficacy endpoint was the proportion of patients experiencing less than or equal to two watery bowel movements per week, during at least two of the four weeks of the placebo-controlled phase of the study. Patients who received concomitant anti-diarrheal medications or opiates were counted as clinical non-responders.

Data demonstrated that a significantly larger proportion of patients taking Fulyzaq™ 125 mg twice daily experienced clinical response compared with patients in the placebo group. In addition, statistically significant reductions from baseline to the end of the double-blind period also were observed for the number of watery bowel movements per day, and daily stool consistency score, among patients taking Fulyzaq™ compared with placebo. Further, the Fulyzaq™ treatment effect for clinical response (125 mg twice daily vs. placebo) was similar in subgroup analyses based on duration of diarrhea, baseline number of daily watery bowel movements, use of protease inhibitors (PI), and CD4 cell count. The most common adverse reactions in the study were respiratory tract infection, bronchitis, cough, flatulence, and increased bilirubin.

Patents for Fulyzaq™ should provide intellectual property protection to 2018. With this approval, Fulyzaq™ is eligible for market exclusivity for five years as a new molecular entity in the United States. Because Fulyzaq™ is a new molecular entity Salix believes the product may be entitled to patent term restoration. Fulyzaq™ is a first-in-class gastrointestinal agent of botanical origin. Fulyzaq™ is not available synthetically and Salix has the right to the manufacturing process for producing Fulyzaq™ from the biologic source.

Salix currently plans on making Fulyzaq™ accessible to patients with HIV/AIDS on anti-retroviral therapies suffering from non-infectious diarrhea in early 2013.

Important Safety Information for Fulyzaq™

Fulyzaq™ (crofelemer) delayed-release tablets should not be used for the treatment of infectious diarrhea. Rule out infectious etiologies of diarrhea before starting crofelemer. If infectious etiologies are not considered, there is a risk that patients with infectious etiologies will not receive the appropriate therapy and their disease may worsen.

In clinical studies, the most common adverse reactions (occurring in ≥ 3% patients and at a rate greater than placebo) were upper respiratory tract infection, bronchitis, cough, flatulence and increased bilirubin.

About Fulyzaq™

Fulyzaq™ is a first-in-class, gastrointestinal agent derived on a sustainable basis from the Croton lechleri plant, native to northwestern South America. Fulyzaq™ acts as an anti-secretory, anti-diarrheal agent that works locally in the GI lumen and exhibits minimal systemic absorption. At the recommended dose of one 125 mg delayed-release tablet taken orally, twice daily, Fulyzaq™ works to inhibit both the cyclic adenosine monophosphate (cAMP)-stimulated cystic fibrosis transmembrane conductance regulator (CFTR) chloride ion (C1-) channel, and the calcium-activated C1- channels (CaCC).

Inhibiting CFTR and CaCC reduces the secretion of chloride ions, along with the water that enables their transport, out of the circulatory system and into the intestinal lumen. The secretion of chloride ions has been shown to cause diarrhea, with the associated symptoms of dehydration, electrolyte imbalance, abdominal cramping, urgency and increased frequency. Unlike other anti-diarrheal agents, Fulyzaq™ does not appear to affect gut motility.

Salix obtained rights to crofelemer under license from Napo Pharmaceuticals, Inc.

About HIV/AIDS-Associated Diarrhea

Diarrhea remains a common problem for patients with HIV/AIDS that often negatively impacts patients’ quality of life and can lead to discontinuation or premature switching of antiretroviral therapy (ART). Currently it is estimated that approximately 1.2 million persons aged 13 and older are living with HIV infection in the United States. Additionally, it is estimated that approximately 150,000 – 180,000 persons on anti-retroviral therapy (ART) suffer from non-infectious diarrhea. This condition, in this patient population, cannot only significantly reduce quality of life but also result in increased direct and indirect healthcare costs. Additionally, patients often suffer from weight loss, depression, and reduced social interaction.

About Salix Pharmaceuticals

Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, develops and markets prescription pharmaceutical products for the prevention and treatment of gastrointestinal diseases. Salix’s strategy is to in-license late-stage or marketed proprietary therapeutic drugs, complete any required development and regulatory submission of these products, and market them through the Company’s gastroenterology specialty sales and marketing team.

Salix markets XIFAXAN^® (rifaximin) tablets 200 mg and 550 mg, MOVIPREP^® (PEG 3350, Sodium Sulfate, Sodium Chloride, Potassium Chloride, Sodium Ascorbate and Ascorbic Acid for Oral Solution), OSMOPREP^® (sodium phosphate monobasic monohydrate, USP and sodium phosphate dibasic anhydrous, USP) Tablets, APRISO^® (mesalamine) extended-release capsules 0.375 g, METOZOLV^® ODT (metoclopramide HCl), RELISTOR^® (methylnaltrexone bromide) Subcutaneous Injection, SOLESTA^®, DEFLUX^®, FULYZAQ™, PEPCID^® (famotidine) for Oral Suspension, Oral Suspension DIURIL^® (Chlorothiazide), AZASAN^® (Azathioprine) Tablets, USP, 75/100 mg, ANUSOL-HC^® 2.5% (Hydrocortisone Cream, USP), ANUSOL-HC^® 25 mg Suppository (Hydrocortisone Acetate), PROCTOCORT^® Cream (Hydrocortisone Cream, USP) 1% and PROCTOCORT^® Suppository (Hydrocortisone Acetate Rectal Suppositories) 30 mg. Budesonide foam, RELISTOR^® , Lumacan^® and rifaximin for additional indications are under development.

For full prescribing information and important safety information on Salix products, including BOXED WARNINGS for OSMOPREP, AZASAN and METOZOLV, please visit www.salix.com where the Company promptly posts press releases, SEC filings and other important information or contact the Company at 919 862-1000.

Salix trades on the NASDAQ Global Select Market under the ticker symbol “SLXP”.

For more information, please visit our Website at www.salix.com or contact the Company at 919-862-1000. Follow us on Twitter (@SalixPharma) and Facebook (www.facebook.com/SalixPharma). Information on our web site, Twitter feed and Facebook page is not incorporated in our SEC filings.

Please Note: The materials provided herein contain projections and other forward–looking statements regarding future events. Such statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include, among others: market acceptance for approved products; generic and other competition in an increasingly global industry; post-marketing approval regulation; and litigation and the possible impairment of, or inability to obtain, intellectual property rights and the costs of obtaining such rights from third parties in an increasingly global industry. The reader is referred to the documents that the Company files from time to time with the Securities and Exchange Commission.