Salix Asks FDA to Review Colitis Drug

The stock fell sharply to a new four-year low Monday after Wall Street learned the drug developer's key product Colazal, also for ulcerative colitis, faces generic competition from three companies.

Salix's new drug application seeks approval for once-a-day dosing of granulated mesalamine to help patients stay in remission from ulcerative colitis. The disease causes ulcers in the lining of the rectum and colon.

The Raleigh, N.C.-based company believes the application will be subject to a 10-month review period by the FDA.

The application is based on results from two studies that showed a statistically significantly greater proportion of patients on granulated mesalamine stayed in remission.

Salix said ulcerative colitis patients dosed once a day with 1.5 grams of the drug remained relapse-free over six months of treatment compared with patients on placebo.

Salix acquired rights to market granulated mesalamine in the U.S. from Dr. Falk Pharma GmbH of Germany. Dr. Falk Pharma sells granulated mesalamine in Germany and other European countries, as well as Australia, under the trade name Salofalk Granu-Stix.

Salix's stock dropped $1.36, or 15.1 percent, to $7.66 in very heavy morning trade, having fallen to a new 52-week low of $7.50 earlier in the day. That's the stock's lowest level since August 2003. Previously, the stock traded between $8.78 and $16.38 over the past 52 weeks.