Salix Pharma, RedHill Biopharma Ink Exclusive License Deal - Quick Facts

(RTTNews) - Salix Pharmaceuticals Ltd. (SLXP) and RedHill Biopharma Ltd. (RDHL) have reached an exclusive agreement under which Salix has licensed the worldwide exclusive rights to RedHill's RHB-106 encapsulated formulation for bowel preparation and rights to other purgative developments.

The transaction's financial terms consist of an upfront payment of $7 million and $5 million in subsequent milestone payments to RedHill. Also, Salix agreed to pay RedHill tiered royalties on net sales, ranging from low single-digit up to low double-digits. As part of the worldwide license deal, the parties agreed on potential strategic collaboration with regard to certain other Salix products in specific territories.

Salix' President and Chief Executive stated, "Many patients find the taste and palatability of current bowel prep products to be unacceptable. We believe the availability of a tasteless solid oral formulation bowel prep, if approved by the FDA, could potentially go a long way in helping to increase patient compliance and to ease patient burden associated with bowel cleansing prior to various medically important abdominal procedures."

RHB-106 is an encapsulated formulation intended for the preparation and cleansing of the gastrointestinal tract prior to the performance of abdominal procedures, including diagnostic tests, such as colonoscopy, barium enema or virtual colonoscopy, and surgical interventions, such as laparotomy.