TEL-AVIV, Israel, Feb. 27, 2014 (GLOBE NEWSWIRE) -- Salix Pharmaceuticals Ltd. (Nasdaq:SLXP) and RedHill Biopharma Ltd. (Nasdaq:RDHL) (TASE:RDHL) today announced that they have entered into an exclusive agreement by which Salix has licensed the worldwide exclusive rights to RedHill's RHB-106 encapsulated formulation for bowel preparation and rights to other purgative developments.
Financial terms of the transaction include an upfront payment of $7 million and $5 million in subsequent milestone payments to RedHill. Salix also has agreed to pay RedHill tiered royalties on net sales, ranging from low single-digit up to low double-digits. Under the worldwide license agreement, the parties also agreed on potential strategic collaboration with regard to certain other Salix products in specific territories.
"Salix is pleased to enter this strategic collaboration with RedHill and to secure what we believe could be the first prescription encapsulated bowel prep product," stated Carolyn Logan, President and Chief Executive Officer, Salix. "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."Dror Ben-Asher, RedHill Biopharma's CEO, said: "The licensing transaction with Salix is an important milestone for RedHill and yet another validation of our business model. This is the first licensing deal derived from RedHill's late clinical-stage pipeline, and we are confident that Salix, a leading company in the gastrointestinal field with a proven track record in drug development and commercialization, is the right partner. I would like to thank our shareholders for their continued support and RedHill's team for their hard work and dedication toward the realization of this important transaction." About RHB-106 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, as well as surgical interventions, such as laparotomy. The RHB-106 preparation is a tasteless solid oral dosage potentially allowing an unobstructed procedure with reduced side-effects and improved compliance. It avoids patient exposure to the often unacceptable taste of current products.