Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) and Alfa Wassermann S.p.A. today announced that they have entered into an exclusive agreement by which Salix has licensed rights in the United States and Canada to an extended intestinal release (EIR) formulation of rifaximin for gastrointestinal and respiratory indications, including Crohn’s disease. The EIR formulation of rifaximin has been designed to release the active drug following passage through the stomach and provide a homogeneous distribution of rifaximin in the intestinal tract. The EIR formulation of rifaximin was designed to provide an efficient delivery of rifaximin and will be studied for its potential to target difficult to treat diseases of the intestinal tract such as Crohn’s disease. Financial terms of the transaction include a $10 million up-front payment and a $25 million development milestone payment upon NDA approval of an EIR formulation rifaximin product for Crohn’s disease. Salix also will pay sales-based milestones in respect of EIR formulation rifaximin products for Crohn’s disease, if sales targets are achieved, plus royalties on product sales of all EIR formulation rifaximin products. Alfa Wassermann will manufacture Salix’s requirements of EIR formulation rifaximin products. Commenting on the transaction, Carolyn Logan, President and CEO, Salix, stated, “We believe gastrointestinal-specific oral antibiotic rifaximin has the potential to treat numerous gastrointestinal diseases. In particular, we believe the EIR formulation we are acquiring in this transaction could be ideally suited to treat patients with Crohn’s disease. Earlier this year in the Journal of Gastroenterology, promising results were published of a Phase 2 Study which indicate that EIR rifaximin might be beneficial in inducing remission in patients with moderately active Crohn’s disease. We intend to further develop EIR rifaximin with the goal of securing FDA approval to market EIR rifaximin for the treatment of Crohn’s disease.” Salix is receiving the rights to EIR formulation rifaximin products as part of a restructuring of long-standing arrangements between Alfa Wassermann and Salix for the development and commercialization of rifaximin products in the United States and Canada for gastrointestinal and respiratory indications. The restructuring does not affect arrangements for the rifaximin products currently approved in the Salix territory, nor for any product for treatment of irritable bowel syndrome that might be approved in the future. Under the new arrangements, Salix has provided Alfa Wassermann with rights to obtain a license to develop and commercialize, outside the United States and Canada for gastrointestinal and respiratory indications, formulations of rifaximin currently being developed by Salix and other new formulations of rifaximin that Salix may develop in the future.