Valeant makes yet another acquisition: Salix Pharmaceuticals (Part 4 of 12)

(Continued from Part 3)

Basics of Salix Pharmaceuticals

Salix Pharmaceuticals (SLXP) is a specialty pharmaceutical company dedicated to developing prescription drugs and medical devices used in the treatment of a variety of gastrointestinal disorders.

Salix Pharmaceuticals’s main products are:

• Xifaxan: indicated for the reduction in risk of overt hepatic encephalopathy

• Apriso: indicated for the maintenance of remission of ulcerative colitis, or UC

• Moviprep: indicated for cleansing of the colon as a preparation for colonoscopy

• Relistor: indicated for the treatment of opioid-induced constipation

• Osmoprep: indicated for cleansing of the colon as a preparation for colonoscopy

• Solesta: indicated for the treatment of fecal incontinence

• Deflux: indicated for the treatment of vesicoureteral reflux

• Fulyzaq: indicated for the symptomatic relief of non-infectious diarrhea in adult patients with HIV/AIDS on anti-retroviral therapy

• Giazo: indicated for the treatment of mildly to moderately active UC

• Metozolv: indicated for the treatment of gastroesophageal reflux disease.

• Azasan: indicated as an adjunct for the prevention of rejection in renal homotransplantations and to reduce signs and symptoms of severe active rheumatoid arthritis

• Anusol: indicated for the relief of the inflammatory and pruritic manifestations of corticosteroid-responsive dermatoses

• Proctocort: indicated for the relief of the inflammatory and pruritic manifestations of corticosteroid-responsive dermatoses

• Pepcis: indicated for the short-term treatment of GERD, active duodenal ulcer, active benign gastric ulcer, erosive esophagitis due to GERD, and peptic ulcer disease

• Diuril: indicated for the treatment of hypertension and also as adjunctive therapy in edema associated with congestive heart failure, cirrhosis of the liver, corticosteroid and estrogen therapy, and kidney disease

• Colazal: indicated for the treatment of mildly to moderately active UC

Xifaxin is by far Salix’s largest product, accounting for about 70% of its revenues in 2013. Xifaxin is a big reason for the Salix–Valeant merger transaction. GI products should account for 24% of Valeant’s (VRX) 2015 pro forma revenues.

Other merger arbitrage resources

Other important merger spreads include the deal between Hospira (HSP) and Pfizer (PFE). For a primer on risk arbitrage investing, read Merger arbitrage must-knows: A key guide for investors.

Investors who are interested in trading in the healthcare sector should look at the Health Care Select Sector SPDR Fund (XLV).

Continue to Part 5

Browse this series on Market Realist:

• Part 1 - The Salix–Valeant merger will follow a cash tender timeline

• Part 2 - Basics of the Salix–Valeant merger transaction

• Part 3 - Rationale of the Salix–Valeant merger