The Food and Drug Administration has approved Salix Pharmaceuticals application to market its best-selling drug Xifaxan for serious liver disease, according to Bloomberg News.

The decision could mean an additional $1 billion in sales for Xifaxan, which generated $93 million in sales for Morrisville-based Salix during the first nine months of last year.

The antibiotic Xifaxan is currently approved for travelers' diarrhea. Salix officials anticipate that prescriptions for the liver disease hepatic encephalopathy ultimately could generate peak annual sales of $1 billion.

The disease, which affects 200,000 U.S. patients, impairs brain functions and can put patients in a coma.

Last month, an FDA advisory panel voted 14-4 to recommend approval of Xifaxan for treatment of serious liver disease. Trading in Salix shares was halted by Nasdaq for an entire day while the FDA panel deliberated and even after the panel made its recommendation.

The day after the vote was announced Salix shares jumped 20 percent and have continued to climb since.

The Nasdaq halted trading in Salix Pharmaceuticals shares this morning, as the Morrisville company awaits word from regulators on one of its medicines.

An outside advisory committee of the Food and Drug Administration is scheduled to meet today to discuss the safety and efficacy of using Salix's Xifaxan to treat a type of liver disease. Last week, the FDA staff released a report that questioned whether the drug had significant benefits for people with hepatic encephalopathy.

Salix shares, which had more than quadrupled in the past year, have fallen nearly 14 percent since Friday. The stock closed Monday at $24.25.

The stock could slump further if the committee recommends against approving Xifaxan, but also could rebound quickly on positive news. The Nasdaq trading halt is common when there news expected that could significantly effect a stock's price.

Shares of Salix Pharmaceuticals nearly tripled in 2009 and the surge is continuing in a new year.

The Morrisville drug company's stock jumped today after analysts with PiperJaffray raised their price target to $58 per share from $29. Salix shares rose $1.58 to close at $27.63 today.

The analysts wrote in a report to investors that Salix will see sales a key medicine for gastrointestinal diseases pass $1 billion annually by 2014. The drug, called Xifaxan, is expected to win regulatory approval to treat several new conditions, including a type of irritable bowel syndrome.

"We believe Salix is the most compelling small-cap growth story in the specialty pharma space," the PiperJaffray analysts wrote.

Salix Pharmaceuticals raised about $128.2 million by selling shares of its surging stock on Wall Street.

The move gives the Morrisville company more cash to market and research drugs to treat gastrointestinal ailments. The company also may use the cash for "potential acquisitions of companies, products and technologies that complement" its business, Salix wrote in a filing with the Securities and Exchange Commission.

Salix shares, which have more than tripled since March, rose 5 cents to $23.46 today.

The company recently hired 64 new salespeople to market its medicines to physicians. In September, Salix won approval for a new drug to treat a stomach ailment that afflicts diabetics. The company also is testing one of its existing products to treat a type of irritable bowel syndrome.

Salix announced plans for the stock sale last week.

Salix Pharmaceuticals is taking advantage of its surging stock price to raise additional cash for research and possible acquisitions.

The Morrisville company sold 5.5 million shares to investment bank Jefferies & Co. The sale is scheduled to close on Monday.

Salix could raise as much as $131 million before expenses, if demand is high and the underwriter buys additional shares.

Salix plans to use the money for general corporate purposes, including further marketing and research on its drugs to treat gastrointestinal ailments. The company also may consider "potential acquisitions of companies, products and technologies that complement" its business, Salix wrote in a filing with the Securities and Exchange Commission.

Chief financial officer Adam Derbyshire declined to comment, citing SEC rules related to new stock sales.

Salix shares rose 37 cents to close at $22 today. The shares have more than tripled since early March.

Salix Pharmaceuticals reported stronger third-quarter sales of its drugs to treat various gastrointestinal diseases.

The Morrisville company announced today that revenue rose to $65.7 million, up 53 percent from the same period last year. Salix reported a net loss of $7.3 million, or 15 cents a share. The results beat the average expectation of Wall Street analysts.

Salix shares have more than tripled since March as investors grow increasingly optimistic about Salix's prospects. The stock closed at $21.14 Monday, up 20 cents.

Salix has become one of the Triangle's most successful drug companies, with several products already on the market and promising experimental treatments in development.

"The third quarter of 2009 was one of the most exciting and rewarding periods in the company's history to date," said CEO Carolyn Logan, in a prepared statement.

Recent success at Salix Pharmaceuticals could have an unexpected consequence:  The Morrisville company is becoming a more attractive takeover target for bigger drug companies, one analyst said.

"It's always been thought that Salix had takeover potential," said Scott Henry, who follows the company for Roth Capital Partners in Newport Beach, Calif. "All this positive news lately makes them even more appealing."

Salix shares surged 51 percent Monday after the company reported positive clinical trial results for one of its treatments for a type of gastrointestinal disease called irritable bowel syndrome. That follows last week's regulatory approval for a new drug to treat a stomach ailment that afflicts diabetics.

Henry speculates that the stock jump Monday was at least partly a bet that the latest news will attract the interest of larger pharmaceutical companies seeking promising new products.

Shares of Salix Pharmaceuticals jumped 50 percent in early trading today after the Raleigh-based company announced positive results of two tests involving one of its stomach ailment drugs.

Salix reported before the markets opened today that its drug rifaximin showed "statistically significant improvement" compared to placebo in the treatment of non-constipation irritable bowel syndrome in two Phase
3 trials involving 600 patients.

Salix shares, which closed Friday at $13.38, were fetching $20.20 in early trading today. Shares were trading at $6.15 in March.

Salix Pharmaceuticals said this morning that it won regulatory approval for a new treatment for stomach ailments, expanding its portfolio of drugs that treat gastrointestinal diseases.

The Morrisville company said the U.S. Food and Drug Administration granted marketing approval for Metozolv ODT to treat a stomach ailment that afflicts about five million diabetics, diabetic gastroparesis, as well as a more serious form of acid reflux known as gastroesophageal reflux disease, or GERD.

Metozolv is a fast-dissolving version of the drug metoclopramide. Salix acquired the worldwide marketing rights to Metozolv in September 2007 from Wilmington Pharmaceuticals of Wilmington, N.C.

Metozolv. which melts on the tongue, offers a better option for patients who have trouble swallowing or need treatment when they don't have water available, Bill Forbes, senior vice president and chief development officer at Salix, said in a prepared statement.

Metozolv is expected to be available in November.

Salix shares were fetching $12.73, up one cent, in mid-morning trading. Shares have risen from a low for the year of $6.15 in early March.

Salix already sells drugs to treat ulcerative colitis, traverlers' diarrhea and other diseases. It is one of the few local drug companies with products that have been approved for patients.

Salix posted a loss of $15.3 million on revenue of $52.2 million in the second quarter. The company expects to be profitable in 2010.

Salix Pharmaceuticals is planning to expand its sales force as the company prepares to win regulatory approval for new medicines that treat gastrointestinal ailments.

The Morrisville company already has 96 salespeople, but wants to hire and train 64 more this year.

There are now a handful of Triangle companies looking to boost their business as they bet the worst of the recession is over. Last week, ChannelAdvisor of Research Triangle Park announced plans to hire about 25 salespeople and other workers by the end of the year.