Exclusive: Salix Pharma working with advisers to explore options - sources
By Olivia Oran
Tue Jan 20, 2015 2:22pm EST
By Olivia Oran
(Reuters) - Salix Pharmaceuticals Ltd SXLP.O, a maker of bowel drugs, is working with investment bank Centerview Partners Holdings LP to explore its options, including a potential sale to a larger drugmaker, according to three people familiar with the matter.
Raleigh, North Carolina-based Salix, whose chief executive officer, Carolyn Logan, stepped down earlier this month, has not yet formally decided whether it will pursue a sale now or wait until it hires a new CEO, the people said this week.
The sources asked not to be identified because the deliberations are confidential. A spokesman for Salix declined to comment. Centerview Partners did not immediately respond to a request for comment.
Shares of Salix rose 8.3 percent on the news.
The move underscores the challenges facing Salix after it announced last November that supply levels for its irritable bowel syndrome drug Xifaxan and other drugs were higher than it had previously indicated, forcing it to slash its full-year earnings forecast.
The inventory issue was also to blame for Botox maker Allergan (AGN.N) ending talks to acquire Salix, sources told Reuters at the time.
Disappointed with the Salix' strategy, a number of top shareholders have already been pushing for the company to consider a sale, sources told Reuters last month.
Salix chairman Thomas D'Alonzo is now acting as CEO on an interim basis as the company tries to recover from the inventory issue and the departure of other top executives, including its chief financial officer.
Salix said last month it would cut sales to wholesalers for three of its four key drugs. It expects to resolve the inventory issue by the end of 2015.
In October, Salix scrapped plans to acquire Italy's Cosmo Pharmaceuticals SpA in a deal that would have allowed it to shift its tax base from the United States to Europe, citing a "changed political environment" relating to so-called tax inversion deals.
(Reporting by Olivia Oran in New York; Editing by Phil Berlowitz, Bernard Orr)